Bidenomics: The Good, The Bad And The Ugly (Atlanta Fed GDP At 4.12% For Q2, Bank Credit Growth Goes Negative, Confernce Board Leading Indicator Goes Negative, REAL Gross Domestic Income Growth = -0.82%)

Bidenomics, which is also Yellenomics (the former Fed Chair and current Treasury Secretary) has The Good, The Bad and The Ugly to say for it.

First, The Good! The Atlanta Fed’s GDP Now real time GDP tracker has Q3 GDP at … 4.12%. Pretty good, but bear in mind that there is still more than $8 trillion in Fed Monetary Stimulus outstanding (aka, Yellenomics).

Second, The Bad. Bank credit growth is now negative.

As lenders are tightening credit standards for commercial and industrial loans.

The ugly? There are several candidates for this dishonor.

One, The Conference Board’s leading economic indicators is down -10.

Two, REAL median weekly earnings growth remains negative at -3.57% YoY.

Third, auto loan and credit card balances are at $1.5 TRILLION making further consumer credit more difficult to finance GDP growth.

Fourth, Real Gross Domestic Income growth was negative in Q1 2023.

I could go on and on about the negatives of Bidenomics (e.g., massive distortion of Federal spending towards green energy and big donors). Isn’t the earth moving closer to the Sun in its elliptical orbit?? HOW is spending trillions on green energy work as we move closer to the Sun??

I am waiting for Bill Gates to recommend firing nukes at the Sun to reduce the extreme heat as Earth moves closer to the Sun.

Merrick “The Mouse That Roared” Garland throws up roadblocks to protect “Stonewall Biden.”

Economic Rollerball! US Regional/Small Bank Shares Drop After Moody’s Cuts Ratings, Warns on Risks (Bidenomics Favors Large Firms, Not Small Firms)

Rating company downgrades 10 lenders, citing dimmer outlook
U.S. Bancorp, BNY Mellon among six firms facing potential cuts

Not surprising given that Bidenomics is nothing more than giving big bucks to big corporations, including banks. Regional/small banks? Not so much.

US bank stocks declined after Moody’s Investors Service lowered its ratings for 10 small and midsize lenders and said it may downgrade major firms including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp., and Truist Financial Corp.

Higher funding costs, potential regulatory capital weaknesses and rising risks tied to commercial real estate are among strains prompting the review, Moody’s said late Monday.

“Collectively, these three developments have lowered the credit profile of a number of US banks, though not all banks equally,” the rating company said.

Moody’s Sees Problems Ahead for US Banks

Rating company issues raft of downgrades, outlook

Source: Moody’s

Shares declined for firms that had their ratings cut, including M&T Bank Corp., down 3.2%, and Webster Financial Corp., which lost 1.3%. Moody’s also adopted a “negative” outlook for 11 lenders, including PNC Financial Services Group, Capital One Financial Corp. and Citizens Financial Group Inc. Among those, PNC was down 2.2% and Capital One lost 2.4%.

Investors, rattled by the collapse of regional banks in California and New York this year, have been watching closely for signs of stress in the industry as rising interest rates force firms to pay more for deposits and bump up the cost of funding from alternative sources. At the same time, those higher rates are eroding the value of banks’ assets and making it harder for commercial real estate borrowers to refinance their debts, potentially weakening lenders’ balance sheets.

“Rising funding costs and declining income metrics will erode profitability, the first buffer against losses,” Moody’s wrote in a separate note explaining the moves. “Asset risk is rising, in particular for small and midsize banks with large CRE exposures.”

Some banks have curbed loan growth, which preserves capital but also slows the shift in their loan mix toward higher-yielding assets, Moody’s said.

Banks that depend on more concentrated or higher levels of uninsured deposits are more exposed to these pressures, especially banks with high levels of fixed-rate securities and loans.

Deposits are declining as The Fed hikes rates.

So, Bidenomics reminds me of the film “Rollerball” where big corporations run the government and run a game akin to Rome’s gladiator fights.

