US Excess Savings Depleted For Bottom 80% Of Households To Cope With Bidenomics (Home Affordability Hits All-time Low!)

Wasting away again with Bidenomics, code for massive Federal subsidies to green energy donors. And incentives to buy impractical EVs. Imagine in an emergency and your car only goes 200 miles (and then you have to wait for an available charger to come open). Well, the top 1% are doing fine. But the bottom 80% of households by income are seeing rapid deplection of savings to cope with the rising costs of Bidenomics.

And then we have shrinking home affordability, now at a record low.

Bidenomics And The BIG Corporate Bias! Smaller Companies Paying Record Interest Without Boost From Interest Income (US Treasury Yield Curve Remains Inverted With Massive Fed Stimulus Outstanding)

We know that the horribly-flawed Bidenomics doesn’t work, unless you are a large corporate donor in green energy. For the rest, particulary small companies, Bidenomics is a total bust.

Under Bidenomics (the Soviet-style command economy), small companies are paying reconrd interest expense WITHOUT a major boost from interest income. Well, ain’t that a kick in the head … to most companies.

Pension funds that invested in “safe” MBS are finding that MBS isn’t so safe under inflation.

Look at the 10Y-2Y yield curve since Covid. I had a slight surge by March 2021, then has flattened then inverted as The Fed’s balance sheet still remains above $8 trillion.

Face it. The Biden Administration and Congress are owned by BIG corporate interests. BIG defense, BIG tech. BIG Pharma, BIG banking, BIG auto, BIG Union, BIG anything.

No wonder the Obamas were seen snorkeling in The Med with Tom Hanks and Steven Spielberg. BIG Hollywood!

Is Bidenomics The Highway To Hell? US Existing Home Sales Declines 17 Of Last 19 Months As Fed Slowly Shrinks Balance Sheet (Federal Debt Exceeds $33 Trillion As Unfunded Liabities Exceed $194 TRILLION)

Is Bidenomics the proverbial “Highway to hell”?

The most recent report on US exisiting home sales showed that sales decreased in 17 of the last 19 months as The Fed tightens monetary policy to combat inflation caused by … 1) The Fed and 2) Bidenomics spending on green energy.

The US housing market will be “back in black” once Biden and Congress stop their reckless spending and borrowing. Biden has added $5,352,202 to the national debt since being selected (not by me!). That is a 19% increase in The Federal debt in just 33 months!

Not to mention the ludicrous $194 TRILLION in unfunded liabilities that the geezers in the Biden Administration (Biden is 80 and slipping into dementia) and the Geriatric wing of Congress (the US Senate) is home to fossils like Mitch McConnell (not looking well) and Diane Feinstein (90 and looking poorly). I didn’t forget about Nancy Pelosi (Communist-California) who is 83 and running for re-election. Younger doesn’t necessarily mean better since Pelosi’s nephew California governor Gavin Newsom is 55 years old and helped destroy California’s economy. Of course, the DNC will probably selected Newsom to replace scandal-ridden Biden as the Democrat in order to finish the job Obama started.

Existing-home sales slipped again in August as rising mortgage rates make housing prices the least affordable ever. Despite denials in many corners, a crash is underway.

The National Association of Realtors^® NAR^® reports Existing-Home Sales Decreased 0.7% in August.

Highlights

Existing-home sales retreated 0.7% in August to a seasonally adjusted annual rate of 4.04 million.
Sales dropped 15.3% from one year ago.
The median existing-home sales price climbed 3.9% from one year ago to $407,100, an increase of 3.9% from August 2022 ($391,700). It’s the third consecutive month the median sales price surpassed $400,000.
The inventory of unsold existing homes dipped 0.9% from the prior month to 1.1 million at the end of August, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
First-time buyers were responsible for 29% of sales in August, down from 30% in July and identical to August 2022.
All-cash sales accounted for 27% of transactions in August, up from 26% in July and 24% in August 2022.

And mortgage rates are now up to 23 year highs!

