Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
Well, perhaps bot a genuine surprise. We are aware that the US economy has been slowing as the massive fiscal and monetary stimulus from Covid is wearing out.
The economics surprise index slumped to -28.10, the lowest since 2022.
I feel like the US economy is experiening a Ragnarok change. With the giants (World Economic Forum/UN. etc) winning.
I am no forune teller, but this doesn’t look to good for old Joe (Biden).
Existing home sales fell -2.8% YoY in May.
US existing home sales fell for the third straight month in May (-0.7% MoM vs -1.0% exp). This left home sales down 2.8% YoY (YoY sales have not increased since July 2021)…
The total home sales SAAR is push back towards COVID lockdown lows once again at 4.1mm, but prices accelerated to a new record high…
“Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers,” NAR Chief Economist Lawrence Yun said in a statement.
“Eventually, more inventory will help boost home sales and tame home price gains in the upcoming months.”
And given that mortgage rates remain stubbornly above 7%, existing home sales show no signs of improving anytime soon…
The supply of homes on the market increased 18.5% from the same month last year to 1.28 million, but it’s still well below the level seen before the pandemic when mortgage rates were much lower.
About 67% of the homes sold were on the market for less than a month in May, roughly flat from the prior month, while 30% sold above the list price. Properties remained on the market for 24 days on average in May, compared with 26 days in April, NAR’s report said.
The Conference Board Leading Economic Index® (LEI) for the U.S. decreased by 0.5 percent in May 2024 to 101.2 (2016=100), following a 0.6 percent decline in April. Over the six-month period between November 2023 and May 2024, the LEI fell by 2.0 percent—a smaller decrease than its 3.4 percent contraction over the previous six months.
It begs the question: where are the 10+ million illegal immigrants living who have poured over the border under Binden/Mayorkas? Especially when 5+ units housing starts dropped -51.7% since last year (YoY) in May. And the trend under Biden looks terrible!
That was the third monthly drop in permits (more forward looking) in a row. Worse still, April Housing Starts were revised lower (from +5.7% to +4.1%), making this miss even worse.
This dragged the SAARs for starts and permits to their lowest since the trough of COVID…
With Multifamily starts falling back near COVID lockdown lows…
And multi-family permits cratering to their lowest since Oct 2018…
And with rate-cut expectations holding near their lows, there is no sign of recovery in home-building yet…
It seems reality is starting to set in for homebuilders…
As housing starts plummet, jobs seem to keep growing to record highs…
Will any rate-cut actually move the dial here?
Now you know why Joe Biden has fund raisers in Hollywood and New York where the elites (the top 1%) live. Biden is the President of The Elites, not the middle class.
How bad it is? The top 1% now have more household wealth than the entire middle class. Note that the recent surge occurred under Trump, but Biden is doing nothing about it.
Further evidence? 46% of households are struggling.
In terms of housing prices, home prices are growing FASTER than average hourly earnings. Again!
Politicians. You can’t trust ANY of them with our money. Or a cookout.
Here is New Yprk Senator Chuck Schumer posing as a middle class American cooking gray hamburgers at super low heat with cheese on top of raw meat. What a fraud!
We’re going down!
One month after the May Consumer Sentiment printed at a record 7-sigma miss to expectations, consumer sentiment once again “unexpectedly” slumped, this time from an upward revised 68.8 to 67.6, the lowest print since last November, and the biggest 3-month drop in sentiment (-13.8 points) going back to the covid lockdowns.
… which was not only a 5-sigma miss to the median estimate (an improvement from last month’s 7-sigma)…
… but also the biggest miss of 2024.
The collapse in sentiment was broad based, and hammered both current conditions – which plunged from 69.6 to 62.5, the lowest since 2022 and badly missing estimates of 72.2 – and also expectations, which dropped from 68.8 to 67.6 (and also far below the 72.0 estimate).
The decline in sentiment coincides with signs that the labor market, which has driven consumer spending over the last year, is also falling apart. The unemployment rate rose to 4% last month, the highest in more than two years, while jobless claims unexpectedly soared following a firing frenzy out of California.
“While lower-income families have, as a group, seen notable wage gains in a strong labor market, their budgets remain tight amid continued high prices even as inflation has slowed,” Joanne Hsu, director of the survey, said in a statement.
But wait there’s more, because if that was the “stag” part of the report, the UMich report also confirmed that the “flation” isn’t far behind, as the inflation outlook continued its recent deterioration, to wit: 1 Year inflation expectations remained unchanged at 3.3%, beating estimates of a drop back 3.2%, while 5-10 Year inflation expectations rose from 3.0% to 3.1%, the highest since November.
If that wasn’t enough, the slide in sentiment suggests restrained consumer demand in coming months. The university’s measure of buying conditions for durable goods decreased to the lowest level since December 2022, a glowing testament to just how tapped out the US consumer truly is.
