Addicted To Gov! $350 Billion In Brand New Central Bank Behind Market Rally (On Top Of US Fiscal Inferno!)

You might as well face it, markets are “addicted to gov.” Government monetary interference, that is. Government money printing and massive Federal spending.

According to Goldman calculations, $350BN of liquidity (in USD terms) was added in November from the G4 central banks + the PBOC was nothing short of a fire hose.

In fact, this was the third largest monthly increase this year after January and March 2023.

The US addition of $60bn for a third consecutive week plus weaker dollar are the main drivers.

While the BoJ keeps adding liquidity via bond purchases, increases in the TGA balances in the past 20 days have net drained Yen liquidity.

Looking forward over the year end and at the start of 2024, Goldman thinks that the US can keep adding liquidity via high bill issuance and RRP withdrawal over the next couple of months (something we discussed last month in “How Treasury Averted A Bond Market “Earthquake” In The Last Second: What Everyone Missed In The TBAC’s Remarkable Refunding Presentation“), while the dollar contribution to benign liquidity conditions could face some headwinds due to the risk of pricing out of some of the March Fed cuts as a result of the strong positive FCI impulse in November.

Goldman’s one-factor model for risky assets based on the liquidity cycle suggests that US IG and EM hard currency debt are cheap and the bank’s STS FX carry and Brent Vol Carry indices have under-performed the benign liquidity environment and may catch up the next two months.

The US and Eurozone money supply and lending growth indicators remain weak, implying extended downside bias in domestic demand and inflation in H1-2024 (i.e., higher likelihood for easing absent a reflationary shock out of China or a supply-driven commodity price surge).

Finally, The US policy impulse (comprising of liquidity, fiscal stance, as well as nominal and real forward rates) has moved sideways in October and November after some renewed tightening in September. The GS FCI index eased nearly -100 basis points (-1.4z) in November.

Doctor, doctor (Yellen), we got a bad case of distortionomics (where the 1% wins and the 99% fall behind). After all, under Dr. Yellen as our Treasury Secretary, we are suffering from massive fiscal inferno with wild government spending. I would use “Government Gone Wild!” but the thought of Yellen … well, never mind.

Meanwhile, while John Kerry pushes for ending ALL coal powered plants (good luck charging the thousands of EV charging stations on wind/solar power!), China is building NUCLEAR plants. While US green wimps (Kerry comes to mind) whine whenever nuclear plants are mentioned for the US.

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!)

Highway To Hell! US Leading Economic Indicators Plunges -7.6% YoY (16th Straight Month Of YoY Declines)

Bidenomics is the economy’s Highway to Hell! Massive, staggering misallocation of scare resources to fund endless wars, green energy fraud, and massive wealth transfers to immigrants while disabled veterans suffer. Now we see that the US leading economic indicators is down -7.6%, definitely smelling like a recession.

On a year-over-year (YoY) basis, the Leading Economic Indicators is down 7.6% (down YoY for 16 straight months) – close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse.

On a monthly basis (MoM), leading economics indicators are down -0.8%. It has been going down for 16 straight months. Here are the components.

Most of the components are in red and need to be back in black for economic growth.

Treasury Secretary Janet Yellen, a mega pro-China elitist, acknowledges that Bidenomics isn’t popular but she attributes that to people not understanding how good Bidenomics is! It is good for the 1% elitist, donor class. But not for the US middle class.

At least Argentina elected AC/DC guitarist Angus Young as President!

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.

Bidenomics Strikes Again! US Existing Home Sales Tumble To Weakest In 13 Years (First-Time Buyers Historical Lows)

Bidenomics strikes … again. No, not his inane ramblings about Hamas being “the other team” or that Hamas has to learn to shoot straight. But his policies freezing effects on the economy. Like housing.

Existing-home sales faded in September, according to the National Association of REALTORS®. Among the four major U.S. regions, sales rose in the Northeast but receded in the Midwest, South and West. All four regions registered year-over-year sales declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 2.0% from August to a seasonally adjusted annual rate of 3.96 million in September. Year-over-year, sales dropped 15.4% (down from 4.68 million in September 2022).
…
Total housing inventory registered at the end of September was 1.13 million units, up 2.7% from August but down 8.1% from one year ago (1.23 million). Unsold inventory sits at a 3.4-month supply at the current sales pace, up from 3.3 months in August and 3.2 months in September 2022.

The total existing home sales SAAR dropped back below 4mm for the first time since October 2010 (during the foreclosure crisis)…

Source: Bloomberg

Sales fell in all regions except the Northeast in September… and in every price range…

Single-family home sales fell to an annualized 3.53 million pace, the lowest since 2010. Condominium and co-op sales also declined.

“As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” said Lawrence Yun, NAR’s chief economist.

“The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains.”

