Biden’s EXPENSIVE Super Bowl Shuffle! (Tickets As Much As $107k, Hotels At $1,500+ Per Night, Sirloin Steak UP 15% YoY)

Remember the Chicago Bears’ “Super Bowl Shuffle”? Well, Joe Biden is thedemented (according to Hur) shuffler so a Super Bowl shuffle video featuring Biden talking about how he is reducing prices.

Attending the Super Bowl in person has long been a lavish expense, reserved for those willing to part with a significant sum for the ultimate fan experience. But when the Kansas City Chiefs meet the San Francisco 49ers in Las Vegas on Sunday, February 11 for the 58th such championship, it will be the most expensive yet.

Stubhub is reporting tickets ranging from $5,300 to $107,000, with the average price paid around $9,500. (Ticketmaster and other estimates vary slightly.) That is a 93 percent increase in ticket prices from last year’s Super Bowl in Phoenix, Arizona, and 300 percent over the past ten years. Lodging prices are skyrocketing as well.

A week out from kickoff, rooms at five-star hotels like the Bellagio, Aria, and The Venetian started at $1,500 or more per night for Super Bowl weekend, according to Expedia. Travelers seeking an affordable stay on the Las Vegas Strip, such as at Excalibur, can find an average nightly rate of $88 on Priceline for this weekend. That jumps to $486 during Super Bowl weekend, an increase of 426 percent. Prices do dip a bit if Super Bowl fans want to stay away from the Strip’s hotels and casinos. Downtown and hotels away from the main drag do offer some cheaper options, with some hotels charging around $200 per night on Fremont Street. Circa, which contains one of the most popular sportsbooks in Las Vegas, is an exception. Rooms this weekend are going for $179 per night on Priceline. That shoots up to $1,232 per night, with only a few rooms remaining at that price, for Super Bowl weekend.

And then, of course, there are the costs of getting there and subsisting. Intrepid drivers looking to travel from San Francisco to Los Angeles (a trip of between 8 and 9 hours) will do so with gasoline prices at $3.66/gallon. That’s down markedly from the mid-2022 spike, but still vastly above levels before the pandemic. Like hotel and ticket prices, airfare into and out of Las Vegas around the big game has also vaulted in price, although a number of carriers have increased capacity to meet surging demand.

Celebrating at Home
Of course, the vast majority of Super Bowl LVIII viewers will not be in Allegiant Stadium, which holds 65,000 spectators. The remainder of viewers, averaging north of 100 million people, will be watching at home or in their hometown sports bars and restaurants. But the persistent inflation of the past three years extended the financial burden into that seemingly more affordable alternative: hosting or attending Super Bowl parties at home. What was once a casual affair of chips, dips, and budget-friendly beverages has transformed into a costly endeavor, as the price of groceries, alcoholic beverages, and even party supplies have surged, affecting the way fans plan to experience one of America’s most iconic sporting events.

The top Super Bowl snacks and dishes include chicken wings, guacamole, potato skins, and deviled eggs, so a look at the recent price trends in chicken, beef, pork, avocados, eggs, beans, potatoes, eggs and condiments is relevant. Pizza, alcoholic beverages, and soft drinks are other popular choices prices have been creeping up.

Below are the prices of a handful of foodstuffs and ingredients which feature prominently in Super Bowl festivities, as well as the price changes from the pre-pandemic period to the most recent data (December 2019 to December 2023). The prices are provided by the US Bureau of Labor Statistics Average Prices by Product series, not seasonally adjusted:

