Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
Inflatiion Joe Biden (or Unaffordable Joe). Bidenflation has led to The Federal Reserve tightening interest rates. As I said on Stuart Varney’s show years ago, “When The Fed starts raising rates, KABOOM!”
Now we are seeing US Loan Demand weakening by the most since the 2009 financial crisis.
Then we have large/medium sized banks reporting a crash in stronger demand for C&I loans.
Call Biden “The Recession Hessian.”
I wish Biden would spend more time trying to negotiate with McCarthy to end the debt crisis rather than stir up race hatred like he did at Howard University graduation. C’mon Joe! White “supremacy” is not the most dangerous terrorist threat. I would actually say that Biden, Yellen and Schumer (throw in Pelosi’s spending splurge as Speaker) are the biggest terrorist threat. They are the 4 horsemen of the US debt apocalypse.
Let’s see how Bidenflation (caused by staggering Federal misspending) and years of Yellen’s TLTL (too low too long) monetary policy has caused a massive dislocation in the housing market.
The February Case-Shiller National home price index less core inflation (CPI less food and energy) year-over-year is declining by -3.5%. This is happening as REAL average weekly earnings growth is at -1.06% YoY and has been negative growth for 25 straigth months.
Look at The Fed’s massive overreaction to the unnecessary government shutdowns of economies and schools. It really sent home price growth soaring, then when The Fed starts slowing the monetary stimulus, we get the largest slowdown of REAL home price growth since 2012.
The 4 Horsemen of the US Debt Apocalypse. I would add Mitch McConnell and Fed Chair Powell, but then would have an entire Cavalry company like George Armstrong Custer had at Little Big Horn.
Living in Biden Country! Where big American cities are becoming like Lori Lightfoot’s Chicago.
And the sad headline of the day (other than pure chaos on the Mexican border) is that NO RENT IS BEING PAID ON 20% OF ALL US OFFICE SPACE! And small banks hold 70% of commercial real estate loans!
Things are so bad, in fact, that 26 Empire State Buildings could fit into New York City’s empty office space, as occupancy in the city is hovering around 50% of prepandemic levels,
As The Fed momentarily pauses rate hikes, office vacancy rate just hit an all-time high. Another Biden first!! And the NCREIF office property index falling as The Fed tightens.
Wasting away again in Bidenville, look for my lost economy.
Face it, nothing has been the same since 1) the Covid economic shutdowns, 2) the massive spending spree by Congress, the massive expansion of monetary stimulus by The Federal Reserve and 3) the election of Unaffordable Joe Biden,
The latest University of Michigan consumer survey is out and it is ugly, reflecting Biden’s ugly approval ratings. A sentiment value of 100 is a good baseline and US consumers were about at 100. Then Covid struck and the ensuing economic and school shutdowns (thank a lot Randi Weingarten, President of the American Federation of Teachers). Then we have the selection of Joe Biden as President, the WORST President in history.
Housing sentiment? It is now near the lowest level since 1982.
Here is Parks and Recreation’s Leslie Knope, one of the only political non-donor class that still likes unaffordable Joe. But big Democrat donors LOVE Biden doling out billions to them!
Another dismal economic report under “Middle class” Joe Biden.
April’s inflation report is out and … it sucks. Core inflation (CPI less food and energy) remains elevated at 5.5% YoY, much higher than The Fed’s target rate of 2%. Even worse, US REAL average weekly wage growth is negative again at -1.1% YoY, negative growth for the 25th straight month.
Turns out that core inflation is higher than overall inflation. 4.9% YoY compared to core of 5.5% YoY.
Despite the hot core inflation report, Fed Funds Futures are pointing to declining rates over time.
While the US middle class is getting screwed, The Biden family are raking in millions …. from China.
Middle class Joe is now “Pay to play” Joe.
Resident Biden has been an unmitigated disaster for the US middle class, but fantastic for BIG corporate America and the donor class.
Mortgage applications increased 6.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 5, 2023.
The Market Composite Index, a measure of mortgage loan application volume, increased 6.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 7 percent compared with the previous week. The Refinance Index increased 10 percent from the previous week and was 44 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 5.3 percent compared with the previous week and was 32 percent lower than the same week one year ago.
