Pelosi Cola! Latest Congressional Spending Spree Includes 21% Increase In Congressional Staff Allowance While Social Security Increases (COLA) By Only 5.9% (Pelosi/Schumer Prioritize DC Staffers Over Retirees)

US Speaker of the House and American Oligarch Nancy Pelosi together with Senate Majority Oligarch Charles Schumer passed yet another massive spending bill that seemingly benefited them and not the American middle class.

As part of the $1.5 trillion omnibus spending bill released Wednesday, the $5.9 billion fiscal 2022 Legislative Branch funding portion would substantially boost the office budgets of House members to pay staff more.

This legislation would provide $774.4 million for the Members Representational Allowance, known as the MRA, which funds the House office budgets for lawmakers, including staffer salaries. This $134.4 million, or 21 percent, boost over the previous fiscal year marks the largest increase in the MRA appropriation since it was authorized in 1996, according to a bill summary by the House Appropriations Committee. For paid interns in member and leadership offices, the House would get $18.2 million.

Unfortunately, retirees received a Social Security Cost of Living Adjustment (COLA) of only 5.9%.

This is especially unfortunate given at inflation is growing at 7.9%. If we remove food and energy (two important categories for consumers and retirees), core inflation is growing at 6.4% YoY. As such, Social Security COLA doesn’t even keep pace with CORE inflation, let alone food and energy costs.

In August, Speaker Nancy Pelosi announced staffers’ salaries could exceed those of lawmakers. Members in both the House and Senate, with the exception of leadership, make an annual salary of $174,000. Staffers can make up to $199,300.

The Hill has a nice summary of the latest Pelosi/Schumer Spendapalooza, “Lawmakers feast on pork in omnibus.”

After an 11-year drought, congressional earmarks are back with vengeance.

The $1.5 trillion, 2,741-page omnibus spending package is loaded with funding for lawmaker pet projects, some of which could help incumbents in this fall’s elections.

The legislation includes more than 4,000 earmarks, according to a list of projects provided to The Hill by a Senate Republican aide that spanned 367 pages.

One of the biggest winners was New York — thanks to Senate Majority Leader Charles Schumer (D-N.Y.), who is up for reelection this year.

Schumer’s name is attached to 59 earmarks totaling nearly $80 million in the omnibus’s transportation and housing and urban development (HUD) section alone, according to a review by The Hill. He successfully requested funding for the projects either individually or with other lawmakers from his home state.

Is wild-spending Pelosi actually “The Bride of Chucky (Schumer)”?

Who Benefits The Most From Federal Reserve Stimulypto? (Hint: NOT The Bottom 50% Of Population)

Following the financial crisis of 2008/2009, The Federal Reserve began their dramatic purchase of assets such as Treasuries and Agency mortgage-backed securities (AgencyMBS). And then Covid struck and The Fed went berserk with asset purchases.

So, who benefited the most? The top 1% or the bottom 50%?

Answer? The top 1%. The share of total net worth spiked dramatically after the Fed infusion.

Even the bottom 50% benefited with The Fed’s Covid stimylpto, but no where near how the top 1% benefited.

World Economic Forum’s elitist Klaus Schwab approves of this message!

On an unrelated note, the US Treasury yield curve is strongly UPWARD sloping, while Russia’s and Ukraine’s yield curves are inverted and collapsing.

Consumer Confidence Plunges As Inflation Worsens (UMich Conditions For Buying Homes Declines To 70)

As inflation worsens, the University of Michigan survey of consumers fell again as US inflation worsens.

On the housing front, buying conditions for houses fell to 70 as a result of soaring home prices.

MY confidence in Biden and Congress has certainly declined.

Atlanta Fed’s Flexible Price CPI Soars To 20% In February, Biden’s Misery Index Now Highest In Modern American History

The flexible cut of the CPI—a weighted basket of items that change price relatively frequently—increased 19.76 percent (annualized) in February.

