Biden’s Economic Dance Macabre: Mortgage Purchase Demand Down -1% From Previous Week And Down -20% From Previous Year (Worst Home Sales Data Since The 1970s!)

Biden’s economic Dance Macabre! Or Biden’s Mortgage Macabre! Mortgage purchase demand actually fell -1% from the previous week (WoW) and is down -20% from the previous year (YoY).

Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 17, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 4 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 20 percent lower than the same week one year ago.

And MBA mortgage refis

Not surprising since most homeowners have locked in low borrowing costs prior to the Biden/Congress Covid spendathon and the inflation that followed.

After all, we are seeing the worst home sales data since the 1970s.

Yes, even KJP is finding it difficult to sell Bidenomics to the public (only talking heads like The View and Morning Joe are still trumpeting the greatness of Bidenomics). And now KJP and the Administration are selling Biden’s age of 81 as a treasure trove of experience. Except that Biden’s record in the Senate is an embarrasment. And Biden keeps shuffling and falling and mumbling through his speeches. Watch Biden’s handlers make sure he doesn’t fall again before the election.

Biden’s Housing Market! Existing Home Sales Crash To Slowest Since 2010 (-14.6% YoY), Hit Record Low In The West (Simply Unaffordable)

Even Biden’s press secretary Karine Jean Pierre admitted that all the slogans and hype about Bidenomics is a losing message. The economy is terrible for the middle class and low-wage workers. But excellent for the 1% donor and political elite class. But housing is very important to the middle class … and housing is simply unaffordable.

With housing affordability at its lowest since at least the early 1980s, (and homebuilder sentiment slumping as mortgage rates rose), it’s no surprise that analysts expected existing home sales in October to tumble 1.5% MoM.

Sales actually fell 4.1% MoM (far worse than expected and down for the 20th time in the last 23 months) with September’s 2.0% MoM decline revised even lower to -2.2% MoM. That decline left existing home sales down 14.6% YoY.

Source: Bloomberg

The total existing home sales SAAR plunged to 3.79mm – the lowest since the tax credit expired in Aug 2010…

Source: Bloomberg

Sales fell in three of four regions, while they were unchanged in the Midwest. They hit a record low in the West and matched an all-time low in the Northeast

Finally, the percentage of homes that are vacant fell to the lowest level on record in August, and ticked up only slightly in September…

Ever the optimistic,Lawrence Yun, NAR’s chief economist, suggested that:

“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” adding “though limited now, expect housing inventory to improve after this winter and heading into the spring.”

Good luck with that idea Larry!

Yun added that nearly a third of homes sold above their list price, indicating that multiple offers are still occurring with the median selling price climbed 3.4% from a year earlier to $391,800, the highest for any October in data back to 1999.

Even though the number of homes for sale ticked up from a month earlier to 1.15 million, it’s still the lowest for any October in the series.

Finally, first-time buyers made up a historically low 28% of purchases in October.

After all, the US economy and housing markets are addicted to goverment. (Addicted To Gov!)

Highway To Hell! US Leading Economic Indicators Plunges -7.6% YoY (16th Straight Month Of YoY Declines)

Bidenomics is the economy’s Highway to Hell! Massive, staggering misallocation of scare resources to fund endless wars, green energy fraud, and massive wealth transfers to immigrants while disabled veterans suffer. Now we see that the US leading economic indicators is down -7.6%, definitely smelling like a recession.

On a year-over-year (YoY) basis, the Leading Economic Indicators is down 7.6% (down YoY for 16 straight months) – close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse.

On a monthly basis (MoM), leading economics indicators are down -0.8%. It has been going down for 16 straight months. Here are the components.

Most of the components are in red and need to be back in black for economic growth.

Treasury Secretary Janet Yellen, a mega pro-China elitist, acknowledges that Bidenomics isn’t popular but she attributes that to people not understanding how good Bidenomics is! It is good for the 1% elitist, donor class. But not for the US middle class.

At least Argentina elected AC/DC guitarist Angus Young as President!

Rioting In The Streets! ‘This Will Not End With A Soft-Landing Whimper’ – Rubino Warns “Only A Matter Of Time Before Everyone Realizes There’s No Fix”

Martha and the Vandellas said it best: “No where to run, no where to hide.” We are already seeing rioting in the streets.

