Biden’s Housing Market! Existing Home Sales Crash To Slowest Since 2010 (-14.6% YoY), Hit Record Low In The West (Simply Unaffordable)

Even Biden’s press secretary Karine Jean Pierre admitted that all the slogans and hype about Bidenomics is a losing message. The economy is terrible for the middle class and low-wage workers. But excellent for the 1% donor and political elite class. But housing is very important to the middle class … and housing is simply unaffordable.

With housing affordability at its lowest since at least the early 1980s, (and homebuilder sentiment slumping as mortgage rates rose), it’s no surprise that analysts expected existing home sales in October to tumble 1.5% MoM.

Sales actually fell 4.1% MoM (far worse than expected and down for the 20th time in the last 23 months) with September’s 2.0% MoM decline revised even lower to -2.2% MoM. That decline left existing home sales down 14.6% YoY.

Source: Bloomberg

The total existing home sales SAAR plunged to 3.79mm – the lowest since the tax credit expired in Aug 2010…

Source: Bloomberg

Sales fell in three of four regions, while they were unchanged in the Midwest. They hit a record low in the West and matched an all-time low in the Northeast

Finally, the percentage of homes that are vacant fell to the lowest level on record in August, and ticked up only slightly in September…

Ever the optimistic,Lawrence Yun, NAR’s chief economist, suggested that:

“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” adding “though limited now, expect housing inventory to improve after this winter and heading into the spring.”

Good luck with that idea Larry!

Yun added that nearly a third of homes sold above their list price, indicating that multiple offers are still occurring with the median selling price climbed 3.4% from a year earlier to $391,800, the highest for any October in data back to 1999.

Even though the number of homes for sale ticked up from a month earlier to 1.15 million, it’s still the lowest for any October in the series.

Finally, first-time buyers made up a historically low 28% of purchases in October.

After all, the US economy and housing markets are addicted to goverment. (Addicted To Gov!)

Rioting In The Streets! ‘This Will Not End With A Soft-Landing Whimper’ – Rubino Warns “Only A Matter Of Time Before Everyone Realizes There’s No Fix”

Martha and the Vandellas said it best: “No where to run, no where to hide.” We are already seeing rioting in the streets.

Analyst and financial writer John Rubino has a new warning about being fooled into thinking the economy is improving because inflation and interest rates have fallen some recently.

Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral…”

“The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control.

We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs.

Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control.

That’s where we are now.

We are in the blowoff stage of a 70-year credit super-cycle.

Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency.

People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’

At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.”

If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks.

Rubino says in the end, we get a “massive reset,” and the everything bubble explodes.

Rubino says the dollar is going to decline and, at some point, it starts to go into freefall in terms of buying power. Rubino explains,

“If a currency starts to decline in a disorderly way, then you have a massive financial crisis on your hands.

That is definitely where Japan is right now. The U.S. is headed that way fast.

So, once we reach that point, there is no fix.

Then it is only a matter of time that everybody realizes that there is no fix, and they just bail on the whole experiment, and that’s where we are headed.”

Rubino talks about plunging home prices, more trouble coming in the commercial real estate market and why you need gold and silver as core assets during a currency reset.

Riots, already happening in American cities (not to mention looting in New York City, Chicago, San Francisco and Los Angeles), will accelerate if Congress attempts to curtail entitlements (now at $211.65 TRILLION).

Meanwhile, Biden keeps giving away money (student loan forgiveness, electric heat pump mandates, etc.).

Hey, at least Argentina elected AC/DC’s Angus Young as President!

Bloom Off The ESG Rose? WEF’s ESG Sustainability Push Is Waning (Issuance Of Sustainability Linked Loans Down 80% In US)

Huey Lewis and the News said it best about ESG goals: “The elites want a new drug.”

The World Economic Forum (WEF) is a leading pusher of the ESG drug, pushed by the elite class intending to control the world. Unfortunately, numerous American politicians and influencers have attended the Davos meetings and have openly praised the WEF and its leader Klaus Schwab.

