Late day illiquidity is pushing production MBS prices...

The Fed's Beige Book typically isn't that interesting, merely serving to recap anecdotes from the Fed's business and industry contacts. Today's really isn't much of an exception and markets aren't doing much with it, but there's perhaps been a bit of a benefit for bond markets and a hit for stocks, though the correlation is microscopic at best.

More interesting than the market's reaction (or lack thereof) is simply the growing body of evidence suggesting that business are concerned about the Fiscal Cliff. While it's somewhat notable that 7 out of 12 regions reported weaker factory activity, 5 of those chalked the weakness up, in part, to the Fiscal Cliff.

As expected, the Book reported some weakness in the New York district due to Hurricane Sandy, but overall, economic activity continued to expand at "a measured pace." Respondents noted that the market for single family homes continued to improve except for the Boston and Philadelphia districts. Keep in mind that the Federal Reserve "districts" aren't limited to the metropolitan area in question. This can account for discrepancies in the apparent health of your local housing market and the Beige Book's anecdotes. The Boston district, for example, is comprised of CT, MA, RI, VT, NH, and ME.

(Reuters) - The chief U.S. housing regulator on Wednesday expressed optimism that the deep downturn in the nation's property market was finally over, but said the future of the government's role in housing finance needed to be settled for long-term health.

"I am cautiously optimistic that the signs of stability - and in some areas, strength - that have started to emerge in certain sectors of the housing market are signals that it is beginning to recover," Edward DeMarco, acting director of the Federal Housing Finance Agency, told the Exchequer Club.

The 5yr Treasury Auction came in better-than-expected...

President Barack Obama said Wednesday he hoped to reach a deal on the "Fiscal Cliff" before Christmas but insisted that Congress move now to prevent a middle-class tax increase in January. "Let's approach this with the middle class in mind," he said.

To that end, Obama spoke Wednesday with an invited group of Americans who would see their taxes go up if the White House and congressional Republicans are unable to strike a deal before the end of the year.

"Our ultimate goal is to get an agreement that is fair and balanced," the president said in a nationally televised statement from the White House. "My hope is to get this done before Christmas."

"But the place where we already have, in theory at least, complete agreement right now is on middle-class taxes," Obama said. "If Congress does nothing, every family in America will see their taxes automatically go up at the beginning of next year."

There was a bit of "which way do we go" after Obama...

Bond markets and especially equities markets continue...

- 368k unit annual rate vs 390k consensus
- Last month revised to 369k from 389k
- Northeast region -32.3 pct, midwest up record 62.2 pct
- Commerce dept says 'minimal effect' from Hurricane
- Gigantic margin of error ±18.3 pct on the monthly change

Sales of new single-family houses in October 2012 were at a seasonally adjusted annual rate of 368,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent (±18.3%)* below the revised September rate of 369,000, but is 17.2 percent (±21.2%)* above the October 2011 estimate of 314,000.

The median sales price of new houses sold in October 2012 was $237,700; the average sales price was $278,900. The seasonally adjusted estimate of new houses for sale at the end of October was 147,000. This represents a supply of 4.8 months at the current sales rate.

US Treasuries hit the Asian open at Tuesday's best...

(Reuters) - The chief U.S. housing regulator on Wednesday expressed optimism that the deep downturn in the nation's property market was finally over, but said the future of the government's role in housing finance needed to be settled for long-term health.

"I am cautiously optimistic that the signs of stability - and in some areas, strength - that have started to emerge in certain sectors of the housing market are signals that it is beginning to recover," Edward DeMarco, acting director of the Federal Housing Finance Agency, told the Exchequer Club.

President Barack Obama said Wednesday he hoped to reach a deal on the "Fiscal Cliff" before Christmas but insisted that Congress move now to prevent a middle-class tax increase in January. "Let's approach this with the middle class in mind," he said.

To that end, Obama spoke Wednesday with an invited group of Americans who would see their taxes go up if the White House and congressional Republicans are unable to strike a deal before the end of the year.

"Our ultimate goal is to get an agreement that is fair and balanced," the president said in a nationally televised statement from the White House. "My hope is to get this done before Christmas."

"But the place where we already have, in theory at least, complete agreement right now is on middle-class taxes," Obama said. "If Congress does nothing, every family in America will see their taxes automatically go up at the beginning of next year."

Late day illiquidity is pushing production MBS prices...

The Fed's Beige Book typically isn't that interesting, merely serving to recap anecdotes from the Fed's business and industry contacts. Today's really isn't much of an exception and markets aren't doing much with it, but there's perhaps been a bit of a benefit for bond markets and a hit for stocks, though the correlation is microscopic at best.

