Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
Inflation soared under Biden/Harris, primarily due to their outrageous wasteful government spending.
US government spening soared with Covid and politicians enjoyed the unbridled spending.
Let’s see if Trump and Republicans can do any better.
It is a brave new world as the US attempts an Argentina-like shift from an over-regulated, corrupt economy to a more free economy. While Argentina has Javier Milei, the US is stuck with greedy Democrats and RINOs and their bloated spending sinking any attempt to cut wasteful spending.
So as we transition from woefully corrupt and demented Joe Biden to Donald Trump, the labor market is … terrible. The job finding rate of unemployed workers has collapsed.
This occurred as the Philly Fed Business Outlook plummeted.
Here is Javier Milei of Argentina and The View’s image of a libertarian leader, Javier Bardem from No Country For Old Men.
Apparently, the late Hawaiian crooner Don Ho foresaw Biden’s irresponsible spending spree. That is, BIG BUBBLES.
Let’s start with the Buffett Indicator (Warren, not Jimmy!). It indicates that the stock market is STRONGLY OVERVALUED.
The S&P 500 Mean Reversion Model also shows the stock market to be STRONGLY OVERVALUED.
How about the Shiller P/E Ratio? Also showing strong overvaluation.
House prices under Biden have exploded partly due to the outrageous Federal spending following COVID.
The Feral Reserve also had a hand in the housing bubble. While mortgage rates remain high (relative to the Trump years), The Fed’s balance sheet remains elevated.
To be sure, some Republicans were complicit in the spending spree. But mostly it was Democrats and the Biden/Harris Administration … which is still doling out millions.
All aboard the Biden/Pelos/Schumer crazy spending train!
Wage and salary income as a percentage of GDP has fallen from over 50% back in 1970 to 43.1% in 2022. And look at the post Covid decline! And the increase in M2 Money.
Meanwhile the US budget balance as a % of GDP has been plunging downwards in recent years.
Despite the slowing economy, pre-tax profits post Covid have SOARED!
Primarily due to reckless/wasteful Federal spending and FEDERAL DEBT that soared.
There you have it! The Biden/Harris economic “miracle” was simply Federal government malspending that benefitted large corporations and few people.
Joe Biden and his woefully corrupt son Hunter of laptop fame.
We didn’t start the fire … The Fed and Biden/Harris did. And it is still burning.
October STICKY core inflation is still up 4% YoY (year-over-year)
Core CPI rose 0.3% MoM (as expected) which pushed it up 3.3% YoY (not even close to the 2% mandate)…
There has not been a single monthly decrease in core consumer prices since Biden too office.
dddd
Between The Fed’s insane monetary policy and Biden/Harris insane fiscal policies, we are living in a world where Ray Bradbury’s novel Fahrenheit 451 becomes a reality. Instead of books burning, it is the US Dollar burning.
While Biden travels to Africa giving away money (and looking like the crypt keeper), the November jobs report was released.
The Establishment report showed a gain of 227k jobs. But the household survey showed a staggering loss of -355k jobs.
But not in labor force increased by 368k
Biden, the economic crypt keeper.
The last gasp of the Biden/Harris reign of (economic) error!
After existing home sales unexpectedly ticked up in October, analysts expected new home sales to slow after their recent resurgence (-1.8% MoM). They were right… BUT… the magnitude is mind-boggling!
New Home Sales collapsed 17.3% MoM in October. That is the largest MoM drop since July 2013.
That MoM plunge dragged sales down 9.4% YoY to 610k SAAR – the lowest since Nov 2022
Of course, all the revisions are lower…
Hurricanes Helene and Milton, which tore through parts of the Southeast, delayed sales in the nation’s biggest housing region and dragged down sales overall.
Sales in the South decreased 28% to 339,000, the slowest pace since April 2020. Sales also fell in the West, but rose in the Northeast and the Midwest.
Finally, we note that the median sale price of a new home increased to $437,300 in October, the highest in 14 months.
Does this mean November’s data will see a massive surge in new home sales? …even as rates have increased significantly?
Rolling into Cleveland to the lake.
NEW YORK, NOVEMBER 26, 2024: S&P Dow Jones Indices (S&P DJI) today released the
September 2024 results for the S&P CoreLogic Case-Shiller Indices. The leading measure of U.S.
home prices recorded a 3.9% annual gain in September 2024, a slight deceleration from the previous annual gains in 2024.
YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 3.9% annual return for September, down from a 4.3% annual gain in the previous month. The 10-City Composite saw an annual increase of 5.2%, down from a 6.0% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 4.6%, dropping from a 5.2% increase in the previous month. New York again reported the highest annual gain among the 20 cities with a 7.5% increase in September, followed by Cleveland and Chicago with annual increases of 7.1% and 6.9%, respectively. Denver posted the smallest year-over-year growth with 0.2%.
Table 2 below summarizes the results for September 2024. Cleveland and New York top 7% YoY.
Meet the new boss, same as the old boss. We did get fooled again!
The problem with the national debt can’t be fixed with Mitch McConnell still in the Senate and too many Obama-era political hacks still in Washington DC.
The Obama/Biden era began in 2009 and it still exists despite Trump winning the Presidency for 2025. The Obama/Biden regime along with Congressional assistance drove up US Federal Debt to around $36 TRILLION. That is an increase of a staggering 236% since Obama/Biden were sworn into office in January 2009. And Federal spending is up 121%.
Unfortunately, Trump cannot pull a Javier Milei (Argentina’s libertarian President) and obliterate the bloated carcas of Federal bureaucracy. Democrats and RINOs like Mitch McConnell will work overtime thwarting Trump’s efforts to control the bloat.
And don’t forget the $221 TRILLION in unfunded liabilities (promises) that Congress had made to get elected. That will eventually become Federal debt.
Fortunately, the Biden/Harris administration is winding down. On the mortgage side, the mortgage market is already gone under Biden/Harris where mortgage purchase applications are down a whopping 60%.
Mortgage applications increased 1.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 15, 2024.
The Market Composite Index, a measure of mortgage loan application volume, increased 1.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 1 percent lower than the same week one year ago. And down -60% under Biden/Harris.
The Refinance Index increased 2 percent from the previous week and was 43 percent higher than the same week one year ago.
Slowing economy, rising rates, too expensive housing. Not a good sign for the mortgage market.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.