Escape From New York And LA! NY, California And Illinois Seeing Net Out-migration Due To High Taxes/Regulations, Crime And High Housing Costs (Moving To Florida, Texas And The Carolinas)

Director John Carpenter had two films, “Escape From New York” and the less popular “Escape From LA.” Carpenter’s vision of a dystopian future with Manhattan as a prison island, filled with criminals and Los Angeles as a just a weird, dystopian area filled with gangs and sleazebags. Apparently, Carpenter read George Orwell with a splash of Franz Kafka in writing these films which are sadly becoming a reality. With Biden’s immigration “policy” (let everyone in without checking who they are) is a blueprint for a new film “Escape From The USA!” I wonder if Kurt Russell is available to reprise his role as Snake Plisken?

Like John Carpenter foretold, both California and New York are leading the nation in outmigration. BAD crime, high taxes, insane politicians and droves of illegal immigrants are making living in those state very difficult. Throw in the NY AG Letisha James and Judge Engmoron’s Marxist show trials of Donald Trump for doing absolutely nothing wrong and many people are are plain fed up. Illinois under the “leadership” of Chicago Fats (Governor J.B. Pritzker) and horrendous Chicago mayor Brandon Johnson (who makes former Chicago Mayor Lori Lightfoot almost look reasonable) is third in the nation for outmigration. Once again, high taxes, high crime, lots of illegal immigrants, and inane policies are causing people and businesses to flee. John Carpenter should do a film “Escape From Chicago.”

Where are people fleeing to? Florida leads followed by Texas, then the Carolinas, and Tennessee. Generally, these states have lower taxes, lower crime, and less intrusive politicians. E.g., no Gavin Newsom (CA), no Kathy Hochul (NY) and no J.B. Pritzker (IL).

Another reason that people are fleeing New York and California is cost of living. To be sure, Bidenomics (an insidious malinvestment plan, aka, donor-nomics) has made matters worse. Home prices (blue line) and rents (red line) has soared and are far higher than the grow in average earnings (green line). Los Angeles is wonderful if you are a celebrity like Steve Spielberg, Tom Hanks and The Office’s Jenna Fischer where you live in a mansion and are protected by the police force. But other parts of Los Angeles are filled with the homeless, illegal immigrants, rampant crime, and is simply unlivable.

Escape From New York is appropriate for today’s situation. An idiot Mayor and Governor, illegals crowding the streets and hotels, crime through the roof, illegals attacking police. And Joe Biden acting like The Duke of New York, A number One! I guess the closest person we have to Snake Plisken is Donald Trump.

On a related note, Georgia is still seeing positive net in-migration. But as the Fani Willis corruption scandals unfolds and their weak-kneed Governor Kemp does nothing, we have yet another film John Carpenter could make “Escape From Atlanta.” Or a computer game like “Call of Booty.”

Another Biden Program Bites The Dust! Ford Halts 2024 F-150 Lightning Shipments (Jan Car And Light Truck Sales Down -0.7% YoY As M2 Money Growth Remains Negative)

Another Biden program bites the dust, this time his big push to encourage everyone to buy an electric vehicle (EV). Meanwhile, Biden keeps going on vacation (as if he REALLY cares about middle America).

Cars and light trucks are seeing declining YoY sales in January (-0.7%) as M2 Money growth remains negative.

Automotive News was the first to report Ford Motor Co. halted shipments of all 2024 F-150 Lightning electric pickup trucks for an undisclosed quality control issue just weeks after slashing production volumes for the EV model due to sliding demand.

A Ford spokesperson did not explain the reasons behind the quality check, but shipments of Lightnings have been halted since Feb. 9. Even with shipments paused, production of the Lightnings continues at the Rouge Electric Vehicle Center in Dearborn, Michigan.

“We expect to ramp up shipments in the coming weeks as we complete thorough launch quality checks to ensure these new F-150s meet our high standards and delight customers,” company spokeswoman Emma Bergg wrote in a statement.

Last month, Ford announced plans to slash the Lightning production in April “to achieve the optimal balance of production, sales growth and profitability.”

The automaker (and many others, like Mercedes Benz) is recalibrating its electric vehicle strategy as the Biden administration plans to downshift the EV transition as demand plummets.

Thousands of auto dealers nationwide recently warned the ‘climate change warriors’ in the White House: the 2030 EV push is backfiring.

“Currently, there are many excellent battery electric vehicles available for consumers to purchase. These vehicles are ideal for many people, and we believe their appeal will grow over time. The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots,” the dealers said.

