Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
US home prices fell for the 3rd straight month In May. The MoM decrease in the seasonally adjusted (SA) Case-Shiller National Index was at -0.29% (-3.5% annual rate).
Despite continued money printing by The Fed.
kkk
Nobody pisses away money like Washington DC.
The Fed lost another $653 million last week, bringing total realized losses to more than $236 billion since Sep ’22.
Nothing has been the same since the financial crisis and Bernanke’s overreaction.
California Governor “Greasy Gavin” Newsom wants to be President of the USA. He will fit right in with the other spendthrifts in Washington DC.
China unleashed the Wuhan virus on the globe, Anthony Fauci convinced Congress to binge spend like drunken sailors on Covid prevention and relief. Homes prices soared, mortgage demand sank and nothing has been the same.
Here is a chart of the Case-Shiller national home price index post Covid outbreak and the hysterical overreaction by Congress and the Administration (including Anthony Fauci).
Another example? New home sales are down 6.6% YoY.
Who do we blame? China? Yes. Anthony Fauci? Yes. Congress? Yes.
US existing home sales dropped 2.7% MoM (vs -0.7% MoM expected) in June leaving existing home sales unchanged year-over-year.
The median sales price increased 2% in June from a year ago to a record high of $435,300.
Meanwhile, The Fed keeps on printing money.
This is a new world for housing and mortgage finance. Outrageous, unafforable housing for millions.
Housing in the USA is simply unaffordable!
House prices have exploded since Covid, primarily due to massive Federal spending.
In terms of YoY growth, average hourly earning are exceeding home price growth.
Affordable housing is difficult to achieve at the national level since local politicians control local economies badly. Think LA Mayor Karen Bass who is taking Pacific Palisades which recently burned down and wants to build multifamily housing for low income households. This reminds me of the folly in Long Branch New Jersey where they built low income housing on the beach front. It failed, of course.
Doctor, doctor, we’ve got a bad casing of unaffordable housing.
Here is a picture of US affordable housing policy.
Keep on printing is the song of The Federal Reserve. But its the same all over the world as global central banks are printing zads of money too.
Bitcoin keeps on growing in price as global M2 Money supply keeps on growing.
And the same is true for ethereum. It keeps growing as M2 Money keeps growing.
It is another example of government gone wild!
The media and Democrat politicians love to fear monger about how Trump’s tariffs would cause inflation and unemployment. But June’s import prices showed no inflation at all. In fact, import prices FELL -0.2% YoY.
The latest jobs report revealed that U-3 unemployment FELL to 4.10%.
But don’t worry. Elizabeth Warren (D-MA) will get hysterial about Trump firing Fed Chair Jerome Powell. And, as usual, be wrong.
Currently, bond market investors are singing Twist And Shout as Trump ponders firing Fed Chair Jerome Powell. In fact, the US Treasury yield curve has TWIST STEEPENED.
The US Treasury curve is indeed steepening its slope.
I strongly urge President Trump to fire Powell and appoint Blue Velvet’s Frank Booth as Federal Reserve Chairman.
And only Pabst Blue Ribbor beer will be served at the Fed’s restaurant in DC. Not Heineken.
US prices rose 0.3% MoM in June according to the Bureau of Labor Statistic (BLS). And on a YoY basis, inflation rose 2.7% while core inflation rose 2.9%.
Supercore inflation was up 3.017% YoY.
As of May, import prices rose a scant 0.0% MoM and 0.2% YoY.
Shelter rose 3.8% YoY in June while gas utilities rose 14.2%.
And on this news, the yield on 30-year Treasuries rose 5%.
Not a chance that Foul Powell will cut rates now.
Confounded Interest - Anthony B. Sanders 
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