Here is the data.
Middle class Joe as he likes to call himself is actually BIG CORPORATE Joe. A friend of big donor and BIG pharmam, BIG banks, BIG tech, BIG defense contractors, BIG media. No wonder Hunter Biden refers to Joe as “The BIG guy!”
Yes, the banking system under green zealots and spendiholics Biden, Pelosi and Schumer have helped drive inflation to 40 years highs leading The Fed to counterattack and raise interest rates and slow M2 Money supply.
The result? As Bank of America analysts said. Fed tightening ‘always breaks something’. And in this case it is regional and community banks. Or as BofA’s Harnett said, “The Fed Hiked Until It Broke The Regional Banks”.
Despite the attempts from The Fed and Treasury Secretary Janet “The Evil Hobbit” Yellen to mollify depositors, bank deposits contine to sink.
And they are sinking faster at smaller banks than larger banks.
Meanwhile, FDIC bridge loans are exploding in terms of useage.
We all know Biden gets bought off by China and big corporate America. Like The Borg (our Too-Big-Too-Fail or TBTF banks).
Ok, it is well-known that Biden was the stupidest man in the US Senate. And with Washington’s Patty Murray in the Senate, that is quite an accomplishment.
But Biden is President and is still stupid and spiraling down the dementia rabbit hole. He is blaming Republicans for their budget proposal to end the debt ceiling crisis despite saying previously that he would negotitate. Apparently, Biden’s puppet masters are telling him to risk default by playing the blame game.
So, US credit default swap (CDS 1Y, SR, EURO) price remains elevated which indicates that Biden, Yellen and Schumer may actually default on US debt.
As M2 Money growth crashes and burns, the US Treasury 2Y-3M yield curve inverts to lowest in history.
Biden loves to brag about the greatest economy in history! Sure Joe. Life during Biden.
Challenger jobs cuts in April were 176% year-over-year. Non farm productivity in Q1 fell -2.7% QoQ. And unit labor costs in Q1 almost doubled to 6.3% QoQ, almost doubled from the Q4 2022 figure of 3.2%.
At least The Fed is going to pause it manic rate hikes. Then begin dropping them again.
As Connor MacLeod said in the film Highlander, “There can only be one!” The US banking system under Joe Biden’s Reign of Error is like the film Highlander: apparently, there can only be one bank. And it is likely JP Morgan Chase.
Take the JP Morgan Chase (JPMC) acquisition of First Republic Bank:
In Acquiring First Republic Bank, JP Morgan Has:
This crisis has taught us that rules don’t matter in times of panic, particularly to regulators.
And now we have PacWest Bancorp. Lender says it’s been approached by potential investors. Bill Ackman warns US regional banking system at risk.
The turmoil at PacWest shows how investor angst still remains elevated after a string of failures and deposit outflows in the sector despite Federal Reserve Chair Jerome Powell’s assurance Wednesday that authorities were closer to containing the crisis. It’s reignited the debate over whether more US regional lenders will fall after this year’s collapse of SVB Financial Group’s Silicon Valley Bank, Silvergate Capital Corp., Signature Bank and most recently First Republic Bank.
Smaller banks are under pressure after a year of interest-rate hikes hammered the value of their bond holdings and drove unrealized losses to an estimated $1.84 trillion. Trouble in commercial real estate is adding to the pain, while depositors take their money out to seek better returns elsewhere. These stresses have put the spotlight on these lenders, which typically have fewer resources to defend themselves.
We are seeing a consolidation of the banking system .. again as smaller and regional banks fail and get gobbled up by the Too-Big-To-Fail (TBTF) banks like … JP Morgan Chase.
Biden’s Reign of Error is not over yet. His campaign slogan (which was also Bill Clinton’s campaign reelection slogan) is “Finish the job!” With Biden’s idiotic mortgage idea of punishing borrowers with good credit and giving subsidies to those with bad credit, Biden is trying to finish off the US economy and banking system.
We are in for more hell.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.