Back In Time! MBA Mortgage Purchase Demand (Applications) Decline To Lowest Level Since 1995 (Down -22% Since Last Year)

We are back in time … at least for the mortgage market. Thanks to Bidenomics!!!!

Mortgage applications decreased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 27, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 3 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 12 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 22 percent lower than the same week one year ago. Back to 1995 levels.

At least mortgage refinancing applications are back to only 2001 levels.

Two-year yields have risen 5%.

At least it looks like Powell will pause rate hikes … for the moment.

I want a new drug, other than Biden’s top-down, big-donor friendly Soviet-style command economy. How about a free market without Fed interest rate manipulation??

Simply Unaffordable! Income Needed To Buy A Home Is $111k While Median Household Income Is Only $78k, Credit Card Delinquencies Highest Since 1991, REITs Down > -10% YTD (Bitcoin, Gold UP YTD!)

Bidenomics is a windfall for the donor class (high rate of return on campaign contributions) while the middle class gets beaten to a pulp. Waiting for Biden to lean over and creepily whisper “It’s working!” Even though it is clearly not working, at least for the middle class.

Evidence that Bidenomics is not working and destructive? Try the surging income needed to buy a house under Biden. Home prices are rising faster than median household income. As in $111,000 income needed to buy a house, while median household income is only $78,000. So, housing is simply unaffordable under Bidenomics. The Biden era is outlined in pink.

Mortgage purchase applications have collapsed to 1994 levels.

Meanwhile, stressed households are seeing credit card delinquencies at the highest level since 1991.

And thanks to Uncle Spam (given how Uncle Sam is destroying the middle class it is now Uncle Spam), 2023 interest payments are the same as the total debt from 1980! Spam, which the Federal government has devolved into, is very high in fat, calories and sodium and low in important nutrients, such as protein, vitamins and minerals.

2022 was a bad year for investments under Bidenomics. 2023 year to date is showing huge gains for Bitcoin, the NASDAQ and gold. Bringing up the rear are long duration Treasuries and REITs (real estate investment trusts), both earning negative returns thus far of less than -10%.

When will we see rats fleeing the sinking SS Bidenomics as it sinks? JPMorgan Chase stock slips after bank says CEO Jamie Dimon is selling 1 million shares.

Biden, Treasury Secretary Janet Yellen and Fed Chair Jay Powell have a bad case of screwing you (Doctor, Doctor).

Back In Red! Personal Savings As % Of GDP In The Red Under Bidenomics, Fed Losses Staggering As Deficits SOAR! (Bitcoin/Gold SOAR)

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

Let’s start with personal savings as a percentage of disposable income. It has been in the red (meaning very low) under Billions Biden.

And The Fed is really in the red under Biden’s inflation rattling spending with losses leading to a surge in remittances.

And then we have the growth in the Federal deficit as a % of GDP in the red.

And the S&P 500 is in the red since August.

Even Biden’s pro-censorship buddies in the tech world are in the red since July.

On the black side of the ledge, Bitcoin (along with gold) are through the roof.

The first inflow to golf since May ’23.

But at least Bidenomics has helped the donor class get wealthier and has helped the lessers get part-time jobs.

Yes, Bidenomics is a highway to hell for the 99%. But a stairway to heaven for the donor class and 1%. And the donor class (and defense/banking/tech/drug industries) have Biden under their thumbs.

My foolish US Senator Sherrod “The Mad Marxist” Brown claimed that he hasn’t noticed illegal immigrants.

Of course, Senator Brown could travel with Biden to the border to witness military age men crossing the border under Biden/Mayorkis “:Operation US Chaos.”

Get me a bottle of cheap wine since it is all I afford under Bidenomics.

Back In Red! C&I Loan Lending Standards Tightening To Recession Era Levels (Bank Credit Growth Remains Negative For Twelve Straight Week)

Back in red? As US fiscal policy deteriorates further thanks to endless Federal spending (not to mention seemingly endless wars under Biden and Nobel Peace Prize winner Obama), we are seeing pain in the bank lending business.

Commercial and industrial (C&I) loan lending standards is tightening (blue line) to levels typically seen in recessions. Even though Barclays HY-10Y spreads remains low.

Bank credit growth remains negative for the twelve straight week.

Billions Biden’s spending spree has led to the budget gap has doubled in the last year.