They warned: “Already, electric vehicles are stacking up on our lots which is our best indicator of customer demand in the marketplace.”

A recent note by RBC analyst Tom Narayan said the EV slowdown is far from over:

“Key takeaways thus far from earnings season are that the EV slowdown is not showing any evidence of an inflection, Level 4 autonomy headwinds continue to persist, and fears over supplier inventory overbuild are likely overblown.

Analyst Adam Jonas at Morgan Stanley suggested consolidation is coming to the industry:

Given that Biden’s 2030 EV mandate is in full collapse, the downturn in the EV space will likely continue through the second half of this year.

Oddly, Biden’s push for chip manufacturing has worked (at least Nancy Pelosi made over $1 million on NVIDIA). I am so glad the Biden/Congress are making Pelosi even wealthier. /sarc

Biden and Pelosi, two honorary Venezuelan plutocrats.

Stop, Stop, Stop … Printing! Consumer Purchasing Power Down 97% Since Fed Creation (1913) And Down 16% Under Biden (M2 Money Velocity And Debt Velocity STINK!)

The Hollies said it best: Stop, stop, stop. FIAT Money Printing that is.

Typically, we look at M2 Money Velocity (GDP/M2) as a measure of how much the economy grows by expanding the money supply.

M2 Money Velocity is currently at 1.344, and still below where we were under Trump prior to Covid. After Powell printing palooza after Covid, M2 Money Velocity collapsed and is slowly rising, but remains low by historic standards.

Perhaps a more interest velocity is DEBT velocity (GDP/DEBT). Under Biden’s Reign of Error, Federal debt has increased by $6,539,359 million while real GDP has increased by only $1,948.731 billion (or roughly $2 trillion in GDP growth after $6.54 trillion in debt). Or a DEBT velocity of 0.3. Yikes! No wonder China is bailing on US debt!

This chart makes debt issuance look better than it really is. Again, the DEBT VELOCITY of 0.3 is terrible meaning that for every $1 of Federal debt, we get 30 cents in Real GDP under Biden. One of my macroeconomics textbooks stated that debt growth is fine as long as real GDP growth rises faster than debt growth. Apparently, Treasury Secretary Janet Yellen didn’t read that textbook! Real GDP has grown by 9.43% under Biden while Federal debt has grown by … gulp .. 24%.

Yes, the US is borrowing like the proverbial drunken sailor while they “invest” in green energy, wars in Ukraine and the Middle East, and massive social welfare programs (like the old breads and circuses from the dying Roman Empire). When watching the media’s obsession with Taylor Swift and Chief’s Tight End Travis Kelce at The Super Bowl, it reminded me of “Breads and Circuses” as our nation is collapsing like a dying star. (That is why I Iike Gold, Silver and Bitcoin!)

What about The Federal Reserve? It was created in 1913 after signed into existence by President Woodrow Wilson. Since The Fed’s inception, consumer purchasing power has declined by 97%.

And under Biden, inflation has been so bad that consumer purchasing power is down 16%.

In summary, The Federal Reserve has been printing like crazy (I would say Batshit Crazy, but I actually think bats are adorable). And Treasury (under former Fed Chair Janet Yellen) has been borrowing like crazy too. While politicians claim the economy is in great shape, it is really because The Fed is printing wildly, Yellen is borrowing wildly, and much of US GDP is not due to the private sector, but Federal government spending … to the donor class. This is NOT a sustainable and will eventually crash into a ravine.

Here is an excellent interview with Col. Douglas MacGregor who talks about Bitcoin.

That’s Bidenomics! US Leading Indicators Decline For 22nd Straight Month, Back To March 2006 Levels

That’s Bidenomics for you!

The Conference Board’s Leading Economic Indicators (LEI) continued its decline in January, dropping 0.4% MoM (notably worse than the -0.1% MoM expectations), and December’s 0.1% declin e was revised down to a 0.2% decline.

The biggest positive contributor to the leading index was stock prices (again) at +0.10
The biggest negative contributor was average workweek at -0.18

This is the 22nd straight MoM decline in the LEI (and 23rd month of 25) – equaling the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008)

“The U.S. LEI fell further in January, as weekly hours worked in manufacturing continued to decline and the yield spread remained negative,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

“While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024).

As a result, the leading index currently does not signal recession ahead.

