Under Biden, the US economy is a land of confusion. Under Biden’s Reign of Error, Mortgage Purchase Demand is down -44%, Refi Demand is down -87%, and Mortgage Rates are UP 106%.
Mortgage applications (demand) decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 26, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 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 7 percent from the previous week and was 45 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 4 percent compared with the previous week and was 31 percent lower than the same week one year ago.
Here is the rest of the story.
1% down payment mortgages when home prices are falling? Truly, a land of economic confusion under Country Joe.
Resident Biden and Congress unleashed inflation of the unsuspecting American middle class. Now real estate is starting to feel the pain of Fed monetary tightening.
For March, the S&P CoreLogic Case-Shiller 20 metro home price index actually fell -1.15% YoY as The Fed continues to tighten its monetary noose on the US economy.
The biggest losers in terms of home prices? The west! Los Angeles, Denver, Phoenix, Portland, Las Vegas, San Diego, San Francisco and Pramila Jayapal-ville, Seattle.
On the commercial real estate side, quarterly returns were all negative in Q1 2023. Especially office space.
California Governor Gavin Newsom (Nancy Pelosi’s newphew). “Watch me make housing values collapse!” Abracadabra!
White House and Republican negotiators tentatively narrowed differences but were still clashing Friday on key issues as the Treasury Department signaled extra time was available before a potential US default.
Treasury Secretary Janet Yellen announced the department expects to be able to make payments on US debts up until June 5 if lawmakers fail to act on the US debt ceiling. That set a more pointed date for a potential default but is also four days later than her previous comments eyeing trouble as soon as June 1.
The new so-called X-date buys negotiators for House Speaker Kevin McCarthy and President Joe Biden more time to strike a deal. The negotiating teams haven’t met in person since Wednesday but spoke late into the night Thursday and were in regular communication throughout the day Friday.
Yes, there isn’t really a crisis folks. Treasury collects tax dollars continuously so Treasury can prioritze debt payments and other disbursements. The only crisis is in the minds of the media.
Deputy Treasury Secretary Wally Adeyemo warned Friday that payments to Social Security beneficiaries, veterans and others would be delayed if there’s a default. But he said he’s gaining some confidence an agreement will be reached.
We’re making progress and our goal is to make sure that we get a deal because default is unacceptable,” Adeyemo said in an interview on CNN. “The president has committed to making sure that we have good-faith negotiations with the Republicans to reach a deal because the alternative is catastrophic for all Americans.”
The accord would also include a measure to upgrade the nation’s electric grid to accommodate sham renewable energy, a key climate goal, while speeding permits for pipelines and other fossil fuel projects that the GOP favors, people familiar with the deal said.
The deal would cut $10 billion from an $80 billion budget increase for the Internal Revenue Service that Biden won as part of his Inflation Reduction Act (big whoop). Republicans have warned of a wave of agents and audits while Democrats said the increase would pay for itself through less tax cheating.
What is taking shape would be far more limited than the opening offer from Republicans, who called for raising the debt ceiling through next March in exchange for 10 years of spending caps. House conservatives were already balking Thursday at the notion of a small deal, with the House Freedom Caucus sending a letter to McCarthy demanding he hold firm.
Treasury’s cash balance is at a low point and The Administration threatens Social Security recipients and veterans of delayed payments … while Biden goes on vacation for Memorial Day weekend to honor veterans??
Of course, Yellen know that all The Fed has to do to increase M2 Money growth again.
Meanwhile, bankrupties among large companies are highest since 2010.
In the mortgage market, current coupon nominal spreads 9Agency MBS 30Y coupon over Treasuries) are soaring.
Meanwhile, to honor US veterans, Biden goes on Memorial Day weekend and threaten veterans with delays in veteran benefits. Sigh.
Is Joe Biden REALLY Reverend Kane from Poltergeist II??
Biden has a line on you! And it isn’t good. More like we are fish being caught and eaten by Washington DC bureaucrats.
Another example of Biden’s dismal economy. US pending home sales plunged -22.6% YoY in April. Even worse, REAL weekly wage growth has been negative for 23 straight months!
Even worse, Core Inflation (PCE core prices) rose to 5%. So, unlike what Treasury Secretary Janet “Transitory” Yellen said, core inflation remains high despite M2 Money growth crashing.
Here is the rest of the story.
Before conservatives have a meltdown over the comments that will be forthcoming from Biden’s Press Secretary Karine Jean=Pierre, bear in mind that she was senior advisor and national spokesman for hard-left progressive advocacy group MoveOn.org.
She will feel obligated to howl and scream about the debt ceiling and budget with idiocy like “the economy will crash and burn if you cut Biden’s proposed budget.” Gee, for the trillions that Biden has spent, we only got 1.3% GDP growth. So her logic will be “President Biden spent trillions and we got only 1.3% GDP growth! Imagine if we spend less????”
