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Registered Investment Adviser Caleb Lawrence 

Despite fairly significant negative data the major averages enter the final hour with small gains while the Dow Jones Industrial Average breaks above 23,000 to set a new record high.

Residential construction data missed big again as starts fell a much larger than expected 4.7% in September to 1.127 million units annualized. This marks the 5th decline in the last 6-months and with 3 consecutive declines is now considered a trend. Permits fell 4.5% over the same period to 1.215 million units annualized, a 4th decline in the last 6-months. This report will subtract from 3rd Quarter GDP or Gross Domestic Product. Admittedly the hurricanes had an impact here for the current month, but not the previous months.

Mortgage activity gained 3.6% last week as per the MBA or Mortgage Bankers Association. Purchase apps increased 4.2% while refi’s advanced 3%. The 30-year contract rate for a jumbo loan increased fractionally to 4.13%.

After a trail of malfeasance and criminogenic behavior that was truly, and continues to be, a sight to behold, though nobody meaningful actually went to jail for some reason. The State of California has finally figured out that Wells Fargo is a criminogenic enterprise. After State Treasurer John Chiang tore the bank a new one over its latest scandals and the disclosures that followed in a letter that would have been funny were it not for the trail of folks victimized by the bank in the process. Adding that management fostered systematic corruption and the venal abuse of Wells Fargo customers. Amongst other choice quotes in the letter. That said the Treasurer has limited tools to go after bad actors such as this as it is really a Federal matter. What should be crystal clear at this juncture, and in fact Mr. Chiang pointed this out in his letter, is the need for real change. Given the lack of appropriate criminal punishment for the banksters in the post crisis period, and that the corporations own the politicians, lock, stock and barrel. I won’t be holding my breath.

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