Category: REITs

China Trade Uncertainty Causes VIX To Fall By 18.7 Pts, Largest In History (Correlation Between Stocks And Bonds Reverse To Positive)

Obama/Biden/Harris/Schumer/Pelosi have let the US be the punks for China. Trump is simply trying to level the playing field and China’s Xie doesn’t like the new equilibrium.

VIX Index fell by 18.7 points yesterday … largest one-day decline in history.

The correlation between stock prices and bond yields has returned to positive territory — hinting at a period of distress in equities and a regime shift in equity and bond markets where recession fears, rather than inflation, may be starting to drive direction of both. The correlation between the two asset classes was positive for the better part of 20 years prior to the pandemic, suggesting equities trended in the direction of yields as inflation mostly coincided with growth. Stocks held a negative correlation to yields throughout most of the 1980s and 1990s, when inflation hurt stocks — and that phenomenon returned for the 2022-24 bear market and recovery period.

Notably, major stock corrections occurred each time the correlation jumped out of its primary regime.

China’s Xi flashes a Hitler salute!

Thunderstruck! Tariff Turbulence Causing 10Y Treasury Volatility To Increase As MBS Spreads Widen

Thunderstruck! The tariff kerfuffle between the Trump Administration and China is causing turbulence in the Treasury market. The 10-year Treasury rate is soaring with China’s counterpunching.

MBS spreads are widening.

Along with volatility.

But corporate spreads are widening more than MBS spreads.

The 10Y-2Y yield curve has risen to the highest level since the early days of “China Joe” Biden.

On a related note, Freddie Mac serious delinquency rates on mortgages is now the highest since the financial crisis.

Soothe Me? Q1 GDP Now At -2.8% As 10Y Treasury Yield Falls To 4.157% (Recession Jitters?)

Soothe me? As we move further away from Sleepy Joe’s horrid economic policies, we should see an improvement in GDP from the current Atlanta Fed GDP Now Q1 Forecast of -2.8%.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.8 percent on March 28, down from -1.8 percent on March 26.

The alternative model forecast, which adjusts for imports and exports of gold as described here, is -0.5 percent. After recent releases from the US Census Bureau and the US Bureau of Economic Analysis, the nowcast of the contribution of net exports to first-quarter real GDP growth declined from -3.95 percentage points to -4.79 percentage points in the standard model and from -1.92 percentage points to -2.53 percentage points in the alternative model.

The US Treasury 10Y yield has fallen to 4.157% as recession fears mount.

Simply Unaffordable! Multifamily Serious Delinquencies Soar To Highest Since 2000 (Home Prices UP 37% Under Biden, Rents UP 25%)

Housing and rental properties are simply unaffordable.

Freddie Mac Serious Delinquency Rate on Multifamily (Apartment) loans soared to highest rate since 2000. Since it is as of January 31, 2025, you can’t blame this on Donald Trump (although I am sure they will try).

Of course, home prices and rents soared under Biden. Home prices rose 37% under Biden and rents rose 25%. Simply unaffordable.

And The Fed will keep on printing money!

Credit has been deteriorating.

Won’t Get Fooled Again? New Homes For Sale Hits 500k (Glut), Existing Homes Inventory At 1.24 Million

Apparently, we DID get fooled again. In February, there were 500,000 new homes for sale.

While new home inventory hit 500k, existing home inventory rose to 1.24 million homes.

Cause? Home prices are too damn high. Thanks to Powell and The Fed.

Mortgage originations have dwindled under Biden/Harris.

Jerome Powell and the Blackhearts.

The Empire Strikes Out! NY’s Empire State Activity Survey Drops To -19.30 (Biden Hangover)

The Imperial March from Star Wars should have been the theme for Bidenomics, the top-down government-directed economy (mainly to political donors). It will take a while for the economy to recover from its addiction to Federal government spending.

Speaking of The Empire, the New York Fed’s Empire State business activity survey declined to -19.30. Would Jerome Powell and The Fed have cut rates had they known about the Empire activity survey yesterday?

Emperor Palpatine. Aka, 10% Joe.

Keep On Printing! Mortgage Applications Decreased 6.2 Percent From Previous Week

Keep on printing!

Mortgage applications decreased 6.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 14, 2025.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 6 percent higher than the same week one year ago.

The Refinance Index decreased 13 percent from the previous week and was 70 percent higher than the same week one year ago.

Mortgage rates increased for the first time in nine weeks, with the 30-year fixed rate rising to 6.72 percent. This increase in rates led to a decrease in refinance volume. However, purchase application volume inched up to its highest level in six weeks, led by a 3 percent increase in FHA purchase applications. Overall, purchase application volume is up 6 percent compared to last year at this time. Growing inventories of homes on the market and steadier mortgage rates are supporting homebuying activity thus far this spring.

Keep on printing!

Mortgage Applications Increased 11.2 Percent From Last Week (Purchase Index Increased 8 Percent)

The US economy is gradually recovering from Bidenomics (government/donor dictated spending). Mortgage applications increased 11.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 7, 2025.

The Market Composite Index, a measure of mortgage loan application volume, increased 11.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12 percent compared with the previous week.  The seasonally adjusted Purchase Index increased 7 percent from one week earlier. The unadjusted Purchase Index increased 8 percent compared with the previous week and was 4 percent higher than the same week one year ago.

The Refinance Index increased 16 percent from the previous week and was 90 percent higher than the same week one year ago.

Mortgage rates declined for the sixth consecutive week, with the 30-year fixed rate dropping to 6.67 percent, the lowest level since October 2024. As a result, applications increased over the week and were up 31 percent from a year ago.

Turnover speeds are arisin’!

The Fool? US Dollar Soars As Probability Of Default Reaches 42%

Trump inherited a brittle economy from “The Fool” Joe Biden. And it is shown up.

The Trump Administration is fighting the remnants of Biden’s policies by cutting spending (DOGE) and deregulation.

All this has resulted in a soaring US Dollar.

Tarot cards have officially renamed “The Fool” card as “The Biden.” Although in Washington DC, there is no shortage of fools (see Maxine Waters (D-CA) and Rashida Talib (D-MI).