If we added the U-3 unemployment rate, we get a MISERY Index under Biden of 23.56%, the highest in modern history. Worse than Carter-era inflation and malaise.

Bear in mind that the traditional use of the misery index is CPI YoY + U-3 unemployment rate, we see that Biden’s misery index is similar to the early years of Obama (following the financial crisis) but lower than the Ford/Carter years.

Biden: No joy for you!

US Inflation Soars To 7.9% YoY In February As Gasoline Prices Climb 38% YoY, Food Rises 7.9% YoY)

As expected, US inflation soared to 7.9% YoY in February as gasoline prices continue climbing.

US rent inflation (owner’s equivalent rent of residence YoY) surged to 4.30%. However, Zillow’s rent index last month was 15.93% YoY.

But if we look at US Monthly Rent YoY, we see that rents are climbing at a 17.6% rate.

Energy costs soared in February YoY. Gasoline was up 38%. Fuel Oil was up 43.6%. Food was up 7.9%.

Volatility (AVAT) rages in the energy sector.

There are still 7 rate hikes in the cards from The Federal Reserve.

Gold has been climbing as Russia invades Ukraine. Cryptos Bitcoin and Ethereum are steady, even as the Biden Administration issues an executive order to “study” cryptocurrencies.

MBA Mortgage Purchase Applications Rise 11%, Refi Applications Rise 9% From Previous Week, But Refi Apps Still Down 50% From Same Week Last Year (10Y-2Y Treasury Curve Continues To Flatten)

The mayhem caused by the Russian invasion of Ukraine is helping drive down interest rates … for the time being … and this is helping push down mortgage rates and increase mortgage applications.

Mortgage applications increased 8.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 4, 2022.

The seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 7 percent lower than the same week one year ago.

The Refinance Index increased 9 percent from the previous week and was 50 percent lower than the same week one year ago. Diane Olick at CNBC has the hilarious headline “Brief drop in mortgage rates sparks mini refinance boom.” The slight rise in refi applications from the previous week is more of a firecracker going off than a boom given that refi apps are still down 50% from the same week last year.

Bear in mind that the US Treasury 10-year yield is up since the MBA’s reporting week ended on March 4, 2022. So, look for Olick’s mini-refi boom to end as quickly as it started.

Here is the rest of the MBA story.

The MBA Mortgage Purchase applications index typically peaks in mid-to-late April, so we still have another month (seasonality) until purchase applications begin declining again.

The US Treasury 10Y-2Y curve continues to flatten and is the worst curve recovery in modern history.

The general rise in US mortgage rates is more closely tied to expectations of Fed rate increases than Fed Agency MBS holdings.

An American Pickle! Nickel Prices SOAR +66.25% As Stock, Bond And Energy Volatility Skyrocket

America is suffering a “nickel pickle.” As the US Federal government pushes their green energy agenda, Mayor Pete Buttigieg (aka, Transportation Secretary) on Monday said “the American people stand to benefit from having more electric vehicles on the road.” Unfortunately, electric vehicles use nickle in their production and guess who produces the most nickel? Russia.

Nickel futures were up +66.25%.

Unfortunately, Russia is the largest miner of nickel. But Brazil is second.

We are also seeing rising volatility of US stocks (VIX) and bonds (MOVE) as Russia’s invasion of Ukraine continues and crude oil prices soar.

While NYM WTI Crude volatility is up +296%, NYM DUBAI Crude is up +4,626.19%, and NYM JKM (Japan/Korea) natural gas volatilty is up 1,900%.

Now, US oil and gas exploration and drilling rig count has almost doubled under Biden as oil price surge.

We are in an American pickle since Russia is a major supplier of oil and natural gas as well as nickel.

On a personal note, I feel good!

Perhaps the US has to send out the bat signal to help reduce energy prices.

Energy Prices SOAR As US Treasury Yield Curve Swoons (Gold Almost At $2,000 As Bankrate’s 30Y Mortgage Rate Declines To 4.10%)

WTI Crude Oil spot price was up 91% from the beginning of 2021 to the Russian invasion of Ukraine. Now it is up 142% thanks to the invasion of Ukraine.

