Tuesday, December 10, 2013
6:50 PMObama pollution rules weighed by sympathetic Supreme Court
- Supreme Court justices today expressed sympathy for the EPA’s approach to air pollution that crosses state lines.
- The rule that would curb emissions from coal-fired power plants in 28 states - struck down by the D.C. Circuit Court of Appeals and being tested by power companies, states and miners - has never taken effect, but it would force companies to either shutter old plants or invest billions of dollars in pollution-control technology.
- The court’s four Democrat appointees, at times joined by Chief Justice Roberts and Justice Kennedy, suggested the EPA had adhered to the language of the Clean Air Act; only Justice Scalia seemed convinced the rule could be unfair to some states.
- ETFs: KOL, XLU, IDU, VPU, RYU, PUI, UPW, FXU, SDP, PSCU, FUTY, UTLT.
- Coal names: PCXCQ, BTU, WLT, CNX, ACI, ANR, JRCC, YZC, ARLP, AHGP, NRP, PVR, PVG, PVA, OXF, CLD, WLB, RNO.
6:31 PMHouse, Senate negotiators agree to budget deal
- House and Senate negotiators announce a budget deal that sets spending levels for the next two years and replace some of the automatic budget cuts in the sequester; if agreed to by the full House and Senate, the deal would head off a government shutdown next month.
- Some conservative groups are trashing the deal and urging rejection.
5:33 PMGundlach reiterates bullish MBS call
- Rising interest rates have killed refinancing - eliminating prepayment risk - and home prices continue to move higher, a particularly bullish cocktail for non-agency MBS, says Gundlach (DBL, DSL), who finds those securities vastly more attractive than high-yield paper (HYG, JNK).
- Asked about Annaly (NLY) - an owner of agency MBS - Gundlach says he likes it and likes its management, but won't be buyer until after the dividend is cut to something more in line with what core earnings might be.
- "Something for Nothing" slides and webcast
- Non-agency MBS players include: MTGE, MFA, DX, TWO
- Related mREIT ETFs: REM, MORT, MORL
- High-yield ETFs: HYG, JNK, HYS, HYLD, SJNK, PHB, SJB, ANGL, XOVR, UJB, QLTC, SHYG
- Previous: "Freaking out" about interest rate risk
4:58 AMAmericans continue to recover wealth lost during recession
- The net worth of U.S. households and nonprofit organizations increased 2.6% in Q3 to $77.3T, although that's still around 1% below the pre-recession peak, when adjusted for inflation.
- Rising shares prices boosted the figure by $917B and increasing home values by $428B.
- Total mortgage debt rose 0.9% on quarter, while consumer debt climbed 6%.
- Debt as a proportion of income was 99%, down from a high of 125% before the recession. (PR)