Morning Report - Bill Gross says hike now.

Vital Statistics:

	Last	Change	Percent
S&P Futures	1930.7	-1.4	-0.07%
Eurostoxx Index	3097.2	21.2	0.69%
Oil (WTI)	46.45	0.1	0.19%
LIBOR	0.326	0.007	2.13%
US Dollar Index (DXY)	96.42	0.138	0.14%
10 Year Govt Bond Yield	2.15%	0.02%
Current Coupon Ginnie Mae TBA	104.4	0.2
Current Coupon Fannie Mae TBA	104	0.0
BankRate 30 Year Fixed Rate Mortgage	3.79

Markets are flattish this morning on no real news. Bonds and MBS are down small.

Mortgage Applications rose 13.9% last week, with purchases rising 9.1% and refis rising 17.7%. Refis increased to 58.4% of all loans. This was the first full week after the Labor Day holiday, so don't break out the champagne quite yet - the increase was due to a holiday-shortened week before. 

Mario Draghi (European Central Bank President) said more time is needed to assess whether more stimulus is needed. 

Bill Gross wrote about financial repression (essentially having rates pegged at the zero bound) and the risks it poses to the financial system. He makes the point that pension funds are getting hammered because they cannot generate the required return on assets with safe assets so they are taking more and more risk, citing municipalities like Chicago, Detroit, etc. He argues that we should be willing to take some short-term financial pain for longer term financial stability. Of course Dr. Cowbell has a different take, which is that bankers want higher rates because they hate poor people and want them to suffer. Or something. 

Now that Scott Walker has exited the race, it looks like his money and staffers are going to Marco Rubio.

Has ATR and HMDA restricted mortgage credit? Not according to the Fed. Probably because credit has been highly restrictive since 2008. It couldn't have gotten any tighter to begin with. Note that QM was intended to make lender more likely to lend. Given what we have seen with the big banks exiting FHA (Wells and Chase), the CFPB's new rules aren't having the desired effect.