Energy prices are still soaring with UK Natural Gas prices up another 34.70% today with Brent Crude futures up 3.34%. Wheat futures are up 7.03%.

The US Treasury 10Y yield rose 6.8 bps this morning (UK takes the lead with a 10.3 bps increase).

The US Treasury 10Y-2Y yield curve slope continues to swoon to where it is now flatter than when President Biden entered office.

Gold is now at it highest level since before Biden was sworn-in as President as WTI Crude Oil soars.

Gold hit $2,000 before retreating back down.

And Bankrate’s 30Y mortgage rate declined to 4.10%.

Russia is the world’s largest exporters of wheat and Ukraine is the 5th largest exporter.

Putin: “No wheat for you!”

Weekend Update II: Russian Bonds, Stocks, Ruble And Oil Exports Crash (But Russian 5Y CDS Drops To 554)

Russia is still engaged in its invasion of Ukraine. And the US continues to import crude oil from Russia. In fact, US crude oil imports from Russia soared under Biden only to decline again in December 2021.

On the sovereign bond and currency front, the 5.25% coupon Russian international sovereign bond has crashed to 22.494. And the Ruble/USD cross has crashed as well.

Sberbank Bank 5 1/8% corporate bond has crashed to 25.

The Russian blue-chip stock market (OTOB Russian Traded Index CRTX) has crashed by over 50% since the invasion of Ukraine.

Fortunately, I like Cheerios for breakfast made from oats, since wheat futures are soaring.

Russia’s Credit Default Swap (CDS) 5Y has dropped to a still-elevated 554.

The US really needs to ban Russian crude oil imports, since Biden’s failed in game theory by cutting US energy exploration on Federal lands and offshore drilling.

War is hell, as Vlad “The Ukrainian Impaler” Putin has demonstrated.

Weekend Update: Oil, Commodities, Wheat, Soaring In Price, Mortgage Rates Down (Inflation Forecast To Worsen)

This has been a brutal week for consumers. With the Russia/Ukraine conflict raging and Congress seems determined to not allow for additional oil and gas production, and Biden’s anti-fossil fuel edicts still in place, we are seeing dramatic price increases in wheat (UP 89.5% since January 1, 2021), WTI Crude (UP 143% since January 1, 2021), and food stuffs (UP 55% since January 1, 2021).

Bankrate’s 30-year mortgage rate has actually been falling the last several days, which is good for prospective home buyers as the 10-year US Treasury Note yield has been declining.

The USD/Russian Ruble cross is skyrocketing and the USD/Euro is doing likewise. Russians visiting the US will find that their trip is suddenly unaffordable (as do many American citizens will its rampant inflation). As Bruce Willis said in “Die Hard,” “Welcome to the party, pal.”

On Friday, the US Treasury 10-year yield declined 11 bps.

And energy prices continue to soar, particularly UK Natural Gas Futures that rose 19.85% overnight.

The US inflation data will be released on March 10th and the consensus is that February CPI inflation will rise to 7.9% YoY.

But even the latest unemployment rate report (3.8%) is signalling that The Fed should be raising interest rates since it is lower than the Natural Rate of Unemployment or NAIRU (4.44%).

And we have the next Fed policy error on March 16th. The Fed dots plot looks like the glide slope for an aircraft, but the message is that rates will be going up at future meetings.

And just for amusement, I present to you the infamous Hindenburg Omen chart that forecast the 2008/2009 stock market correction. Since that correction, the Hindenburg Omen has been flashing “danger” but the only correction was the COVID-linked correction of early 2020. While the Hindenburg Omen is flashing red right now, The Federal Reserve’s balance sheet (green line) has protected against market corrections. Let’s see what happens if and when The Fed decides to remove the epic monetary stimulus.

Its anyone’s guess as to whether The Fed will actually tighten monetary policy.