Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
The US economy is crumbing down under Biden/Harris. No, the economy doesn’t hurt so good.
The Citi Economic Surprise Index just rose to its highest level since April.
The 10Y Treasury yield just rose to its highest level since August.
Housing starts dropped -0.7% YoY in September.
After surprising top the upside in August, Housing Starts and Building Permits disappointed in September, declining more than expected (-0.5% MoM and -2.9% MoM respectively)…
Under the hood, multi-family permits plunged 10.8% MoM (and multi-family starts dropped for the second straight month). Single-family starts rose 2.7% MoM and permiots inchjed higher by 0.3% MoM…
Rate-cut expectations appear to have taken the excitement out of the building market…
Housing Completions also dropped (but the BLS thinks construction jobs continue to rise non-stop)…
So, The Fed cuts short-term rates… mortgage-rates rise… and builders slow their building plans… that’s not how it’s supposed to work!
Perhaps Harris/Walz should adopt the Imperial March from Star Wars as their theme song. Between Biden/Harris uncontrolled immigration disaster helping to destroy New York City, Harris’ statement that she won’t do anything differntly from Biden/Harris is alarming.
The NY Empire survey crashed from +11.5 to -11.9 – the lowest since May. That is the biggest MoM drop since January…
A measure of current new orders plunged nearly 20 points to -10.2 after climbing a month earlier to the highest since April 2023.
The index of shipments decreased almost 21 points to minus 2.7.
The employment index, however, rebounded to 4.1 – the first expansion in a year – while a measure of hours worked also climbed.
Meanwhile, the New York Fed’s gauge of prices paid for materials increased to a six-month high of 29, while an index of prices received by state manufacturers also accelerated.
And with this awful news, the US Treasury yield curve remains downward/upward sloping. I call this the schizophenic yield curve.
Thunderstruck! Interest rates should be thunderstruck when realization dawns that the recend BLS jobs reporr was grossly mismeasured.
National unemployment was 8.7% in this month’s Rasmussen Reports Real Unemployment and significantly more than double the 4.1% rate officially reported by the Bureau of Labor Statistics today.
Mortgage rates are rising again with Friday’s surprising jobs report. But as it just a false election report. If Rasmussen is correct, mortgage rates should FALL again.
The Presidential and Vice Presidential debates thus far feature weak moderators asking lame questions. For example, there are still 97 hostages stll held by Hamas and what would the candidates do to get them released? (Hint: Trump/Vance would have sensible responses. Harris would just laugh and say she was raised in a middle class family and Walz would look like a deer in the headlights. Then we have national debt of $36 trillion, $271K per taxpayer.
But the hidden bomb that will never be discussed is unfunded liabilities (entitlements) such as Social Security and Medicare. Currently, unfunded liabilities are $219 TRILLION or $650K per citizen.
Of course, Biden/Harris have let the southern border wide open to criminals and uneducated Democrat voters who will voter for MORE entitlements.
So, when will the lame debate moderators ask HARD questions? And can Harris attempt to answer one hard question without laughing or falling back on lame “I was raised in a middle-class household.” etc.
The University of Michigan consumer survery is out and the results are startling.
Under Biden/Harris, buying conditions are far worse than under Trump/Pence.
In fact, buying conditions were extremely favorable (above 100) under Trump and dismal under Harris. Particularly for housing (where higher than normal mortgage rates and high housing prices made the “American Dream” the American Scream.
More evidence of how destructive Biden/Harris economic policies have been.
The NAR data show existing home sales down 2.5 percent in August to a 3.86 million unit seasonally adjusted annual rate after a small upward revision to 3.96 million units in July.
US existing home sales fell in August to near 14-year lows. Pink box.
Meanwhile, pending home sales (red line) ARE at an all-time low.
Like in the film The Poseidon Adventure, we are living in “The Morning After.”
When The Fed lowered their target rate by 50 basis points yesterday, we saw the 2 year Trreasury rate take a plunge.
With a declining 2-year Treasury yield, we see the 10Y-2Y yield curve going positive.
Of course, mortgage rates are falling with declines in the Fed Funds target rate.
Rates will continue to decline.
If HarrsWalz are elected in two months, we will see a repeat of The Poseidon Adventure. Call it the Harris/Walz Adventure!
Kamala Harris and Tim Walz have produced a destructive proposal to solve the inflation problem: price controls. Her biggest supporters like Elizabeth Warren and Ohio’s Sherrod Brown love the idea of meddling in the private sector,
But I would be symapatheic to their arguement if consumer prices soared more than producer prices. However, the truth is that prices paid by producers (PPI) SOARED far more than prices paid by consumers (CPI).
The cause? Federal goverment spending (green line) exploded with Covid. Harris/Walz are proposing massive spending under her administration hence there will be MORE inflation under Harris/Walz. So, the have to rely on flawed gimmics like price controls. Which will lead to shortage, food lines, rastioning, etc.
Market participants are expecting a 50 BPS cut tomorrow. From 5.50% to 4.913%.
This painting represents Washington DC where the deep state lingers in darkness.
The US is slippin’ into darkness under Biden/Harris.
Q2 marks the 11th STRAIGHT quarter of unrealized losses on investment securities for banks, a streak never seen before. The number of banks on the FDIC Problem Bank List increased to 66 and represents 1.5% of total.
This is in addition to price Increases over last 4 years…
CPI Medical Care: +7.8%
CPI Apparel: +12.7%
CPI Used Cars: +18.3%
CPI New Cars: +20.5%
CPI Food at home: +21.4%
CPI Shelter: +23.4%
CPI Food away from home: +25.4%
CPI Electricity: +29.8%
CPI Gas Utilities: +34.9%
CPI Transportation: +38.8%
US Home Prices: +48.0%
CPI Auto Insurance: +52.4%
CPI Gasoline: +53.5%
CPI Fuel Oil: +54.9%
Don’t spill the wine, its too expensive under Biden/Harris/Powell.
Confounded Interest - Anthony B. Sanders 
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