It is not a surprise that the ill-advised COVID economic shutdowns would harm small businesses that large corporations.
Yes, The Fed’s M2 Money printing press went wild with COVID emergency refief. And so did the discrepancy between the top 1% and the bottom 50% in terms of “Share of Total Net Worth Held.” The top 1% is in blue and the bottom 50% is in red. M2 Money is in green.
Compared to pre-COVID, the top 1% increased their share of total net worth from 29.7% to 31.9%, an increase of 7.4% since January 2020. The bottom 50% fell from 30% to 28.5%, a -5% decline. An elitist wonderland!
And The Biden family keeps raking in the money far about Joe’s salary.
And I assume Fed Chair Jerome Powell and Treasury Secretary Janet Yellen also made fortunes from COVID relief.
Well, Biden and McCarthy have agreed in principle to a budget revision, raise the debt ceiling and avoid a US debt default. The Uniparty strikes again! No restraint of reckless Federal spending t speak of . The big donor class wins and middle class Americans lose.
Mike Shedlock (aka, Mish) makes a good point: the US is already in recession if we look at GDI (gross domestic income) rather than GDP (gross domestic product). The US has already declined two consecutive quarters in terms of negative GDI growth.
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??
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.
The US middle class is wasting away in Bidenville. While Climate Envoy John Kerry threatens to seize farms in the name of … climate change? The moral hazard problems associated with farm seizures boggle the mind.
So, everyone keeps talking about the debt ceiling and the fact that America is about to run out of money. How did we just find $375 million dollars AGAIN to ship on over to Zelenskyy?
Biden and McCarthy met on the debt ceiling and nothing has been resolved. They both represent the BIG donor class and big Pharma, big defense, big tech, big media, big tech, anything that is big runs Congress and the Administration. So of course they will finally agree to raise the debt ceiling and continue their insane spending on the donor class.
As of right now, there is no deal to raise the debt limit. Biden wants to raise the already insane and irresponsible Federal budget. McCarthy wants no new taxes. Who will cave in this game of chicken? My guess is that McCarthy will cave. Biden may whip out the 14th Amendment to bypass McCarthy and Congress, but this makes Biden a dictator (which would suit him fine, but would be a horrible precedent).
Core Inflation Rate UP 244% under Biden, Food UP 46%, Gasoline Prices UP 60%, Rental Growth UP 268%. What a disaster under Biden’s Reign of Error.
But at least the Biden family are getting wealthy beyond comprehension. Isn’t that Ashley Biden in the blue?
Like the famous novel “All Quiet on the Western Front,” its “All Quiet on the Default Front” as China Joe and Speaker McCarthy are set to meet again. In short, Biden wants to raise taxs on middle class and McCarthy wants to return Federal spending to pre-Covid levels. Sure, Biden throws around the Bernie Sanders’s tax on millionaires and billionaires line, but they know that M&Bs have professional accounts and lawyers to protect them while the middle class has Turbo Tax and H&R Block.
In any case, markets are calm (the calm before the storm?) although I think Biden WANTS to default and blame Republicans ahead of Biden’s reelection. The media will mindlessly repeat DNC talking points. So Biden is covered. After all, he says it isn’t his fault (although it is 100% Biden’s fault if America defaults because of his reckless budget and insane ramblings).
Let’s look at regional banks and the US Treasury SHORT curve: 2Y-3M. Notice that regional bank stocks have gotten demolished as The Fed tightens.
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 
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