Sept 6. Payrolls better than expected.
Sept 6. Better than expected payroll data caused a sell off in interest rate futures, though the move was muted and implied vol declined. Ten year yield rose from 2.63 to 2.70. Equities strengthened, but it is really commodities/metals that are shining. Silver surged (new yearly high) as did corn. Gold shook off early weakness to close only slightly lower. Beans are back at top end of recent range. Oil and gas remain at lower end of ranges, but commodity inflation is a warning sign for bonds.
–Light week for economic news, but supply comes in the form of 3, 10 and 30 year treasuries.
–Obama admin set to announce another tepid attempt to help underwater borrowers. WSJ reports that 500k to 1.5m borrowers could be helped, but the same article notes that 11 million borrowers are underwater. And lenders have to agree to the new proposal. It will probably be touted as a great success for the handful of borrowers who are temporarily aided.
–Here is a hard example of data which reflects of the state of muni finances, real estate, etc. In my suburb, Wilmette, IL pop 30k, a middle management type place near the city, when real estate changes hands there is a transfer tax. In 2007 the city budget was for $1.582M, actual was $1.366. In 2008, $1.417 budget, actual $880k. In 2009 $1.060 budget, actual $634k. And it’s not because the tax rate decreased, it’s a reflection of fewer sales at smaller prices. Oh, but let’s review the same data for Property taxes, where the rate did increase. 2007, $9.214m in budget, 9.087 actual. 2008, 8.845B, 8.719A, 2009 9.684B, 9.643A. So while values fall, taxing agents are trying to squeeze more revenue any way possible.
