Category: GDP

Big Short Redux CMBS Style, Top AAA-rated CMBS Experienced $40 Million Loss In May (First Time Since 2008 Financial Crisis)

Is this The Big Short, CMBS style?

The delinquency rate on commercial mortgage-backed securities (CMBS) for offices spiked to 8.1% in July, the highest in 11 years.

The delinquency rate of office CMBS loans has QUADRUPLED in 1.5 years.

Delinquencies are currently rising at a faster pace than during the 2008 Financial Crisis.
A top AAA-rated CMBS experienced a $40 million loss in May for the first time since the 2008 Financial Crisis.

While not an office, Edward Hopper painted some great real estate properties!

Kama Kameleon! Fed Loses Record Amount, Bankrupty Filings (Chap 11) Highest In 13 Years, Foreign Investors Pulling Out Of China

Kama Kameleon.

Kamala Harris, despite being VP for almost 4 years, is going to annouce her plans for taming inflation. Why doesn’t she do it now?? What Harris can’t control is The Federal Reserve that is losing money at breakneck speed.

Here is The Fed’s balance sheet.

I shudder to think what Harris will propose to solve the highest bankrupty (Chap 11) rate in 13 years. Probably more Bidenomics (big wealth transfers to large corporations/donors).

Meanwhile, foreigns pulled a record amount of funds from ailing China.

Kamala Harris will say anything to get elected, then fall back on her Communist agenda.

VIX Vapo Rub! VIX Explodes Last Monday (Only Two Other VIX Episodes Higher Than 60)

I have another use for VIX … to wipe out stock market gains. VIX is the S&P 500 volatility index, also known as “The Fear Index.”

Over the last 35yrs, the whole life of VIX history, there have only been 2 prior episodes of VIX trading >60: The 1st was during GFC, the collapse of Lehman, the 2nd episode occurred during Covid and we had a 3rd occurrence: that was last Monday.

VIX … wiping out stock returns!

Trouble With The Curve! US Yield Curve Rises Above 0 Slope While Mortgage Rates Fall

We know several things about the yield curve. First, it goes negative before recessions. Second, it is related to the inverse of The Fed’s target rate (blue line).

How about the US mortgage rate? Generally, US Mortgage rates are inverse to the 10Y-3M yield curve, but lately the US mortgage rate (pink circle) have declined with the 10Y-3M yield curve.

The yield curve does forecast recessions, but is unreliable in forecasting mortgage rate movements.

The Fed Money Printing And Stock Prices And Housing Prices (Why The Fed Must Keep On Printing!)

The Fed’s theme song: Keep on printing!

Look at this chart of the S&P 500 index against M2 Money stock.

And this chart of Case-Shiller home prices against M2 Money.

Bottom line? The Fed has to keep on printing money. Otherwise, the US economy will collapse like a cheap building.

Here is Fed Chair Jerome Powell creating assets bubbles.

The Wheels Came Off Biden/Harrisnomics: Record Low Savings Rate And Record High Consumer Debt

The wheels are coming off Bidenomics. Code for corporate welfare and massive government spending. Coupled with misguided and burdensome regulations, we got gut wrenching inflation.

The result? A disastrous stock market showing yesterday.

What has Biden/Harris’ economic agenda wrought? Record high personal debt and record low savings rates.

Biggest Loser? Fed Posts Record Loss Of $114 BILLION In 2023

Remember the TV show “The Biggest :Loser”? That show was about weight loss.

Now The Federal Reserve has posted a record loss of $114 BILLION IN 2023.

The cause of the loss? Massive expansion of The Fed’s balance sheet coupled with rising interest rates. The two year track record of The Fed is truly appaling. With a bloated balance sheet, rising interest rates have caused staggering losses.

The Fed is the biggest loser!

And the biggest losers!

Commercial Real Estate Is Dying! NY CRE Property Sells For 97% Discount At Auction (135 W 50th St)

The US commercial real estate sector is dying, like an episode of The Twillight Zone.

Example? This is 135 W 50th St in NYC. In 2006, this building sold for $332 million. Yesterday it sold for $8.5 million at auction. A 97% discount!

It is mostly smaller banks with large CRE exposure.

Biden/Harrisnomics In One Chart! Treasury Interest Outlays Exceed Entire Defense Outlays (Medicare And Social Security Lead Government Outlays)

Here is Biden/Harrisnomics in one chart! Treasury (interest) payments are growing faster than other government outlays and a larger than the entire Defense outlays. Leading outlays include Medicare/Medicaid and Social Security.

Here is Treasury Secretary Janet Yellen symbolically gorging on a foot-long sub. No one spends like unelected government bureaucrats!