Medusa Touch II: REAL Wage Earning Growth Remains Negative, Reverse Repos Continue To Grow, Lithium Prices And Mortgage Rates SOAR

President Biden (or whoever is pulling his strings) is inflicting a “Medusa Touch” on the US. That is, everything his administration touches turns to stone.

Yesterday, I walked through the rise in energy and food prices under Biden, and it is horrific. The only “disinformation” was generated by the Biden Administration itself claiming that soaring inflation is due to Russia’s invasion of Ukraine. I demonstrated that inflation began with Biden’s anti-fossil fuel executive orders and the Russia invasion only made things worse.

Let’s look at average hourly earnings. Thanks to “progressive” energy policies from Biden, REAL average hourly earnings growth has crashed and burned.

But here is the chart that the Biden Administration touts showing average hourly earnings growth at 5.6% YoY (although I doubt if Jen Psaki would leave out the massive distortion caused by The Federal Reserve’s “Let’s go crazy!” monetary policy.

Another Medusa Touch moment is the reverse repo market. When I wrote about reverse repos before, several people wrote me saying “You don’t understand. This is a temporary problem and will vanish shortly.” However, The Fed’s reverse repo facility has now climbed to an all-time high.

Then we have the disruptive effects of The Federal Reserve deciding for us that mortgage rates are too low and should be higher.

Now look at lithium prices, a key element for electric car batteries. Making the switch from Internal combustion engines to electric motors far more costly.

The list goes on and on.

Suffice it to say, everything the Biden Administration touches turns to stone.

But I wager that the Biden Administration wishes that Hunter Biden’s laptop would turn to stone.

Only an elitist DC bureaucrat like Joe Biden would laugh at inflation that is ruining the lives of millions of Americans.

Consumer Sentiment For Home Buying Crashes To Lowest Level Since 1982 As Bear Sentiment Takes Hold In Stock Market

Rising home prices and The Fed signaling an end to the perpetual punch bowl have resulted in the University of Michigan buying conditions for houses to hit the lowest level since 1982.

While bearish sentiment in markets highest since 2009 in the stock market.

I don’t get why Biden created a “Disinformation Control Board” led by Nina Jankowicz – a disinformation spewer. We already have disinformation media outlets like CNN, MSNBC, ABC, CBS, NBC, New York Times, Washington Post, etc., so why create a Federal control board? All in time for the midyear elections!!

If this move by Biden doesn’t terrify you, then you didn’t study history.

Terminal (Money) Velocity? M2 Money Velocity Crashes To Near All-time Low As Fed Continues To Print Money At 9% YoY Clip (Mortgage Rates Keep Rising)

M2 Money Velocity (GDP/M2 Money) peaked in Q3 1997, but after several bouts of Fed money printing, M2 Money Velocity is near the all-time low at 1.1216 In Q1 2022. And M2 Money stock is still growing at a torrid pace of 9.9% YoY. But the massive overreaction of The Federal Reserve in response to the Covid outbreak has led to near zero money velocity.

Now with The Federal Reserve considering removing the monetary stimulus, what will happen to US GDP left to survive on its own?

An example of how The Fed’s expected tightening of monetary policy can be seen in the meteoric rise in mortgage rates.

So, the US has hit terminal money velocity. I wish The Fed lots of luck going forward.

Is Charlie Sheen the Chairman of The Federal Reserve Board of Governors?? That must be Lael Brainard falling out of the sky with Charlie Sheen (aka, Jerome Powell).

Spot The Loser! Japan’s Yen, China’s Yuan or Russia’s Ruble (Russian Ruble Bounced Back While Yen And Yuan Have Crashed)

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.

Commodities Versus S&P 500 And The New World Order (Crashing Currencies And Flight To Commodities) The End Of US Dollar Hegemony?

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?

REAL Mortgage Rates At -3.25%, REAL Wage Growth At -2.99% YoY While REAL Home Price Growing At +11.7% YoY (Powell And Fed Singing “No Sugar Tonight”)

For the moment, Fed Chair Jerome Powell and several Fed governors are singing “No sugar tonight” for the economy.

As The Fed sings “No sugar tonight” exemplified by the number of expected Fed rate hikes by February 2023 has grown to 10.4. Mortgage rates are now the highest since 2009, but inflation is the highest in 40 years. The result? The REAL 30-year mortgage rate is -3.25%.

REAL average hourly earnings are now a terrible -2.99% YoY thanks to the worst inflation in 40 years. REAL home prices are growing at 11.8% YoY.

Traders are betting that even with the Fed boosting its target for the federal funds rate by 2.5 percentage points this year to 3% won’t be enough to get the inflation rate back down to 2% over the next decade from around 8.5% currently.