First-time buyers made up a historically low 27% of purchases, down from the prior month.

Cash sales represented 29% of total sales, matching the highest level in over a decade. Investors, who often purchase with cash and are therefore less sensitive to mortgage rates, made up 18% of the market.

“It would be very unusual to have higher cash compared to first time buyers,” Yun said on a call with reporters.

And, if mortgage rates (and thus affordability) are anything to go by, things are about to get real…

Source: Bloomberg

The median selling price rose 2.8% from a year earlier to $394,300, the highest September reading on record, pushing affordability even lower. But existing home prices are falling relative to new home prices (with the ratio near record lows)…

Finally, amid all this un-affordability for shelter, some Americans are turning elsewhere…and with mortgage rates back above 8%, it can only get worse.

It looks like The House may elect a RINO as Speaker (Patrick McHenry, RINO-NC) to replace McCarthy. One RINO replacing another RINO … all so The House can continue its insane, inflation inducing spending.

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.

Pushin’ Too Hard? Mortgage Rates Jump To 23-Year Highs As Conference Board Leading Economic Indicator Declined To -7.6% YoY

Is The Fed pushin’ too hard on rates to fight inflation? Or not hard enough??

Between the data and the overnight momentum in overseas markets, bonds are at their weakest levels in years. Mortgage-backed securities (the bonds that dictate mortgage rates) didn’t swoon quite as much as Treasuries, but as of today, it was just enough to push the average mortgage lender almost perfectly back in line with the highest 30yr fixed rate of the past 23 years. [30 year fixed 7.47%]

Conference Board Leading Economic Indicator declined -0.4%MoM in August, bringing the year-over-year change to -7.6%.

The Fed can’t seem to make inflation go away, despite what Janet Yellen says. The reason? While The Fed’s target rate has risen rapidly over the past year and a half, The Fed’s Balance Sheet is slowwwwwllyyyyyyyyyyyyyy unwinding.

US Mortgage Rates Remain Above 7% (UP 158% Under Biden) As 10Y-2Y Treasury Curve Remains Inverted Since July 4th, 2023 (Food CPI UP 19% Under Lunchbox Joe And Gasoline UP 69% Under Green Joe)

It is a day of rememberance for the tragedy of the 9/11 terrorist attacks in New York City, while Biden embarrasses himself in Vietnam in a rambling speech which his aides cut off mid-sentence. Oh and he used his “lying dog-faced pony soldier” line again about global warning, ignoring the massive growth in coal useage in nearby China. Is this Bozo Joe?

But back in the USA (while Biden does his humiliate the US tour of Vietnam, India, etc, and ignores the tragedy of the 9/11 attacks), we see mortgage rates still up above 7% as the US Treasrury 10Y-2Y yield curve

CPI food prices are up 19% under “Lunchbox Joe” and up 69% under “Green Joe”. True, the American middle class is far worse off under Bidenomics, but it is all about marketing Bidenomics at this point.

Well, at least former NJ Governor Chris Christies (aka, Kristy Kreme) isn’t lecturing us on healthy eating and exercise.

Of course, being a true RINO (Republican in name only), he won’t follow Biden around criticising him. Just critcising Trump. He is part of the Globalist Romney RINO Party (GRR).

Biden’s ShamWow Economy! Real Home Price To Real Median Earnings Not As Bad As 2006’s Housing Bubble (Home Prices UP 32% Under Biden While Mortgage Rates UP 155%)

You know Bidenomics isn’t working at all when the best I can say about it is … the current housing bubble isn’t as bad as the house price bubble of 2006. We are truly in Biden’s ShamWow economy!

Yes, if I look at real home prices less real median earnings we can see that the ratio, while terrible, is still not as bad as the housing bubble of 2006.

If I look at Case-Shiller National home price index less REAL median earnings, it is now far worse than in 2006.

But home prices are still up 32% under Biden

While the 30-year conforming mortgage rate is up 155% under Vacation Joe.

It should be GREEN ShamWow!. The money seems to be disappearing into the pockets of green energy donors, and Ukraine.

Bidenomics! US Payrolls Were Likely 306,000 Lower Than Previously Estimated (July Jobs Growth Slowed To 2.2% YoY As M2 Money Growth Slowed To -3.7% YoY)

Preliminary benchmark revision smaller than some had projected

Biggest payrolls adjustment in transportation and warehousing

Are you surprised that the Biden Administration has been lying about job creation?? Not really since Biden compulsively lies about everything. Including his corruption.

US job growth was probably less robust in the year through March than previously reported, according to government data released Wednesday.

The number of workers on payrolls will likely be revised down by 306,000 for March of this year, according to the Bureau of Labor Statistics’ preliminary benchmark revision.

Even without the revision, job growth has slowed to 2.2% YoY in July as M2 Money growth slowed to -3.7% YoY.