Bloom Off The ESG Rose? WEF’s ESG Sustainability Push Is Waning (Issuance Of Sustainability Linked Loans Down 80% In US)

Huey Lewis and the News said it best about ESG goals: “The elites want a new drug.”

The World Economic Forum (WEF) is a leading pusher of the ESG drug, pushed by the elite class intending to control the world. Unfortunately, numerous American politicians and influencers have attended the Davos meetings and have openly praised the WEF and its leader Klaus Schwab.

ESG refers to the environmental, social and governance information about a firm. There is growing evidence that companies that take their environmental and social responsibilities seriously perform better financially. This has naturally made investors sit up and take notice.

ESG investing, or sustainable responsible investing (SRI), uses this information about a company to inform investment decisions that prioritize all stakeholders.

Here’s how the Forum’s partners are leading the switch to stakeholder capitalism.

There are 3 pillars to ESG and sustainable investment. This reminds me of the 10 pillars (or planks) of Marxism. So ESG is Marxism with a different name, but the end result is the same. Big government control.

But all is not well with WEF’s ESG drug distribution. In fact, ESG flows into socially consious funds were a big thing during Covid (2020) and the first year of Biden’s Reign of Error. But ESG flows slowed sharply in 2022 and seeing net outflows in 2023.

Issuance of sustainability linked loans is down 80% in the US.

US borrowers are retreating en masse from the world’s second-biggest ESG debt class.

The $1.5 trillion market for sustainability-linked loans, in which borrowing is tied to environmental, social or governance goals, has seen an overall slowdown in volumes this year as both interest rates and greenwashing fears rise. But nowhere has the decline been as precipitous as in the US, where the number of new sustainability-linked loans is down 80% from a year earlier.

But ESG is still relatively popular in Europe, Middle East and Africa (orange). But taste for ESG is waning around the globe. But the selection of Biden as President in the US marked a surge in ESG -tied loans in 2021 and 2022 (not to mention the insane levels of spending out of Biden and Congress, much tied to the sustainability, green energy fantasy.

Loans with terms tied to borrower’s ESG goals have fallen worldwide.

Several states (largely blue states like California, Minnesota, Illinois, and Colorado have pro-ESG laws) while several states have anti-ESG laws (largely red states like Montana, Idaho, North Dakota, Kansas, Utah, Indiana, Arkansas, Florida, and West Virginia).

And of course, global warning may not be as dire as John Kerry and Greta Thunberg say.

WEF’s Klaus Schwab about to get sniffed by his 80-year old puppet, Joe Biden. In fact, Biden is singing “I’m your puppet.”

Here is Hunter Biden welcoming the Green Energy fairy and all the trillions in misallocated spending it brings.

NOT Born Under A Bad Sign! Housing Starts Are Down -4.2% YoY As M2 Money Growth Dies (Illegal Immigration Outpaces US Births, But Supply Not Keeping Pace)

Under Biden’s Reign of Error (or green economic transformation), the US has seen over 8 million illegal immigrants enter the US which is a far greater number than births in the US. In other words, Americans apparently are NOT being born under a bad sign. Hence, the US is seeing the demand for housing increase. But …. housing start were DOWN -4.2% YoY in October.

Housing Starts:
Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,372, the October 2022 rate of 1,432,000. Single‐family housing starts in October were at a rate of 970,000; this is 0.2 percent above the revised September figure of 968,000. The October rate for units in buildings with five units or more was 382,000.

Building Permits:
Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,487,000. This is 1.1 percent above the revised September rate of 1,471,000, but is 4.4 percent below the October 2022 rate of 1,555,000. Single‐family authorizations in October were at a rate of 968,000; this is 0.5 percent above the revised September figure of 963,000. Authorizations of units in buildings with five units or more were at a rate of 469,000 in October.

Total starts were down 4.2% in October compared to October 2022. And starts year-to-date are down 11.3% compared to last year.

In YoY terms (change since one year ago), shows housing starts declining with dying M2 Money growth.

Starts have been down year-over-year for 16 of the last 18 months (May and July 2023 were the exceptions), and total starts will be down this year – although the year-over-year comparisons are somewhat easier in Q4.