CDS is now at 55.24, highest after the Covid shock.

Under Biden/Yellen’s economic model, the appropriate themesong is “Hell’s Bells.”

Can The Fed Fix Biden/Congress Spending Addiction? Volcker, Greenspan, Yellen, Powell All Pushed Rates Lower … Until Biden (Fed Still Ignoring Taylor Rule) Mortgage Rates Continue To Climb

I had a wonderful time speaking at the Passive Investors Conference last night. One question I was asked was “Why doesn’t Powell (the current Fed Chair) pull “a Volcker” to cool inflation. She was referring to former Fed Chair Paul Volcker’s sudden raising of The Fed’s target rate which resulted in a cooling of inflation, but also an increase in the 30-year fixed mortgage rate to 16.63% in 1981.

Notice the trend in the Fed’s target rate and 30-year mortgage rate after Volcker’s rate shock. The trend in both has been downward as inflation was cooled.

But, each Fed Chair ranged from hyperactive to hypoactive (meaning doing little). Volcker and Greenspan saw wild swings in The Fed’s target rate. Bernanke pretty much only lowered rates AND expanded the Quantitative Easing (QE) or asset purchases by The Fed. And nothing has been the same since.

Yellen, now Treasury Secretary, continued Bernanke’s practice of zero interest rate policies (ZIRP) and QE (asset purchases) … until Donald Trump was elected President. In fact, Yellen raise rates only once prior to Trump’s election as President. Then raises rates 8 consecutive times. This is why I call Yellen “TLTL Janet”. Too low for too long Janet.

The she was replaced with DC insider Jerome Powell. Trump’s economy was strong (one explanation for Yellen trying to cool the economy with 8 consecutive rate hikes). But the Covid struck and Powell/Fed Open Market Committee overreacted, lowered the target rate back to 25 basis points and massively expanded the balance sheet. Powell also oversaw a rapid increase in the target rate, very Volckerish! But Powell stopped short of the rate suggested by The Taylor Rule of around 6.5% to 8.17%. The current target rate is 5.50%. So, Powell stopped far short of rates need to cool inflation.

But with Bidenomis came Bidenflation and a reversal of misfortunes for The Fed. They started rapidly raising rates … again.

Mortgage rates continue to climb as The Fed stubbornly won’t reduce its balance sheet.

Biden/Congress have a broken fiscal model where spending is out of control. And The Fed can’t buy all the debt Biden/Yellen want to issue.

US deficits are the third highest on record.

We might as well have Taylor Swift as Fed Chair. And Travis Kelce as Treasury Secretary replacing TLTL Janet.

Weekend Update! Gold UP, Mortgage Rates UP 174% Under Biden, Fed Balance Sheet Barely Below $8 Trillion (Yellen Speaks At IMF/World Bank Meeting In Marraskesh)

Well, the San Francisco 49ers are playing the Cleveland Browns today with the Browns missing injured RB Nick Chubb and QB Deshaun Watson, replacing them with QB Dorian Thompson-Robinson (aka, Do Not Resuscitate or DNR) and RB Jerome “Exploding Pinto” Ford. ESPN gives the Browns a 26% chance of winning. I am amazed it is that high!

But back to economic news!

Gold is soaring due to the instability in the Middle East (Iran/Hamas/Hezbollah attacks on Israel). Let’s see if Israel continues it assault on Gaza or not.

Janet Yellen, Biden’s Treasury apparatchik, was at the IMF/World Bank meetings in Marrakesh (yes, former students are expecting me to like Crosby, Stills and Nash “Marrakesh Express” but I detest CS&N). Instead, here is Them with Here Comes The Night which is more fitting about risks in the global economy.

Debt squeeze

The heavy debt burdens of advanced economies — from the United States to China and Italy — was a recurrent theme in the meetings, which came after financial markets in recent weeks pushed U.S. bond yields higher. Italian central bank governor Ignazio Visco said there was an impression markets were “reevaluating the term premium” as investors become more nervous about holding longer-term debt.

JPMorgan chair of global research Joyce Chang put it another way. “The bond vigilantes are back, and the Great Moderation is over,” she told a panel of the two-decade era of relative economic calm before the 2008/09 financial crisis.

The Federal Reserve still hasn’t shrunk their massive balance sheet and removed the Covid stimulus. Call it lack of Fed retreat.