Why US Inflation Will Start Rising Again (WTI Crude Futures UP Above $80 Again As Gasoline Futures UP 91.5% Under Bidenomics)

Joe Biden said that Republicans will impeach him in the House of Representatives since inflation is coming down. Huh? No Joe, it is because your are the most corrupt President in history, a compulsive liar and your economic policies are pure World Economic Forum mandates (open borders, Central Bank Digital currency, green energy, etc). Biden started off his Presidency by declaring war on fossil fuels that helped drive prices through the roof. And the middle class are paying the price.

But as inflation cools (blue line) thanks in part to Biden draining the Strategic Petroleum Reserve (orange line), Biden can gloat. But remember, gasoline prices remain 56% higher under Biden’s Reign of Error. Even worse, gasoline FUTURES are up 91.5% under Biden. Yikes!

But look at how gasoline prices and gasoline futures have risen in July (pink circle). The last inflation report showed that inflation has declined to 3% (still higher than The Fed’s 2% target), gasoline prices are up almost 5% since July 19, 2023.

Gasoline, meanwhile, started the year at less than $2.50 per gallon. This week, gasoline topped $2.90 per gallon and may yet reach $3.

WTI Crude Oil futures have broken through the $80 barrier … again. Heating oil futures are up 1.43% today with WTI Crude futures up 0.61%.

So as energy prices keep rising (and Biden’s EPA keeps issuing green energy edicts and fails to recognize that our power grid can’t support all the electric cars and trucks envisioned by the Obama/Biden green dreamers). As such, energy prices will keep rising and with it … inflation.

Biden’s Mortgage Market! Mortgage Demand Falls 1.8 Since Last Week, Purchase Mortgage Demand Down -49% Since April 2021, Refi Mortgage Demand Down -87% As Mortgage Rates Up 115% (Hurts So Bad?)

Biden loves to brag about Bidenomics, or should I say selective stats like the labor market. But the mortgage market hurts so bad.

Mortgage applications decreased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 21, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index 1.5 percent compared with the previous week. The Refinance Index decreased 0.4 percent from the previous week and was 30 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 3 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 23 percent lower than the same week one year ago.

Since April 2021, purchase mortgage demand is down -49%, refi mortgage demand is down -87% as mortgage rates are up 115%.

KJP “Hurts So Good” Presser: Prices UP 16.6% And Real Wages Down -3% Since Biden Took Office (Food UP 56%, Gasoline UP 52%, Mortgage Rates UP 153%) Hurt So Good???

Biden Press Secretary KARINE JEAN-PIERRE: “The American people are beginning to feel Bidenomics”

Prices are up 16.6% and real wages are down 3% since Biden took office.

Well, at least Jean-Pierre didn’t claim like her boss Joe Biden claimed that he “ended cancer as we know it.”

But getting back to Jean-Pierre’s claim that “The American people are beginning to feel Bidenomics.” She is right (for once). Americans are REALLY feeling Bidenomics. And it hurts SO BAD!!!

What hurts so bad? Food (CRB Foodstuffs) are up 56% under Bidenomics. Real weekly wage growth is down -90% since Biden assumed office. Regular gas prices are up 52%. And the 30Y mortgage rate is up a staggering 153%. Yes, Karine, this hurts so bad!

While real wages are down -3% under Biden and the real average weekly wage growth is down -90%. That REALLY hurts so good.

But Biden and KJP think that Bidenomics “hurts so good.”

A video of Bidenomics.

There Goes The Economy! US Producer Prices Approach Deflation With 0.1% Annual Rise (US Dollar Down -8.2% Since Sept ’22 As Fed Tightens The Noose) Silver UP >2% Today!

There goes the economy!

As The Federal Reserve is poised to continue it inflation-fighting crusade, the US economy is rapdily approaching DEFLATION. US Producer Price Index FINAL DEMAND fell to 0.1% YoY in June.

Bidenomics, the combination of insane monetary stimulus and insane directed Federal spending towards going green at all costs, is running out of steam. M2 Money growth was last measured to be -4% YoY and the US Dollar is down -8.2% since September 2022.

The good news? Silver is up over 2% today!

And Bitcoin is up almost a percent today.

Speaking of the Biden White House ….

