11 Indications That The US Economy Is In Slow Motion Collapse After 4 Years Of Biden/Harris

Let’s put this in black and white. There are 11 indications that the US economy is in a state of slow motion collapse.

The fact that economic conditions are getting worse is certainly not good news, but it is better to know in advance what is coming. After four years under Joe Biden, the U.S. economy is a giant mess. We have been witnessing a slow-motion collapse right in front of our eyes, and those at the bottom levels of the economic food chain have been experiencing more pain than anyone else. Of course this is one of the biggest reasons why Donald Trump won the election.

Example? Sticky inflation remains far higher under Biden/Harris than it did when Trump was President. Prices remain elevated as you will notice when Christmas shopping!

#1 When the economy is in good shape, holiday spending increases each year. In 2024, only 16 percent of Americans say that they are going to spend more than last year and 35 percent of Americans say that they are going to spend less…

Americans this holiday season say they are seeing a ghost of Christmas past: inflation.

The CNBC All-America Economic Survey finds inflation is still haunting the buying public, leading to what’s shaping up to be just an average season for retailers. Just 16% of respondents say they will spend more, down two points compared to last year. Forty-eight percent said that they’ll lay out the same amount for holiday gifts, up five points. At the same time, 35% say they’ll spend less, down two points as well.

#2 The number of job openings in the U.S. is now the lowest it has been since January 2021, but unlike January 2021 we don’t have a pandemic to blame our poor performance on…

US job openings tumbled last month to their lowest level since January 2021, a sign that the labor market is losing some momentum. Still, posted vacancies remain well above pre-pandemic levels.

The Labor Department reported Tuesday that the number of job openings dropped to 7.4 million in September from 7.9 million in August.

Economists had expected the level of openings to be virtually unchanged. Job openings fell in particular at healthcare companies and at government agencies at the federal, state and local levels.

#3 The manufacturing numbers that we are getting are extremely dismal. For example, the Philadelphia Federal Reserve Manufacturing Index just experienced an extremely sharp decline…

The Philadelphia Federal Reserve Manufacturing Index, a critical gauge of the general business conditions in Philadelphia, has reported a significant drop. The actual figure stands at -16.4, a sharp decline that suggests worsening conditions for manufacturers in the region.

This figure starkly contrasts with the forecasted number of 2.9, highlighting a more severe downturn than initially predicted. Analysts had anticipated a positive shift, indicating improving conditions, but the actual data presents a different, more concerning situation.

Moreover, when compared to the previous index value of -5.5, the current reading of -16.4 further emphasizes the severity of the decline. This continuous drop indicates a concerning trend for manufacturers within the Philadelphia Federal Reserve district.

#4 Thanks to rapidly rising mortgage rates, the average U.S. homebuyer just lost $33,250 in purchasing power in just six weeks…

Mortgage rates hit 7% on October 28, the highest level since the start of summer and up nearly one percentage point from the 18-month low they dropped to in mid-September.

A homebuyer on a $3,000 monthly budget can afford a $442,500 home with a 7% mortgage rate, the daily average 30-year fixed rate on October 28. That buyer has lost $33,250 in purchasing power over the last six weeks; they could have purchased a $475,750 home with the 6.11% average rate on September 17. That was the lowest level since February 2023.

#5 Our cost of living crisis is officially out of control. According to Bank of America, almost a third of all households “spend more than 95% of their disposable income on necessities such as housing costs, groceries and utility bills”…

Many Americans are still in a tough spot: Nearly 30% of all US households this year said they spend more than 95% of their disposable income on necessities such as housing costs, groceries and utility bills, according to a Bank of America Institute report, up from 2019 levels.

#6 A recent Lending Tree survey discovered that nearly a quarter of all households couldn’t pay their entire power bill at some point within the past year…

LendingTree’s findings about electricity bill costs comes as it reported 23.4% of Americans experienced an inability to cover their entire energy bill or portions of it in the last year, based on Census Bureau Household Pulse Survey data.

#7 The same Lending Tree survey found that about a third of all households had to reduce spending “on necessary things” within the past year in order to pay utility costs…

Needing to cover utility bills prompted 34.3% of Americans to curb their spending on necessary things – or eliminate some altogether – in at least one instance in the prior year, LendingTree said.

#8 As I discussed last week, demand is at record levels at food banks all over the nation…

Why is demand at food banks all over the country higher than it has ever been before? The media keeps insisting that economic conditions are just fine, but it has become quite obvious to everyone that this is not true. In particular, the rising cost of living has been absolutely crushing households from coast to coast. In the old days, most of the people that would show up at food banks were unemployed. But now food banks are serving large numbers of people that actually do have jobs but that don’t make enough to pay for all of the basics. The ranks of the “working poor” are growing very rapidly, and this is creating an unprecedented crisis all over America.