In short: the verdict for Bidenomics is in, and it’s a complete disaster, as for Powell’s recent laughable comment that he can’t see the “stag” nor the “flation”… well, Fed chair, they just bit you on the ass.
On top of a poor consumer sentiment report, the PPI Final Demand index was down … again.
And The Fed and Powell keep losing money.
Biden at the G7, His new name is “The Wanderer.”
Joe Biden is a dishonest politician, so it is no wonder that he ignores actual data. Like claiming that crime is down under his leadership, when it is actually large cities like New York and Los Angeles not reporting their crime data to the FBI.
Take the May jobs numbers. The BLS reports that 272k jobs were added. However, the more accurate Household Survery reported a loss of -408k jobs in May.
While the Establishment Survey did indeed report that 272K “jobs” were added, this number also included multiple job holders; stripping those out, we get that the actual number of “employed” workers plunged by -408K.
On the jobless claims side, the number of Americans applying for jobless benefits for the first time surged last week to 242k (up from 229k and well above the 225k exp). That is the highest since August 2023…
On an NSA basis, claims exploded higher.
The last three weeks have seen the largest surge in claims since January…
Notably this surge is very VERY similar to what we saw last year (but not the prior few years, so not a ‘seasonal’ pattern per se)…
The surge in NSA claims was driven by California…
California leads the nation in initial jobless claims, thanks to Newsom’s $20 per hour minimum wage law for fast food restaurants. This one’s gonna hurt Californians for a long, long time.
Biden and Newsom WISH they were Atlas.
Too much debt should be the theme song for the US! Both for consumers and the Feral government (not a typo!)
Consumer credit increased by +$6.403 billion in April, much softer than consensus estimate of +$10 billion … more notable, however, was March data, given initial read of +$6.274 billion was revised down to -$1.099 billion.
Not to mention $13 trillion in mortgage debt (1-4 unit housing), but at least that is backed by property. Unlike The Feral government who borrows/prints with only a promise.
Consumer Debt Hits $17.69 TRILLION.
US national debt stands at $34.8+ trillion.
And growing awfully fast. Note that since the “pandamic”, debt as % of GDP has exceeded 100% and is projected to hit 166% by 2054. But look at the UNFUNDED LIABILITIES the need to be paid ($216+ TRILLION ($641.5k per citizen!). Pretty soon, we (the 99%) will be back on the chain gang paying for endless wars and government corruption. I wish Biden, Schumer, McConnell and other swamp creatures would consider all the spending the government is on the hook for rather than focus on spending that will help them get elected perpetually. There is no middle of the road anymore. The US is broke and has too much debt.
Of course, President Biden wants endless spending on wars (Ukraine, Israel, etc) and now wants an unlimited check to pay for the next pandemics. The Pretenders’ song “My City Was Gone” seems to be appropriate for the US as “My County Is Gone.”
Of course, some “economists” claim that the US can borrow/print unlimited amounts of money … until they can’t.
Under Bidenomics and Fed monetary “policies”, we now have the wreck of the US middle class.
To begin with, America’s paychecks are bigger than 40 years ago, but purchasing power of those larger paychecks is about the sames as it was 40 years ago. Great job Washington DC!!! … NOT!!!!
Meanwhile, credit card delinquencies are at the highest level since 1991.
Americans are feeling extreme financial stress.
Coping with Bidennomics and The Fed has been most difficult. Especially if you listened to Biden’s D-Day speech (almost stolen word-for-word from a Ronald Reagan speech).
Demented Joe Biden being led by the hand by his money-grubbing wife. “Joe, you will be here soon!”
The theme song for the Biden Administration should be “South of The Border.”
Biden’s open borders policies are like something out of the book/film “Gangs of New York.” This time it isn’t Irish immigrants that are rioting/looting, it iis illegal immigrants from Latin America, China, and the Middle East. Essentially replacing native-born workers with foreign-born workers.
Since COVID, the growth in foreign-born workers have blow away the growth in native-born workers. So much so that since 2019, native-born workers have actually lost jobs while foreign-born workers have surged.
But for May 2024, native-born workers lost 463k jobs while foreign-born gained 414k jobs.
In May, part-time jobs soared by 286k jobs while full-time jobs nosedived by -625k jobs.
Finally, the difference between the BLS survey and the more accurate Household Survey is huge!
2024 hasn’t been a good year for Bidenomics. The Economic Surprise Index is falling to its lowest point in years.
The economic confidence index has been terrible since Covid and Biden’s Reign of Ecoomic Error.
We need to give Biden the hook!’
And I don’t want The Lizard Queen either.
Confounded Interest - Anthony B. Sanders 
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