In nominal terms, mortgage rates are seemingly trying to rise to 2007 levels (6.5%). But the gap between the 30-year mortgage rate and Fed Funds target rates is back to 2009 levels.

Talk about Fed and Fed government OVER stimulypto! Even REAL US home prices grew at 12% YoY pace while the REAL Fed Funds Target rate is -8.04%.

Slipping Into Darkness! Bidenflation And Fed’s Reaction Causing Social Security And Pension Funds To Get Clobbered (Mortgage Rates Keep Climbing)

US President Biden went green and signed executive orders on his first day to limit oil and natural gas exploration of Federal lands and offshore (also, killed the Keystone Pipeline), helping to drive up energy prices and food prices. These orders begat inflation (also caused by the massive Covid relief by the Federal government). The highest inflation in 40 years begat The Federal Reserve signalling a tightening of Fed monetary policy … to fight the problem caused by The Fed in the first place … too much monetary stimulus for too long. Fiscal and monetary fanaticism and ignorance is forever busy and needs feeding

There was an interesting article on MarketWatch entitled “Bond rout exposes Social Security’s insanity.” The headline was “Every dollar of yours that’s invested in the Social Security trust fund is invested in low-yielding government bonds.”

Yes, another disastrous consequence of The Fed’s lax monetary policy since 2008, helping to push Treasury yields extremely low. And REAL Treasury yields into negative territory.

But here we sit today with The Fed threatening to trim their balance sheet and raise rates … to combat the inflation they helped create in the first place. Now we have the 10-year Treasury Note price falling like a paralyzed falcon with expected hate hikes going above rate hikes by February 2023 (based on Fed Funds Futures prices).

Most pension funds also invest heaving in US Treasuries, along with agency Mortgage-backed Securities (AgencyMBS).

Plus we have the Treasury curve slipping into darkness.

Speaking of “Slipping Into Darkness,” mortgage rates are soaring.

Meanwhile, Biden, Fed economists and Congress are merrily partying at some DC nightclub.

What is hip? NOT Biden, Pelosi, Schumer or Powell.

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

US Existing Home Sales Decline -2.7% In March As Available Inventory Remains MIA (Median Price YoY At 15.23% YoY As Fed Keeps Foot On Monetary Accelerator)

US existing home sales declined -2.7% MoM in March and are down -3.8% YoY.

The median price of existing home sales are still sizzling at 15.23% YoY while inventory available still remains MIA by historic standards.

While mortgage rates have been smoking, existing home sales growth slowed compared to February as the US begins its Spring/Summer buying season.

WHO is buying homes? There are considerably purchases by investors as of Q4 2021 taking advantage of Fed stimulypto.

Stimulypto! How The Federal Reserve Helped Drive Property Taxes Above $10,000 In New York City (NYC Home Prices UP 26.3% Since February 2020, Chicago UP 21.7%, LA UP 32.5%)

As we are all aware, The Federal Reserve launched its monetary “stimulypto” in March 2020 to combat the Covid virus. Coupled with the surge in Federal stimulus, we have seen home prices rise over 20% since February 2020.

Specifically, New York City home prices are up 26.3% since February 2020, Chicago home prices are up 21.7%, and Los Angeles home prices are up 32.5%. Fed monetary stimulypto is up 113% since February 2020.

Of course, this has resulted in soaring PROPERTY TAXES as well. According to Attom Data Services, “Among 1,481 U.S. counties with at least 10,000 single-family homes in 2021, 16 had an average single-family-home tax of more than $10,000, including 12 in the New York City metro area. The top five were Kings County (Brooklyn), NY ($13,734); Marin County, CA (outside San Francisco) ($13,719); Westchester County, NY ($13,674); Essex County, NJ ($13,116) and Nassau County, NY ($13,095).”

Of course, not all metro areas raised their property taxes. Major markets with the largest decreases in average property taxes included Pittsburgh, PA (down 35.1 percent); New Orleans, LA (down 20.2 percent); Houston, TX (down 18.7 percent); Dallas, TX (down 12.2 percent) and Austin, TX (down 7.7 percent).

States with the highest effective property tax rates in 2021 were Illinois (1.86 percent), New Jersey (1.73 percent), Connecticut (1.67 percent), Vermont (1.55 percent) and Pennsylvania (1.37 percent).

Even if The Federal Reserve removes its massive monetary stimulypto (MMS), property taxes will remain elevated unless cities reduces their property tax rates. But Democrat-controlled cities tend to be addicted to spending much like The Federal government.

You might as well face it, they’re addicted to gov.