Bidenomics Strikes Again! Foreclosure Sale Notices For Commercial Property Loans Are Exploding, LA Apartment Sales Cratering (Newsom Creates New Potemkin Village For China Xi’s Visit)

Bidenomics strikes again!

After listening in horror to Joe Biden’s press conference after his summit with China’s Xi, I had to ask the following question: what does Joe Biden has in common with Georgia Tech? Answer? They are both rambling wrecks. Biden made a horrendous foreign policy blunder by calling Xi a “dictator” and almost blew it by nearly spillling the beans on our foreign policy negotiations with Israel. SecState Blinken had to intervene. We are represented by Winken (Harris), Blinken and Nod (Biden, who usually looks asleep or confused).

But back to the horrors of a slowing economy.

As the US economy slows down (like Biden himself), we are seeing further cracks in the real estate market. Foreclosure sale notices for commercial property loans are exploding.

And depending on the MSA, multifamily delinquencies are booming, like in Houston, Texas, New York City and Phoenix AZ.

Then we have this headline: “Not Just Office Towers – Commercial Real Estate Sales Crater Throughout Los Angeles.” It’s difficult to find big commercial real estate deals of any kind in Los Angeles. A new report from NAI Capital reveals how severe and universal the decline in activity is throughout the region this year amid collapsing values, higher interest rates, and a new tax on property sales above $5 million.

A related headline screams “LA Apartment Sales Plummet 50% as Investors Confront New Taxes, Higher Costs.” Every submarket saw an increase in vacant units and a decline in year-to-date sales volume in the second quarter. Construction, interest rates, eviction protections, also define 2023.

Yes, I know, California’s real estate woes are mostly the fault of their politicians like Governor Gavin (Gruesome) Newsom. The same guy who ordered San Francisco’s homeless population to be moved creating a new Potemkin Village. But rising interest rates are the fault of excessive spending by Congress and the Biden Administration.

Prepayments on Ginnie Mae MBS are extremely low.

But things are less than rosy in Communist China. China’s housing woes worsen as prices fall most in eight years.

But my favorite headline is from the Babylon Bee (a satire site): “After Five Minutes With Biden, Xi Gives Order To Invade Taiwan.”

We WILL Get Fooled Again! Purchasing Power Of US Dollar DOWN -15% Under China Joe Biden (Top 1% Doing Great Under Bidenomics, Not The Middle Class)

Republicans elected Mike Johnson from Louisiana as House Speaker, then were surprised when Johnson agreed with big spending Senators McConnell and Schumer on Biden’s mega spendathon. Also, several Republicans voted with Democrats NOT to impeach Cuba Pete (Mayorkas) for allowing 8 million illegals to cross the southern border. Bottom line: the Biden Administration and Congress are closely held subsidiaries of the elite 1% and US large corporations. The middle class be damned! But we will get fooled again in every election.

Since Biden’s inaugration in January 2021, the purchasing power of the US dollar is down a staggering -15%.

Yes, under control of large corporations and the 1%, the economy is an economic wasteland. But the 1% are doing great under Bidenomics! With The Fed’s help of course.

Here is a chart of core inflation relative to M2 Money printing. Easy way to cool inflation … stop printing money!

Here is China’s Xi and America’s “China Joe” Biden.

Seriously, Biden has always been known as being stupid and corrupt. Now he has dementia. A PERFECT President for the 1% in their war against the middle class. Biden is the penultimate “useful idiot” with an emphasis on idiot.

Bidenomics Breakfast! Orange Juice Prices UP 47% Under Biden (Even Though Food CPI Has Slowed To 3.69% YoY)

Even eating breakfast under Bidenomics is more expensive. Particularly if you like orange juice like I do. To save money, I am probably going to have to switch to nasty-tasting Tang.

Food CPI is up 3.69% year-over-year. The rate of growth in food prices is slowing. But do I trust BLS data on CPI? Of course not.

Orange juice prices are up 47% under Biden.

And we see that REAL GDP is growing at a slower rate than nominal GDP.

