On the commodity side, Spot Silver is up 1.46%. Iron Ore is up 1.60%, but I don’t think my neighbors would appreciate me taking delivery on 10 tons of iron ore on my driveway! Heating oil is up 2.90%.
On the crypto side, bitcoin is up 20.84 (0.08%) with Ethereum up slightly more.
Bitcoin and silver doing well as the US Dollar loses ground since September 2022.
I wonder if Biden’s proposed railroad from the Pacific to the Indian Ocean will generate massive industrial production growth? Is this more Bidenomics??
Industrial production edged down 0.2 percent in May following two consecutive months of increases. The Bloomberg Econoday consensus was a small increase.
In May, the index for manufacturing ticked up 0.1 percent, while the indexes for mining and utilities fell 0.4 and 1.8 percent, respectively.
The index for motor vehicles and parts moved up 0.2 percent in May after jumping nearly 10 percent in April.
At 103.0 percent of its 2017 average, total industrial production in May was 0.2 percent above its year-earlier level.
Capacity utilization moved down to 79.6 percent in May, a rate that is 0.1 percentage point below its long-run (1972–2022) average.
Peak Months For 5 Indexes
Industrial Production: September 2022, 103.5
Manufacturing: October 2022, 101.2
Motor Vehicles and Parts, new high this month, 112.1
Consumer Durable Goods: April 2022, 109.4
Manufacturing Durable Goods: January and April 2023: 129.8
Despite the strength in autos, no debt led by Biden’s EV push and subsidies, manufacturing production is still below where it was seven month’s ago.
A long term chart better shows the trends.
Industrial Production Index Since 1972
Industrial production data from the Fed, Chart by Mish
Recession Lead Time After Industrial Production Peak
Industrial production data from the Fed, peak calculation and Chart by Mish
Peaks in industrial production tend to mark recessions.
Industrial production and manufacturing industrial production peaked eight and seven months ago respectively.
Politically speaking, if you are going to have a recession on your watch, it’s much better to have it early in your term than heading into an election campaign. But here we are.
Inflation is still not under control, and this economy is certainly not firing on all cylinders.
Tomorrow is the Federal government’s inflation report. As it stands today, overall inflation is slowing as M2 Money growth crashed. Core inflation remains persisitently high (white line), rent is still getting worse (orange dotted line at 8.1% YoY. What about food? Online food prices are up 8.2% YoY.
Shopping online is a good place to find cheaper computers and appliances, but grocery prices are still rising at a fast clip.
Prices of consumer goods sold online fell 2.3% in May in the US, the ninth consecutive month of declines and the biggest drop since the pandemic started, according to data from Adobe Inc. That was mainly due to steep decreases in discretionary categories.
Essential items like food, pet products and personal care, however, are seeing persistent inflation. Online grocery prices increased 8.2% from last year — although the pace of inflation has been abating since peaking at 14.3% last September.
Americans have been shifting more of their discretionary purchases to services over the past year, cutting spending on items for the home.
Online prices for appliances were down 7.9% in May from last year, the largest drop in digital-prices data from Adobe going back to 2014. Online prices for computers slumped 16.5% and electronics were down 12%.
The Adobe Digital Price Index was developed with the help of Austan Goolsbee before he became president of the Federal Reserve Bank of Chicago this year. The gauge analyzes one trillion visits to retail sites and more than 100 million items to track price changes.
Yes, Biden and Congress have levied a devastating tax on Americans. Rent and food are two of the largest household expenditures and they are up 8.1-8.,2% YoY.
Nicolas Maduro of Venezuela must be envious of Joe Biden. I don’t think even Maduro has the stones to have his politiical opponent charged with espionage in the run-up to a Presidential election. Particularly when the US President has been bribed by China and Ukraine and has similiar sensitive document hoarding issues (at least Trump didn’t leave boxes of sensitive documents in a garage like Biden did when he keeps his Chevy Corvette).
So where do we sit today after Biden has signed the debt ceiling increase and massive spending splurge?
First, look at the crashing bank deposit problem. Well, the solution is for The Fed to fire up the money printing press! Keep on printing!
This not surprising if you have read Nobel Laureate George Stigler’s treastise on regulatory capture. Essentially, big corporations (big media, big tech, big banking, big pharma, big defense, big agriculture, etc.) essentially own Congress, the Biden Administration and Federal regulators. After all, Biden has been bribed with millions of dollars by China and Ukraine and, like a Banana Republic, has is avoiding prosecution and instead prosecuting his political opponent, Trump. Don’t worry, if they get Trump that will indict DeSantis for something.
US debt stands at $31.8 TRILLION with $188 TRILLION in unfunded liabilities (which means higher personal taxes and much more debt).