ESG refers to the environmental, social and governance information about a firm. There is growing evidence that companies that take their environmental and social responsibilities seriously perform better financially. This has naturally made investors sit up and take notice.

ESG investing, or sustainable responsible investing (SRI), uses this information about a company to inform investment decisions that prioritize all stakeholders.

Here’s how the Forum’s partners are leading the switch to stakeholder capitalism.

There are 3 pillars to ESG and sustainable investment. This reminds me of the 10 pillars (or planks) of Marxism. So ESG is Marxism with a different name, but the end result is the same. Big government control.

But all is not well with WEF’s ESG drug distribution. In fact, ESG flows into socially consious funds were a big thing during Covid (2020) and the first year of Biden’s Reign of Error. But ESG flows slowed sharply in 2022 and seeing net outflows in 2023.

Issuance of sustainability linked loans is down 80% in the US.

US borrowers are retreating en masse from the world’s second-biggest ESG debt class.

The $1.5 trillion market for sustainability-linked loans, in which borrowing is tied to environmental, social or governance goals, has seen an overall slowdown in volumes this year as both interest rates and greenwashing fears rise. But nowhere has the decline been as precipitous as in the US, where the number of new sustainability-linked loans is down 80% from a year earlier.

But ESG is still relatively popular in Europe, Middle East and Africa (orange). But taste for ESG is waning around the globe. But the selection of Biden as President in the US marked a surge in ESG -tied loans in 2021 and 2022 (not to mention the insane levels of spending out of Biden and Congress, much tied to the sustainability, green energy fantasy.

Loans with terms tied to borrower’s ESG goals have fallen worldwide.

Several states (largely blue states like California, Minnesota, Illinois, and Colorado have pro-ESG laws) while several states have anti-ESG laws (largely red states like Montana, Idaho, North Dakota, Kansas, Utah, Indiana, Arkansas, Florida, and West Virginia).

And of course, global warning may not be as dire as John Kerry and Greta Thunberg say.

WEF’s Klaus Schwab about to get sniffed by his 80-year old puppet, Joe Biden. In fact, Biden is singing “I’m your puppet.”

Here is Hunter Biden welcoming the Green Energy fairy and all the trillions in misallocated spending it brings.

Bidenomics Strikes Again! Foreclosure Sale Notices For Commercial Property Loans Are Exploding, LA Apartment Sales Cratering (Newsom Creates New Potemkin Village For China Xi’s Visit)

Bidenomics strikes again!

After listening in horror to Joe Biden’s press conference after his summit with China’s Xi, I had to ask the following question: what does Joe Biden has in common with Georgia Tech? Answer? They are both rambling wrecks. Biden made a horrendous foreign policy blunder by calling Xi a “dictator” and almost blew it by nearly spillling the beans on our foreign policy negotiations with Israel. SecState Blinken had to intervene. We are represented by Winken (Harris), Blinken and Nod (Biden, who usually looks asleep or confused).

But back to the horrors of a slowing economy.

As the US economy slows down (like Biden himself), we are seeing further cracks in the real estate market. Foreclosure sale notices for commercial property loans are exploding.

And depending on the MSA, multifamily delinquencies are booming, like in Houston, Texas, New York City and Phoenix AZ.

Then we have this headline: “Not Just Office Towers – Commercial Real Estate Sales Crater Throughout Los Angeles.” It’s difficult to find big commercial real estate deals of any kind in Los Angeles. A new report from NAI Capital reveals how severe and universal the decline in activity is throughout the region this year amid collapsing values, higher interest rates, and a new tax on property sales above $5 million.

A related headline screams “LA Apartment Sales Plummet 50% as Investors Confront New Taxes, Higher Costs.” Every submarket saw an increase in vacant units and a decline in year-to-date sales volume in the second quarter. Construction, interest rates, eviction protections, also define 2023.

Yes, I know, California’s real estate woes are mostly the fault of their politicians like Governor Gavin (Gruesome) Newsom. The same guy who ordered San Francisco’s homeless population to be moved creating a new Potemkin Village. But rising interest rates are the fault of excessive spending by Congress and the Biden Administration.