			Dec-19 to
	Dec 2019	Dec 2023	Dec-23
Grade A Large Eggs	$1.54	$2.51	63.30%
White Sugar All Sizes	$0.59	$0.96	62.30%
Price Frozen Concentrate OJ	$2.34	$3.72	59.10%
Coffee	$4.05	$6.09	50.30%
White Bread	$1.36	$2.02	48.50%
All Ham Ex Canned and Slices	$3.04	$4.40	45.00%
Chocolate Chip Cookies	$3.58	$5.12	42.80%
Grapefruits	$1.25	$1.78	41.90%
Potato Chips	$4.53	$6.41	41.40%
Long Grain White Rice	$0.71	$0.99	38.70%
All Uncooked Beef Steaks	$7.71	$10.65	38.10%
Sirloin Steak Boneless	$8.48	$11.69	37.80%
All Other Uncooked Beef ExVeal	$5.05	$6.91	36.70%
Round Roast Choice Boneless	$5.07	$6.89	35.80%
Boneless Ham Excluding Canned	$4.07	$5.50	35.10%
Ground Beef 100% Beef	$3.86	$5.21	34.90%
Fresh Whole Chicken	$1.45	$1.96	34.80%
Whole Wheat Bread	$1.96	$2.65	34.80%
Round Steak Boneless	$5.98	$7.99	33.70%
All Uncooked Beef Roasts	$5.54	$7.35	32.70%
All Other Pork Ex Can/Sliced	$2.76	$3.64	31.80%
Boneless Chicken Breast	$3.11	$4.08	31.10%
Chuck Roast Choice Boneless	$5.65	$7.38	30.70%
All Uncooked Ground Beef	$4.30	$5.57	29.40%
Ice Cream	$4.74	$6.02	26.90%
Processed American Cheese	$3.91	$4.96	26.80%
Ground Chuck	$4.07	$5.12	25.90%
Fresh Fortified Whole Milk	$3.19	$4.01	25.70%
All Pork Chops	$3.39	$4.26	25.50%
All Purpose White Flour	$0.43	$0.54	25.40%
Sliced Bacon	$5.47	$6.77	23.70%
Chicken Legs Bone In	$1.51	$1.86	23.30%
Romaine Lettuce	$2.18	$2.68	23.30%
White Potatoes	$0.78	$0.96	23.20%
Malt Beverages	$1.42	$1.75	23.00%
Boneless Beef for Stew	$5.75	$7.03	22.20%
Lean Ground Beef	$5.52	$6.67	20.90%
Navel Orange	$1.33	$1.60	20.60%
Boneless Chops	$3.81	$4.56	19.80%
Iceberg Lettuce	$1.30	$1.53	17.30%
Spaghetti and Macaroni	$1.19	$1.38	15.80%
Dry Pint Fresh Strawberries	$3.10	$3.57	15.40%
Center Cut Bone In Chops	$3.77	$4.33	14.70%
Dried Beans	$1.40	$1.59	13.60%
Red and White Table Wine	$12.04	$13.32	10.60%
Bananas	$0.57	$0.63	9.10%
Natural Cheddar Cheese	$5.30	$5.55	4.60%
Lemon	$2.00	$2.07	3.60%
Field Grown Tomatoes	$1.95	$2.00	2.10%

And although disinflation has proceeded, by their nature the various indices (Consumer Price Index, Personal Consumption Expenditure Price Index) obscure individual price changes. For example: the US CPI Urban Consumers Food-at-Home index, in December 2023, showed a year-over-year change of 1.31 percent (from 299.089 to 303.005). Below are the actual December 2022 to December 2023 changes in individual food items which are prominent in Super Bowl celebrations.