And mortgage rates continue to rise, up 174% under Stumblin’ Joe Biden despite The Fed not really shrinking their balance sheet.

The honorary drink for Bidenomics is The Fireballs “Bottle of (Cheap) Wine.” While Biden, Kerry and Obama drink Dom Perignon champagne.

I may be the only person in the US cheering for House Republicans being at an impasse over House Speaker. Why? Congress can’t approve massive spending bills with out a Speaker! Less spending, less inflation! There fixed inflation without The Fed.

Fear The Talking Fed! 10Y Treasury Yield Subsides As Fed Presidents Speak While Hamas Terrorizes Israel (Fed Halting Rate Increases OR Flight To Safety?)

Like President Biden enjoying a barbeque at The White House with a live band (probably NOT Justin Moore singing “Small Town USA”) while Hamas declared war on Israel and Americans are being held hostage with the promise of public executions of hostages livestreamed. Nothing that “Empathy Joe” does ever surprises me anymore, but I am surprise that various Federal Reserve Presidents will speak today while Hamas terrorizes Israeli and US citizens.

It could be that investors think that Talking Heads at The Fed will claim that Fed rate increases are over. Then again, the Iran/Hamas terror campaign against Israel is spookking markets, driving up oil and gold prices and driving up “flight to safety” in US Treasuries.

President Biden called on Americans in Israel to book a commercial flight home, even though Israel has cancelled all flights. Does Old Joe even read the news??

Fear The Talking Fed!

Bidenomics Is Working? Economic Outlook Index Plunges To Record Low In IBD/TIPP Poll (Net Savings As % Of Gross National Income Negative For 2nd Straight Quarter)

As Biden sleeps through the Hamas invasion of Israel, that is nothing new. Biden is sleeping through a disastrous downturn in the economy and pretending that Bidenomics is working. It isn’t Joe!

The IBD/TIPP U.S. Economic Optimism Index sank to a 12-year low in October as confidence in the near-term economic outlook crashed to the lowest level in the poll’s history. The survey casts doubt on the Federal Reserve’s justification for turning more hawkish last month: robust consumer spending.

The overall IBD/TIPP U.S. Economic Optimism Index dived 6.9 points to 36.3, the lowest since August 2011. Readings below the neutral 50 level reflect pessimism. The 6-month economic outlook index cratered 9.6 points to 28.7, a record low since the IBD/TIPP Poll began in early 2001.

That means the outlook suddenly appears worse than it was at the depths of the dot-com crash, the great financial crisis and the coronavirus pandemic.

And on the personal savings front, net savings as a percentage of gross national income was negative for the second straight quarter.

Sleepy Joe, wake up! The US economy is slowing down REALLY fast!

17 Days Later? Mortgage Demand Decreased -6% WoW In Weekly Survey, Purchase Apps Lowest Since 1995 (Only 17 Days Left For Strategic Petroleum Reserve)

Another week under Biden, another economic disaster. This time, its the mortgage market with mortgage demand (applications) down 6% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 29, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 11 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 22 percent lower than the same week one year ago.

The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market. ARM loan applications picked up over the week and the ARM share increased to 8 percent, as some borrowers searched for ways to lower their payments.

The US 30-Year Mortgage Rate Tops 7.5% for First Time Since 2000.

On the energy front, where we are represented by former Michigan governnor Jennifer Granholm and former South Bend Indiana mayor Pete Buttigieg, we see that the Strategic Petroleum Reserve is down to only 17 days left.

Fear The Talking Fed! Treasury Rates Keep Climbing To Multiyear Highs As Fear Of More Rate Hikes Surfaces (Treasury Yields Decouple From Sinking Manufacturing Numbers)

Fear the talking Fed! Various Fed Presidents are talking this week and when they do. WATCH OUT!

The latest fear mongering will be … inflation is persistent and they might have to keeep raising rates.

The two-year Treasury remains above 5% and the 10Y-2Y T-Curve remains inverted.

Treasury 30-year yield rose to 4.856%, HIGHEST SINCE 2007.

The likelhood of another Fed rate hike is growing.

While inflation is cooling (but still elevated), The Fed could choose to rate hikes again.

Treaury yields have decoupled from US manufacturing data.

Best picture of Lael Brainard, Director of the National Economic Council of the United States and former Federal Reserve member and talking head. Or screaming head.