Yellen Says Only Good Outcome Is Congress Raising Debt Ceiling (US CDS Remains Elevated As Child-like Biden Refuses To Negotiate The Debt Ceiling)

Treasury Secretary Janet “The Evil Hobbit” Yellen is a Statist. She can only think of an all powerful central government calling the shots since the private sector and individual liberties are something to be eliminated.

So, it is not surprising that Yellen is pushing for Congress to raise the debt ceiling without conditions. Even Democrat Senator Joe Manchin is saying that Biden is ‘Hypocritical’ On Debt-Limit Demands’.

Yellen has mostly declined to spell out what her department would do if Congress fails to raise or suspend the debt limit before the Treasury finds itself unable to cover all the government’s obligations.

Back in Mordor on The Potomac, President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling set for Friday. People familiar with the talks said the postponement was a sign that staff-level talks were yielding progress.

Biden and congressional Republicans have been locked in disagreement for weeks over raising the US federal government’s $31.4 trillion borrowing limit. GOP leaders have demanded promises of future spending cuts before they approve a higher ceiling. Biden has jinsisted on a “clean” increase, with budget talks kept separate.

Now what no one in our lame pro-government media or Congress or Administration has said is the a US debt default does NOT necessarily mean that the US walks away from its debt. Very likely, China and Japan, our two biggest foreign debt holders, will insist on debt restructuring so that the US pays some fraction of debt owed, like 80%.

But foreign debt holders are a relatively small percentage of US debt holders. The Federal Reserve is the largest single borrower, thanks in part to Yellen who has formally Federal Reserve Chair,

Of course, financial entities like Vanguard, Blackrock and Fidelity are the largest holders of US debt. Since pensions invest heavily with these enetitites, the Federal government would restructure the debt rather than outright default.

US CDS 1Y continues to remain high as Biden/Yellen/Schumer play chicken with the lives of the American middle class while the political donor class is clamoring for endless spending and wealth transfers.

Remember, Biden, Yellen and Schumer all Statists and believe that their job is growing Federal government to wear it is all powerful and their donors get billions in subsidies and wealth transfers. You don’t think green energy subsidies make any common sense, do you? Wind turbines (aka, whale and eagle killing machines) are ineffective. We need nuclear power but Progressives fear nuclear power as much as they have Donald Trump.

US Credit Default Swap Price 1Y Remains Elevated As Clueless Joe Defies Republican Budget Cuts, US Treasury 2Y-3M Yield Curve Inverts To Lowest In History

Ok, it is well-known that Biden was the stupidest man in the US Senate. And with Washington’s Patty Murray in the Senate, that is quite an accomplishment.

But Biden is President and is still stupid and spiraling down the dementia rabbit hole. He is blaming Republicans for their budget proposal to end the debt ceiling crisis despite saying previously that he would negotitate. Apparently, Biden’s puppet masters are telling him to risk default by playing the blame game.

So, US credit default swap (CDS 1Y, SR, EURO) price remains elevated which indicates that Biden, Yellen and Schumer may actually default on US debt.

As M2 Money growth crashes and burns, the US Treasury 2Y-3M yield curve inverts to lowest in history.

The Highlander Banking System: PacWest Says in Talks With Potential Partners After Share Plunge (But Powell Promise That The Banking Crisis Is Close To Over)

As Connor MacLeod said in the film Highlander, “There can only be one!” The US banking system under Joe Biden’s Reign of Error is like the film Highlander: apparently, there can only be one bank. And it is likely JP Morgan Chase.

Take the JP Morgan Chase (JPMC) acquisition of First Republic Bank:

In Acquiring First Republic Bank, JP Morgan Has:

Bypassed laws against acquiring bank while controlling 10%+ of US deposits
Shared $13 billion in losses with the FDIC
Received a $50 billion loan from the FDIC
Effectively bought back its own deposits
Expects to profit $5 billion+ over the next 5 years

This crisis has taught us that rules don’t matter in times of panic, particularly to regulators.

And now we have PacWest Bancorp. Lender says it’s been approached by potential investors. Bill Ackman warns US regional banking system at risk.

