How Biden And Congress Helped Crush Netflix Stock Price (Declining REAL Earnings Led To Crash In Neflix Subscriptions)

Netflix, the movie and TV show subscription service, suffered an extraordinary decline in its stock price. But like the film “Margin Call” that pretends the Lehman Brothers bankruptcy in 2008 was a surprise, it really is no surprise that Netflix is getting crushed. Why? Thanks to Bidenflation, millions of American households are suffering (REAL average hourly earnings are declining under Biden) and many of those were Netflix subscribers.

Netflix’ earnings per share soared when Biden was first installed as President, likely due to effects of Biden’s/Pelosi’s/Schumer’s Covid stimulus. But alas, fiscal stimulus is short-lived but the negative effects of inflation are long-lasting.

Inflation Joe, the bully of the middle class and low-wage workers. But at least millionaires will get more electric cars charging stations! /sarc

Overheated Labor Market? US Capacity Utilization Rises To Near 80% (Fed Too Slow To Remove Stimulus As Supply-Chain Strain Increases)

The good news is that US industrial production rose 0.9% in March. The bad news? US capacity utilization rose to 78.3% indicating that the labor market is overheating.

Notice that prior to Covid, The Fed began rising raising its target rate as capacity utilization was increasing towards 80%. But once The Fed Funds Target rate (upper bound) hit 2.50%, capacity utilization started to cool off. Then Covid stuck.

Since Covid struck and The Fed massively expanded its balance sheet, capacity utilization has increased. But this time around, The Fed has been sloth-like in its removal of monetary stimulus.

Of course, The Fed has been slow to cool inflation which is the highest in 40 years. And supply-chain strains are peaking again (isn’t Mayor Pete in charge of infrastructure?) This is helping to drive prices up.

And don’t forget that REAL average weekly earnings YoY are falling.

Here is Fed Chair Powell explaining how The Fed will withdraw its historic monetary stimulus.

Fed’s Dual Mandate Derby! Misery Index Hits All-time High (Flexible Price Core Inflation Losses At 21.82% Overwhelming Employment Gains)

The Federal Reserve’s two goals of price stability and maximum sustainable employment are known collectively as the “dual mandate.” Unfortunately, inflation is running away (bad) from employment gains (good). Sort of like “The Good, The Bad and The Ugly.” But just the Good and The Ugly combine to create the Misery Index.

Here is the Atlanta Fed’s CORE flexible CPI YoY for March. The good news? Flexible Core CPI YoY was a little lower than the historic high reading in February. The bad news? We are still talking about 21.82%+ rise in prices (down from 23.56% in February).

If I use the Atlanta Fed’s flexible consumer price CORE index combined with the U-3 unemployment rate, we see that March’s inflation report plus U-3 unemployment is generating a misery index that was last seen in July 2008 during The Great Recession. Unless we consider the July 2021 reading of 31.3%, so we have seen two horrible misery index readings under Biden.

If we look at the Misery Index since 1967, we now have the GOAT (Greatest of All-time) Misery.

Now, inflation under Presidents Ford and Carter (red line) were higher than the flexible core price index (blue line) in the 1970s and 1980. But flexible core price CPI YoY is substantially higher than March’s CPI growth of 8.5%.

The bottom line is that inflation losses are far outweighing the employment gains, resulting in elevated misery.

Misery. We are all feeling it.

Inflation Nation! Real Average Weekly Earnings Growth Lowest Since 2007 (-3.6%) While Mortgage Payments UP 50% (US Treasury 2Y Yield Dumps 12 Basis Points)

Feeling hot, hot, hot! Inflation, that is.

US real average weekly earnings growth YoY is down to -3.60%. That is the lowest since 2007 and is worse than The Great Recession and financial crisis of 2008.

And look at this chart of mortgage payments under Biden. The US was actually experiencing DECLINING mortgage payments YoY in 2019 and 2020. But under Biden’s leadership, mortgage payments have increased by 50% making housing even MORE unaffordable for the middle class and lower-income households.

