If just half of these workers were currently in the labor force and were unemployed, the unemployment rate would be 10.7% instead of 9.4%. None of these workers is reflected in the official unemployment count, but their entry or re-entry into the labor force will contribute to keeping the unemployment rate high. –From Heidi Shierholz’ analysis of the latest unemployment report.
More of the Same, by Tim Duy: The jobs report was a clear disappointment relative to both expectations at the beginning of the week and certainly after the blowout ADP report. After adjusting expectations to the upside, ADP once again scores a major miss (how we came to care about this data series still remains a mystery to me). That said, the overall tenor of fourth quarter employment reports suggest an economy growing around trend growth. Better, but not good enough to prompt a policy response from the Fed. The headline NFP gain was 103k overall, 113k private. Consensus had been looking for something around 140k at the beginning of the week. On the upside, the BLS revised up the October and November numbers, so that the average monthly NFP gain during the fourth quarter was 128k, pretty much right in the middle of the 100k to 150k estimates of growth required to keep a lid on unemployment.
Massachusetts court voids Foreclosures – From Bloomberg: Banks Lose Pivotal Massachusetts Foreclosure Case The state Supreme Judicial Court today upheld a judge’s decision saying two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were improperly transferred into two mortgage-backed trusts. The concurring opinion by Justice Cordy helps clarify the situation: I concur fully in the opinion of the court, and write separately only to underscore that what is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets. There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Although there was no apparent actual unfairness here to the mortgagors, that is not the point. …
Banks Lose Pivotal Massachusetts Foreclosure Case – U.S. Bancorp and Wells Fargo & Co. lost a foreclosure case in Massachusetts’s highest court that will guide lower courts in that state and may influence others in the clash between bank practices and state real-estate law. The ruling drove down bank stocks. The state Supreme Judicial Court today upheld a judge’s decision saying two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were transferred into two mortgage-backed trusts without the recipients’ being named. Joshua Rosner, an analyst at the New York-based research firm Graham Fisher & Co., called the decision “a landmark ruling” showing that at least in Massachusetts a mortgage “must name the assignee to be valid.” “This is likely to open the floodgates to more suits in Massachusetts and strengthens cases in other states,” Rosner said. “We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph D. Gants wrote for a unanimous court.
Chairman Ben Bernanke pontificates on the municipal bond market (worries are overblown), the dollar (it’s holding up), oil (don’t blame him for its rise) and the Fed’s mandate (he welcomes a debate on it) in the question and answer session of his testimony with the Senate Budget Committee. Here are the highlights so far:
- 1) Mr. Bernanke downplayed the notion that many state and local governments run the risk of defaulting and that the municipal bond market could be headed for turmoil. The muni market, he says, has been functioning “reasonably well,” with lots of bond issuance and liquidity in trading.
- 2) Mr. Bernanke says his quantitative easing policy is not to blame for the sharp increase in the price of oil. Instead, oil’s rise is the result of strong demand from emerging markets.
- 3) He welcomed a congressional debate about the Fed’s legal mandate. Mr. Bernanke said he’s not seeking a change in the mandate, but could live with a change if Congress decides to pursue one.