Blue Monday Or Stagflation? Commodities Signal Stagflation (WTI Crude DOWN 2.72%, Iron Ore DOWN 5%, S&P 500 Futures DOWN 1.7%, 10Y Treasury Yields Rise To 3.20% Then Sinks)

As the US is engulfed in inflation while The Federal Reserve is engaged in trying to fight inflation (well, sort of), we are seeing markets taking a shellacking, particularly commodities.

One indicator of a slowdown is declining commodity prices. Crude oil futures are down around -2.5%. Iron Ore is down -5% and steel rebar is down -3.21%.

Inflation numbers are due out Wednesday and are forecast to be 8.1% YoY (based on headline CPI). But combined with a slowing global economy, we get the dreaded “STAGFLATION.”

Meanwhile, the S&P 500 index futures are down around 1.726% for Monday open. Asian markets already got clobbered with the Hang Seng down almost -4%.

On the bond side, the 10Y Treasury Note yield rose to 3.20% early in the morning, but has retreated to 3.1447% as of 8:40am EST.

Both stock and bond market volatility measures are increasing.

So, is it a Blue Monday effect? Or global stagflation?

Time for supplemental income under the Biden Administration.

Weekend Update! Mortgage Rates UP 87% Under Biden, Gasoline UP 80%, Food UP 59%, Commodities UP 63%, WTI Crude UP, Rents UP 17% YoY (Ain’t That A Kick In The … Head!)

As crooner Dean Martin once said, “Let ’em have it!” Ain’t this a kick in the … head.

Perhaps Joe Biden and Fed Chair Jay Powell are channeling Dean Martin by letting us have it.

Since Obama’s 3rd term as President (aka, Biden’s installation as President on January 20, 2021), mortgage rates have risen 87%, regular gasoline prices have risen 80%, CRB foodstuffs are up 59% and Commodities are up 63%.

And don’t forget about America’s energy life force, WTI Crude Oil. It is UP 123% under Biden.

Rents? Rising at a 16.8% rate.

Rents rising, food costs rising, energy costs rising, Biden and The Fed are taking us higher. In terms of prices and cost of living.

Cooler Kings! As Biden Keeps Going Green And Fed Raises Rates, Everything Is Cooling (Mortgage Rates UP, Venture Capital Down 53%, Stocks Crushed, Etc)

The Biden Administration and The Federal Reserve together should be called “The Cooler Kings” in that their policies are putting a Big Chill on the mortgage market and equities.

Mortgage rates are skyrocketing thanks to the Federal Reserve.

The 30-year fixed-rate mortgage averaged 5.27% for the week ending May 5, according to data released by Freddie Mac  FMCC, -1.62% on Thursday. That’s up 17 basis points from the previous week — one basis point is equal to one hundredth of a percentage point, or 1% of 1%.

House price growth to wage growth is below the all-time high, but remains above housing bubble levels of 2005-2007.

The Refinitiv Venture Capital Index is down 53% since November ’21 as The Fed cranks up interest rates.

Well, at least commodities are soaring under “The Cooler Kings.” Pretty much everything else is sucking wind.

Home prices are actually falling in some cities, like Toledo Ohio, Detroit Michigan, Rochester NY, and Pittsburgh PA. Even La-La Land (Los Angeles CA) is seeing a drop in median listing price since 2021 of -5.0%.

The question, of course, is whether The Federal Reserve will back off its plans to aggressively raise interest rates in lieu of crashing stock market, venture capital, and possibly home prices.

This is Scorcher VI: Global Meltdown.

Does Biden and The Fed Feel Like We Do?

Bidenflation And Jobs: REAL Avg Hourly Earnings Growth Declines Further To -3% YoY, Fertilizer Prices UP 262% Under Biden

Trevor Noah was correct. EVERYTHING is more expensive under Biden. And REAL average hourly earnings YoY keeps declining.

REAL average hourly earnings YoY fell further to -3%.

Meanwhile, fertilizer prices, a key ingredient to food costs, is up 262% under Biden.

Today’s jobs report was better than expected, at 428k jobs added (versus 380k expected). Its just too bad Bidenflation is clubbing American workers to economic death.

US labor force participation actually declined in April and struggles to get back to levels pre-Covid and Trump.

Here is the jobs market data for April 2022.

Leisure and hospitality sector still has a way to go after the ill-advised government shutdowns surrounding Covid.

Oddly, there are two job openings for every unemployed person.

Here is the new version of American Gothic.

Don’t Panic! NASDAQ Plunges 5% As 10Y T-Note Yield Rises +16.1 BPS (NASDAQ Simply Back To Before Fed Announcement, But Treasury Rates Higher)

The headline screamed “NASDAQ PLUNGES 5%!

True, it did, but it simply lost the gain’s from yesterday’s surprisingly mild Fed announcement.

But the 10-year Treasury yield is rising faster than my blood pressure. The 10-year Treasury yield is up to 3.09%.

Cryptos? Bitcoin is down -7.27% and Dash is down -8.23%.