If Biden bows out and Newsom runs for President … and loses, Newsom always has a career in Hollywood in vampire movies. “I will suck your (economic) blood!” – Count Newsom.

Inflation Reanimator! Producer Prices Soar In August As Goods Inflation Reignites While WTI Crude Hits $90

Jerome Powell is the God of Hellfire and he brought us …. FIRE! By rapildy raising The Fed’s target rate rapidly. And then sending mixed signals as inflation begins heating up … again.

WTI crude just hit $90. Rising oil prices may be one of the reasons.

After yesterday’s hotter than expected rebound in CPI, all eyes are on PPI for signs that the pipeline for inflation may be more dove-friendly.

It wasn’t!

Producer Prices rose 0.7% MoM in August (up from +0.3% in July and hotter than the +0.4% exp). That is the hottest PPI since June 2022, and pushed YoY prices up 1.6%…

Source: Bloomberg

Goods prices are reaccelerating fast, now back into inflation YoY (as Services cost growth slowed only modestly)…

Source: Bloomberg

As a reminder, much of last month’s PPI rise was driven by a big jump in portfolio management costs – as stocks soared. August saw a further rise in those costs…

Source: Bloomberg

More problematically, the pipeline for PPI appears to have inflected as intermediate demand is re-accelerating…

Source: Bloomberg

This is not what The Fed wanted to hear.

Bits And Pieces: US Real Median Income Falls By -2.3%, Worst Decline Since 2010, Core Inflation (CPI) At 13% YoY (Fed Likely To Raise Rates)

Here are some bits and pieces about the US economy and interest rates.

The Federal Reserve, the most powerful Socialist machine on the planet, is considering rate their target rate after some bad economic news.

First, real median household income (released yesterday for 2022) showed a decline of -2.3%. That is the worst decline 2010 when Biden was Vice-president. Notice that real median household income has never been positive under Biden (I doubt if PressSec Jean Pierre will brag about this!)

Then we have today’s BLS inflation report. The highlight? Core inflation is at 13% YoY.

Here is a colorful Bloomberg chart of inflation.

Apparently, The Fed has more work to do!

Fed Chair Powell gestures about inflation still being too high (although dim bulb “economist” AOC claimed that inflation is just propaganda).

Danger Jay Powell! US Median Home Prices Crashed -7.4% In Q2, Worst Decline Since Recessions Of 1970 And 2008 (Higher Mortgage Rates + Tighter Mortgage Credit Box = Heartaches On Heartaches!)

Danger Will Robinson! Danger! Median sales price of homes in the US sank by -7.4% in Q2 2023.

This is particulary dangerous since it was the worst correction in home prices since two rather nasty recessions of 1970 and 2008 (The Great Recession and financial crisis). This correction occured as M2 Money growth (green line) went negative.

With Fed rate hikes, debt to income ratios are the highest in history.

Mortgage rates are above 7% under Biden and Powell (not Baden-Powell, the founder of the Boy Scouts).

But not only are mortgage rates above 7%, but the mortgage credit box is tightening.

Mortgage rates above 7% and a tightening mortgage credit box = heartaches on heartaches for America’s middle class and low wage workers.

Danger Jay Powell! Danger!!

US Credit Default Swaps Price Now Above Spain As US Debt Gets Close To $33 TRILLION And $194 TRILLION In Unfunded Federal Promises (Joy To The Globalist Elites!)

I ain’t never been to Spain, but the US under Biden is like Spain in terms of default risk.

Actually, I have to Spain numerous times and love visiting Barcelona. But the US debt fiasco under Biden and Congressional spending sprees has led to … US credit default swap being priced worse than Spain’s CDS.

With Biden/Congress orgy of spending (and a declining economy in many important respects), the US is seeing Federal debt near $33 TRILLION and even worse, unfunded Federal liabilities (promises, promises) are at $193 TRILLION, almost 6 times the current Federal debt load.

