Morning Report - Quicken's CEO has some choice words about the DOJ lawsuit

Vital Statistics:

	Last	Change	Percent
S&P Futures	2117.4	5.7	0.27%
Eurostoxx Index	3747.5	33.6	0.90%
Oil (WTI)	57.61	0.5	0.80%
LIBOR	0.279	0.002	0.72%
US Dollar Index (DXY)	97.14	0.222	0.23%
10 Year Govt Bond Yield	1.92%	0.01%
Current Coupon Ginnie Mae TBA	103.3	0.2
Current Coupon Fannie Mae TBA	102.4	-0.1
BankRate 30 Year Fixed Rate Mortgage	3.78

Markets are higher on no real news. bonds and MBS are down small.

Not much in data this morning. The Markit PMI numbers fell slightly in April from March. I think we can officially scrap "the weather did it" excuse for weak numbers. 

The FOMC meets this week, and this will be the last meeting where rate hikes are not on the table. It won't contain any new forecasts and it won't have a press release. It should be a nonevent.

This week contains some important economic data (especially for the Fed). We will get the advance estimate for Q1 GDP, Personal Income and Personal Spending, and the PCE deflator (the Fed's preferred measure of inflation). Note that the first Friday of the month is this week, but the government is delaying the jobs report until next week. The GDP report is going to be weak - the Street forecast is +1.0% - however personal income could move the bond market if we start seeing wage inflation. The PCE deflator will be important on the other side - if inflation remains well below the Fed's target they have an excuse not to move. Finally, we get construction spending and the Case-Shiller index. 

The battle between Quicken and the DOJ is heating up. Quicken CEO Dan Gilbert spoke truth to power on Friday: "This is what happens when you dare to stand up for justice and the truth to the Department of Justice," Gilbert said on a conference call Friday evening with the Free Press. "This was an attempt to embarrass us and continue to pressure us to write enormous size checks to settle (allegations) to make them go away, and to admit things that did not occur." The industry is rooting for Quicken on this one - believing the government is systematically making mountains over immaterial clerical error molehills in order to squeeze more 8 and 9 digit settlements out of the industry. Of course, then the government scratches its head wondering why credit is tight, especially at the lower FICO scores. Is it time to start pushing the housing recovery forecast out to 2017? I hope not. At least one economist thinks 2015 is going to be good.