While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”

While the Conference Board seems optimistic, we are struggling to see any signs of hope! tumbling back below the peak in March 2006…

And on a year-over-year basis, the LEI is down 7.0% (down YoY for 19 straight months) – still close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse (but starting to inflect)…

The annual growth rate of the LEI remains deeply negative and decoupled from Real GDP…..

Finally, the massive easing of financial conditions in the last few months suggests a turn in LEI is imminent…

And hence the ‘soft landing’ mission is accomplished… so no need for rate-cuts? (Except for the banking crisis that looms in March).

Here is the roadmap for Bidenomics.

The Sisyphus Economy! Top 1% Of Earners Gaining Wealth Relative To Middle Class Thanks To The Federal Reserve And Federal Government Policies (Top 1% Have More Wealth Than The Middle Class)

According to mythology, Hades made King Sisyphus roll a huge boulder endlessly up a steep hill in Tartarus. Unfortunately, the modern day version of Sisyphus is the middle class pushing a boulder endlessly up a steep hill while the top 1% (the elite class) horde more and more wealth.

An example of the Sisyphus economy? The top 1% of earners (blue line) have seen an incredible increase in net worth, particularly after Fed Chair Alan Greenspan’s big rate cuts (green line) from 2000 to 2004. Each subsequent rate cuts under Bernanke (2007-2008) and Yellen (who just kept rates too low for too long). The end result? In the red box, the top 1% made out like bandits.

The end result? The top 1% of earners now have more wealth the the middle class.

Of course, asinine Federal government policies (like open borders and making donors wealthy with green energy spending) and the lack of a serious approach to corruption have complicated matters.

So the working class, middle class and low wage workers, are the ones pushing the boulder up a hill while government insiders like Biden make millions through influence peddling. So, unlike the Sisyphus legend, the middle class and low wage workers are being punished by simply existing.

The Fed’s balance sheet has had a similar effect, particularly since the financial crisis of 2007-2008 when The Fed truly became unhinged under Janet Yellen. So of course, Yellen was made Secretary of Treasury, the largest honey pot in the world, so she could continue growing the elites power while minimizing the wealth of all others.

Should we end The Fed? Of course! But we can’t even have a rational discussion on why we are funding a war in Ukraine (to protect their border?) while we leave our borders open to invasion?

Here is one of the 1% who made a fortune by simply having a big mouth and being in politics.

Back In The Saddle Again! Why The Fed Will RAISE Rates (Home Price Growth Reaccelerating, SuperCore Inflation Is Rising, Mass Immigration)

The Federal Reserve (aka, The Keep) is back in the saddle again. The Fed has been unable to control inflation since Federal government spending was so fast and furious after Covid that little thought was given to the long-term ramifications of insane spending. Not to mention The Fed’s overreaction to Covid.

Example?

Home price growth is rising again. Home prices in traditional “bubble cities” out west were cooling, but are reaccelerating. Even Detroit and Cleveland are seeing rapid home price acceleration.

Yes, housing inflation is sticky.

In retrospect, this wholesale dovish euphoria may have been rather short sighted, because after several strong economist reports hit the tape (with the Nov 2024 election growing closer by the day, that should hardly have been a surprise), March rate cut odds collapsed from over 100% in late December, to just 12% currently…

… as first the January CPI printed red blazing hot – with core coming in at 3.9% far higher than the 3.7% expected, with the 3-month annualized rate jumping to 4% from 3.3% and the 6-month annualized rate spiking to 3.7% vs 3.2%, but the biggest highlight was SuperCore CPI (i.e., core CPI services ex-Shelter) which soared 0.7% MoM, the biggest jump since Sept 2022…

… and then the January PPI print come in even hotter, with a core component surging in January by 0.5%, smashing expectations and beating estimates by the most since Jan 2021.

The result: not only has the market rapidly priced out what if formerly saw as many as 6 rate cuts in 2024, but growing speculation that a rate cut may not come at all unless the Fed tightens some more first (and with the S&P500 now over 5000, it is pretty clear that the market has already priced in virtually all rate cuts and has cornered the Fed).

Of course, the mass migration across the Mexican border (who knows? could be up to 11 million under Biden’s Reign of Error). While Paul Krugman, the resident lunatic economist for the New York Times, extols the virtues of mass immigration for driving up GDP, fails to recognize that mass migration is helping drive up prices. This is inflation that The Fed can’t control. And Biden/Mayorkas want even MORE mass immigration.

Maybe Fed Chair Powell should watch the film “The Keep” for lessons on how to control inflation. in the face of government sanctioned mass ILLEGAL immigration from Latin America, China, Africa and The Middle East.