			Dec-22 to
	Dec 2022	Dec 2023	Dec-23
Price Frozen Concentrate OJ	$2.72	$3.72	36.80%
Sirloin Steak Boneless	$10.17	$11.69	15.00%
White Sugar All Sizes	$0.84	$0.96	13.30%
Round Steak Boneless	$7.06	$7.99	13.20%
All Uncooked Beef Steaks	$9.46	$10.65	12.50%
Round Roast Choice Boneless	$6.22	$6.89	10.70%
Whole Wheat Bread	$2.42	$2.65	9.40%
All Uncooked Beef Roasts	$6.72	$7.35	9.30%
All Ham Ex Canned and Slices	$4.05	$4.40	8.70%
Ground Beef 100% Beef	$4.80	$5.21	8.50%
Ice Cream	$5.56	$6.02	8.20%
White Bread	$1.87	$2.02	8.10%
Navel Orange	$1.49	$1.60	7.80%
Chuck Roast Choice Boneless	$6.86	$7.38	7.60%
Ground Chuck	$4.76	$5.12	7.60%
All Uncooked Ground Beef	$5.19	$5.57	7.30%
Fresh Whole Chicken	$1.83	$1.96	6.80%
Processed American Cheese	$4.66	$4.96	6.30%
All Other Uncooked Beef ExVeal	$6.59	$6.91	4.80%
Lean Ground Beef	$6.39	$6.67	4.50%
All Purpose White Flour	$0.52	$0.54	3.10%
Chocolate Chip Cookies	$4.97	$5.12	2.90%
Boneless Ham Excluding Canned	$5.37	$5.50	2.40%
Boneless Beef for Stew	$6.87	$7.03	2.20%
Potato Chips	$6.28	$6.41	2.00%
Long Grain White Rice	$0.97	$0.99	2.00%
White Potatoes	$0.95	$0.96	1.40%
Malt Beverages	$1.74	$1.75	0.70%
Boneless Chops	$4.56	$4.56	0.00%
All Other Pork Ex Can/Sliced	$3.64	$3.64	0.00%
Bananas	$0.63	$0.63	-0.50%
Lemon	$2.09	$2.07	-0.90%
All Pork Chops	$4.31	$4.26	-1.30%
Red and White Table Wine	$13.66	$13.32	-2.50%
Sliced Bacon	$6.96	$6.77	-2.60%
Spaghetti and Macaroni	$1.43	$1.38	-4.00%
Chicken Legs Bone In	$1.95	$1.86	-4.60%
Fresh Fortified Whole Milk	$4.21	$4.01	-4.80%
Coffee	$6.47	$6.09	-5.80%
Boneless Chicken Breast	$4.35	$4.08	-6.10%
Dried Beans	$1.70	$1.59	-6.40%
Dry Pint Fresh Strawberries	$3.86	$3.57	-7.30%
Center Cut Bone In Chops	$4.67	$4.33	-7.40%
Natural Cheddar Cheese	$6.00	$5.55	-7.50%
Field Grown Tomatoes	$2.23	$2.00	-10.50%
Romaine Lettuce	$3.57	$2.68	-24.80%
Grade A Large Eggs	$4.25	$2.51	-41.00%

Avocado prices, according to the Mexico Products CPI, have risen 27.2 percent from December 2019 (83.80) to December 2023 (106.554). From December 2022 (95.922) to December 2023, they rose 11.1 percent.

Determining the average price of a delivery pizza is more difficult. In local contexts, the price of a slice of pizza can act as an inflationary benchmark of sorts, but estimates indicate that from February 2023 to February 2024 the price of an average delivery pizza has increased from $17.81 to $18.33, or 2.9 percent.

Comparing these numbers with the year-over-year headline and core CPI numbers (3.4 percent and 3.9 percent, respectively), two significant insights emerge. The individual price changes above, over a four- and one-year period, frequently underscore how price indices obscure trends in prices which, at specific times can be considerably graver than the headline figures suggest. Second, that one needn’t be anywhere near Las Vegas to feel the damage of expansionary monetary policies acutely. Well over a year after the lies about Vladimir Putin, gas station owners, ocean shippers, and corporate profits have been told and forgotten, and despite the cynical political impudence of calling a massive green spending bill an “Inflation Reduction Act,” spending Super Bowl Sunday at home in 2024 will be much more expensive than it was in 2023, and vastly more than it was four short years ago.

Bidenomics Failing Farmers As Expected Incomes Crash The Most Since 2006 (Food Prices UP 21% Under Biden’s Reign Of Error)

This reminds me of “The Human Farm” episode of Parks and Recreation.

A new report from the US Department of Agriculture forecasts that US farmers are poised for another year of financial misery, facing the most significant decline in incomes in almost two decades as crop prices slide and US dominance in ag exports wanes.

USDA forecasts net farm income, a broad measure of profits, to plunge $39.8 billion, or 25.5%, to $116.1 billion in 2024. This follows a forecasted decrease of $29.7 billion, or 16%, from 2022 to $155.9 billion in 2023.

If the estimate holds, farmers face the largest income drop since 2006 and back-to-back years of financial pain.

“With this expected decline, net farm income in 2024 would be 1.7 percent below its 20-year average (2003–22) of $118.2 billion and 40.9 percent below the record high in 2022 in inflation-adjusted dollars,” USDA wrote in the report.

Simultaneously, farmers are witnessing a rapid decline in their leading role in the global grain market. Decades of corn export dominance were shredded by Brazil last year.

Bidenomics is failing blue-collar workers who put food on America’s table.

