Darkness, Darkness! Recession Fears Push Mortgage Rates Down And MBA Purchase/Refi Applications Up (Home Prices Up 20.9% YoY In May)

Biden’s new campaign theme for the midterms: economic darkness, darkness.

Well, this is one way to get inflation under control … crash the economy. And inflation fears growing, we are seeing mortgage rates declining and mortgage applications increasing.

Mortgage applications decreased 5.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 1, 2022. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day.

The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 17 percent lower than the same week one year ago.

The Refinance Index decreased 8 percent from the previous week and was 78 percent lower than the same week one year ago.

In May, CoreLogic’s national home price index was up 20.9% YoY. But home prices are expected to grow at a 5.6% clip over the coming year.

Today, we are seeing global sovereign debt yields declining which should help US mortgage rates decline further.

And the US Treasury yield curve (10Y-2Y) continues to invert, signaling recession.

Under Bidenflation, we will be forced to eat the daisies instead of meat.

Bidenflation Strikes! Dow Down 2% As Recession Fears Grow (Check Out M1 Money Growth!)

Lightning strikes!

Inflation has been a disaster for millions of Americans. As inflation grows (highest in 40 years), fears of recession are jolting markets.

The Dow today is down 2%.

Then again, Europe is down even more.

My favorite chart for explaining the surge in inflation is M1 Money Stock around the Covid outbreak in early 2020. Which has NOT been removed.

The US Treasury 10Y-2Y yield curve just inverted.

No, this is not a real ECB currency, but it might as well be.

Ted Day! Spread Between 3M Libor And 3M Treasury Yield Rising Fast (Recession Alert!)

Its Ted Day!

TED refers to the difference between the three-month Treasury bill and the three-month LIBOR based in U.S. dollars, a measure of fear in the market.

The 3-month TED spread is rising awfully fast. A sign of impending recession.

US bank credit default swaps (CDS) are rising fast as inflation gets ugly.

The US Treasury 10Y-3M curve is bumping against the zero barrier.

I am still shaking my head at President Biden chastising gasoline stations for not lowering prices at the pump when refiners are near full capacity and the Biden Administration is doing nothing to increase the supply of US-source non-green energy.

But what the heck. It’s Ted Day!

Misdirection On Inflation? US Refineries Near 100% Capacity As Gasoline/Diesel Prices Rise (Fed Hasn’t Removed Monetary Stimulus Yet)

The Biden Administration blames everyone else for the highest inflation in 40 years (like Russia), everyone other than themselves, of course.

Amazon’s Jeff Bezos got it right — massive Federal spending (too much stimulus pumped into markets in a short period of time) is a major inflation culprit.

Amazon founder Jeff Bezos took aim at President Biden, arguing the Biden administration’s “misdirection” is harmful to the country while pinning the blame for inflation on the president.

“In fact, the administration tried hard to inject even more stimulus into an already over-heated, inflationary economy and only Manchin saved them from themselves,” Bezos said on Twitter Sunday. “Inflation is a regressive tax that most hurts the least affluent. Misdirection doesn’t help the country.“

Well stated. But other factors are contributing to inflation such as excessive monetary stimulus and rising gasoline/diesel prices thanks to Biden’s halt of fossil fuel drilling. And then Biden asked gas stations to lower prices (only a career politician like Biden would think that this is a good idea).

The problem facing Americans is rising gasoline/diesel prices and refineries operating at near 100% capacity. The theory coming out of Washington DC is that if DC raises gasoline prices enough. But we are seeing refineries at near full capacity DESPITE gasoline prices being up over 100% since Biden took office in January 2021.

And The Federal Reserve still has not removed the Covid-related monetary stimulus yet.

Fourth of July has become a Weekend at Joe’s.

Heartaches On Heartaches! US Court Ruling May Take 70,000 Truckers Off Road, Spur Jams (Diesel Prices UP 118% Under Biden, Things Just Keep Getting Worse)

Hey, I thought Mayor Pete Buttigieg, the US Transportation Secretary, was supposed to unclog the supply-chain crisis! Instead, we get heartaches on heartaches as diesel prices rise 118% under Biden AND now the bottle-necks may get a lot worse.

A US Supreme Court decision that could force California’s 70,000 truck owner-operators to stop driving is set to create another choke point in already-stressed West Coast logistics networks, a truckers’ organization said.

“Gasoline has been poured on the fire that is our ongoing supply-chain crisis,” the California Trucking Association said in a statement following the Supreme Court’s decision to deny a judicial review of a decision of a lower court, a process known as certiorari.

“In addition to the direct impact on California’s 70,000 owner-operators who have seven days to cease long-standing independent businesses, the impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening runaway inflation,” the CTA said.

The association asked the Supreme Court for a review of a case challenging California’s Assembly Bill 5, a law that sets out three tests to determine whether a worker is an employee entitled to job benefits or an independent contractor who isn’t. The trucking industry relies on contractors, and has fought to be exempt from state regulations for years because of federal law.