The turmoil at PacWest shows how investor angst still remains elevated after a string of failures and deposit outflows in the sector despite Federal Reserve Chair Jerome Powell’s assurance Wednesday that authorities were closer to containing the crisis. It’s reignited the debate over whether more US regional lenders will fall after this year’s collapse of SVB Financial Group’s Silicon Valley Bank, Silvergate Capital Corp., Signature Bank and most recently First Republic Bank.

Smaller banks are under pressure after a year of interest-rate hikes hammered the value of their bond holdings and drove unrealized losses to an estimated $1.84 trillion. Trouble in commercial real estate is adding to the pain, while depositors take their money out to seek better returns elsewhere. These stresses have put the spotlight on these lenders, which typically have fewer resources to defend themselves.

We are seeing a consolidation of the banking system .. again as smaller and regional banks fail and get gobbled up by the Too-Big-To-Fail (TBTF) banks like … JP Morgan Chase.

Biden’s Reign of Error is not over yet. His campaign slogan (which was also Bill Clinton’s campaign reelection slogan) is “Finish the job!” With Biden’s idiotic mortgage idea of punishing borrowers with good credit and giving subsidies to those with bad credit, Biden is trying to finish off the US economy and banking system.

We are in for more hell.

The Punisher! Biden “Punishes Responsibility” As New Mortgage Equity Program Begins

Joe Biden should be nicknamed “The Punisher” for his new woke mortgage idiocy.

Starting yesterday, the Federal Housing Finance Agency’s mortgage pricing adjustments will increase fees for borrowers with high credit scores while reducing costs for those with subpar credit scores. This upside-down policy is blatantly socialism, and one can’t help but wonder if anyone in the Biden administration learned anything from the subprime mortgage meltdown that occurred more than a decade ago.

As part of the Biden administration’s plan to make housing affordable for everyone (we’ve seen this story before), upfront fees for loans backed by Fannie Mae and Freddie Mac will be adjusted based on the borrower’s credit score. Borrowers with high credit scores will pay more in fees, while those with lower credit scores will pay less.

The Wall Street Journal cited data from Evercore ISI that shows borrowers with credit scores between 720-759 who make around 15-20% down payments will see loan-level pricing adjustment (LLPA) costs rise by .750%. Inversely, under the new adjustments, risky borrowers with a credit score below 639 and who put down only 5% of the value of their home will only have to pay 1.750%, compared with 3.750% under old rules.

Backlash over LLPA changes prompted the FHFA to publish a statement last week, calling such concerns “a fundamental misunderstanding.” The Biden administration ensures the new changes are meant to help those with poor credit scores obtain homes amid the worst housing affordability in a generation. Note that Biden did not speak on this himself since he would undoubtedly get confused and call people names. And get lost leaving the podium.

According to the FHFA, the new adjustments will redistribute funds to reduce the interest rate costs paid by risky borrowers. This sounds like socializing home buying to us.

Even more alarming is data from the American Enterprise Institute found that default rates of Fannie/Freddie owner-occupied 30-year fixed-rate purchase loans acquired in 2006-2007 were between 39.3% and 56.2% for borrowers with credit scores between 620 and 639 and less than 4% down payments. Those with credit scores between 720 and 769 and 20% down payments had default rates between 4.2% and 8.8%.

Joe Biden’s new nickname is “The Punisher.” Not only for this sick and twisted theft from people who work hard and are careful with their credit, but also for his crazy obsession with going green and driving energy prices (and inflation) through the roof.

The Core! US March Core PCE Prices Remain HOT At 4.6% YoY Despite Fed Crashing M2 Money Growth, March Personal Spending Slows To 0% MoM (Taylor Rule Suggests 10.27% Target Rate)

March’s Personal Consumption Expenditures Core Prices remain HOT despite The Fed crashing M2 Money growth. PCE Core price growth remained elevated at 4.6%.

Personal spending in March slowed to 0% growth.

The Taylor Rule infers a Fed Funds target rate of 10.27% Alas, we will never get there.

