Monday Morning Cup of Coffee takes a look at news coming across HousingWire's weekend desk, with more coverage to come on bigger issues.

It's the week of Christmas, which means a half day on Wall Street on Thursday, Dec. 24, and a federal holiday on Friday, Dec. 25.

This short week comes after the Fed's much anticipated interest rate hike last Wednesday, which has been much discussed since then. On Friday, Jerome Powell, a member of the board of governors of the Federal Reserve, gave an interview to NPR's Kai Ryssdal on the rate hike. Here's part of their conversation:

Kai Ryssdal: Do me a favor and help us make sense of the difference between what we're finding in the reporting out there, which is a lot of people still feel stuck in this economy and with what the FOMC and chair Yellen and you guys in your statement the other day said is a recovering and strong economy. Help me make sense of that.

Jerome Powell: Sure. So the economy has recovered quite a bit since the global financial crisis. And one way to think about it is unemployment. Unemployment was at 10 percent, we lost about 9 million jobs in the financial crisis, which was the worst episode since the Great Depression, the deepest recession since the Great Depression. Since that time we've generated 13 million new jobs and unemployment has declined from 10% to 5%. So that's a really material improvement in the state of things.

That's a pretty positive take on unemployment, considering the number of people who have dropped out of the labor force or working part time. Consider these stats from the Bureau of Labor Statistics:

  • The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 2.1 million in November, accounting for 25.7% of the unemployed.
  • The civilian labor force participation rate was 62.5%.
  • The number of people employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 319,000 to 6.1 million in November, following declines in September and October.

Treasury Secretary Jack Lew echoed those sentiments on Sunday in a CNN interview. “Frankly, the U.S. economy is doing quite well. We have a lot of international headwinds, and notwithstanding that, we’re staying in a very good place," Lew said, according to a Bloomberg story. “We’re seeing strong consumer demand, record levels of auto sales, and improvements in the housing market.”

As alternative credit scoring systems gain steam, customer data — even really random facts — have become vital parts of lenders' underwriting decisions. The LA Times on Saturday looked at the pros and cons of using non-financial data to determine creditworthiness, highlighting Basix, SoFi and IOU Financial. And it's not just information from social media. From the story: 

ZestFinance collects thousands of pieces of consumer information — some submitted in an online application, some obtained from data brokers — and runs them through algorithms that judge how likely it is a borrower will repay.

Merrill acknowledges that in many cases, there's no explanation for why a particular data point helps or hurts a credit score. For instance, borrowers who write in all-caps are riskier, the firm's credit scoring system discovered after underwriting thousands of loans.

“We don't know why. It just is,” said Merrill. 
But the article also called into question the reliability of this data in determining creditworthiness. Chi Chi Wu, an attorney with the National Consumer Law Center, was quoted:
“How have they been tested to show they're predictive and relevant?” Wu said. “What if a data point is your astrological sign? Does that mean anything about creditworthiness?” 

Affordable housing in New York City got a boost on Friday when Blackstone and Ivanhoé Cambridge announced that they closed on their acquisition of Peter Cooper Village Stuyvesant Town, a large, post-World War II private residential development on the east side of Manhattan. From the Blackstone press release:

As part of the transaction, a long-term affordability program has been established to protect 5,000 below-market units, ensuring they remain affordable to moderate and middle-income families for at least the next 20 years. The agreement also offers new protections for roughly 1,400 “Roberts” units.PCVST has a combined total of over 11,200 apartments in 56 residential buildings across 80 acres of land.

Movies and holidays are made for each other, which is why, after you see Star Wars for the fifth time, you should make time to see The Big Short, the movie based on the book by Michael Lewis about the financial crisis. It came out on Dec. 11, but has understandably gotten lost in the blockbuster shuffle. But it's a crazy good movie that will make you laugh and want to punch someone at the same time. Here's how the New York Times explains it:

"At the end, your brain hurts and you feel sick to your stomach, as can happen when too much adrenaline has been surging through your system. But that queasy, empty feeling is the point: This is a terrifically enjoyable movie that leaves you in a state of rage, nausea and despair."

Who could resist that kind of promo?

No banks were reported closed by the Federal Deposit Insurance Corporation for the week ending Dec. 18.