Analyst and financial writer John Rubino has a new warning about being fooled into thinking the economy is improving because inflation and interest rates have fallen some recently.

Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral…”

“The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control.

We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs.

Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control.

That’s where we are now.

We are in the blowoff stage of a 70-year credit super-cycle.

Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency.

People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’

At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.”

If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks.

Rubino says in the end, we get a “massive reset,” and the everything bubble explodes.

Rubino says the dollar is going to decline and, at some point, it starts to go into freefall in terms of buying power. Rubino explains,

“If a currency starts to decline in a disorderly way, then you have a massive financial crisis on your hands.

That is definitely where Japan is right now. The U.S. is headed that way fast.

So, once we reach that point, there is no fix.

Then it is only a matter of time that everybody realizes that there is no fix, and they just bail on the whole experiment, and that’s where we are headed.”

Rubino talks about plunging home prices, more trouble coming in the commercial real estate market and why you need gold and silver as core assets during a currency reset.

Riots, already happening in American cities (not to mention looting in New York City, Chicago, San Francisco and Los Angeles), will accelerate if Congress attempts to curtail entitlements (now at $211.65 TRILLION).

Meanwhile, Biden keeps giving away money (student loan forgiveness, electric heat pump mandates, etc.).

Hey, at least Argentina elected AC/DC’s Angus Young as President!

Biden’s Brawndo (The Economic Mutilator)! Fed Paid Treasury $76 Billion In 2022, $200 Million Every Day, Bank Willingness To Lend Crashes, Bank Credit Falls For 16th Straight Week, Biden Enacts War Powers To Get Households To Use Inefficent Electric Heat Pumps

Biden’s terrible economic policies and horrid fiscal managment has put stress on The Federal Reserve. The Federal Reserve paid an estimated $76 billion to the Treasury in 2022 while banks’ willingness to lend has plummeted.

First, let’s look at Biden’s and The Fed’s Brawndo.

One of the key ways central banks absorb liquidity back out of the market is through reverse repo. These are short-term transactions where the Fed sells securities to banks and agrees to buy back at a higher price the next day.

This means banks are being paid to park cash with the Fed instead of injecting it into the economy through loans and fanning the fires of inflation.

That alone is costing the Fed $200M every single day.

In addition, the Fed is spending another $500M in daily interest payments on its reserve policy, i.e. balances that banks are holding in their reserve accounts at the Fed.

Banks’ willingness to lend has plummeted making credit availability increasingly tighter. Current levels have typically ended in recessions.This time is NOT different.

And on the energy side of the market, Biden Invokes ‘Wartime Powers’ to Attack Gas-Powered Furnaces. Of all the stupid things Biden has done, invoking wartime powers to make households use inefficent electric heat pumps instead of gas furnaces in stupid of two levels. First, invoking wartime powers for things unrelated to national defense is reckless and capricious. Second, electric heat pumps in the colder areas of the country is stupid as well. Electric heat pumps are inefficient, unless the goal of Biden and his Idiocracy is to “cull the herd” or kill off people during winter months (I had an electric heat pump in a condo I owned and it was terrible in winter months).

Yes, the Biden Administration and The Fed are economic mutilators!

Bloom Off The ESG Rose? WEF’s ESG Sustainability Push Is Waning (Issuance Of Sustainability Linked Loans Down 80% In US)

Huey Lewis and the News said it best about ESG goals: “The elites want a new drug.”

The World Economic Forum (WEF) is a leading pusher of the ESG drug, pushed by the elite class intending to control the world. Unfortunately, numerous American politicians and influencers have attended the Davos meetings and have openly praised the WEF and its leader Klaus Schwab.

ESG refers to the environmental, social and governance information about a firm. There is growing evidence that companies that take their environmental and social responsibilities seriously perform better financially. This has naturally made investors sit up and take notice.

ESG investing, or sustainable responsible investing (SRI), uses this information about a company to inform investment decisions that prioritize all stakeholders.

Here’s how the Forum’s partners are leading the switch to stakeholder capitalism.

There are 3 pillars to ESG and sustainable investment. This reminds me of the 10 pillars (or planks) of Marxism. So ESG is Marxism with a different name, but the end result is the same. Big government control.

But all is not well with WEF’s ESG drug distribution. In fact, ESG flows into socially consious funds were a big thing during Covid (2020) and the first year of Biden’s Reign of Error. But ESG flows slowed sharply in 2022 and seeing net outflows in 2023.