US Mortgage Purchase Demand Drops -19% From Previous Week As Mortgage Rates Top 7% (Down -53% Under Bidenomics, Rates Up 138%) Strongly Recommend “Sound Of Freedom”

As Bidenomics (why Biden would brag about massive inflation in energy, food and shelter is beyond me), lurches forward, we have another shred of lousy economic news: US mortgage purchase demand fell -19% from the previous week and is how down -53% under Bidenomics).

Mortgage applications increased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 7, 2023. This week’s results include an adjustment for the observance of Independence Day.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 19 percent compared with the previous week. The Refinance Index decreased 21 percent from the previous week and was 39 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 19 percent compared with the previous week and was 26 percent lower than the same week one year ago.

Yes, mortgag purchase demand is down a staggering -53% under Bidenomics (another word for the next best thing to Socialism which is Federal control of where the trillions are spent). Economic traffic led by The Keystone Kops.

Here is the rest of the data. Mark Zandi will look at the seasonally adjusted data, I look at the raw or non-seasonally adjusted data.

On a different note, I watch “Sound of Freedom” last night. A tremendous film highlighting the problem of pedophelia and child sex slavery in the US and Latin America. Very, very moving. Biden should be ashamed for cancelling Trump’s anti trafficking program.

US Manufacturing Activity Shrinks By Most in Three Years As Cardboard Box Shipments Declining At Fastest Rate Since Financial Crisis) Ethereum UP >2% This AM

I was hoping that the week of July 4th would start off with fireworks, but we got bad news about the economy.

US factory activity contracted for an eighth month in June, slipping to the weakest level in more than three years as production, employment and input prices retreated.

The Institute for Supply Management’s manufacturing gauge fell to 46, the weakest since May 2020, from 46.9 a month earlier, according to data released Monday. The current stretch of readings below 50, which indicates shrinking activity, is the longest since 2008-2009.

The decline in the ISM production gauge, which also stands at the lowest level since May 2020, suggests demand for merchandise remains weak. The index of new orders contracted for the 10th straight month and order backlogs shrank, which may help explain a pullback in a measure of manufacturing employment.

The ISM gauge retreated to a three-month low and, at 48.1, indicates fewer producers adding to payrolls.

Many Americans continue to limit their spending on merchandise as they rotate to services and experiences. Others are simply tightening their belts as still-high inflation takes a toll on their incomes.

And then we have cardboard box shipments declining at fastest rate since 2008/2009.

At least Ethereum is up over 2% this morning.

And the US Treasury 10Y-2Y keeps on diving deeper into inversion.

Joe Biden, the face of Bidenomics.

Bidenomics? US Pending Home Sales Plunge More Than Expected In May To -20.8% YoY (Negative On Top Of 25 Straigth Months Of Negative REAL Wage Growth)

Bidenomics? Yes, an economy where inflation crushes the middle class and low wage workers with 2 years of negative wage growth and now 24 or the last 25 months of negative growth rates of Pending Home Sales YoY.

After existing home sales were flat and new home sales exploded higher, pending home sales once again are the tie-breaker on May’s housing market (and were expected to decline 0.5% MoM). The actual print was considerably worse than expected, down 2.7% MoM (and April was revised down from unchanged to -0.4% MoM). Pending Home Sales were down -20.8% YoY in May.

This is not exactly surprising given that Americans have suffered from 25 straight months of NEGATIVE real weekly earnings growth.

“C’mon man! The Biden clan is getting filthy rich with foreign bribes! Stop the malarkey about Bidenomics being a disaster!”

US New Home Sales Spike 20% Year-over-Year (YoY) In May As Fed Pauses Rate Hikes (The Buck Drops Here!)

Well its about time that homebuilder started building again! And maybe it was The Fed rate hike pause (and possible rate cuts in the future.

US new home sales rose 20% in May as The Fed pauses rate hikes.

Fed Funds Futures point to one or two more rate hikes, then down she goes!!!

763k new homes were added in May

Remember, there is still a lot of stimulus (M2) sloshing around the economy. Perhaps we can rename all the infrastructure stimulus that is leaking out into the economy “Buttigieg Bucks.” Or “Buty Bucks!”