And now for something kind of scary. The US today suffered a 12 basis point decline in the 2-year Treasury yield, generally a bad sign for the economy. As if we needed more bad news for today.

Highest inflation in 40 years, worst wage growth since 2007 and rising mortgage payments. We will need all the luck we can get.

Bidenflation SOARS To 8.5%, Real Average Hourly Earnings Growth Falls To -3% YoY, Mortgage Rates Rise To 5.14% (The Four Horsemen Of The Inflation Apocalypse?)

The US inflation numbers were released this morning and they are grim. Inflation YoY grew to 8.5%.

With 8.5% YoY inflation, REAL average hourly earnings growth fell to -3% YoY.

And with The Fed intent on extinguishing their part of the inflation, Bankrate’s 30Y mortgage rate rose to 5.14%.

Energy is the biggest culprit (fuel oil up 70.1% YoY) thanks to the double whammy of 1) Russia’s invasion of Ukraine and 2) Biden’s restrictions on oil and natural gas production. Food at home is up 10% YoY.

Here is a colorful chart of MoM growth in prices.

The Taylor Rule model now says that The Fed Funds Target Rate should be 11.90%. Hence, Fed Stimulypto is still in place with the signal that rates will increase.

How about WTI Crude and Brent Crude soaring over 4% today?

Once again, the Four Horsemen of the Inflation Apocalypse (Biden, Powell, Pelosi, Schumer) overstimulated the economy and financial markets with excessive monetary stimulus (Powell) and excessive Federal spending (Biden, Pelosi, Schumer) where demand soared for products and supply naturally hasn’t caught up.

Euphoria! CoreLogic February Home Price Index UP 20% While Real Hourly Wages Decline (Wine Prices UP 25.1%, Foodstuffs UP 52.7 Under Biden)

Euphoria!

CoreLogic’s Home Price Insights revealed that home prices rose 20% YoY in February despite REAL average hourly earnings declining -2.678% YoY. THAT is euphoria! Or Stimulypto, as I like to call it.

No, The Federal Reserve still hasn’t removed its staggering monetary stimulus. Notice that M2 Money Stock is still growing at a torrid 11% pace.

20% YoY home price growth in February? CoreLogic has increased their forecast of home price growth to 5%, likely because The Federal Reserve is imitating a sloth in removing its monetary Stimulypto.

Of course, there are other assets growing at lightning speeds. US Regular gasoline prices are UP 75.4% under Biden. Foodstuffs are UP 57.2% since Biden was installed as President. At least ground beef is only up 16.8% while the fine wine index is up 25.1%.

Speaking of wine, Hitching Post II in Buellton, CA must be suffering from rising food and grape costs too (I highly recommend eating there and using their HP Magic Stuff at home). Not to mention their spectacular wines. Roast artichokes anyone??

The Great Reset … In Asset Returns (Commodities Soaring, Treasuries Tanking, Home Price Growth Still 4x Soaring Mortgage Rates)

Numerous elites like Klaus Schwab of The World Economic Forum (and Davos fame) are calling for a “Great Reset” in global economies. But perhaps “The Great Reset” in taking place in asset markets … and not in a good way.

Consider what has happened since President Biden was elected. The S&P 500 total return index (green index) has risen thanks to The Federal Reserve’s balance sheet expansion (orange line) with COVID. Until 2022 when the expectation of Fed rate hikes surged from 3 in late December 2021 to 9.4 expected rate hikes over the next 12 months (yellow line).

The US Treasury total return index (white line) has gotten crushed with The Fed’s signals of rate hikes and quantitative tightening (QT). Call it “White Line Fever.” The commodity total return index (blue line) has surged as The Fed’s expected rate hikes have risen from 3 to 9.4 in 2022.

Is The Fed causing a Great Reset in housing? In 2022, we see the surge in Fed rate hike expectations leading the 30-year mortgage rate to be nearly 5%. The last Case-Shiller home price index was for January and it was still raging at 19.17% YoY growth. Let’s see if The Fed’s QT will slow down home price growth. But home prices are growing at 4x 30-year mortgage rates.

I hope that Klaus Schwab and the global elites pick us up on our way down. But probably not.