Issuance of sustainability linked loans is down 80% in the US.

US borrowers are retreating en masse from the world’s second-biggest ESG debt class.

The $1.5 trillion market for sustainability-linked loans, in which borrowing is tied to environmental, social or governance goals, has seen an overall slowdown in volumes this year as both interest rates and greenwashing fears rise. But nowhere has the decline been as precipitous as in the US, where the number of new sustainability-linked loans is down 80% from a year earlier.

But ESG is still relatively popular in Europe, Middle East and Africa (orange). But taste for ESG is waning around the globe. But the selection of Biden as President in the US marked a surge in ESG -tied loans in 2021 and 2022 (not to mention the insane levels of spending out of Biden and Congress, much tied to the sustainability, green energy fantasy.

Loans with terms tied to borrower’s ESG goals have fallen worldwide.

Several states (largely blue states like California, Minnesota, Illinois, and Colorado have pro-ESG laws) while several states have anti-ESG laws (largely red states like Montana, Idaho, North Dakota, Kansas, Utah, Indiana, Arkansas, Florida, and West Virginia).

And of course, global warning may not be as dire as John Kerry and Greta Thunberg say.

WEF’s Klaus Schwab about to get sniffed by his 80-year old puppet, Joe Biden. In fact, Biden is singing “I’m your puppet.”

Here is Hunter Biden welcoming the Green Energy fairy and all the trillions in misallocated spending it brings.

NOT Born Under A Bad Sign! Housing Starts Are Down -4.2% YoY As M2 Money Growth Dies (Illegal Immigration Outpaces US Births, But Supply Not Keeping Pace)

Under Biden’s Reign of Error (or green economic transformation), the US has seen over 8 million illegal immigrants enter the US which is a far greater number than births in the US. In other words, Americans apparently are NOT being born under a bad sign. Hence, the US is seeing the demand for housing increase. But …. housing start were DOWN -4.2% YoY in October.

Housing Starts:
Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,372, the October 2022 rate of 1,432,000. Single‐family housing starts in October were at a rate of 970,000; this is 0.2 percent above the revised September figure of 968,000. The October rate for units in buildings with five units or more was 382,000.

Building Permits:
Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,487,000. This is 1.1 percent above the revised September rate of 1,471,000, but is 4.4 percent below the October 2022 rate of 1,555,000. Single‐family authorizations in October were at a rate of 968,000; this is 0.5 percent above the revised September figure of 963,000. Authorizations of units in buildings with five units or more were at a rate of 469,000 in October.

Total starts were down 4.2% in October compared to October 2022. And starts year-to-date are down 11.3% compared to last year.

In YoY terms (change since one year ago), shows housing starts declining with dying M2 Money growth.

Starts have been down year-over-year for 16 of the last 18 months (May and July 2023 were the exceptions), and total starts will be down this year – although the year-over-year comparisons are somewhat easier in Q4.

The Thrill Is Gone? US Industrial Production Plunges In October As Auto-Maker Strikes Hit (But Also Federal Stimulypto Has Worn Out)

The thrill has gone from all the BIG spending bills from Biden.

After its surprising bounce last month (on a seasonally-adjusted basis, because it crashed NSA), US Industrial Production was expected to decline 0.3% MoM in October. It was worse – down 0.6% MoM from a downwardly revised September print (from +0.3% to +0.1%). October’s decline is the worst since Dec 2022 and the YoY drop of 0.8% is the worst since the COVID lockdowns. AND Federal stimulypto is wearing off (M2 Money growth surge peaked in February 2021, but has slowed into negative growth starting in August 2022.

Notably, once again, the non-seasonally-adjusted industrial production tumbled more than then seasonally-adjusted data…

Source: Bloomberg

On the manufacturing specific sector, consensus was for a 0.4% drop MoM but it was considerably worse, dropping 0.7% MoM (and September’s print was revised down from +0.4% to +0.2% MoM). That is the biggest MoM drop since March and biggest YoY drop since the COVID lockdowns.

That is also the 8th straight month of YoY declines for Manufacturing production.