Prepayments on Ginnie Mae MBS are extremely low.

But things are less than rosy in Communist China. China’s housing woes worsen as prices fall most in eight years.

But my favorite headline is from the Babylon Bee (a satire site): “After Five Minutes With Biden, Xi Gives Order To Invade Taiwan.”

Biden’s Mortgage Market! Mortgage Purchase Demand Falls 0.3% Since Last Week And -12% Since Last Year, Stocks, Bitcoin Booming, Gold Enters Contango (Mortgage Rates UP 172% Under Biden)

Biden says he wants 4 more years to finish the job. Like killing off the mortgage market completely, Joe?

Mortgage applications increased 2.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 10, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index decreased 0.3 percent compared with the previous week and was 12 percent lower than the same week one year ago.

The Refinance Index increased 2 percent from the previous week and was 7 percent higher than the same week one year ago.

Of course, mortgage rates have been declining slightly over the past few weeks, but remain up 172% under Biden.

At least the stock market is booming after the inflation report signalled that The Fed is likely done with rate hikes.

On the gold front, we are seeing evidence of contango.

Bitcoin? Down a wee bit after a staggering rise in price over the past year.

Here is China’s Xi meeting with Biden’s likely replacement, “Greasy Gavin” Newsom and Newsom’s likely Treasury Secretary, Janet “Too Low For Too Long” Yellen. Newsom, Yellen and Xi all want havoc in America.

We WILL Get Fooled Again! Purchasing Power Of US Dollar DOWN -15% Under China Joe Biden (Top 1% Doing Great Under Bidenomics, Not The Middle Class)

Republicans elected Mike Johnson from Louisiana as House Speaker, then were surprised when Johnson agreed with big spending Senators McConnell and Schumer on Biden’s mega spendathon. Also, several Republicans voted with Democrats NOT to impeach Cuba Pete (Mayorkas) for allowing 8 million illegals to cross the southern border. Bottom line: the Biden Administration and Congress are closely held subsidiaries of the elite 1% and US large corporations. The middle class be damned! But we will get fooled again in every election.

Since Biden’s inaugration in January 2021, the purchasing power of the US dollar is down a staggering -15%.

Yes, under control of large corporations and the 1%, the economy is an economic wasteland. But the 1% are doing great under Bidenomics! With The Fed’s help of course.

Here is a chart of core inflation relative to M2 Money printing. Easy way to cool inflation … stop printing money!

Here is China’s Xi and America’s “China Joe” Biden.

Seriously, Biden has always been known as being stupid and corrupt. Now he has dementia. A PERFECT President for the 1% in their war against the middle class. Biden is the penultimate “useful idiot” with an emphasis on idiot.

Back In Red? Bank Credit Growth Negative For 15th Straight Week, Savings Growth (As % Of Gross National Income) Negative For Last Two Quarters As Bitcoin Soars (Biden Wants 4 More Years To “Finish The Job”!)

To paraphrase AC/DC, the US consumer is “back in red.”

On a amusing or sad note, Biden campaign communications director Michael Tyler’s message to Americans who are worse off economically under Biden: “That’s precisely why we need another four years to finish the job.” OMG! What does “finish the job” mean?? I am afraid to ask.

Where we currently sit is … bank credit growth is in the red (15th straight week of negative growth) and net savings as a percentage of gross national income has seen negative growth YoY for 2 consequtive quarters.

September marked the largest consumer credit drop since May 2020, signaling a significant recession warning.

And with Bidenflation (or Yellenflation) and The Fed’s counterattack, we are seeing bank stocks losing relative to the tech sector.

Proshares Bitcoin (BITO)’s assets have nearly doubled in the past 30 days.

Yes, the Three Stooges (Biden, Yellen, Powell) have put the US on a highway to hell!

Here is a video of Biden, Yellen and Powell trying to spend trillions and NOT cause sustainable inflation.

Well, hell’s bells. The US is starting to resemble Venezuela and Argentina.

Livin’ On A Prayer … And Credit! US Consumer Debt Hits $17.3 TRILLION As Credit Card Delinquency Growth Highest Since Covid Lockdown (UMich Inflation Expectations SOAR To Highest Since 2011!)

