Biden’s economy and mortgage market are like a bad wine hangover. Thanks to inflation and The Fed’s tightening to fight inflation, mortgage purchase demand is down a staggering -42.4% since April 2021.
Mortgage applications decreased 5.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 12, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 8 percent from the previous week and was 43 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 4.8 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 26 percent lower than the same week one year ago.
Inflatiion Joe Biden (or Unaffordable Joe). Bidenflation has led to The Federal Reserve tightening interest rates. As I said on Stuart Varney’s show years ago, “When The Fed starts raising rates, KABOOM!”
Now we are seeing US Loan Demand weakening by the most since the 2009 financial crisis.
Then we have large/medium sized banks reporting a crash in stronger demand for C&I loans.
I wish Biden would spend more time trying to negotiate with McCarthy to end the debt crisis rather than stir up race hatred like he did at Howard University graduation. C’mon Joe! White “supremacy” is not the most dangerous terrorist threat. I would actually say that Biden, Yellen and Schumer (throw in Pelosi’s spending splurge as Speaker) are the biggest terrorist threat. They are the 4 horsemen of the US debt apocalypse.
Let’s see how Bidenflation (caused by staggering Federal misspending) and years of Yellen’s TLTL (too low too long) monetary policy has caused a massive dislocation in the housing market.
The February Case-Shiller National home price index less core inflation (CPI less food and energy) year-over-year is declining by -3.5%. This is happening as REAL average weekly earnings growth is at -1.06% YoY and has been negative growth for 25 straigth months.
Look at The Fed’s massive overreaction to the unnecessary government shutdowns of economies and schools. It really sent home price growth soaring, then when The Fed starts slowing the monetary stimulus, we get the largest slowdown of REAL home price growth since 2012.
The 4 Horsemen of the US Debt Apocalypse. I would add Mitch McConnell and Fed Chair Powell, but then would have an entire Cavalry company like George Armstrong Custer had at Little Big Horn.
Treasury Secretary Janet “The Evil Hobbit” Yellen is a Statist. She can only think of an all powerful central government calling the shots since the private sector and individual liberties are something to be eliminated.
Yellen has mostly declined to spell out what her department would do if Congress fails to raise or suspend the debt limit before the Treasury finds itself unable to cover all the government’s obligations.
Back in Mordor on The Potomac, President Joe Biden and House Speaker Kevin McCarthy postponed a meeting on the debt ceiling set for Friday. People familiar with the talks said the postponement was a sign that staff-level talks were yielding progress.
Biden and congressional Republicans have been locked in disagreement for weeks over raising the US federal government’s $31.4 trillion borrowing limit. GOP leaders have demanded promises of future spending cuts before they approve a higher ceiling. Biden has jinsisted on a “clean” increase, with budget talks kept separate.
Now what no one in our lame pro-government media or Congress or Administration has said is the a US debt default does NOT necessarily mean that the US walks away from its debt. Very likely, China and Japan, our two biggest foreign debt holders, will insist on debt restructuring so that the US pays some fraction of debt owed, like 80%.
But foreign debt holders are a relatively small percentage of US debt holders. The Federal Reserve is the largest single borrower, thanks in part to Yellen who has formally Federal Reserve Chair,
Of course, financial entities like Vanguard, Blackrock and Fidelity are the largest holders of US debt. Since pensions invest heavily with these enetitites, the Federal government would restructure the debt rather than outright default.
US CDS 1Y continues to remain high as Biden/Yellen/Schumer play chicken with the lives of the American middle class while the political donor class is clamoring for endless spending and wealth transfers.
Remember, Biden, Yellen and Schumer all Statists and believe that their job is growing Federal government to wear it is all powerful and their donors get billions in subsidies and wealth transfers. You don’t think green energy subsidies make any common sense, do you? Wind turbines (aka, whale and eagle killing machines) are ineffective. We need nuclear power but Progressives fear nuclear power as much as they have Donald Trump.
Bankrate’s 30-year mortgage rate is down slighty to 6.89%, but that masks the reality that mortgage rates were only 2.88% when Biden was sworn in as President. That is a staggering increase of 140 in the 30-year mortgage rate.
In fairness to Unaffordable Joe, Congress went on a crazy spending spree with Covid, much of which had nothing to do with Covid. Green energy spending for the donor class is helping drive core inflation up 291% since Biden was installed as President.
And yes, The Fed is playing catch up for former Fed Chair Janet Yellen’s “Too low for too long (TLTL) monetary policy. So, now she is creating mayhem as US Treasury Secretary. And she was a terrible Fed Chair, now a terrible Treasury Secretary.
And yes, The Fed looks like they are pausing rate hikes.
Resident Biden has been an unmitigated disaster for the US middle class, but fantastic for BIG corporate America and the donor class.
Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 5, 2023.
The Market Composite Index, a measure of mortgage loan application volume, increased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week and was 44 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 5.3 percent compared with the previous week and was 32 percent lower than the same week one year ago.
