Daily Commentary by Larry Baer: Not only is it pathetic - it is starting to get
down-right embarrassing.
Investors continue
to shake their collective heads in disappointment as the prospects of a fiscal
agreement between the White House and Republications before year-end becomes
increasingly unlikely. House members and senators now have no chance of
voting on any plan to step back from the edge of the so called "fiscal
cliff" until after Christmas, giving them less than a week to reach
agreement on an issue they been trying to resolve for more than a year.
As a result, investors continue to move capital to the sidelines as the
curtain opens on yet another act of ongoing political theater.
Today's battery of
economic data was completely overshadowed by the lack of action from Washington.
The Commerce Department announced earlier this morning consumer spending surged
a surprisingly strong 0.4% higher in November - posting its best single-month
performance in three-years. Consumer spending was supported by an equally
solid 0.6% month-over-month gain for personal incomes. The Fed's favorite
measure of inflation pressure at the consumer level, the personal consumption
expenditure index, gained a very modest 0.1% last month.
Normally solid
numbers like these would have caused mortgage investors to nudge rates a touch
higher - but the increasing likelihood we all should brace for an imminent
tumble over the edge of the "fiscal cliff" fueled a
"flight-to-quality" buying spree more than powerful enough to muscle
through today's otherwise mortgage interest rate unfriendly economic news.
As has been the case
for the past several weeks - economic news may cause a temporary little flutter
in the mortgage market - but any substantial shift in the current trend
trajectory of mortgage interest rates will almost certainly be tied to events
surrounding political action - or lack thereof - with regard to the looming
"fiscal cliff".
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