#9 During normal times, troubled retailers would at least wait until after the holiday season to throw in the towel. But we haven’t even reached Christmas and Party City has already announced that it will be closing all stores…

Party City is closing down all of its stores, ending nearly 40 years in business, CNN has learned.

CEO Barry Litwin told corporate employees Friday in a meeting viewed by CNN that Party City is “winding down” operations immediately and that today will be their last day of employment. Staff were told they will not receive severance pay, and they were told their benefits would end as the company goes out of business.

#10 Not to be outdone, Big Lots has announced that all 936 of their remaining stores will be shutting down on a permanent basis…

Big Lots is beginning ‘going out of business’ sales at all its stores across the US, as it prepares to close its remaining locations.

The discount retail chain filed for Chapter 11 bankruptcy in September, and has already shut hundreds of stores nationwide.

In a press release Thursday, the company said it would begin the sales at its 963 remaining locations, after a sale to a private equity firm fell through.

#11 As of the end of November, more than 7,000 store closings had been announced in the United States. That is a 69 percent increase from last year…

According to a report from CoreSight Research, U.S. retailers had announced more than 7,100 store closures through the end of November 2024, which represents a 69% increase compared to the same time in 2023. These closures are spread across numerous different sectors of retail from auto parts to restaurants to pharmacies, leaving many consumers wondering which companies will survive. This brings us to GameStop, the beloved retail gaming store, which has not only been closing hundreds of retail store locations since 2020, but also appears to be on track to close hundreds more of its locations in the very near future.

This is what a failing economy looks like.

Last week, a prominent mall in downtown San Francisco was empty of shoppers in the middle of the afternoon…

Look at all of these beautiful Christmas decorations at the Crocker Galleria mall in San Francisco. It’s 4:47 PM and everybody should be shopping and buying Christmas presents for their family, but nobody is in this mall.

There are only three stores left that are open here. The escalators hum on inside this beautiful but empty decorated mall.

Outside on Market Street the fentanyl addicts lay folded over while a street performer sings Last Christmas to an empty Street.

Of course the lack of shoppers at that particular mall is just the tip of the iceberg.

Unfortunately, the truth is that downtown areas all over California “are crumbling under the weight of homelessness and drug addiction”…

California’s biggest downtown areas are crumbling under the weight of homelessness and drug addiction, causing a vital part of its economy to dry out.

Cities like Los Angeles and San Francisco have made countless headlines since the pandemic about their drug-infested streets where businesses are quickly pulling out due to high crime rates and low consumer passage.

The number of drug addicts in America is at the highest level ever.

The number of homeless people in America is at the highest level ever.

They are victims of our slow-motion economic collapse, and the holidays will not be very happy for them.

So if you still have food on the table and a warm home to sleep in, you should consider yourself to be incredibly blessed.

Sadly, more Americans are being forced out into the streets with each passing day as the slow-motion collapse of our economy accelerates.

Merry Christmas!

The Brave New World? Job Finding Rate Collapses As Philly Fed Business Conditions Plummet

It is a brave new world as the US attempts an Argentina-like shift from an over-regulated, corrupt economy to a more free economy. While Argentina has Javier Milei, the US is stuck with greedy Democrats and RINOs and their bloated spending sinking any attempt to cut wasteful spending.

So as we transition from woefully corrupt and demented Joe Biden to Donald Trump, the labor market is … terrible. The job finding rate of unemployed workers has collapsed.

This occurred as the Philly Fed Business Outlook plummeted.

Here is Javier Milei of Argentina and The View’s image of a libertarian leader, Javier Bardem from No Country For Old Men.

Fed Drops Target Rate By 50 BPS, Assets Smashed, Gold Falls More Than 2% (Fed Predicts Fewer Rate Cuts In 2025)

As expected, Powell and The Fed dropped their target rate by 50 basis points yesterday, deflating some of the air in the asset markets, More rate cuts will come, but at a slower rate.

Gold got clobbered but has somewhat rebounded.

Bitcoin did likewise: dropping like a rock then bouncing back somwhat.

But gold and bitcoin/ethereum are down again.

The CBOE VIX volatility index exploded upwards.

Powell is looking old, like most of Congress and Biden.

Biden Boogie! Biden’s Final Punch In The Jaw, Greatest Fiscal Deficit To Start The Year In History, Largest Debt Load, Interest Expense Now Exceeds Social Security

It is the Biden Boogie!

Joe Biden is leaving the Presidency with an attrocious record. While saying he is leaving Trump with the strongest economy in modern times, the is actually leaving Trump and Republicans with a hollow shell for an economy. It is the final punch in the jaw from an angry, failed President.