Food prices (CPI) are up 21% under listless, dementia Joe Biden.

I am surprised that Orin from Parks and Recreation hasn’t been appointed to Biden’s cabinet as Secretary of Agriculture.

US Jobs In The Underworld! Mass Layoffs Plague Bidenomics For 2024 (Credit Card Delinquency Rate SOARS As Bidenomics Dies)

Like Offenbach’s “Orpheus in the Underworld,” the US economy under Joe Biden is going to hell. Like the tech sector! Thanks to the massive hiring surge related to Covid and Covid spending, now trimming the bloat.

In the real world labor market – in 2024... (not the one Biden, Yellen and Powell occupy) … companies are slashing jobs.

1. Twitch: 35% of workforce
2. Roomba: 31% of workforce
3. Hasbro: 20% of workforce
4. LA Times: 20% of workforce
5. Spotify: 17% of workforce
6. Levi’s: 15% of workforce
7. Xerox: 15% of workforce
8. Qualtrics: 14% of workforce
9. Wayfair: 13% of workforce
10. Duolingo: 10% of workforce
11. Washington Post: 10% of workforce
12: Snap: 10% of workforce
13. eBay: 9% of workforce
14. Business Insider: 8% of workforce
15. Paypal: 7% of workforce
16. Charles Schwab: 6% of workforce
17. Docusign: 6% of workforce
18. UPS: 2% of workforce
19. Blackrock: 3% of workforce
20. Citigroup: 20,000 employees
21. Pixar: 1,300 employees

And here’s the government-supplied statistics…

The number of Americans filing for jobless benefits for the first time last week dropped from 227k to 218k (below the 220k exp). On an NSA basis, claims tumbled even more…

Source: Bloomberg

We assume there was some impact in here from the ice storms, but still, Oregon, Ohio, and California saw the biggest declines in claims while Missouri and Texas saw the biggest increase…

Continuing jobless claims also decline (of course, it’s an election year) from 1.894mm to 1.871mm…

Source: Bloomberg

We give the Richmond Fed’s Tom Barkin the last word:

“I am cautious about accuracy of numbers around the turn of the year.”

Cautious is one word…

Not to mention 2024 is an election year, so expect mega nonsense spewing from The White House and the BLS and other government agencies.

With massive job cuts in the real world (unlike the protected, ivory tower of Biden and Congress), the serious delinquency rate on credit cards.

Biden’s Phantom Jobs Market! Over One Million Jobs Reported In 2023 Didn’t Actually Exist

The infamous jobs report from the BLS is like a scene from the film “Phantoms.” Where nothing is what is seems.

The federal government in 2023 overestimated the number of jobs in the U.S. economy by an average of 105,000 per month in initial reports, equating to a cumulative monthly difference of 1.3 million, according to data from the Bureau of Labor Statistics (BLS).

The cumulative number of jobs reported each month was 1,255,000 less than previously thought, with new seasonal and census data affecting total employment estimates, according to data from the BLS calculated by the Daily Caller News Foundation. The huge downward revisions are in spite of a 115,000 upward revision in December, the only month that saw an upward revision to the employment level in 2023.

The biggest revision was for March, which was revised down by a total of 266,000 jobs, followed by January at 234,000 and April at 205,000, according to the BLS. The lowest downward revision was in November, with only 2,000, followed by 11,000 in October.

“Revisions are a normal part of the reporting process, but large changes, or adjustments that consistently move in the same direction, are not normal,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Instead, they’re indicative of something problematic with the BLS’ methodology. That can happen when market conditions change drastically enough to be outside of the assumptions used in their models.”

The revisions are due in part to an overestimate of the number of jobs in the U.S. economy in January 2023 at 155,007,000 instead of the revised 154,773,000, according to the BLS. The job level increased to a revised 157,347,000 by December, totaling an increase of 2,340,000 positions in the year.

The most recent jobs report in February also released an adjustment to the total jobs level, lowering March by 266,000 positions, according to the BLS. The jobs totals were also adjusted to recent census data, throwing off past estimates.

Recent years have not seen the same high downward revisions as 2023, with 2022 only seeing negative revisions in five months, equating to a downward revision of 66,000 for the year. March was the only month that was revised down in 2021, with the total number for the year being revised up by nearly 2 million as the country recovered from the COVID-19 pandemic.