If you are into archaelogy and fossils, Nancy Pelosi (83) has announced that she is running for re-election to The House. Hasn’t San Francisco suffered enough under Feinstein, Newsom and Mayor Breed?

Or as 3 Dog Night sang, “Joy to the globalist elites!”

Biden’s Follies! Banks’ Usage Of Fed’s Emergency Funds Jumps To New Record High, Money-Market Inflows Soar As Bank Deposit Growth Remains Negative

What a mess Biden and his Progressive backers have made. And we are forced to suffer the consequeinces of his policies. Or follies!

Money-market funds saw inflows for the 7th week of the last 8 with a $42BN jump (the most in 2 months) to a new record high of $5.625TN…

Source: Bloomberg

The inflow was dominated by a $24BN increase in Institutional fund assets while Retail also saw a sizable $17.7BN increase…

Source: Bloomberg

And the divergence between money-market fund assets and bank deposits continues to grow…

Source: Bloomberg

And while we actually saw huge deposit outflows (on a non-seasonally-adjusted basis) – despite The Fed’s seasonally-adjusted deposits increase – The Fed balance sheet shrank by another $20BN last week to its smallest since June 2021…

Source: Bloomberg

The Fed’s QT program continues apace with$18.4BN sold last week to its smallest since June 2021…

Source: Bloomberg

Usage of The Fed’s emergency bank funding facility jumped by $328 Million last week to a new high of $108BN…

Source: Bloomberg

Fed BS weekly change:

Fed balance sheet QT (Notes and bonds decline): $4.255 trillion, down $18,2BN
Discount Window $2.1BN, down $800M from $.29BN
BTFP new record $107.9BN, up $400MM
Other Credit Extensions (FDIC Loans): $133.8BN, down $0.6BN from $134.4BN

Finally, US equity markets and bank reserves at The Fed have converged a little recently, but the gap remains wide (thanks to the plunge in reverse repo balances)…

Source: Bloomberg

Tick, tock, banks!

Source: Bloomberg

You have six months to figure out how to clean up the $108 Billion hole in your balance sheet that you’re currently paying The Fed’s exorbitant rates to fill.

Bank deposit growth remains negative as The Fed tightens its overly accomodative monetary policy.

And then we have this chart showing plinging M2 Money (white line fever).

And the horrific unrealized losses on bank’s books.

Bidenomics is failing America. Primarily because Biden was one of the stupidest members of the US Senate. Not to mention nasty. Great President, America! /sarc

Bidenomics Strikes Again! US Mortgage Purchase Mortgage Demand Lowest in 28 Years As Bank Deposits Down -4% YoY (Purchase Demand Down -28% YoY)

Bidenomics’ new themesong, “I’ve youv’e got the money, honey, I’ve got the time.” Otherwise, sod off.

Speaking of Bidenomics, US mortgage purchase demand just declined to the lowest level in 28 years.

Mortgage applications decreased 2.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 1, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 5 percent compared with the previous week. The Refinance Index decreased 5 percent from the previous week and was 30 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 28 percent lower than the same week one year ago.

This is not good.

Bank deposits, a source of bank lending, are down -4% YoY as The Fed tightens rates.

Here is Lefty Frizzell’s original version of the Bidenomic’s themesong “If you’ve got the money, honey,I’ve got the time.” Like big donors receiving green energy subsidies. But not middle class mortgage borrowers.

Bidenomics 101 (Hand To Mouth): 61% Of Americans Living Paycheck To Paycheck With Unsustainable Debt Levels, Up 19.4% Under Biden (50,000 U.S. Stores Likely To Close By End Of 2027)

Bidenomics is forcing Americans to live hand to mouth. Or as Lou Chrisite sang, “Lightning Strikes …. Americans” leaving them worse off under Bidenomics.

The cost of living has been soaring, and our standard of living has been steadily going down.

Coping with inflation is tough for American households where consumer debt is up 19.$ under Biden while the free-spending Federal government’s public debt is up only 16.5%.