The following chart shows that in October and November, the US deficit exploded to a staggering $624.2 billion, and even though this included several calendar adjustments – which explains the freak September surplus which as we said was due to calendar effects – the November deficit of $367 billion was $14 billion more than consensus estimates of $353 billion. Worse, combining October and November we find that not only was the combined number of $624 billion some 64% higher than the corresponding period one year ago, but it was also the highest deficit on record for the first two-months of the year (and that includes the spending insanity during the covid crisis).

Putting the deficit in context, the budget deficit in October and November – the first two months of fiscal 2025 – are now officially the worst start a year for the US Treasury on record.

No wonder even Statist Janet Yellen (Treasury Secretary who failed utterly at her job) apologized that her abysmal performance. “I am concerned about fiscal sustainability and I am sorry that we haven’t made more progress,” she said adding that “I believe that the deficit needs to be brought down especially now that we’re in an environment of higher interest rates.” Meanwhile Biden keeps handing out $$$ to Ukraine, Africa, Syria, illegal immigrants and anything else that asks … unless it it American citizens. Man, does Biden HATE America!

Here is Yellen’s record on debt. A total of $15.2 TRILLION under her leadership.

Under Biden/Yellen (don’t forget Senate fools like Schumer and McConnell!), debt interest has surpassed Social Security and Medicare as the second largest government agency expense.

Biden is a classic progressive Democrat, spending other people’s money like a wild man (sort of like California Governor “Greasy Gavin” Newsom’s father. Or grandfather. And let’s not forget the $222 TRILLION in UNFUNDED liabilities such as Social Security and Medicare.

“See Joe, I can destroy California’s economy just like you destroyed the US economy!”

Fahrenheit 451! Sticky Core Inflation Still At 4% YoY (Fed Can’t Douse The Fire Caused By Too Much Government Spending)

We didn’t start the fire … The Fed and Biden/Harris did. And it is still burning.

October STICKY core inflation is still up 4% YoY (year-over-year)

Core CPI rose 0.3% MoM (as expected) which pushed it up 3.3% YoY (not even close to the 2% mandate)…

Source: Bloomberg

There has not been a single monthly decrease in core consumer prices since Biden too office.

dddd

Between The Fed’s insane monetary policy and Biden/Harris insane fiscal policies, we are living in a world where Ray Bradbury’s novel Fahrenheit 451 becomes a reality. Instead of books burning, it is the US Dollar burning.

Going Down! UMich Inflation Expectations Jump To 16-Year-High, Housing Buying Conditions Remains Depressed

To quote Freddie King, the US is going down.

Longer-term inflation jumped to their highest since June 2008, according to the latest UMich Sentiment survey, while short-term inflation expectations dropped to four year lows…

Housing sentiment (buying conditions for housing) remains depressed under Biden/Harris
“Reign of (economic) error.”

Here is a picture depicting the assassination of the US housing market.

Slow Down? Existing Home Sales Rise YoY For First Time Since July 2021 (Near 2010 Levels, So Barely Rising)

Its a slow down in the housing market.

Existing Home Sales were expected to rebound modestly in October (+2.9% MoM) after dropping for 6 of the last 7 months to the lowest levels since 2010, and they did. Sales rose 3.4% MoM (a beat) but thanks to a downward revision for September from -1.0% to -1.3% MoM. What is most shocking about the shift is that it pushed the YoY change for existing home sales positive (+2.9% YoY) for the first time since July 2021…

Source: Bloomberg

…but in context, that shift up to 3.96mm SAAR homes sold is nothing…

Source: Bloomberg

High borrowing costs have led to a shortage of previously owned homes on the market, discouraging many would-be home sellers from listing their properties for sale and having to part with their current low financing costs.

“Additional job gains and continued economic growth appear assured, resulting in growing housing demand,” NAR Chief Economist Lawrence Yun said in a prepared statement.

“While mortgage rates remain elevated, they are expected to stabilize.”

Last month, the inventory of available homes edged up 0.7% to 1.37 million, continuing to trend higher although well below pre-pandemic levels.

Despite the weakness in sales, tight inventory is keeping prices elevated, yielding one of the least affordable housing markets on record. The median sale price last month increased 4% from a year earlier to $407,200, the highest ever for any October, the NAR figures show.

Contract signings rose in all four US regions, led by a 6.7% jump in the Midwest.

Sales of single-family homes increased 3.5% in October; purchases of condominiums and co-ops were up 2.7%

Finally, while that’s all very exciting – a scintilla of growth off almost record lows – the fecal matter is about to strike the rotating object as rising mortgage rates lagged impact threatens…

Source: Bloomberg

In October, 59% of homes sold were on the market for less than a month, compared with 57% in September, and 19% sold above the list price. Properties remained on the market for 29 days on average, compared with 28 days in the previous month. First-time buyers made up 27% of purchases, still historically low.

Core Consumer Prices Rise For 53rd Straight Month, Hit New Record High (Shelter Index Increased 4.9 Percent YoY)

There is one way out of the inflation trap. And it’s drill, baby, drill!