Growth in government positions has bolstered recent job numbers, adding a total of 601,000 jobs to the U.S. economy in the past 12 months. The gains have led to an all-time record for government positions at 23,091,000, outdoing a surge in hiring from the 2010 census collections.

“When the economy was rapidly deteriorating at the onset of the Great Recession, the BLS repeatedly and consistently overestimated job levels, which then had to be revised down,” Antoni told the DCNF. “The worsening economic conditions fell outside of the assumptions used by the BLS statisticians, so the estimates became inaccurate. There could be similar problems today due to fallout from the government-imposed recession in 2020 because the labor market still hasn’t recovered.”

Biden is the Negan of economic growth.

The Truth About Biden’s Awful Jobs Report And Rising Credit Card Delinquencies (Weakest Jobs Report For January On Record, 90+ Day Delinquency Rate Rises To Almost 10%)

I think the Biden Presidency is nicely summed-up by Biden confusing France’s President Macron with former French President Mitterand. Particularly since Mitterand died in 1996. Is Biden seeing dead people??

Anyway, the Biden economy and his Bidenomic strategy is based on massive debt expansion, both public and private debt. Household Debt reached $17.5 Trillion in Fourth Quarter; Delinquency Rates Rise 

Credit card delinquecies (90+ days) rose to almost 10% in Q4 2023.

Credit card delinquencies surged more than 50% in 2023 as total consumer debt swelled to $17.5 trillion, the New York Federal Reserve reported Tuesday.

Debt that has transitioned into “serious delinquency,” or 90 days or more past due, increased across multiple categories during the year, but none more so than credit cards.

Rising credit card delinquencies combined with the worst job additions in January on record.

But at least the 10Y-2Y US Treasury yield curve is ALMOST flat (h

Huh?

Why People HATE Politicians! Schumer/McConnell’s Mega $118 BILLION Spending Bill … For Ukraine/Israel And Olly-olly Oxen Free For Illegal Immigrants (Claiming That Is A Border Security Bill With Ukraine Spending 3x US Border Spending)

Well, the anticipated Establishment, and anti-middle class “Boader Security” bill has been released. It is all about military spending for Ukrainse (of course), grudging spending for Israel and peanuts for the border patrol to MONITOR, not stop the illegal immigrant caravans.

The bill is the typical establishment/Democrat pork barrell biil at 370 pages. And loads of exclusions and loopholes so the migrant invasion will never end.

Independent US Senator Kyrsten Sinema told reporters the legislation would secure the US southern border (OMG, that is hilarious!!), including by requiring the Department of Homeland Security to close the border if there are an average of more than 5,000 crossing attempts per day over seven days.

In addition to $20.23 billion for border security, the bill included $60.06 billion to support Ukraine in its war with Russia, $14.1 billion in security assistance for Israel, $2.44 billion to US Central Command and the conflict in the Red Sea, and $4.83 billion to support US partners in the Indo-Pacific facing aggression from China, according to figures from US Senator Patty Murray.

An additional $10 billion would provide humanitarian assistance for civilians in Gaza, the West Bank, and Ukraine.

The US would provide $4.83 billion to support key regional partners in the Indo-Pacific where tensions have risen between Taiwan and China, as well as $2.33 billion for Ukrainians displaced by Russia’s invasion and other refugees fleeing persecution.

Millions for the military to keep Zelensky and his family in mansions while American veterans are homeless. But we expect massive Ukraine funding and the important US border security begins on page 62.

Example: $404,000,000 shall be for Immigration Judge Teams, in16 cluding appropriate attorneys, law clerks, paralegals, court 17 administrators, and other support staff, as well as necessary court and adjudicatory costs, and $36,000,000 shall be for representation for certain incompetent adults pursuant to section 240(e) of the Immigration and Na21 tionality Act (8 U.S.C. 1229a(e)).

What? Homeless vets live on the streets, but Schumer/McConnell want to QUICKLY process illegal immigrants.

Nobody spends other people’s money like Biden and Congress!