Source: Bloomberg

Output was weighed down by a 10% plunge in motor-vehicle production as the annualized rate of car assemblies dropped to 9.22 million units, the least since February 2022. Excluding parts production, autos and trucks production fell 16.5% MoM – the biggest drop since the COVID lockdowns…

Source: Bloomberg

Starting in September, the United Auto Workers union authorized targeted strikes against the Big Three Detroit automakers, disrupting production at the companies and at their suppliers. The UAW reached tentative agreements with management in late October, laying the groundwork for a rebound in factory output in November.

So theorteically, we should see bounce back next month. Unless demand – as WMT hinted at – has fallen off a cliff.

Smells Like Fed Spirit! Homebuilder Confidence Fall To 34 In November Due To High Interest Rates … But 2024 Should See A Decline In Mortgage Rates

Its beginning to smell like Fed spirit! As the 2024 Presidential election rapidly approaches, The Fed will be pressured into lower interest rates to haul Biden’s befuddled and corrupt ass across the finish line. Or his replacement, Greasy Gavin Newsom. (Leaving an oil slick in his wake).

Lowering the mortgage rate will benefit the real estate market, which is currently been “Biden’d.” Due to inflation and The Fed’s mission to crush inflation.

High mortgage rates that approached 8% earlier this month continue to hammer builder confidence, but recent economic data suggest housing conditions may improve in the coming months.

Builder confidence in the market for newly built single-family homes in November fell six points to 34 in November, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. This is the fourth consecutive monthly drop in builder confidence, as sentiment levels have declined 22 points since July and are at their lowest level since December 2022. Also of note, nearly the entire HMI data for November was collected before the latest Consumer Price Index was released and showed that inflation is moderating.

Mortgage rates will likely decline in 2024 as The Fed reverses its inflation-crushing policy for Presidential election interference.

And Morgan Stanley forecasts the Fed Funds Rate to plunge to 2.375%.

Joe Biden is 80 and not exactly the most energetic President that can inspire confidence.

Maybe the economy needs Viagra.

I really wish Biden would stop babbling about “his” approach to economic growth, a Chinese Communist approach of top down economic management.

Under Biden, Americans have seen a 17.6% price hike and a 3% pay cut. Inflation has averaged 5.9% — more than double the level of inflation under any of the last four presidents.

Bidenomics Strikes Again! Foreclosure Sale Notices For Commercial Property Loans Are Exploding, LA Apartment Sales Cratering (Newsom Creates New Potemkin Village For China Xi’s Visit)

Bidenomics strikes again!

After listening in horror to Joe Biden’s press conference after his summit with China’s Xi, I had to ask the following question: what does Joe Biden has in common with Georgia Tech? Answer? They are both rambling wrecks. Biden made a horrendous foreign policy blunder by calling Xi a “dictator” and almost blew it by nearly spillling the beans on our foreign policy negotiations with Israel. SecState Blinken had to intervene. We are represented by Winken (Harris), Blinken and Nod (Biden, who usually looks asleep or confused).

But back to the horrors of a slowing economy.

As the US economy slows down (like Biden himself), we are seeing further cracks in the real estate market. Foreclosure sale notices for commercial property loans are exploding.

And depending on the MSA, multifamily delinquencies are booming, like in Houston, Texas, New York City and Phoenix AZ.

Then we have this headline: “Not Just Office Towers – Commercial Real Estate Sales Crater Throughout Los Angeles.” It’s difficult to find big commercial real estate deals of any kind in Los Angeles. A new report from NAI Capital reveals how severe and universal the decline in activity is throughout the region this year amid collapsing values, higher interest rates, and a new tax on property sales above $5 million.

A related headline screams “LA Apartment Sales Plummet 50% as Investors Confront New Taxes, Higher Costs.” Every submarket saw an increase in vacant units and a decline in year-to-date sales volume in the second quarter. Construction, interest rates, eviction protections, also define 2023.

Yes, I know, California’s real estate woes are mostly the fault of their politicians like Governor Gavin (Gruesome) Newsom. The same guy who ordered San Francisco’s homeless population to be moved creating a new Potemkin Village. But rising interest rates are the fault of excessive spending by Congress and the Biden Administration.

Prepayments on Ginnie Mae MBS are extremely low.

But things are less than rosy in Communist China. China’s housing woes worsen as prices fall most in eight years.

But my favorite headline is from the Babylon Bee (a satire site): “After Five Minutes With Biden, Xi Gives Order To Invade Taiwan.”