White House Plans Downshift In Electric Vehicle Transition As Demand Slides (A Tesla 4-module Battery Pack Costs $20,000 To $28,000 BEFORE Labor!)

Burn on, Bidenomics!

The Biden administration is reportedly considering easing tailpipe emissions regulations, a move that was designed to force Americans from gas and diesel-powered vehicles to electric vehicles, according to The New York Times, citing three people familiar with the plan. This potential policy adjustment is in response to concerns from major automakers and labor unions and comes amid sliding EV demand, recently prompting companies such as Ford Motor Company to reduce EV production and lay off workers.

“Instead of essentially requiring automakers to rapidly ramp up sales of electric vehicles over the next few years, the administration would give car manufacturers more time, with a sharp increase in sales not required until after 2030,” the people said.

This policy change comes after 3,900 auto dealers penned a letter to President Biden at the end of 2023, warning the president to reconsider the pace of EV mandates, citing a severe decline in demand for these vehicles.

“Currently, there are many excellent battery electric vehicles available for consumers to purchase. These vehicles are ideal for many people, and we believe their appeal will grow over time. The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots,” the dealers said.

They warned: “Already, electric vehicles are stacking up on our lots which is our best indicator of customer demand in the marketplace.”

Last month, Ford Motor’s electric vehicle sales ran out of juice as the automaker was forced to slash production of its all-electric F-150 Lightning to April “to achieve the optimal balance of production, sales growth and profitability.”

A recent note by RBC analyst Tom Narayan said the EV slowdown is far from over:

“Key takeaways thus far from earnings season are that the EV slowdown is not showing any evidence of an inflection, Level 4 autonomy headwinds continue to persist, and fears over supplier inventory overbuild are likely overblown.”

Analyst Adam Jonas at Morgan Stanley suggested consolidation is coming to the industry:

The EV bubble is no match for elevated interest rates, and no fiscally conservative American is trying to survive the era of failed Bidenomics with a +$1,000 EV car payment.

Plus, Toyota’s chairman and former CEO, Akio Toyoda, will likely be proven right: EV cars will never dominate the global market, adding hybrids are the future.

If the alleged climate crisis is as urgent as portrayed by radicals in the White House and woke corporate media, then why does the Biden administration feel the need to move the transition goalposts if banning gas cars saves the planet?

Biden would likely sound more sincere if he dumped his gasoline-powered Corvette for a lousy electric car. On a personal note, I own at Volvo XC-60 hybrid and HATE the damn thing!!!

Recession In Mid 2024? Bank Credit And Deposit Growth NEGATIVE After The Stimulus Has Worn Out (EU Ordered To Accept 75 Million More Migrants)

This headline from Zero Hedge makes me so glad I have eaten heart-healthy Quaker Oats and Cheerios every morning for the last 20 years! Study Finds 80% Of Americans Exposed To Fertility-Lowering Chemicals In Cheerios, Quaker Oats. The chemical (chlormequat chloride) was detected in “92 percent of oat-based foods purchased in May 2023, including Quaker Oats and Cheerios.” But that was nothing compared to this Zero Hedge headline: EU “Suicide Pact” Threatens To Flood Continent With 75 Million More Migrants. Makes me wonder if Biden/Mayorkas are under orders from the UN/WEF/Soros to let immigrants pour across our southern border (including 20,000+ Chinese military age males). But back to the economy.

Both bank credit growth year-over-year (YoY) and bank deposit growth (YoY) are NEGATIVE. Covid resulted in massive Federal government stimulus spending (and Federal Reserve hyper stimulus) in 2020, but as the stimulus wears out, so does bank lending and deposits.

Having seen The Fed’s QT appear to stall in February, as Reverse Repo liquidity withdrawal accelerates, all eyes are once again back on the situation on bank’s balance sheets and how deposits are standing up (‘adjusted’ by The Fed’s magical seasonals).

And after the prior week’s miraculous surge in deposits (again, according to The Fed), last week saw total bank deposits (seasonally-adjusted) drop $57BN – the biggest weekly drop since October…

This data is from the week when Regional bank shares shit the bed thanks to NYCB…

Interestingly, on a non-seasonally-adjusted basis, total bank deposits declined about the same as SA -$58BN (and are down $180BN YTD)…

And, excluding foreign banks, domestic deposits dropped $52BN SA (Large Banks -$40BN, Small Banks -$12BN), and tumbled $65BN NSA (Large Banks -$57BN, Small Banks -$$8BN)

As the chart above shows, on an NSA basis, domestic banks have only seen one week of inflows in 2024.