$47,500,000 for the procurement and deployment of mobile surveillance capabilities, including mobile video surveillance systems and for obsolete mobile surveillance equipment replacement, counter-UAS, and small unmanned aerial systems;
– $25,000,000 for subterranean detection capabilities;
– $7,500,000 for seamless integrated communications to extend connectivity for Border Patrol agents; and
– $10,000,000 for the acquisition of data from long duration unmanned surface vehicles in
support of maritime border security.

Other than helping the border patrol with surveillance, there are NO FUNDS FOR A WALL and just a lot of gibberish on reporting crossings, but NOTHING TO SLOW THE MIGRANT CROSSINGS.

In other words, it is a BIG DEFENSE SPENDING BILL … for Ukraine and Israel and peanuts for the US border. Child slavery and Fentanyl will continue unabated as will murders by illegal immigrants. Why? Illegals rarely live near Biden, Clintons, Obamas, McConnell, Thune and other frauds in the US House of Lords (aka, Senate).

And you wonder why the US is careening off the debt cliff?

Fortunately, the House says that the bill is DOA.

Deficit Joe Strikes Again! Record $10 Trillion In US Treasuries Coming To Market In 2024 As Budget Deficits SOAR Under “Deficit Joe” (Don’t Forget About $212.5 TRILLION In Unfunded Liabilities)

The great Will Rogers once said he never met a man he didn’t like. US President Joe Biden and Democrats have never met a spending opportunity they didn’t like (except for US border security, of course).

Under “Deficit Joe” Biden, Federal budget deficits have soared! And deficits are projected to grow!

Over the past year, we have been closely watching the staggering acceleration in the growth of both US debt (the chart below which is just one month old is already woefully outdated, as total US debt just hit $34.191 trillion on the first day of February)…

… and global debt.

The problem, as Apollo’s gloomy chief strategist Torsten Slok points out, is that this feverish pace will only accelerate further, as a record $8.9 trillion of government debt will mature over the next year.

Meanwhile, the government budget deficit in 2024 will be $1.4 trillion according to the CBO (realistically expect this number to hit $2.0 trillion), and the Fed has been running down its balance sheet by $60 billion per month.

The bottom line is that someone will need to buy more than $10 trillion in US government bonds in 2024. That is more than one-third of US government debt outstanding. And more than one-third of US GDP.

This may be a particular challenge when the biggest holders of US Treasuries, namely foreigners, continue to shrink their share.

More fundamentally, Slok muses, “interest rate-sensitive balance sheets such as households, pension, and insurance have been the biggest buyers of Treasuries in 2023, and the question is whether they will continue to buy once the Fed starts cutting rates.”

(Spoiler alert: no… but that’s what QE is for, and sooner or later, it’s coming back).

Apollo’s latest updated outlook on Treasury demand is below (pdf link).

And don’t forget about $212.5 TRILLION in unfunded liabilities (Social Security, Medicare, etc).

Slowdown! ADP Reports an Increase of 107,000 Private Payrolls As Powell Proclaims “No Sugar Tonight” (Why Do We Need Millions Of Illegal Immigrants?)

Slowdown! Bidenomics, based on historic binge spending and Fed sugar, is wearing out as the enormous sugar (stimulus) rush is over.

The hiring slowdown of 2023 spilled into January, and pressure on wages continues to ease. The pay premium for job-switchers shrank to a new low last month.

Another Soft Landing Proclamation

“Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay. Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally,” says Nela Richardson, Chief Economist, ADP.

ADP National Employment Report

The ADP National Employment Report shows Private Sector Employment Increased by
107,000 Jobs in January; Annual Pay was Up 5.2%

Job Switching Payouts

Year-over-year pay gains for job-stayers reached 5.2 percent in January, down from 5.4 percent in December.
For job-changers, pay was up 7.2 percent, the smallest annual gain since May 2021.
Median Change in Annual Pay (ADP matched person sample) Job-Stayers 5.2%, Job-Changers 7.2%

ADP Notice

January’s report presents the scheduled annual revision of the ADP National Employment Report, which updates the data series to be consistent with the annual Quarterly Census of Employment and Wages (QCEW) benchmark data for March 2023. In addition, this revision introduces technical updates, namely, in re-weighting of ADP data to match QCEW data. The historical file was updated to reflect these revisions.

Notice Translation

ADP revises its data to match annual BLS data from March of 2023. The BLS will do the same in its annual revisions.