Is That All There Is? US GDP Grows At A Pathetic 1.1% QoQ Rate Despite Massive Spending Spree By Biden, Gross Private Domestic Investment Crashes By -12.5% QoQ (Bad Return On $3.37 TRILLION In Spending)

Crooner Peggy Lee said it best: Is that all there is?

Unfortunately, US GDP grew at a pathetic 1.1% QoQ.

Official estimates from the Congressional Budget Office (CBO) show that, since January 2021, legislation signed by President Biden has set in motion a record $3.37 trillion in new spending. And for all that spending, we get a pathetic 1.1% QoQ growth rate?

Inflation continues to be 4% QoQ despite M2 Money growth collapsing.

Gross private domestic investment crashed by -12.5% QoQ.

This is Biden’s idea of a strong economy? His lame campaign slogan is “Let’s finish the job!” Please don’t Joe!

And take Janet “The Evil Hobbit” with you!

Recession Alert! Philly Fed Crashes To -22.8 For April (Slippin’ Into Darkness)

The US economy is slippin’ into darkness.

The Philly Fed NBOS General Business Activity Region Diffusion Index SA crashed to -22.8 in April.

And today’s Fed Funds Futures data points to a return of The Bernanke/Yellen “Low Rider” policy for rate management.

Why can’t the corporate media, AOC and Tucker Carlson be friends?

Life Under Biden! US Sovereign Risk, US Debt Roar To Record Highs As Inflation Remains High … In One Chart!

This is life under Joe Biden. Record sovereign risk, record high debt, near 40-year highs in inflation, a hot war in Ukraine with Russia, failure of DOJ/FBI to do anything about the content of Hunter Biden’s laptop, repression of free speech, soaring crime, out of control borders. Should I keep going? It is a disastrous mess created by Obama/Biden and their creepy allies.

US sovereign risk just hit 130, the highest since CDS was recorded. This alligns with Biden/Congress massive borrow and spend policies where Federal debt has soared to it highest level in history. Inflation, while cooling, remains high.

On the housing front, REAL national home price growth is negative which makes sense since REAL average hourly wage growth has been negative for the last 24 months.

And just over the past year, commericial bank deposits are falling like a paralyzed falcon.

Biden and Obama’s chief hack in the White House, Susan Rice, are burning down the house.

And she was.

Out Of Time? US Credit Default Swap 1Y Breaches 100 As US Treasury Curve Remains Inverted And M2 Money Growth Crashes

The US is beginning to be out of time for agreeing on a debt limit increase. But you don’t need a fortune teller to tell you that Biden and McCarthy will eventually agree to increase the US debt limit because everyone in Washington DC love to borrow and spend money. Regardless, we are seeing the 1-year US Credit Default Swap (SR, EUR) rise above 100, higher than during the 2008/2009 financial crisis.

This is occuring as the US Treasury 10Y-2Y yield curve remains inverted and M2 Money growth has crashed.

But never fear! The Evil Hobbitt (aka, Janet Yellen) is still US Treasury Secretary. You know, the one who left interest rates too low for too long (TLFTL) as Federal Reserve Chair, then tightened as soon as Donald Trump was elected President.

Alarm! US M2 Money Growth Crashes To -3.128% YoY As Fed Depthcharges US Economy To Fight Inflation (Fed Funds Rate Expected To Rise Twice, Then Depthcharge Like Das Boot)

Alarm!

America’s mega bank, The Federal Reserve, is slowing M2 Money growth so rapidly that it looks like it is depthcharging the US economy.

Inflation in the US has been booming since 1) Biden attacked fossil fuels, 2) The Fed’s overresponse to Covid (+27.48% YoY on February 22, 2021 near the beginning of Biden’s Reign of Error). and 3) out of control Federal spending under Biden, Pelosi and Schumer.

Fed Funds Futures point to two more Fed rate hikes before The Fed drop rates like a depthcharge. This depthcharge will help create a rekindling of asset bubbles.

The Taylor Rule suggets a Fed Funds Target rate of 11.77 while the current target rate is only 5%. This is called “leading from behind.”

Here is The Fed monitoring the US economy in order to decide on firing more financial torpedos!