One has to wonder about The Feral Reserve. Since The Great Recession of 2008, The Federal Reserve has printed a staggering amount of money (know as QE). There is still about $8.3 TRILLION in monetary stimulus sloshing around the economy.
And M2 Money printing is up 167% since November 2008.
So, despite the talking heads from The Fed and CNBC, etc blathering about Fed tightening, there remains over $8 TRILLION in monetary stimulus chasing asset prices.
Is The Fed ACTUALLY the US economy? Or is The Fed the financing arm of the Democrat party?
Yes, The Fed looks like they are pausing .. rate hikes.
Biden signed the debt ceiling bill craftted by McCarthy (RINO-CA) and Schumer (Communist-NY). Its allows for uncontrolled spending and borrowing for at least 2 years. And as Milton Friedman once said “There is nothing more permanent than a temorary Federal program … or debt limitiations.
With Biden signaling that government has gone wild with no controls on fiscal responsibility (and Elizabeth Warren flailing her arms and screaming for regulations on cryptocurrencies), cryptos today are getting demolished.
China, Japan and the BRICs realize that there are no controls on ANYTHING coming out of Washington DC. Insane spending, an insane Federal Reserve, corrupt DOJ and FBI.
Don’t kid yourself. The talking heads at The Federal Reserve (more like Feral Reserve) are only about halfway there in terms of rate hikes. There is still over $8 trillion in monetary stimulus sloshing around the economy.
The Taylor Rule implies a target rate of 10.12% while the current target rate is just over half that rate at 5.25%. A little over halfway there and The Fed is likely to pause rate hikes.
Of course, Yellen and Powell think The Taylor Rule is a pork roll product from Trenton, New Jersey.
Well, Biden and McCarthy have agreed in principle to a budget revision, raise the debt ceiling and avoid a US debt default. The Uniparty strikes again! No restraint of reckless Federal spending t speak of . The big donor class wins and middle class Americans lose.
Mike Shedlock (aka, Mish) makes a good point: the US is already in recession if we look at GDI (gross domestic income) rather than GDP (gross domestic product). The US has already declined two consecutive quarters in terms of negative GDI growth.
White House and Republican negotiators tentatively narrowed differences but were still clashing Friday on key issues as the Treasury Department signaled extra time was available before a potential US default.
Treasury Secretary Janet Yellen announced the department expects to be able to make payments on US debts up until June 5 if lawmakers fail to act on the US debt ceiling. That set a more pointed date for a potential default but is also four days later than her previous comments eyeing trouble as soon as June 1.
The new so-called X-date buys negotiators for House Speaker Kevin McCarthy and President Joe Biden more time to strike a deal. The negotiating teams haven’t met in person since Wednesday but spoke late into the night Thursday and were in regular communication throughout the day Friday.
Yes, there isn’t really a crisis folks. Treasury collects tax dollars continuously so Treasury can prioritze debt payments and other disbursements. The only crisis is in the minds of the media.
Deputy Treasury Secretary Wally Adeyemo warned Friday that payments to Social Security beneficiaries, veterans and others would be delayed if there’s a default. But he said he’s gaining some confidence an agreement will be reached.
We’re making progress and our goal is to make sure that we get a deal because default is unacceptable,” Adeyemo said in an interview on CNN. “The president has committed to making sure that we have good-faith negotiations with the Republicans to reach a deal because the alternative is catastrophic for all Americans.”
The accord would also include a measure to upgrade the nation’s electric grid to accommodate sham renewable energy, a key climate goal, while speeding permits for pipelines and other fossil fuel projects that the GOP favors, people familiar with the deal said.
The deal would cut $10 billion from an $80 billion budget increase for the Internal Revenue Service that Biden won as part of his Inflation Reduction Act (big whoop). Republicans have warned of a wave of agents and audits while Democrats said the increase would pay for itself through less tax cheating.
What is taking shape would be far more limited than the opening offer from Republicans, who called for raising the debt ceiling through next March in exchange for 10 years of spending caps. House conservatives were already balking Thursday at the notion of a small deal, with the House Freedom Caucus sending a letter to McCarthy demanding he hold firm.
Treasury’s cash balance is at a low point and The Administration threatens Social Security recipients and veterans of delayed payments … while Biden goes on vacation for Memorial Day weekend to honor veterans??
Of course, Yellen know that all The Fed has to do to increase M2 Money growth again.
Meanwhile, bankrupties among large companies are highest since 2010.
In the mortgage market, current coupon nominal spreads 9Agency MBS 30Y coupon over Treasuries) are soaring.
Meanwhile, to honor US veterans, Biden goes on Memorial Day weekend and threaten veterans with delays in veteran benefits. Sigh.
Is Joe Biden REALLY Reverend Kane from Poltergeist II??
Confounded Interest - Anthony B. Sanders 
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