What happened to Biden? He used to be a “reasonable” Senator (reasonable for a racist Democrat, that is), willing to negotiate with the opposition on budgetary issues and the debt ceiling. Now we have “Progressive Joe” who is acting like crazy Progressive Congresswoman Pramila Jayapal from Seattle. {Aka, Seattle’s Worst!} But his newly found Progressive identiy is leading down a terrible path. Rating agencies are putting the US of credit watch because of Biden’s newly found Progressive back bone. (Progressive means progressing towards full blown Communism).
Ratings company warns on worsening political partisanship
US AAA ratings on review with negative implications at DBRS
The tension around the US debt-limit negotiations ratcheted up after Fitch Ratings warned the nation’s AAA rating was under threat from a political standoff that’s preventing a deal.
Fitch may downgrade its assessment to reflect the increased partisanship that is hindering a resolution despite the fast-approaching so-called X date, it said, referring to the point at which Washington runs out of cash. It moved the US to “rating watch negative” under its classification. Meantime, DBRS Morningstar placed the US ratings of AAA under review “with negative implications.”
Markets have been showing increasing nervousness over the standoff, with Treasury-bill yields slated to mature early next month surging past 7%, while the S&P 500 Index has declined for two days. Economists project a US default could trigger a recession, with widespread job losses and a surge in borrowing costs.
Fitch’s warning “underscores the need for swift bipartisan action by Congress to raise or suspend the debt limit and avoid a manufactured crisis for our economy,” said Lily Adams, a spokesperson from Treasury.
Biden’s childish refusal to reduce his insanely huge budget (crammed with pork for large donors and Progressives) is causing ripples to be felt overseas. Look look at the Japanese Yen.
Pramila Jayapal, Joe Biden’s intellectual soulmate.
Remember when former Fed Chair and current Treasury Secretary Janet Yellen said that inflation was transitory? As usual, Yellen was wrong. Look at April’s new home sales. Up 4.1% since March even through M2 Money growth has collapsed.
The Taylor Rule, based on Core CPI of 5.25% (persistent, not transitory inflation Janet) suggest a Fed target rate of 11.78%. The Fed is at 5.25% and likely to pause rate hikes and maybe even lower rates again.
But that is where we are in the US. A President who acts like a spoiled 12 year old bully, members of Congress like Cori Bush and AOC who think The Fed can just print trillions MORE and give it to preferred groups. Senator Diane Feinstein (soon to be replaced by a horrible human being in the person of Adam Schiff). John Fetterman, the next Bernie Sanders?? C’mon DC. A true ship of fools. And dangerous ones at that.
So since September 26, 2022, we have seen a fundametal shift in markets. The US Dollar is down -21% since September 26, 2022 while Bitcoin is up 41%, Gold is up 21% and Silver is up 28%.
Biden is sitting pretty, If McCarthy chickens out and agrees to Biden’s outrageous budget, Biden looks like a hero. If Biden defaults, the MSM media will blame McCarthy and Republicans, so Biden wins. No wonder Biden said he isn’t worried about the debt ceiling negotations. He wins no matter what, And we the 99% get screwed.
Yes, the clock is ticking on a possible debt default and Biden is off in Hiroshima Japan instead of negotiating with House Speaker McCarthy.
The treasury cash balance is only $18 billion away from Yellen’s minimum balance redline of $50 billion. That’s one day of spending in crazy spending Washington DC.
Reminder, the US already has $32 TRILLION in debt and politicians have promised $188 TRILLION in entitlement spending. yet we are sending billions to Ukraine, etc. Yet Biden is visiting Japan (hide your little girls, Hiroshima!) and Biden/Congress still haven’t solved the debt limit crisis and Biden’s insane budget yet. Meanwhile, Americans are suffering from Biden’s inflation (aka, Bidenflation) and bad economic policies.
As many as 89.1 million American adults (or about 38.5%) were found to experience some form of difficulty in covering expenses between April 26 and May 8, according to Bloomberg, citing new data from the Household Pulse Survey. This is up from 34.4% in 2022 and 26.7% during the same period in 2021.
The rising trend is alarming but not surprising. Consumers have been battered by two years of negative real wage growth.
As wages fail to outpace the cost of living, many consumers have burned through savings and resorted to credit cards. The latest revolving credit data shows consumers appear to be ‘strong,’ but that’s only because they use their plastic cards more than ever to survive.
The Household Pulse Survey found struggling households were primarily based across West Coast and the South.
Compared with the same period last year, the survey found 2.7 million more households were relying on credit cards to cover expenses.
Consumers have record card debt and ultra-low savings rates and are paying some of the highest borrowing costs in a generation (the average interest rate on cards now exceeds 20%). This debt is becoming insurmountable for some as delinquencies rise.
And what we have now is new debit and credit card data published by the Bank of America Institute that shows not just spending slowdown for lower-income consumers, but also the upper-income cohort is finally starting to crack.
However, it is appropriate that Biden is visiting Hiroshima Japan where a nuke was detonated to help end World War II.. Biden is doing the same to the US.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.