The BLS does not even back adjust the numbers so its historical record is bogus. And despite being incredibly lagging, the Fed makes key decisions on the data.

Job Openings Rise in December But Quits Tell the Real Story

There’s lots of meaningless chatter yesterday about job openings. However, actions speak louder than openings.

This report comes after Fed Chair Jerome Powell said “No Sugar Tonight” as in no expected rate cuts. That is, until it becomes obvious that Biden will lose the election, THEN The Fed will start cutting rates like crazy.

An example of the trash that Biden and Democrats are importing from Latin America, Africa and China. Among other sewers. I am sure that employers are lining up to hire this guy. … NOT! Correction: Biden may appoint this creep to his cabinet with the other losers.

Shades Of “The Big Short”! Commercial RE Exposure Helps Crush Japan’s Aozora Bank (Follow Negative Profit Warning For NY’s Community Bancorp)

Shades of “The Big Short” and subprime crash of 2008.

Following a profit warning from New York Community Bancorp on Wednesday, largely attributed to continued turmoil in the commercial real estate sector (which led the bank to slash its dividend and bolster reserves leading to a 38% plunge in its shares and triggering the largest drop in the KBW Regional Banking Index since the collapse of Silicon Valley Bank last March) Japan’s Aozora Bank slashed the value of some of its US office tower loans by more than 50%, according to Bloomberg.

Like rows of falling dominoes, Aozora Bank, the 16th largest in Japan by market value, saw its shares plunge by 20% on Thursday after reporting a net loss of 28 billion yen ($191 million) for the fiscal year. This was in stark contrast to its earlier projection of a 24 billion yen profit.

Aozora wrote down the value of its non-performing office loans by 58%, including a 63% reduction in Chicago and between 51% and 59% in New York, Washington D.C., Los Angeles, and San Francisco – all of these cities are plagued with violent crime and controlled by radical Democrats.

In total, the bank’s US office loans were about 6.6% of its portfolio, or approximately $1.89 billion. It said 21 office loans worth $719 million were classified as non-performing, and as a result it increased its loan-loss reserve ratio on US offices to 18.8% from 9.1%.

“It’s a shock,” said Tomoichiro Kubota, a senior market analyst at Matsui Securities Co., adding, “The expectation was the worst was over and that the bank had set aside enough provisions.” Guess not.

Far markets, this was another flashing red warning sign that not only is a tsunami of office loan defaults still on the horizon, but that banks continue to be woefully underprovisioned for the coming bloodbath.

“This is a huge issue that the market has to reckon with,” said Harold Bordwin, a principal at Keen-Summit Capital Partners LLC in New York, specializing in renegotiating distressed properties.

Bordwin said, “Banks’ balance sheets aren’t accounting for the fact that there’s lots of real estate on there that’s not going to pay off at maturity.”

Besides New York Community Bancorp and Aozora Bank, Deutsche Bank noted in fourth-quarter results:

“Interest rate environment remains key driver for refinancing risk and potential [credit-loss provisions] in 2024 especially in office, with further drivers being ongoing sponsor support and expiring rental agreements.”

Fed chair Powell delivered bad news for the CRE world in yesterday’s FOMC meeting, warning that a March rate cut isn’t happening (absent a shock of course). Perhaps most notably, the Fed removed the following sentence from the FOMC statement: “The US banking system is sound and resilient.” Cynics asked why the Fed no longer sees “the US banking system is sound and resilient” – is it a signal of rumblings in the economy near-term, or was it just a lie before, and now that bank dominoes are again falling, will Powell be forced to trot it back out?

Where will this lead? Likely more bank and pension fund bailouts. You didn’t really believe that hype about the Dodd-Frank banking legislation that there will never be another bank bailout did, you??

TBAC-O Road? Treasury Announces Big Cut In Borrowing (Despite Skyrocketing Deficits) But Shifting Towards More Expensive, Higher Duration Coupon Bonds

Constitution Avenue in Washington DC is actually becoming Tobacco Road. No, not the dysfunctional family of Georgia sharecroppers during the Great Depression, but the Treasury Borrowing Advisory Committee (TBAC).