More interesting than the market's reaction (or lack thereof) is simply the growing body of evidence suggesting that business are concerned about the Fiscal Cliff. While it's somewhat notable that 7 out of 12 regions reported weaker factory activity, 5 of those chalked the weakness up, in part, to the Fiscal Cliff.

As expected, the Book reported some weakness in the New York district due to Hurricane Sandy, but overall, economic activity continued to expand at "a measured pace." Respondents noted that the market for single family homes continued to improve except for the Boston and Philadelphia districts. Keep in mind that the Federal Reserve "districts" aren't limited to the metropolitan area in question. This can account for discrepancies in the apparent health of your local housing market and the Beige Book's anecdotes. The Boston district, for example, is comprised of CT, MA, RI, VT, NH, and ME.

(Reuters) - The chief U.S. housing regulator on Wednesday expressed optimism that the deep downturn in the nation's property market was finally over, but said the future of the government's role in housing finance needed to be settled for long-term health.

"I am cautiously optimistic that the signs of stability - and in some areas, strength - that have started to emerge in certain sectors of the housing market are signals that it is beginning to recover," Edward DeMarco, acting director of the Federal Housing Finance Agency, told the Exchequer Club.

The 5yr Treasury Auction came in better-than-expected...

President Barack Obama said Wednesday he hoped to reach a deal on the "Fiscal Cliff" before Christmas but insisted that Congress move now to prevent a middle-class tax increase in January. "Let's approach this with the middle class in mind," he said.

To that end, Obama spoke Wednesday with an invited group of Americans who would see their taxes go up if the White House and congressional Republicans are unable to strike a deal before the end of the year.

"Our ultimate goal is to get an agreement that is fair and balanced," the president said in a nationally televised statement from the White House. "My hope is to get this done before Christmas."

"But the place where we already have, in theory at least, complete agreement right now is on middle-class taxes," Obama said. "If Congress does nothing, every family in America will see their taxes automatically go up at the beginning of next year."

There was a bit of "which way do we go" after Obama...

Bond markets and especially equities markets continue...

- 368k unit annual rate vs 390k consensus
- Last month revised to 369k from 389k
- Northeast region -32.3 pct, midwest up record 62.2 pct
- Commerce dept says 'minimal effect' from Hurricane
- Gigantic margin of error ±18.3 pct on the monthly change

Sales of new single-family houses in October 2012 were at a seasonally adjusted annual rate of 368,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent (±18.3%)* below the revised September rate of 369,000, but is 17.2 percent (±21.2%)* above the October 2011 estimate of 314,000.

The median sales price of new houses sold in October 2012 was $237,700; the average sales price was $278,900. The seasonally adjusted estimate of new houses for sale at the end of October was 147,000. This represents a supply of 4.8 months at the current sales rate.

US Treasuries hit the Asian open at Tuesday's best...

- 368k unit annual rate vs 390k consensus
- Last month revised to 369k from 389k
- Northeast region -32.3 pct, midwest up record 62.2 pct
- Commerce dept says 'minimal effect' from Hurricane
- Gigantic margin of error ±18.3 pct on the monthly change

Sales of new single-family houses in October 2012 were at a seasonally adjusted annual rate of 368,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.3 percent (±18.3%)* below the revised September rate of 369,000, but is 17.2 percent (±21.2%)* above the October 2011 estimate of 314,000.

The median sales price of new houses sold in October 2012 was $237,700; the average sales price was $278,900. The seasonally adjusted estimate of new houses for sale at the end of October was 147,000. This represents a supply of 4.8 months at the current sales rate.

The Fed's Beige Book typically isn't that interesting, merely serving to recap anecdotes from the Fed's business and industry contacts. Today's really isn't much of an exception and markets aren't doing much with it, but there's perhaps been a bit of a benefit for bond markets and a hit for stocks, though the correlation is microscopic at best.

More interesting than the market's reaction (or lack thereof) is simply the growing body of evidence suggesting that business are concerned about the Fiscal Cliff. While it's somewhat notable that 7 out of 12 regions reported weaker factory activity, 5 of those chalked the weakness up, in part, to the Fiscal Cliff.

As expected, the Book reported some weakness in the New York district due to Hurricane Sandy, but overall, economic activity continued to expand at "a measured pace." Respondents noted that the market for single family homes continued to improve except for the Boston and Philadelphia districts. Keep in mind that the Federal Reserve "districts" aren't limited to the metropolitan area in question. This can account for discrepancies in the apparent health of your local housing market and the Beige Book's anecdotes. The Boston district, for example, is comprised of CT, MA, RI, VT, NH, and ME.