Watch out mortgage rates!!

Don’t panic … about the NASDAQ. EVERYBODY PANIC about rising mortgage rates.

Winter Is Coming! Natural Gas Price SOARS 216% Under Biden, Heating Oil SOARS 199% (Cost Of Heating Homes Getting Expensive!)

President Joe Biden should do an ad for his energy policies ala Game of Thrones, “Bundle up! Winter is Coming!”

Since Biden was installed as President in January 2021, natural gas futures prices are UP 216% and heating oil is up 199%.

The average price of home electricity has SOARED under Biden, as has the prices of many things.

Fortunately for Biden and Congress, they live in well-heated (and air-conditioned) digs in the DC area and are not exposed to the damage done by Biden’s executive orders on energy.

Biden looks good in that armor!

10Y Treasury Yield Hits 3% Then Retreats, Europe Suffers A Flash Crash (US Dollar Rises As Powell & The Gang Signal Tightening)

Today we saw the 10-year Treasury Note yield break through the 3% barrier, then retreat as is there was a reflecting barrier at 3%.

And in Europe, we saw a flash crash allegedly caused by Citi’s trading desk.

The selloff was triggered by a large erroneous transaction made by the U.S. bank’s London trading desk, according to people with knowledge of the matter who asked not to be identified discussing private information. A knee-jerk selloff in OMX Stockholm 30 Index in five minutes wreaked havoc in bourses stretching from Paris to Warsaw toppling the main European index by as much as 3% and wiping out 300 billion euros ($315 billion) at one point.

The US Dollar rose again as expectations of Fed monetary tightening due to inflation become a reality.

Bond Rout Boogie by Powell and The Gang!

Is YET another Fed error in the making??

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.

Medusa Touch! Natural Gas UP 192% Under Biden, Diesel UP 176%, Regular Gasoline UP 74%, Foodstuffs UP 59% (Thanks Biden And Federal Reserve!)

We all know (except for Biden apparently) that inflation is up 8.5% YoY as measured by the change in the Consumer Price Index (CPI). However, the CPI change doesn’t fully capture what is crushing Americans’ pocketbooks. Here is a brief update on where we stand prior to the upcoming Federal Reserve Open Market Committee meeting on May 4th.

Since Biden was installed as President on January 20, 2021, prices for key commodities have soared. Natural gas futures UP 192%, Regular Gasoline prices UP 73.6%, Commodity Research Bureau Foodstuffs UP 59%, Low sulfur Diesel futures UP 176%.

Since we now have the Biden’s Orwellian Ministry of Truth (actually The Department of Homeland Security’s “Disinformation Board”) which will start censoring free speech. And this post is what could fall under their reign of terror. Or in Biden’s case, reign of error.

Jen Psaki, the President’s talking head, has said that it is Russia and Putin’s fault. So, here are the same prices up to Russia’s invasion of Ukraine since Biden was installed as President: Natural gas futures UP 82.3%, Regular Gasoline prices UP 80.2%, Commodity Research Bureau Foodstuffs UP 50.1% ,Low sulfur Diesel futures UP 47.7%.

Yikes! So, even before Russia invaded Ukraine, the lethal combination of Biden’s green energy executive orders and The Fed’s continuing monetary stimulypto was deadly for American households.

On a sad note, The Biden Administration is considering cancelling student loan debt as a way to control inflation (?). Of course, cancelling student debt will lead to a surge in consumer spending and even MORE soaring inflation. Biden is suffering from The Medusa Touch. Everything he touches turns to stone.

While The Fed is expected to remove monetary stimulus, don’t expect inflation to return to pre-Biden levels. The anti-fossil fuels edicts from Biden are still in effect. Even if the bottlenecks clear up, Biden and Congress may unleash more Federal spending (although much of Federal spending benefits “Friends and Family” of Biden and Congress, not the American middle class or lower-wage workers).

Here is a video of President Biden stalking the streets of Washington DC in search of things to destroy with his policies.

Q1 US Employment Costs Skyrocket Most In History Helping To Increase Already Soaring Inflation (PCE YoY Rises To 40-year High of 6.60% YoY)

Not only has The Federal Reserve driven M2 Money Velocity to near historic lows, but now we find out that the Employment Cost Index just rose to a historic high.

Of course, a variety of minimum wage laws have helped drive up employments costs. Don’t tell lawmakers that minimum wage laws lead to higher inflation since they typically deny responsibility for anything. But I can almost picture the 4 Horsemen of the Inflation Apocalypse (Powell, Biden, Pelosi, Schumer) sitting around asking “What we can do to make inflation worse?”

We did see the PCE Deflator YoY rise to 6.6%, the highest since 1982, the highest in 40 years.

Personal spending increased to 1.1% in March, probably panicking buying over further inflation.

A PCE Deflator of 6.60% leads to a Taylor Rule estimate of 9.05% for The Fed Funds Target Rate.

The Federal government and Federal Reserve trying to solve inflation reminds me of Parks and Recreation’s Jerry Gergich trying to celebrate his retirement.