On Monday, after we got the first part of the Treasury’s Quarterly Refunding Announcement (QRA), in which the Treasury unexpectedly announced a big drop in its borrowing estimates for Q1 (from $816BN to $760BN) coupled with a shockingly low calendar Q2 borrowing estimate of just $202BN (as a reminder we got the second part of the QRA this morning which came in very much as expected)…

… yields tumbled as this was viewed as an aggressively dovish outlook on the future of i) the US fiscal deficit and ii) the debt needed to fund said deficit. Here is another way of visualizing the US historical and projected marketable debt funding needs:

Commenting on this surprise drop in expected borrowing, on Monday we said that “the numbers also mean that the Reverse Repo facility will be fully drained by Q2, and we expect that on Wednesday we will learn that the bulk of the reduction in Q1 and Q2 estimates will be due to sharply lower Bill issuance for one simple reason: there is just no more Reverse Repo cash to buy it all.“

Boy, were we right: earlier today, in the Treasury’s presentation to the Treasury Borrowing Advisory Committee (TBAC) as part of the Quarterly Refunding, Janet Yellen revealed what the composition of this sharp drop in Q2 funding needs would be. As we expected, it was all bills!

In fact, as the chart below – which we have dubbed the scariest chart in the Treasury’s presentation to TBAC today (link here) – shows, with Bills expected to fund some $442 Billion of the $760BN funding deficit in the Jan-March quarter (the balance of $318BN funded by coupons), in Q2 the Treasury now anticipates a $245BN DECLINE in net Bills outstanding (i.e., not only no incremental Bill funding but a quarter trillion maturity in Bills outstanding). In other words, while we expected a “sharply lower” Bill issuance in Q2, the Treasury is actually expecting a $245BN drawdown in Bills.

But wait, there’s more: because while the market was expecting some pro rata decline in coupon issuance to go with the slide in net Bills (we were not) in Q2 to justify the sharp drop in long-end yields, it was not meant to be. In fact, just the opposite, because as highlighted in the chart above, net Coupon issuance in Q2 is actually expected to increase by $130BN to $447BN from $318BN in Q1. This is a huge shift in higher duration supply, and is hardly what all those who were buying 10Y bonds on Monday were expecting, and yes, that too was to be expected: with Bills now well above the “comfortable” ceiling of 20% as a percentage of total debt outstanding, the Treasury had no choice but to roll it back, especially since the Reverse Repo is already mostly drained. And sure enough, in its presentation, the Treasury no longer anticipates a flood of Bill issuance in the future.

That’s not all: while the Treasury said it does “not anticipate needing to make any further increases in nominal coupon or FRN auction sizes, beyond those being announced today, for at least the next several quarters”, the TBAC politely disagreed, stating that “it may be appropriate over time to consider incremental increases in coupon issuance depending on how the current uncertainty regarding borrowing needs evolves” (translation: as the need to bribe the population with more fiscal stimmies ahead of November rises, so will borrowing needs).

As for any naive expectations that any decline in issuance in structural instead of merely shifting away from Bills to Coupons, we have some more bad news: as the table below confirms, the Primary Dealer estimate of the US 2024 budget deficit dropped just $22BN in the past quarter, from $1.8 trillion to $1.778 trillion, a meaningless change (expect this number to rise sharply as the full brunt of fiscal stimulus in an election year become visible).

As for the bigger picture, well you can listen to either the Primary Dealers…

… or the CBO:

Both reach the same sad conclusion, the same one voiced by Nassim Taleb on Monday when he said that “we need something to come in from the outside, or maybe some kind of miracle…. This makes me kind of gloomy about the entire political system in the Western world.”

Sorry, Nassim, no miracles… just lots and lots of money printing coming.

And speaking of money printing, the fact that Bill issuance is about to grind to a halt in Q2 means that, just as we expected, reverse repo balances will tumble in the remaining two months of Q1…

… bringing it effectively to zero (which means the Treasury’s stock market liquidity pump is now almost drained), at which point the Fed will have to take over and taper QT as the alternative would be draining some $100BN in reserves every month at a time when total Fed reserves are already at the level which Waller hinted may be the infamous LoLCR floor which is a hard constraint at “10-11% of GDP.” The alternative is simple: a stock market crash just months before the November election, hardly the stuff Biden’s handlers or the anti-Trump Deep State would approve of.