The Daily Dish - February 24, 2010

It’s such a defeating feeling. You finally start to see your driveway and front lawn emerge from the layers upon layers of snow fall we’ve seen this winter. And then we get slammed with another wave. This hasn’t been the coldest Cleveland winter, but I can’t remember looking at snow on the ground for this long a stretch.

The Cavs got back on track last night with a 105-95 win over the New Orleans Hornets that was tougher and closer than the final score would seem to indicate. It was a playoff-style win. The Cavs played pretty much a seven man rotation (Jamison started, Andy and Delonte off the bench, Hickson didn’t even play), really buckled down defensively late, and won the last five minutes of the game behind their star players. Good to see Delonte West really starting to look like the old Brotha Redz. He shut down Hornets rookie guard Marcus Thornton (who dropped 37 on us) late, and had a big block and a big three with about a minute left that helped seal it. Mo Williams on the other hand looks lost right now. He’s been a matador defensively all season and his effort and offensive game are very shaky right now as well.

Luckily for the Cavs they are still 5.5 games up on Orlando for the #1 seed in the East and have about 25 games to get everything clicking on all cylinders.

More trouble for Rich Rodriguez and Michigan. The NCAA has issued a notice of allegations to the University of Michigan alleging five major potential violations in its football program.

What a mess they have on their hands up there in that state up north. It’s just one thing after another, and it should be no surprise to anyone that’s followed Rodriguez’s career.

As much as I like to rag on Michigan, I respect the school and the institution. The way I was brought up, you cheer for the Buckeyes first and the Big Ten second. And that you should cheer for Michigan every week (I still struggle with that) to make the win over then in late November all the more meaningful and sweet. Also, as we’ve seen these last few years, a weak Michigan generally means a weak Big Ten.

It’s mind-boggling to me that they haven’t cut bait on Rodriguez yet, and at this point, it seems as if they are in denial about the situation. And it’s getting worse, one allegation at a time, as Rodriguez drags that once proud football program through the mud.

Quote of the day …

Bob: It gets a whole lot more complicated when you have kids.
Charlotte: It’s scary.
Bob: The most terrifying day of your life is the day the first one is born.
Charlotte: Nobody ever tells you that.
Bob: Your life, as you know it… is gone. Never to return. But they learn how to walk, and they learn how to talk… and you want to be with them. And they turn out to be the most delightful people you will ever meet in your life.

Bill Murray and Scarlet Johansson, as Bob Harris and Charlotte, talking about marriage and kids in the film “Lost in Translation”

Market …

Big news morning. All kinds of financial/housing sector related stories linked below.

Got a little rally in the bond markets yesterday after the release of the Consumer Confidence Index. Expected to come in at about 55.0, it came in well below that at 46.0, which was a ten-month low. Pessimism surrounding the labor markets/employment picture was the reason for the low reading. After the release, stocks went in the tank and treasury and mortgage bonds rallied. The Consumer Confidence Index is seen as one of the top indicators of near term consumer spending, which is the biggest component of the US economy. People are hunkered down right now and are not spending. Most of the growth to the “economic recovery” has been due to manual intervention by the federal government. Yesterday’s weak Consumer Confidence report was a reminder of those hard truths.

We also got the release of the Case-Schiller Home Price Index yesterday, which tracks monthly changes in the value of residential real estate in 20 major US cities. The index as a whole rose 0.3%, which was more than expected, and matched November’s 0.3% gain. Prices fell in just five of the 20 markets included in the survey, remained flat in one and rose in the other 14.

Two notable and potentially market moving events today: January new home sales report at 10 AM, and Big Ben Bernanke gives his semi-annual monetary policy report to the House Committee on Financial Services.

New home sales have been all over the board because of the first time homebuyer tax credit, which is fueling this #’s. We had a big push before the first purported deadline in the fall, then we’ve seen huge drop offs as the deadline was extended out the end of April 2010. In December the index dropped 7.6%, pushing the annual pace of sales down to 342,000. With homebuyers back in the market to take advantage of the tax incentive, economists are looking for the annual pace to climb to about 360k.

Bernanke is walking into a hornet’s nest at 10 AM. We’re in an election year, all kinds of financial reform is being bandied about, there’s the issue of when the Fed will start raising rates, and we’ve also got the huge issue of when the Fed is going to start to pull back on some of their manual intervention into the markets. The man is earning his money right now. And we’re at such a critical juncture. A premature exit from the Fed may cause the economy to slip back into recession from higher interest rates. On the other hand, waiting too long risks the outbreak of inflation and the emergence of bubbles from easy monetary conditions. Puts things in perspective the times we feel our jobs are stressful.

News …

~ Home Purchase Loan Demand at Lowest Level Since 1997

http://www.cnbc.com/id/35557374

~ Round Two: Bernanke Faces More Grilling From Congress

http://www.cnbc.com/id/35542268

~ Fed Officials Take Aim at Financial Reform Plans

http://www.cnbc.com/id/35553714

~ HUD Secretary Requests 41 Billion for 2011 Budget

http://www.mortgagenewsdaily.com/02232010_hud_secretary_proposes_budget.asp

~ FDIC Bracing for a Wave of Bank Failures

http://www.nytimes.com/2010/02/24/business/24fdic.html?adxnnl=1&adxnnlx=1267017717-m0Er0oboTY8OaKbovbJH+g

~ Geithner May Give Regulators Leeway in Applying Volcker Rule

http://www.bloomberg.com/apps/news?pid=20601087&sid=aieZ19R8J5HI&pos=1