For the 53rd straight month, core consumer prices rose on a MoM basis in October with the YoY pace re-accelerating to +3.33%.

The shelter index increased 4.9 percent over the last year, accounting for over 65 percent of the total 12-month increase in the all items less food and energy index.

Thank goodness Harris can’t try to impliment her ridiculous plans to boost housing!

Glad to see Vivek Ramaswamy and Elon Musk (the NEW Two Bobs from Office Space) cleaning up the mess in Washington DC.

Did The US Treasury Yield Curve Predict Trump’s Victory? Mortgage Rates Rising With Rising 10Y Treasury Yield

Put it where you want it. Trump that is!

The US Treasury yield curve (10Y-2Y CMT) went negative on April 1, 2024. And remains positive.

The US Treasury 10Y-2Y CMT (constant maturity Treasury) peaked locally on March 29, 2024 and then fell, eventually turning negative on April 1, 2024. And remained negative until August 30, 2024 just prior to the election. It looks like the yield curve accurately predicted the election of Trump.

The 10-year Treasury yield is rising with a positive economic outlook under Trump. And with that optimism we see mortgage rates rising too.

The market is feeling comfortable under Trump. Not Harris.

Office CMBS Delinquency Rate Spikes to 9.4%, Highest Since Worst Months after the Financial Crisis

Relaxing music for the office sector!

The office sector of commercial real estate has been in a depression for about two years, with prices of older office towers plunging by 50%, 60%, or 70% from their last transaction, and sometimes even more, with some office towers selling for land value, with the building by itself being worth next to nothing even in Manhattan.

Landlords of office buildings are having trouble collecting enough in rent to even pay the interest on their loans, and they’re having trouble or are finding it impossible to refinance a maturing loan, and so many of them have stopped making interest payments on their mortgages, and delinquencies continue to spike.

The delinquency rate of office mortgages backing commercial mortgage-backed securities (CMBS) spiked to 9.4% in October, up a full percentage point from September, and the highest since the worst months of the meltdown that followed the Financial Crisis. The delinquency rate has doubled since June 2023 (4.5%), according to data by Trepp, which tracks and analyzes CMBS.

Office CRE fund managers have spread the rumor that office CRE has bottomed out, but the CMBS delinquency rate doesn’t agree with this bottomed-out scenario; it’s aggressively spiking.

Three months ago, the delinquency rate surpassed the surge in delinquencies that followed the American Oil Bust from 2014 through 2016, when hundreds of companies in the US oil-and-gas sector filed for bankruptcy as the price of oil had collapsed due to overproduction, which devastated the Houston office market in 2016.

But now there’s a structural problem that won’t easily go away with the price of oil: A huge office glut has emerged after years of overbuilding and industry hype about the “office shortage” that led big companies to hog office space as soon as it came on the market with the hope they’d grow into it. However, during the pandemic, companies realized that they don’t need all this office space, and vast portions of it sits there vacant and for lease, with vacancy rates in the 25% to 36% range in the biggest markets.

Mortgages are considered delinquent by Trepp when the borrower fails to make the interest payment after the 30-day grace period. A mortgage is not considered delinquent here if the borrower continues to make the interest payment but fails to pay off the mortgage when it matures. This kind of repayment default, while the borrower is current on interest, would be on top of the delinquency rate here.

Loans are pulled off the delinquency list if the interest gets paid, or if the loan is resolved through a foreclosure sale, generally involving big losses for the CMBS holders, or if a deal gets worked out between landlord and the special servicer that represents the CMBS holders, such as the mortgage being restructured or modified and extended.

Survive till 2025 has been the motto. But that might not work either. The Fed has cut its policy rate by 50 basis points in September and is likely to cut more but in smaller increments. Many CRE loans are floating-rate loans that adjust to a short-term rate (SOFR), and short-term rates move largely with the Fed’s policy rates. And floating-rate loans will have lower interest rates as the Fed cuts.

Long-term rates, including fixed-rate mortgage rates have risen sharply since the Fed started cutting rates, so that option isn’t appealing.

So the hope in the CRE industry is that rate cuts will be steep and many, thereby reducing floating-rate interest payments, making it easier for landlords to meet them. And so the prescription was: Survive till 2025, when interest rates would be, they hope, far lower than they were.

But rate cuts will do nothing to address the structural issues that office CRE faces. The landlord of a nearly empty older office tower isn’t going to be able to make the interest payment even at a lower rate when the tower is largely vacant.

And these older office towers face the brunt of the vacancy rates, amid a flight to quality now feasible because of vacancies even at the latest and greatest properties. And there are a lot of these older office towers around that have been refinanced at very high valuations in the years before the pandemic, but whose valuations have now plunged by 50%, 60%, or 70%, and they have become a nightmare for lenders and CMBS holders.