Tang is the taste I hate and I can get Vitamin C from a multi vitamin. But I just don’t like having government policies (or follycies) dictate my food consumption. Or auto choice (I refused to buy an electric car or pickup truck).

Speaking of Bidenomics, here is an interesting Zero Hedge story on “The Biden-Du Pont Nexus: From A Prestigious Golf Club To A Controversial Child Rape Plea Deal.” What is it with Delaware elites having sex with their children?? And why is NY AG Letitia James prosecuting Donald Trump when there has been no crime while she let’s Epstein’s clients who flew to have sex with minors (used to be illegal) off the hook?

But I feel good! After my breakfast of … Scotch Broth. OJ is just too expensive.

Livin’ On A Prayer … And Credit! US Consumer Debt Hits $17.3 TRILLION As Credit Card Delinquency Growth Highest Since Covid Lockdown (UMich Inflation Expectations SOAR To Highest Since 2011!)

Under Bidenomics, with its high inflation rate and crushing negative wage growth, consumers are draining their savings and living on a prayer …. and consumer credit to cope.

US consumer credit just rose to $17.3 trillion, up dramatically since Biden’s inaugaration as El Presidente of the United Banana Republics of America.

What is worriesome in the transition rates (like current to 90-days delinquent) Credit cards (blue) and auto loans (red).

A closer look at credit card delinquency rates on a year-over-year (YoY) basis, showing the fastest growth in delinquencies since the Covid economic lockdowns.

Then we have commercial real estate delinquencies are now the highest the have been since 2013.

Meanwhile, University of Michigan consumer sentiment about inflation spiked to 4.4%. That is the highest medium-term inflation expectation since 2011.

The US consumer is being shot through the heart and Biden and The Fed are to blame. Biden gives gov a bad name.

Wreck Of The USS 30Y Treasury! Disastrous 30Y Auction Sees Rising Long-term Treasury Yields

Today was the Wreck of the USS 30Y Treasury. Disastrous Federal fiscal policies and Yellen’s slowness to refinance outstanding Treasury debt has created a mess. Biden’s nerves must be a wreck with Powell and Yellen managing the nation’s finances.

That’s the only way one can describe today’s 30Y auction, which many expected could be challenging after a mediocre 3Y and a subpar 10Y auction earlier this year, but nobody expected… this.

The bond priced at a high yield of 4.769%, which was below last month’s 4.837%, and just shy of the April 2010 high. But more importantly, it tailed the When Issued by a whopping 5.3bps, which was… well… terrible, because as shown in the chart below, this was the biggest tail on record (going back to 2016).

The bid to cover was just as bad: at 2.236 it was the lowest since Dec 2021.

The internals were even worse as foreign bidders (Indirects) tumbled from 65.1% to 60.1%, the lowest since Nov 2021, and with Directs taking down only 15.2%, banks (Dealers) were forced to step up and take the balance, or a whopping 24.7%, double the recent average of 12.7%, and the highest since Nov 2021.

This is a big warning flag because every time we have seen a surge in Dealer takedowns, some sort of Fed intervention – QE or otherwise – has usually followed and we doubt this time will be different.

So what happened? Well, maybe the bond market read our note from earlier this week in which we explained “How Treasury Averted A Bond Market “Earthquake” In The Last Second: What Everyone Missed In The TBAC’s Remarkable Refunding Presentation.” It may be difficult to fool the bond market for a second time.

The market reaction to the catastrophic 30Y auction was immediately, sparking a swift and painful response across markets with bonds and stocks hammered lower and the dollar spiking.

Treasury yields – as you would expect – exploded higher, with 30Y Yields back up to pre-payrolls levels…

That is the biggest spike in 30Y yields since March 2020…

But the entire curve is higher in yields…

Stocks tanked…

Regional bank stocks tumbled…

The dollar ripped back up to pre-payrolls levels…

Finally, we note that this ugly auction comes as Treasury Liquidity is evaporating dramatically…

The Fed (and The Treasury) have a problem!! Particularly since the 30Y yield reversed course and is on the rise again.

And at the 10 year tenor, the rate rose to 4.638%.