Here is the data.
Middle class Joe as he likes to call himself is actually BIG CORPORATE Joe. A friend of big donor and BIG pharmam, BIG banks, BIG tech, BIG defense contractors, BIG media. No wonder Hunter Biden refers to Joe as “The BIG guy!”
Biden’s approval ratings are terrible. Okay, Biden is the worst President in history, weak, can’t speak coherently and is letting chaos reign on the southern border. But from a consumer standpoint, he and crazy spending Congress have helped make America simply unaffordable for miillions.
Once again, Biden’s obsession with foolish green energy, Congress using Covid to spend trillions, then the green energy subsidy Act (aka, Inflation Reduction Act) where Biden and Congress agreed to make massive payoffs to big donors (the donor class). All this resulted in 40 year highs in inflation leading The Federal Reserve to raise interest rates to combat inflation.
For autos, the interest rate on an auto purchase has soared to it highest level since 2008. And car prices at up 19% under Biden’s Reign of Error.
And when we consider that US Real Average Weekly Earnings growth continues to be negative under Unaffordable Joe.
Housing? At least home price growth is slowing and even negative in some cities. But housing is still unaffordable for millions of Americans.
The housing situation will only get worse as Title 42 expires and millions of illegal immigrants invade the US. Texas Governor Abbot should ship all of them to Wilmington Delaware, home of Unaffordable Joe Biden. Let him suffer for once from his own folly.
Food? Don’t get me started. The Commodity Research Bureau is up 44% under Unaffordable Joe.
Okay, Biden is a useful idiot for BIG banks, BIG Pharma, BIG tech, BIG defense, and BIG government. He is popular with the 1% and people who watch “The View.” But many of the 99% are suffering under Unafforable Joe.
Ok, it is well-known that Biden was the stupidest man in the US Senate. And with Washington’s Patty Murray in the Senate, that is quite an accomplishment.
But Biden is President and is still stupid and spiraling down the dementia rabbit hole. He is blaming Republicans for their budget proposal to end the debt ceiling crisis despite saying previously that he would negotitate. Apparently, Biden’s puppet masters are telling him to risk default by playing the blame game.
So, US credit default swap (CDS 1Y, SR, EURO) price remains elevated which indicates that Biden, Yellen and Schumer may actually default on US debt.
As M2 Money growth crashes and burns, the US Treasury 2Y-3M yield curve inverts to lowest in history.
As Connor MacLeod said in the film Highlander, “There can only be one!” The US banking system under Joe Biden’s Reign of Error is like the film Highlander: apparently, there can only be one bank. And it is likely JP Morgan Chase.
Take the JP Morgan Chase (JPMC) acquisition of First Republic Bank:
In Acquiring First Republic Bank, JP Morgan Has:
Bypassed laws against acquiring bank while controlling 10%+ of US deposits
Shared $13 billion in losses with the FDIC
Received a $50 billion loan from the FDIC
Effectively bought back its own deposits
Expects to profit $5 billion+ over the next 5 years
This crisis has taught us that rules don’t matter in times of panic, particularly to regulators.
And now we have PacWest Bancorp. Lender says it’s been approached by potential investors. Bill Ackman warns US regional banking system at risk.
The turmoil at PacWest shows how investor angst still remains elevated after a string of failures and deposit outflows in the sector despite Federal Reserve Chair Jerome Powell’s assurance Wednesday that authorities were closer to containing the crisis. It’s reignited the debate over whether more US regional lenders will fall after this year’s collapse of SVB Financial Group’s Silicon Valley Bank, Silvergate Capital Corp., Signature Bank and most recently First Republic Bank.
Smaller banks are under pressure after a year of interest-rate hikes hammered the value of their bond holdings and drove unrealized losses to an estimated $1.84 trillion. Trouble in commercial real estate is adding to the pain, while depositors take their money out to seek better returns elsewhere. These stresses have put the spotlight on these lenders, which typically have fewer resources to defend themselves.
We are seeing a consolidation of the banking system .. again as smaller and regional banks fail and get gobbled up by the Too-Big-To-Fail (TBTF) banks like … JP Morgan Chase.
Biden’s Reign of Error is not over yet. His campaign slogan (which was also Bill Clinton’s campaign reelection slogan) is “Finish the job!” With Biden’s idiotic mortgage idea of punishing borrowers with good credit and giving subsidies to those with bad credit, Biden is trying to finish off the US economy and banking system.
This is last data dump for mortgage demand (applications) before Biden’s idiotic woke mortgage policies go into effect (taxing those with good credit to subsidize those with lousy credit) take effect. I call this Bolshevik Biden’s Mortgage Market.
Mortgage applications decreased 1.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 28, 2023.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.4 percent compared with the previous week. The Refinance Index increased 1 percent from the previous week and was 51 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 1 percent compared with the previous week and was 32 percent lower than the same week one year ago.
Confounded Interest - Anthony B. Sanders 
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