As one might expect, loan volumes shrank during that week by just over $9BN (Large banks -$4.6BN, Small banks -$4.4BN)…

And finally, as a reminder – despite the rebound off the lows again this week in regional bank shares, which must mean everything is awesome, right? – the regional bank crisis is still very much alive as evidenced by the red line below (without The Fed’s imminently expiring BTFP facility)…

…what else are big banks (green line) going to do with all that cash burning a hole in their pockets?

The bottom line is – this looks a lot like a ‘Small Bank’ crisis. The last time this happened, the crisis sparked a sudden $300BN ‘run’ in small bank deposits…

Is The Fed ‘hoping’ for a controlled bank-run this time – so as many small bank deposits are drained voluntarily, before they are drained all at once in a panic (and the Reverse Repo facility is empty, unable to provide any cushion)?

It is looking like a recession in mid-2024 as Covid Stimulypto has run its course. Is the US economy so lame that is requires constant Federal government and Federal Reserve manipulation??

Joe Biden (President of the top 1% of Americans) and his likely replacement “Greasy Gavin” Newsom, wrecker of the California economy. Two economy wreckers on the same stage.

Remember when Democrats were the party of the working man and Republicans (like George HW Bush) were called “Country Club Republicans”? Now Biden and Democrats represent the elitist top 1% of wealth and Trump/Republicans (that Biden snidely calls “Maga Republicans”) represent the bottom 99%. Who woulda thunk??

BTW. Congrats to Iowa’s Caitlin Clark who set the all-time NCAA women’s scoring record with a PERFECT shot.

Biden’s Mortgage Market! Mortgage Demand Down 2.3% From Last Week, Purchase Demand Down -12% From Last Year (Mortgage Rate UP 151% Under Bidenomics)

Wake Joe up before the economy go goes … down any further.

Mortgage applications decreased 2.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 9, 2024.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index increased 4 percent compared with the previous week and was 12 percent lower than the same week one year ago.

The Refinance Index decreased 2 percent from the previous week and was 12 percent higher than the same week one year ago.

Mortgage rates (30Y fixed) are up 151% under Bidenomics.

Fed’s Powell Admits Bidenomics Is Not Remotely Sustainable Or Fixable! Too Much Debt And Spending, Too Little Growth (GDP Growth Higher Than Debt Growth In Only 1 Quarter Under “Brainless Joe”)

As Commander Cody sang, “We have too much debt.”

“The prices of some things will decline. Others will go up. But we don’t expect to see a decline in the overall price level,” said Federal Reserve Chair Jerome Powell, Nvidia stock hitting new highs, its market cap soaring to $1.78trln.

“That doesn’t tend to happen in economies, except in very negative circumstances. What you will see, though, is inflation coming down,” explained the Fed Chairman, the average American neither understanding nor caring about the nuance.

Bitcoin raced upward, its market cap roughly half of Nvidia. The market now values this remarkable maker of the semiconductor chips necessary to create an artificial life form at roughly twice the value of the most secure network in human history.

Fidelity added Bitcoin to a model portfolio, spurring investors to consider what happens to the price of a digital asset, whose supply is fixed at 21mm for all eternity, once passive investment products start really stacking Satoshis.

You see, the supply of everything in the universe expands as its price increases, but no matter how high the price of Bitcoin goes, its pre-defined pace of production will only ever decrease.

Nvidia (or any other stock) can be created at the click of a new issuance, or an executive equity option grant for that matter. The average investor neither understands this yet, nor cares for the nuance.

“I would say this. In the long run, the US federal government is on an unsustainable fiscal path,” said Powell, pointing out one of the most important top-down investment themes of the coming decade.

“And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial. And I think we know that we have to get back on a sustainable fiscal path. And I think you’re starting to hear now from people in the elected branches who can make that happen,” he added, without naming names, because there really aren’t any.

Under Brainless Joe and Dr. Janet Yellen, the US economy has experienced real GDP growth YoY only once (Q1 2021). Otherwise, debt growth YoY has always exceeded real GDP growth under Biden.

I admit I am rooting for the SF 49ers over the Kansas City Swifties. At least we won’t have to listen to Brainless Biden ramble on during the Super Bowl, unless they issue a pre-recorded propaganda piece for half time similar to the John Gill character from Star Trek.