All together now!!

The Edmund Fitzgerald, symbolic of the US under Biden and Janet Yellen.

Interest On US Debt Skyrockets Above $1 Trillion For The First Time Ever (Annual Interest Payments On 30-year Mortgage In 2020 Was $8,500, But Has Almost Tripled To $24,300!)

Another day, another dose of bad fiscal/monetary news. Not surprising with the US Treasury being run by Janet Yellen, who doesn’t seem to know much economics. In fact, with Biden/Congress spending like drunken sailors in port, inflation and The Fed’s counterattack, we see that interest of US debt just hit $1 TRILLION!

$1.027 trillion in interest is calculated by multiplying the average interest rate on marketable US Treasury debt (which according to the Treasury is 3.096% as of Oct 31) by the $26.003 trillion in marketable US debt (as of Oct 31) which nets off to $805 billion, and adding to this non-marketable debt interest (which as of Oct 31 was 2.884% multiplied by the amount of non-marketable debt which is $7.696 trillion) and which in turn is an additional $222 billion in interest. Add across and you get $1.027 trillion.

Naturally, this calculation of estimated real-time interest costs – which is entirely based on Treasury data – is different than what the Treasury actually paid. Interest costs in the fiscal year that ended Sept. 30 ultimately totaled $879.3 billion, up from $717.6 billion the previous year and about 14% of total outlays, however that number is merely lagging what the pro forma print currently is, and will inevitably catch up to it, and then lag on the other side even as pro forma interest payment start dropping (once interest rates plunge after the next QE/YCC is launched).

Fans of exponential functions, we got you covered: the unprecedented surge in both interest rates and interest expense in the past two years means that total US interest has doubled since April 2022 and that’s with the inherent lag in interest catch up – as a reminder, the vast majority of 5, 7, 10 and 30 year debt is still locked in at much lower interest rates, and as such, rates will continue to rise as all of the existing debt rolls into much higher rates over the coming years.

Looking ahead, the staggering surge in both yields and total long-term Treasuries in recent months confirms the government will continue to face an escalating interest bill. As a reminder, we were the first to point out that it took just one month after US federal debt first rose above $33 trillion for the first time, to spike by another $600 billion.

On the personal finance side, annual Interest payments on a 30-year, fixed-rate mortgage before Biden was $8,500, but after Biden it almost tripled to $24,300! That means that annual mortgage interest rose 186% under Biden.

Down, Down, Down! Cost Of US Debt Surges As Federal Debt Hits $33.71 TRILLION And Unfunded Liabilities Hit $211 TRILLION (Livin’ La Vida Bidenomics!)

The US economy is drowing in debt, going down, down, down.

US Federal debt just hit $33.71 TRILLION. And unfunded liabilities (promises from Uncle Spam) are now $211 TRILLION. That is 526% of the the current debt load. Which means either lots of additional debt, higher tax rates or cuts in entitlements.

The cost of US debt continues to soars as The Fed combats Bidenflation.

But it isn’t just Federal government debt that is exploding under Bidenomics. Consumer credit card debt has exploded under Bidenomics as consumer struggle with inflation.

Livin’ La Vida Biden! And Bidenomics!!!

Biden’s Mortgage Market! Mortgage Demand (Applications) Increase By 2.5% From Previous Week As Mortgage Purchase Demand Down -20% From Last Year (Refi Demand Down -7% From Last Year While Mortgage Rate Is UP 169% Under Biden)

US inflation is lower than it was a year ago (cheers from The View CNN and MSNBC cheerleaders), but inflation remains stubborning above The Fed’s 2% target rate and will likely remain above 2% for the nexf few years. So mortgage demand is much like inflation … mortgage demand increased in the latest week but generally is very low compared to last year.

Mortgage applications increased 2.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 3, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 7 percent lower than the same week one year ago.

The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 20 percent lower than the same week one year ago.

The 30-year fixed mortgage rate dropped by 25 basis points to 7.61 percent, the largest single week decline since July 2022. But, mortgage rates are up 169% under Biden and Bidenomics.

Bideomics is over, under, sideways, down. Mostly down.