US Mortgage Rates Plunge for a Second Week, Hit Two-Month Low, Purchase And Refi Applications Rise (But Purchase Apps Down 86% YoY, Refi Apps Down 41% YoY)

The global economic slowdown has one nice unintended consequence: as the 10-year Treasury yield softens, mortgage rates decline.

US mortgage rates retreated sharply for a second week, hitting a two-month low and providing a bit of traction for the beleaguered housing market.

The contract rate on a 30-year fixed mortgage decreased 23 basis points to 6.67% in the week ended Nov. 18, according to Mortgage Bankers Association data released Wednesday.

Rates have plunged nearly a half percentage point in the past two weeks, the most since 2008, as recession concerns mount, inflation shows signs of cooling and a number of Federal Reserve officials say it may soon be appropriate to slow the pace of monetary tightening.

The slide in borrowing costs helped stir demand as the group’s index of applications to buy a home climbed 2.8%. That marked the third-straight increase since the gauge stumbled to the weakest level since 2015.

The pickup in demand allowed the overall measure of mortgage applications, which includes refinancing, to rise for a second week, but it still remains depressed. The index of refinancing activity edged up from a 22-year low.

The Refinance Index increased 2 percent from the previous week and was 86 percent lower than the same week one year ago. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 41 percent lower than the same week one year ago.

But you need an electron microscope to see the increase in both purchase and refi apps.

One indicator of a slowing global economy is the decline of FANG (Facebook, Amazon, Netflix, Google) with declining liquidity.

98 Shades Of Gray! US Treasury 10Y-2Y Yield Curve Inverts To -73.5 BPS, Worst Since 1981 (98 Straight Days Of Inversion)

The Biden Administration is setting all sorts of records. One is the worst inflation rate in 40 years. Another is highest gasoline prices in history (until the latest global slowdown). The list goes on, but here is another one: the US Treasury 10Y-2Y yield curve is now at -72.5 basis points, the more inverted curve since 1981.

This is the US Treasury version of 50 Shades Of Grey.

Drivers To See Highest Thanksgiving Gasoline Prices Ever While Diesel-To-Gasoline Spread Soars (Food Prices UP 49% Under Biden, Diesel Prices UP 102%)

As Americans prepare to hit the road for Thanksgiving, average gas prices will be at their highest seasonal level ever, according to GasBuddy.

GasBuddy says the national average is projected to stand at $3.68 on Thanksgiving Day. This is nearly 30¢ higher than last year, and over 20¢ higher than the previous record of $3.44 set in 2012.

And diesel prices, the life blood of the shipping industry, relative to gasoline prices, are soaring. Highest since 2004.

As we approach Thanksgiving Day, it is important to be thankful … that things aren’t even worse under Billions Biden. US CRB foodstuffs are up 49% under Biden while diesel fuel is up 102%.

Now, gasoline prices fell recently as WTI crude prices slipped on slowing demand. And as stimulus wears out.

And its now only food.

Have a holly jolly Thanksgiving!!

My Thanksgiving dinner, because of the cost, will be a Jersey Mike’s turkey and provolone sub (mini). Or this canned dinner.

Alarm! Yesterday’s PUT/CALL Ratio Was Highest In History (1.46, Higher Than 2001 And 2008!) REAL M2 Money YoY Plunges To Lowest Since 1980 And Jimmy Carter

Alarm!

Yesterday’s PUT/CALL ratio was the highest in history at 1.46. That is higher than 2001 and 2008.

REAL M2 Money YoY has crashed to its lowest level since 1980 and Jimmy Carter.

And the train keeps on rollin’.

Instead of Little Games, The Federal Reserve is making this BIG GAMES.

Existing Home Sales Update: REAL Median Home Price Growth At -1.17% YoY, REAL Wage Growth At -3.0% YoY, REAL 30yr Mortgage Rate At -0.5254% (How Bad Is US Inflation??)

The US housing market is slowing, to be sure. Yesterday’s existing home sales (EHS) report revealed that US EHS were down -28.43% YoY and the median price of EHS slowed to 6.6% YoY.

But that is just the surface of the EHS report for October. Once I removed inflation (CPI YoY) from the numbers, we are left with REAL median price of EHS growth of -1.17% and REAL average hourly earnings YoY of -3.0% YoY. The REAL 30-year mortgage rate is -5.25%. That reveals how horrible inflation is in the US.

It is important to note that EHS numbers are lower in October than they were before Covid stimulypto (my name for the massive spending spree by Congress and massive injection of monetary stimulus by The Fed. Even the REAL 30-year mortgage rate is negative at -0.5254%.

On a side note, how come fraudulent former Stanford student Elizabeth Holmes gets 11 years in prison for her Theranos scam, but Sam Bankman-Fried only gets a House hearing with Maxine “Dirty” Waters as Chair by losing a far greater amount? Could the fact that SBF and his co-founders at FTX contributed $300,351 to nine members of the House Financial Services Committee, according to Federal Election Commission records?

I guess Elizabeth Holmes did not make the requisite pay-offs.

US Existing Home Sales In October Plunge -28.43% YoY As Fed Tightens Monetary Noose (EHS Median Price Growth YoY Slows To 6.6% As Inventory Declines)

As I mentioned on Varney and Company on Fox Business, housing is going to suffer when The Fed starts to tighten their monetary policy. And here we are, folks!

US existing home sales fell a staggering -28.43% YoY in October as M2 Money growth grinds to almost a halt.

October’s existing home sales YoY of -28.43% is the WORST since The Great Recession and collapse of Lehman Brothers.

The median price of existing home sales slowed to 6.6% YoY. Inventory of EHS remains below pre-Covid levels.

