Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on bigger issues.
So what’s the big deal about this weekend being the 100th day in office for President Donald Trump? For those who need reminding, the president put forth a 100-day plan and we’re looking to see if he accomplished what he originally set out to do.
In fact, while fundraising, his election team referred to the plan as his “Contract with the American Voter.”
See for yourself by clicking here.
The New York Times’ Linda Qiu put some context around the victory lap President Trump took this weekend in Quaker Country.
“On his 100th day in office, President Trump offered familiar misleading defenses and boasts about his early progress, his setbacks and his predecessor.
Mr. Trump began his Saturday night rally in Pennsylvania with attacks on the news media, before giving himself oversize credit for accomplishments. He followed a similar pattern in an interview with CBS’s “Face the Nation” that aired Sunday morning.”
So what does an economist think of all this?
“At this point, we believe underlying momentum will keep the economy growing at a modest pace over the next few years,” said SP Global U.S. Chief Economist Beth Ann Bovino. “We expect policy changes, including measures to cut back regulation, a simple debt-drive set of tax cuts ($500 billion) and a small infrastructure package ($100 billion) will likely give 2018 growth an extra boost, though we still expect growth to be within the 2% to 2.5% range the U.S. economy has tracked on average since 2010.”
Here is her in-depth analysis of two potential GDP outcomes, one positive, one negative:
In our positive scenario, more deregulation comes with larger tax reductions and a bigger infrastructure package with limited changes in trade and immigration policies. We assume a federal income-tax reduction for corporations and households in the neighborhood of $1 billion stretched over the next 10 years, with cuts that are roughly equal, proportionately, for companies and individuals. We assume Congress would pass a $200 billion (little above 1% of real GDP) public infrastructure-spending plan. In 2018, the federal deficit would be almost $120 billion higher than in our baseline scenario. Based on these assumptions, the U.S. would grow 2.4% this year and 2.9% in 2018 (versus 2.3% and 2.4%, respectively, in our baseline). The economy would benefit not only from lower taxes and increased infrastructure spending, but also from reduced policy uncertainty beginning the fourth quarter of this year.
However, in our downside scenario, President Trump’s campaign promises fail to materialize and gridlock leads to rigor mortis as political paralysis and protectionist concerns set in to kill the postelection optimism. More uncertainty for businesses keeps investments at bay, and this would feed into already disappointing productivity growth. In this scenario, stock markets pull back and consumer sentiment falters. Together, real GDP growth would slip to 1.4% this year and 1.5% in 2018.
Meanwhile, let’s move over to a more congenial part of the world: New York City.
The Big Apple, known worldwide for being filled with the globe’s greatest citizens, is this week hosting the Mortgage Bankers Association Secondary Conference.
HousingWire editor Sarah Wheeler and reporter Kelsey Ramirez will be providing coverage this week, along with our live in firebrand Christopher Whalen and a few extra guest blogs. Be sure to check back later every day, and often.
So how is it going at the conference tonight?
Sarah Wheeler sends her thoughts:
“I would say the mood of the conference so far reflects the energetic setting of Times Square, and the tone set at the first session was optimism that the Congress and new administration are willing to work with the industry to reform Fannie and Freddie in a way that helps consumers and the industry.”
Speaking of Secondary, what’s the big deal about the latest bond transaction from Lone Star Funds. Well, according to Matt Scully of Bloomberg, plenty.
And he has a point, we are seeing life being slowly breathed back into a private-label mortgage securities market. And thankfully, reporters such as Scully have the wherewithal to treat these deals fairly.
Yes, these are low-doc mortgages being used as collateral. “In this case, the low-documentation mortgages backing the bonds, originally made by Sterling Bank Trust, include other features that make them less risky,” Scully writes.
It’s important to remember our history so we are not doomed to repeat it, but it’s enjoyable to see coverage that doesn’t punish for the sins of the father.
Enjoy your week, everyone!