Morning Report - Job Openings highest since 2001

Vital Statistics:

	Last	Change	Percent
S&P Futures	2040.9	-18.5	-0.90%
Eurostoxx Index	3190.7	-57.3	-1.76%
Oil (WTI)	62.9	-0.1	-0.24%
LIBOR	0.236	0.000	0.11%
US Dollar Index (DXY)	88.62	-0.425	-0.48%
10 Year Govt Bond Yield	2.21%	-0.05%
Current Coupon Ginnie Mae TBA	104.7	0.3
Current Coupon Fannie Mae TBA	104.3	0.2
BankRate 30 Year Fixed Rate Mortgage	4.12

Markets are lower worldwide after a big sell-off in China. Bonds and MBS are rallying. 

The Chinese government instituted new regulations for local debt last night, which sent the markets reeling. Chinese stocks have been on a tear recently (up something like 30% since Nov 1) so the news was an excuse for some major profit-taking, which sent the indices down something like 5%. 

Small business optimism picked up a bit in December, as the NFIB Small Business Optimism approached the historical average before the Great Recession began. A big increase in economic optimism drove the increase. Earnings trends are heading higher, and some are planning to increase employment, which is good news for the economy.

Another good data point for the market: Job openings rose to 4.834MM in October from 4.685MM in September. This almost matches August's number, which was the highest since early 2001. Combine that with a steady diet of sub 300k initial jobless claims prints and the leading indicators of the labor market are looking strong. Now about that wage growth...

New 3% down loans are expected to have only a marginal effect on increasing credit availability. Separately, This is all part of an attempt to get the first time homebuyer back into the market, which has been the Achilles Heel of this housing recovery. The problem is that while a 3% downpayment isn't necessarily daunting, the credit score the banks require is - something like 755. For young adults with student loan debt, that sort of score probably just isn't in the cards. Here are the FAQs for the 3% down loans from Freddie Mac.

Obamacare Architect Jonathon Gruber heads to Capitol Hill today to discuss the obfuscation and white lies involved in the selling of Obamacare. In an unfortunate (for him and Obama) minute of candor, he discussed how the the plan relied on the "stupidity of the American voters" to get it through, and how the "Cadillac Tax" was a brilliant piece of wordsmithing that set in motion the eventual taxability of employer-provided health care benefits. Don't expect much out of Gruber - he will probably apologize for the language he used and spend the rest of the time lawyered up and will simply relay previously prepared talking points. Note that the Medicaid subsidy issue is going to be taken up by the Supreme Court as well, which could throw the whole thing in peril.