Under Bidenomics, with its high inflation rate and crushing negative wage growth, consumers are draining their savings and living on a prayer …. and consumer credit to cope.

US consumer credit just rose to $17.3 trillion, up dramatically since Biden’s inaugaration as El Presidente of the United Banana Republics of America.

What is worriesome in the transition rates (like current to 90-days delinquent) Credit cards (blue) and auto loans (red).

A closer look at credit card delinquency rates on a year-over-year (YoY) basis, showing the fastest growth in delinquencies since the Covid economic lockdowns.

Then we have commercial real estate delinquencies are now the highest the have been since 2013.

Meanwhile, University of Michigan consumer sentiment about inflation spiked to 4.4%. That is the highest medium-term inflation expectation since 2011.

The US consumer is being shot through the heart and Biden and The Fed are to blame. Biden gives gov a bad name.

Wreck Of The USS 30Y Treasury! Disastrous 30Y Auction Sees Rising Long-term Treasury Yields

Today was the Wreck of the USS 30Y Treasury. Disastrous Federal fiscal policies and Yellen’s slowness to refinance outstanding Treasury debt has created a mess. Biden’s nerves must be a wreck with Powell and Yellen managing the nation’s finances.

That’s the only way one can describe today’s 30Y auction, which many expected could be challenging after a mediocre 3Y and a subpar 10Y auction earlier this year, but nobody expected… this.

The bond priced at a high yield of 4.769%, which was below last month’s 4.837%, and just shy of the April 2010 high. But more importantly, it tailed the When Issued by a whopping 5.3bps, which was… well… terrible, because as shown in the chart below, this was the biggest tail on record (going back to 2016).

The bid to cover was just as bad: at 2.236 it was the lowest since Dec 2021.

The internals were even worse as foreign bidders (Indirects) tumbled from 65.1% to 60.1%, the lowest since Nov 2021, and with Directs taking down only 15.2%, banks (Dealers) were forced to step up and take the balance, or a whopping 24.7%, double the recent average of 12.7%, and the highest since Nov 2021.

This is a big warning flag because every time we have seen a surge in Dealer takedowns, some sort of Fed intervention – QE or otherwise – has usually followed and we doubt this time will be different.

So what happened? Well, maybe the bond market read our note from earlier this week in which we explained “How Treasury Averted A Bond Market “Earthquake” In The Last Second: What Everyone Missed In The TBAC’s Remarkable Refunding Presentation.” It may be difficult to fool the bond market for a second time.

The market reaction to the catastrophic 30Y auction was immediately, sparking a swift and painful response across markets with bonds and stocks hammered lower and the dollar spiking.

Treasury yields – as you would expect – exploded higher, with 30Y Yields back up to pre-payrolls levels…

That is the biggest spike in 30Y yields since March 2020…

But the entire curve is higher in yields…

Stocks tanked…

Regional bank stocks tumbled…

The dollar ripped back up to pre-payrolls levels…

Finally, we note that this ugly auction comes as Treasury Liquidity is evaporating dramatically…

The Fed (and The Treasury) have a problem!! Particularly since the 30Y yield reversed course and is on the rise again.

And at the 10 year tenor, the rate rose to 4.638%.

All together now!!

The Edmund Fitzgerald, symbolic of the US under Biden and Janet Yellen.

Alarm! Bidenomics And The Tilt Effect (Mortgage Rates Up 174% Under Biden, 10Y Treasury Yield Up 402%, Real Disposable Income Declining, TLT Calls Explode!)

Alarm!

No, this isn’t the tilt effect in the mortgage market where inflation is front-loaded in mortgage rates making mortgage payments quite unaffordable. Although inflation is causing mortgage rates to be up 174% under Biden (while Biden continues to brag about how Bidenomics is helping). Meanwhile, the 10Y Treasury yield is up 402% under Biden (making refinancing the US staggering debt load more difficult to refinance. Higher mortgage rates tilt the present value of mortgage payments to the front, making housing even more unaffordable. Thanks Joe!