Economic Vertigo! US Interest Payments Expected To Keep Rising Under Marxist Harris (And Why The Fed MUST Try To Lower Interest Rates)

After watching the Democrat hate fest last night (Aka, the Democrat National Convention), I was not shocked that the DNC platform looked like a playbook to destroy the US economy. High taxes, endless spending, more regulations, etc. Not a word about the staggering side of the US debt load … with Harris’ economic plan projected to add a whopping $25 trillon in debt to the already massive $35+ trillion debt load.

And not a mention that US interest payments on the national debt already exceeds defense spending. And is booming!

Of course, Harris’s economic vision is a continutation of Biden’s disastrous visions (which are Obama’s vision of US obliteration). Most politicians in Congress are millionaires (including Bernie Sanders) and won’t suffer from their insane “progressive” policies. Watching last night’s DNC hatefest was like watching nasty 2nd graders having a party.

Of course, the drove of anti-American, anti-properity speakers spewing venom (I hate Hillary’s flat-tone speaking style) like Hillary, Jaime Raskin (aka, Rasputin), AOC, etc. all failed to acknowledge to acknowledge the already monstrous size of the US debt ($35+ trillion) or the massive size of the unfunded promises ($218+ TRILLION). Of course not.

The handle the staggering interest payments that will crowd out other spending, The Federal Reserve will be forced to lower rates.

Of course, Democrats will wheel out “economists” like Robert Reich who say that the debt doesn’t matter.

That’s Biden/Harrisnomics! Leading Economic Indicators Down For 29th Straight Month (Outside Of Great Financial Crisis, The Worst Decline In LEI Since Mid ’70s!!!)

That’s Biden/Harrisnomics!

US Leading Economic Indicators down for their 29th straight month – at a level worse than the trough of COVID lockdowns…

…and the head of The Conference Board says ‘nothing to see here’…

The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.

For context, outside of the great financial crisis, this is the worst decline in LEI since the mid ’70s!!!

And what is behind the ‘no recession’ call… US equity strength!!

Thank The Feral Reserve for the equity spike!

So, to summarize – almost all the macro data signals weakening growth for years… but because stocks are up (and credit spreads down), there’s no recession anywhere on the horizon!!??

Buying Conditions For Housing Drops To 21, All-time Low

Harris has released her “vision” for the US economy, but it is what you would expect. $25k subsidy for first-time homebuyers which will make housing even MORE expensive. According the University of Michigan consumer survey, buying conditions for housing has already plummeted to 21, the lowest in history.

Cause? Already high housing prices and relatively high mortgage rates.

Kama Kameleon! Fed Loses Record Amount, Bankrupty Filings (Chap 11) Highest In 13 Years, Foreign Investors Pulling Out Of China

Kama Kameleon.

Kamala Harris, despite being VP for almost 4 years, is going to annouce her plans for taming inflation. Why doesn’t she do it now?? What Harris can’t control is The Federal Reserve that is losing money at breakneck speed.

Here is The Fed’s balance sheet.

I shudder to think what Harris will propose to solve the highest bankrupty (Chap 11) rate in 13 years. Probably more Bidenomics (big wealth transfers to large corporations/donors).

Meanwhile, foreigns pulled a record amount of funds from ailing China.

Kamala Harris will say anything to get elected, then fall back on her Communist agenda.

VIX Vapo Rub! VIX Explodes Last Monday (Only Two Other VIX Episodes Higher Than 60)

I have another use for VIX … to wipe out stock market gains. VIX is the S&P 500 volatility index, also known as “The Fear Index.”

Over the last 35yrs, the whole life of VIX history, there have only been 2 prior episodes of VIX trading >60: The 1st was during GFC, the collapse of Lehman, the 2nd episode occurred during Covid and we had a 3rd occurrence: that was last Monday.

VIX … wiping out stock returns!

Trouble With The Curve! US Yield Curve Rises Above 0 Slope While Mortgage Rates Fall

We know several things about the yield curve. First, it goes negative before recessions. Second, it is related to the inverse of The Fed’s target rate (blue line).

How about the US mortgage rate? Generally, US Mortgage rates are inverse to the 10Y-3M yield curve, but lately the US mortgage rate (pink circle) have declined with the 10Y-3M yield curve.

The yield curve does forecast recessions, but is unreliable in forecasting mortgage rate movements.

The Fed Money Printing And Stock Prices And Housing Prices (Why The Fed Must Keep On Printing!)

The Fed’s theme song: Keep on printing!

Look at this chart of the S&P 500 index against M2 Money stock.

And this chart of Case-Shiller home prices against M2 Money.

Bottom line? The Fed has to keep on printing money. Otherwise, the US economy will collapse like a cheap building.

Here is Fed Chair Jerome Powell creating assets bubbles.

The Wheels Came Off Biden/Harrisnomics: Record Low Savings Rate And Record High Consumer Debt

The wheels are coming off Bidenomics. Code for corporate welfare and massive government spending. Coupled with misguided and burdensome regulations, we got gut wrenching inflation.

The result? A disastrous stock market showing yesterday.

What has Biden/Harris’ economic agenda wrought? Record high personal debt and record low savings rates.

Manic Monday? VIX Fear Index Soars To 52.2 (Head Over Heels For Harris?)

Like the Go-Go’s song Manic Monday, it is a manic Monday for stocks. The awful jobs report from last Friday is reverberating through markets. The VIX (fear index) soared to 52.2 this morning.

MY fear is that Congress will go wild and start (mis)spending trillions of dollars again on hare-brained projects like green energy (and electric cars) when our electric grid can’t support the increase in electric cars.

US 2s/10s yield spread is now flat for the 1st time since 2022 on aggressive repricing of Fed rate cuts. US 2y yields have plunged by 70bps to 3.69% since last Wed while US 10y yields only dropped by 40bps in the same time.

Voters are head-overheels for Kamala Harris, a dim-witted Marxist authoritarian.