With few exceptions, the relationship between independent truckers and their carriers, brokers and shippers will be governed by the tests.

As if US consumers aren’t getting crushed by rising prices already. In response to the Covid outbreak, The Fed slammed its foot on the money accelerator along with Federal government stimulus. Throw in Biden’s anti-drilling executive orders, and we have a nightmare.

Consumer confidence is already crumbling under inflation and rising energy prices.

Let’s get ready to stumble.

The End? Home Sellers Are Slashing Prices in Sudden Halt to Fed’s Stimulypto Boom (Dallas, Phoenix AZ And Las Vegas NV Seeing >20% Price Cuts)

As The Fed raises rates in their attempt to wrangle inflation, we are seeing an about-face in the US housing market.

The pandemic-related Fed monetary stimulypto begat a housing boom that is careening to a halt as the fastest-rising mortgage rates in at least half a century upend affordability for homebuyers, catching many sellers wrong-footed with prices that are too high. It’s an astonishing turnaround. Just a few months ago, house hunters felt pushed to make offers within days, waive inspections and bid way above asking. Now they can sleep on it and maybe even shop for a better deal.

It doesn’t mean real estate is heading for a crash on the order of 2008. But when a market reaches these heights, even a drop toward normalcy will feel steep. And of course, a recession could make everything worse.

Dallas, Phoenix AZ and Las Vegas NV are leading in the price-slashing derby.

Is this the end for the home price bubble?

Or is the music over with The Fed tightening monetary policy to fight inflation.

Wipe Out! Bitcoin Falls Below $20,000 As Crypto Slaughter Continues (Good Luck With Soaring Gasoline And Food Prices On July 4th Weekend!)

Wipe out!

Crypto markets have slumped, adding to a decline that has wiped away some $2 trillion of market value and left market participants uneasy heading into the long Fourth of July weekend.

Bitcoin has fallen below $20,000 as the US Dollar strengthens.

At least Dogecoin is up today.

Enjoy your expensive 4th of July weekend! As long as you don’t eat much due to expensive food prices or drive anywhere due to high gasoline prices.

And government bonds on course for worst year since 1865 and President Abraham Lincoln (then President Andrew Johnson).

At least the Biden Administration is doing what The New World Order is making them do. Or The Liberal World Order.

Biden looks like he is saying “Kiss me you Statist fool!”

Slip, Slidin’ Away! US Q2 Real GDP Descends To -2.1% (Late In The Evening For The Midterm Elections!)

Slip slidin’ away
Slip slidin’ away
You know the nearer the midterm elections
The more you’re slip slidin’ away

As Bill Clinton once said about elections, “It’s the economy, stupid.”

Which is bad news for Biden and Democrats after Q1’s bad GDP report of -1.6% “growth”, we now see the Atlanta Fed’s real-time GDP report for Q2 at -2.1%.

Today’s miserable construction spending report helped tank Q2’s real GDP forecast.

Its getting late in the evening since the midterms are only a couple of months away and Biden’s approval rating is miserable.

Sing it, Joe!

Reversal Of Fortune! Fed Funds Futures Point To Feb ’23 Reversal Of Fed Rate Hikes (Recession Alert!) As Crippling Inflation Soars

No, not the Claus von Bülow kind of reversal of fortune where has was accused of killing his wife. But this murder is coming from The Federal Reserve hiking interest rates even when they know that doing so could lead to a recession. And Biden’s anti-fossil fuel energy policies.

“Fed Chair Powell Admits That Fighting Inflation Could Lead To Recession.”

And investors in the Fed Funds Futures market see The Fed changing its rate-hiking ways in February 2023.

Inflation is what is killing the US economy and millions of households. Financially speaking.

And Biden’s approval ratings are sinking faster than The Titanic. In other words, he’s just killing us.

And then we have turbulence in the housing market as Fed intentions are driving up mortgage rate which helped listings with price reductions at 98.2% YoY.

Biden’s energy policies plus The Fed’s war on inflation will result in an economic reversal of fortune.

S&P 500 Posts Worst First Half Rout Since 1970 As 10Y Treasury Yield Tanks 14 Basis Points (Biden Approval Drops To 38.3% On Rising Inflation, Gasoline Prices)

Run runaway! For safety to Treasuries.

A “recession shock” begins for markets following the worst first-half for the S&P 500 in more than 50 years.

And investors are running to Treasuries for safety as US Treasury 10-year yields tank 14 basis points.

Biden’s approval rating has collapse with inflation and rising gasoline prices. Note that Biden’s approval rating dropped below 50 in mid-August 2021, long before the Russian invasion of Ukraine in late February 2022. Gasoline prices had risen 49% since Biden’s inauguration as President, but before the Russian invasion of Ukraine.

Winter is coming!