Unrelated to housing, Prince Imhotep (Federal Reserve Bank of Minneapolis President Neel Kashkari) said Friday that the whole idea of cryptocurrency is “nonsense” after the implosion of FTX revealed the industry’s shortcomings.

“This isn’t case of 1 fraudulent company in a serious industry,” Kashkari said on Twitter, commenting on an article about how investors fell for FTX. “Entire notion of crypto is nonsense. Not useful 4 payments. No inflation hedge. No scarcity. No taxing authority. Just a tool of speculation & greater fools.”

Or it could be that investors don’t trust The Fed or Federal government to act in their best interest.

Here is a crypto investor (in red fez) being lectured by Minneapolis Fed President Neel Kashkari.

Shanghai To LA Shipping Costs Decline 81% From Peak As Fed/Fed Gov Stimulypto Slows To 2010 Levels (M2 Money Growth Slows To 2.6% YoY)

Liz Ann Sonders, Chief Investment Strategist, Charles Schwab & Co, wrote today “Collapse in shipping rates continues to look unreal … cost to ship 40-foot container from Shanghai to Los Angeles has fallen by 83% from peak, by far largest drop on record (bringing level to lowest since June 2020)”

Yes, Liz Ann, shipping costs from Shanghai to Los Angeles are plunging. But why?

Federal Reserve and Federal government stimultypo has wound down. M2 Money YoY growth is the lowest since 2010 and no, it isn’t the result of Mayor Pete’s magical skills at clearing the logjam at Los Angeles ports. It is the slowing of Federal stimulus (or stimulypto).

Here is Liz Ann Sonders tweet.

Let’s see if 1) The Fed continues to hike and 2) will House Republicans halt the insane spending, particularly since the start of Covid in 2020.

FTX Chief Hunts for Crypto, Calls Controls ‘a Complete Failure’ (Cryptos Getting Creamed As Fed Tightens) Didn’t SBF See That Coming??

As I have said before, Sam Bankman-Fried and FTX exemplifies loose Fed monetary policy and its unintended consequences: shoddy investment practices by both sides and ridiculous claims that are unverified.

Like Sam Bankman-Fried tweeting that FTX and his team were held as paragons of running an effective company.

I am sure that SBF’s attorneys (like his parents) are telling Spam to stop tweeting ridiculous defenses. As in its all the fault of crypto volatility. We now know that at best SBF had a total lack of corporate controls and thought risk management was the Hasbro board game. And SBF while virtue signaling failed to mention his twisted relationship to Ukraine funding.

(Bloomberg) — Advisers now overseeing the carcass of Sam Bankman-Fried’s FTX Group are struggling to locate the company’s cash and crypto after finding poor internal controls and record keeping at the now-bankrupt company.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information,” John J. Ray III, the group’s new chief executive officer who formerly oversaw the liquidation of Enron Corp., said in a sworn declaration submitted in bankruptcy court.

“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.

Advisers have located “only a fraction” of the digital assets of the FTX Group that they hope to recover during the Chapter 11 bankruptcy, Ray said. They’ve so far secured about $740 million of cryptocurrency in offline cold wallets, a storage method designed to prevent hacks.

The company’s audited financial statements should not be trusted, Ray said. Advisers are working to rebuild balance sheets for FTX entities from the bottom up, he said.

FTX “did not maintain centralized control of its cash” and failed to keep an accurate list of bank accounts and account signatories, or pay sufficient attention to the creditworthiness of banking partners, according to Ray. Advisers don’t yet know how much cash FTX Group had when it filed for bankruptcy, but has found about $560 million attributable to various FTX entities so far.

Although restructuring advisers have been in control of FTX for less than a week, they’ve seen enough to depict the crypto company as a deeply flawed enterprise. Lasting records of decision making are hard to come by: Bankman-Fried often communicated through applications that auto-deleted in short order and asked employees to do the same, according to Ray.

Well, this story keeps getting worse and worse and makes Sam The Sham look like a common criminal rather than a Democrat Saint.

Didn’t SBF’s chief economist show this chart to him and his Alameda team? The one where crytpos soars at The Fed and Federal government go wild on stimulus, then back-off? As The Fed tightens, cryptos are getting crushed.

At least Bitcoin rallied a bit today to $16,564.21, but other cryptos are down … again. Litecoin is actually up 4.57% while Solana is down -4.35%.

SBF, like Janet Yellen, will claim he didn’t see it coming.

The Thrill Is Gone … From Cryptos? Bitcoin Resumes Downward Trend As Fed Tightens To Fight Inflation

The Thrill Is Gone … from cryptocurrencies.

The cryptocurrency market is getting hammered thanks mostly to two things: 1) Sam Bankman-Fried’s horrid failure with FTX (fraud, Enron, front-running, stupid investors, Democrat-Ukraine connection) and 2) Fed tightening to combat high inflation.

Bitcoin, the Mac Daddy of cryptos, is down another 2% today.

The rest of the story.

The NEW face of the US Federal government and why they will sweep the Bankman-Fried fiasco under the rug, just like Hunter Biden’s laptop fiasco.

Buying Typical US Home Now Requires Income of Over $100,000, Up 46% YoY (19 Straight Months Of Negative REAL Wage Growth Isn’t Helping)

Redfin had an interesting post where they showed that the “typical” US home now requires income of over $100,000.

Of course, it is easy to blame the figure on rapidly rising mortgage rates and Federal Reserve tightening.

But the rest of the story (as Paul Harvey used to say) is that US REAL wage growth has been NEGATIVE for 19 straight months. This alone makes housing unaffordable for the middle class and low wage workers.

Good day!

Again, why are Biden and Trudeau wearing Mao jackets in Bali? And why is Biden looking like a robot?? Biden does look like he is saying “Take me to my leader, Pei.”