As a result, over 60 percent of Americans are living paycheck to paycheck at this point, and debt levels are rising to unprecedented levels.

“In July 2023, 61% of U.S. consumers live paycheck to paycheck, unchanged from June 2023, but 2 percentage points higher than July 2022. Generally, more consumers of all income brackets reported living paycheck to paycheck in July 2023 than last year,” Alia Dudum, a money expert at LendingClub told FOX Business.

Now, 78% of consumers earning less than $50,000 a year and 65% of those earning between $50,000 and $100,000 were living paycheck to paycheck in July, both up from a year ago, LendingClub found. Of those earning $100,000 or more, only 44% reported living paycheck to paycheck.

Because consumers have so little disposable income these days, retailers all over the nation are experiencing difficulty.

In fact, UBS is projecting that 50,000 stores could close in the United States by the end of 2027…

Analysts at investment bank UBS are forecasting that some 50,000 U.S. stores are likely to close by the end of 2027, because of expected cutbacks in consumer spending, tighter credit and the continued shift to ecommerce.

Store closings could accelerate to 70,000 to 90,000 if retail sales turn out to be weaker than expected, according to UBS.

Actually, I think that losing 50,000 stores is a wildly optimistic scenario.

Hopefully I am wrong about that.

The housing market has also been going haywire.

According to Fortune, the month of August “will become the worst month for housing affordability this century”…

On Monday, the average 30-year fixed mortgage rate reached 7.48%, marking the highest level since the year 2000. Even prior to this recent surge in mortgage rates, housing affordability, as monitored by the Atlanta Fed, had already deteriorated beyond the levels seen at the housing bubble’s peak in 2006. Once this latest mortgage rate surge is factored in, August 2023 will become the worst month for housing affordability this century.

Wow.

Thanks Delaware Joe Biden (as opposed to Country Joe Stalin).

Home prices are going to have to come down, and in some areas they have already fallen quite a bit…

Homeowners are sitting on a negative equity timebomb after losing $108.4 billion on their property values this year, experts say.

The average borrower saw their home equity plummet by $5,400 in the first quarter of 2023 compared to last year – with households in Washington, California and Utah worst affected.

Do you remember the housing crash of 2008 and 2009?

Well, now the next housing crash is here, and it isn’t going to be fun.

For a while there, Joe Biden and his minions could at least boast about the employment market.

But now large companies all over America are laying off workers, and it is being reported that a staggering 1.223 million native-born Americans lost their jobs during the months of July and August…

Staggering figures have revealed that over 1.2 million US-born workers lost their jobs last month while the foreign-born workforce increased by nearly 700,000 – as migrants continue to flood across the border under the Biden administration.

Data from US Bureau of Labor Statistics show that between July and August, there was a staggering decrease of 1.223 million native-born people in the workforce – which is a low not beaten since the jobs crash when Covid hit in April 2020.

The numbers that I have shared with you are nothing to brag about.

But Joe Biden is going to keep trying to pull the wool over the eyes of the American people anyway.

Unfortunately for Biden, it has become quite clear that most Americans have lost faith in him. According to the same Wall Street Journal poll that I mentioned above, 73 percent of U.S. voters now believe that Biden “is too old to run for president”…

For Biden, one of his biggest challenges is age. The Wall Street Journal poll found that about 73% of voters think Biden is too old to run for president while only 47% think Trump is too old. Thirty-six percent of voters think that Biden is mentally up for the job while 46% of voters think Trump is mentally capable of being president.

We have never seen numbers like this for any other president.

It is obvious that Biden is in a very advanced state of decline, and this is happening during one of the most critical periods in our history.

Sadly, Biden fully intends to run again. (Especially since half-wit Jill Biden is allegedly running The White House).

And the Democrats will get behind him, because at this point no other candidate is posing a serious threat to Biden. Wait, not Gavin Newsom who almost single handedly destroyed California or Michelle Obama who has absolutely no qualifiications?? Other than being Barry Soetoro’s wife?

Nobody likes a clown like Biden.