So let’s see if The Fed still is going to withdraw its “Snake Juice” from the market.

Wasting Away In Biden/Pelosiville! US Treasury 10Y-2Y Yield Curve INVERTS As Real Average Hourly Earnings Decline -2.678% YoY (30Y Mortgage Rate Rises To 4.90%)

Wasting away again in Biden/Pelosiville, looking for my lost inexpensive gasoline and food. Some people say that Putin is to blame, but we know its Biden/Pelosi’s fault.

The US Treasury 10Y-2Y yield curve just inverted, generally a precursor to a recession. Called it, nothing but net!

Meanwhile, today’s jobs report shows that Bidenflation is crushing America’s wage growth. While average hourly earnings grew to 5.6% YoY, we are still seeing inflation growing at 7.9% YoY meaning that inflation is reeling hurting the middle class and lower-income households.

The good news is that the U-3 unemployment rate fell to 3.6%, almost back to the Trump-era unemployment rate of 3.5% prior to the Covid outbreak. And the unemployment rate remains below the CBO’s short-term natural rate of unemployment indicating that the labor market is OVERHEATED.

Today’s jobs report was pretty good, as we would expect from a recovery caused by governments shutting down economies, then reopening them. 431k jobs were added, but less than last month’s jobs added of 678k and less than the forecast 490k.

The number of people NOT in the labor force fell slightly, but it still around 100 million. The number of people holding multiple jobs to overcome Bidenflation rose to 7.5 million.

On the mortgage front, Bankrate’s 30-year mortgage rate rose to 4.90% as the 2-year Treasury rate (yellow) rises and the number of expected Fed rate hikes over the coming year is 9.26%.

No Cheap Gas For You! Pelosi Slams Oil Companies, Says She’s ‘Not for Drilling on Public Lands’

Despite crude oil, natural gas and gasoline price skyrocketing, House Speaker Nancy Pelosi proclaimed that

“The president has already talked about releasing oil from the — the st– as he already has done from the (slurred, inarticulate). And (slurred, inarticulate) I’m not for drilling on public lands.”

Well, if President Biden rescinded his executive order on drilling, pipelines, etc., we would see a reduction in energy prices AND inflation. But between Biden’s anti-fossil fuel orders and the Russia-Ukraine conflict, we can see that the WTI Cushing crude oil spot price has risen from $47 per barrel in early January 2021 to $112.05 today. That is over a doubling of crude oil prices.

Energy prices are up across the board, particularly gasoil, heating oil and coal.

If we use the core Flexible Price Index as a measure of inflation, we can see that Americans are the most miserable in modern history (Core Flexibe CPI + U-3 Employment rate).

But, no cheap gas for you! Pelosi said so.

UPDATE! House Republicans introduced the “American Independence from Russian Energy Act” on Feb. 28, a measure meant to authorize the Keystone XL pipeline, boost domestic oil and gas production, and prevent President Joe Biden’s executive branch agencies from halting energy leasing on federal land and water, among other provisions. Yet on March 1, the legislation was shot down by Democrats in a 221–202 vote, almost entirely along partisan lines.

Hey Bartender! Jobs Report Friday … The Good? 678k Jobs Added, The Bad? 0% Growth In Earnings (MoM), The Ugly? Inflation Is 7.5% (REAL Wage Growth Is -2.4%) WTI Crude UP 4.37% Overnight

Today’s jobs report is a mixed-bag. According to the February Bureau of Labor Statistics (BLS) report …

The good: 678k jobs were added.

The bad: Month-over-month wage earning experienced 0% growth (although YoY growth declined to 5.1%).

The ugly: inflation is still at 40 years highs of 7.5%. Meaning that REAL wage growth is -2.4%.

Here is the jobs report summary.

Of course, the leading sector for job creation was … leisure and hospitality with 179k added. Food services and drinking places (aka, bars) added 124k jobs.

Energy prices are way up … again … which will fuel more price increases. WTI Crude is up over 4% overnight, NYH gasoline futures are up 4.33%, coal is up 22.48%.