Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
While headline inflation is growing at 8.6% YoY in March, flexible price inflation grew at a terrifying 25% YoY rate.
Even with headline inflation of “only” 8.56% YoY, today’s Q1 real GDP growth checked in at -1.4% QoQ. Clearly, Bidenflation isn’t help the economy or anyone else.
Diesel prices have skyrocketed under Biden.
Instead of Shoeless Joe, we have Clueless Joe as President.
I hope America’s foreign policy wizards (Biden, Harris and Blinken) weren’t relying on the Russian Ruble staying pulverized, because the Ruble (relative to King Dollar) has regained all its losses.
On the other hand, the Japanese Yen and Chinese Yuan have crashed harder than Biden’s popularity.
Actually, The Atlanta Fed’s flexible price inflation rate is 25%, up from 3.90% Pre-Joe.
Perhaps Biden, Harris and Blinken think Putin is a pasta sauce.
It’s official! The Biden economy stinks!
US real GDP growth for Q1 slipped into negative territory (-1.4% QoQ) while GDP price growth rose to 8%. So, negative real GDP growth is negative coupled with horrid inflation.
Personal consumption expenditures were below expectations at 2.7%.
Now that the Biden Administration has created an old Soviet Union-style Ministry of Disinformation (called the “Disinformation Governance Board”), I hope that I don’t get censored for reporting that the Biden economy officially stinks.
Good luck to The Federal Reserve in withdrawing the monetary stimulus.
Particularly if you are a pension fund and hold US Treasuries and Agency Mortgage Backed Securities.
The bad news is that the 10-year US Treasury Note declined in price, sending the yield up over 10 bps today.
As The Fed is projected to raise its target rate over 10 times by February 2023, 10-year Treasury Note prices and agency MBS 3.5% prices continue to decline.
Heartaches in heartaches. US GDP growth for Q2 has stumbled to 0.446% as The Fed is launching quantitative tightening (QT) to fight the inflation that they caused in the first place.
According to the Atlanta Fed’s GDPNow real-time GDP tracker, US GDP growth has stumbled to a meager 0.446%. Despite the massive stimulus from The Federal Reserve and Washington DC’s massive fiscal stimulus.
Biden, Powell and Congress are driving me crazy with inflation/price changes.
No corporate economists, inflation is NOT a good thing.
Pending home sales decline 8.9% in March, another heartache for Americans.
Will The Fed say good bye to its Snake Juice??
Thanks to The Federal Reserve helping to raise mortgage rates through the roof, mortgage applications are going down.
From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey. Mortgage applications decreased 8.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 22, 2022.
The Refinance Index decreased 9 percent from the previous week and was 71 percent lower than the same week one year ago.
The seasonally adjusted Purchase Index decreased 8 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was 17 percent lower than the same week one year ago.
The percentage of adjustable-rate mortgages (ARMs) increase 9.4% from previous week.
Yes, the 30-year mortgage rate is rising extremely fast.
“You’re Going Down” by Jerome Powell and The Constitution Avenue band. President Joe Biden conducting.
US existing home sales in March were expected to fall -0.6% from February, but they actually fell -8.6%. This is happening at The Federal Reserve is signaling tightening and mortgage rates are rising rapidly.
I think the above chart says it all.
Making homes affordable is NOT one of the mottos for The Federal Reserve. But making homes outrageously unaffordable for the masses should be their motto.
The February Case-Shiller home price indices are out for February and the national home price index rose to 19.80% YoY.
Instead of the limbo rock, The Fed is apparently trying to see “How HIGH can we go?”
Once again, Phoenix is the fastest growing city in term of home prices at a sizzling 32.86% YoY. The slowest? Washington DC at 11.94% YoY. That’s right! 12 of the top 20 metro areas had price growth of over 20% in February!
Here is Dvorak’s New World Symphony, an appropriate piece the global turmoil that has taken place after Russia’s invasion of Ukraine.
Here is the ratio of the S&P 500 index against the Bloomberg Commodity Price Index. This ratio is plotted against The Federal Reserve’s balance sheet of assets. Notice the decline in the Commodity Ratio in 2022, even ahead of the Russian invasion of Ukraine.
Global currencies, on the other hand, have been really crushed since the Russian invasion of Ukraine. The Japanese Yen, China’s Renminbi and Europe’s Euro relative to the US Dollar are falling due to a variety of reasons. Covid lockdown in China, Japan’s insistence on monetary easing while other Central Banks are tightening and the Euro with Russia threatening nuclear war.
WTI Crude is back to $100 a barrel. Critical metals are down today related to a slowing global economy and wheat is up 2.75%.
Could it be that US Dollar hegemony is nearly over and commodity-backed currencies are the way of the future?
M2 Money stock YoY skyrocketed during the Covid mini-recession, peaking at 21% during February of 2021. The Dallas Fed manufacturing outlook grew to 38.1 in March 2021.
However, as M2 Money growth has slowed 11%, the Dallas Fed manufacturing outlook has plunged to near zero.
So, with the economy faltering (and REAL wage growth in negative territory), will The Fed reinstate its “Low Rider” interest rate policies?
The US Treasury 10Y yield is down -12.5 basis points (never a good sign as investors buy Treasuries in a flight to safety).
Crude oil is down below $100 again and is down -5.61% today on … problems everywhere. ALL metals are down.
Cryptos are getting clobbered today as well.
Between Biden’s “Going green!” policies and The Fed’s allegedly trying to fight inflation, markets are getting trashed.
Confounded Interest - Anthony B. Sanders 
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