In statistics we talk about “jump processes.” Like Federal government spending every time there is a financial crisis like the subprime crisis of 2008-2009 and the Covid lockdowns of 2020. Each crisis brought a jump in the level of spending and jump in Federal debt.
Federal debt under Biden started at $27.7 trillion and is currently at $34.5 trillion, that amounts to $6.75 TRILLION in additional debt under Old Grand-dad Joe Biden. Federal spending, of course, is out of control with Biden/Congress spending $569 BILLION since Joey took office.
Generally speaking, the Federal government needs to justify the elevated levels of Federal spending, like another COVID outbreak, escalate the war in Ukraine, get into a hot war with Iran and China, or … say … Washington DC pols never need much of an excuse to go on a spending spree.
If only Biden would retire gracefully. He could be the new face of “Old Grand-dad Bourbon Whiskey.” Except Biden’s version would be an angry 80+ year old man with dementia.
Somehow, Biden left this factoid out of his State of The Union (SOTU) address. In February, immigrants added 1,277 million jobs while native Americans lost -420,000 jobs according to the BLS. Or maybe Biden can change his campaign motto to “Make America Great Again … For Immigrants, NOT Natives.”
In February, the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%).
And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years…
It is clear that the labor market is softening, but Biden/Mayorkas will continue to let millions of illegal immigrants pour across the border making the labor market even softer than before. But the top 1% are making out like bandits from the illegal immigration. Bandits benefitting bandits.
We are living in a banker’s paradise. Where a top administrative official pushes to change forecasts of the economy. Hey, it’s a Presidential election year and literally anything goes.
The disagreement was over forecasts for 10-year Treasury yields in the budget, a linchpin estimate that is intertwined with other measures, like debt service costs.
Forecasts in the president’s budget proposal — scheduled for release Monday — are typically set by Treasury Secretary Janet Yellen, Office of Management and Budget Director Shalanda Young and the chair of the Council of Economic Advisers, Jared Bernstein. The group is known in fiscal circles as the troika.
An October meeting, however, included a fourth invited principal: Brainard, who directs the National Economic Council. Brainard at one point disagreed with Yellen, Young and Bernstein on the 10-year interest rate projections and predicted a slightly lower rate, the people said, speaking on condition of anonymity to detail the discussions.
The difference between the forecasts was modest and both were well within range of private-sector estimates, the people said. The exact scope of Brainard’s changes aren’t clear.
Brainard’s forecast painted a modestly better picture for Biden. A lower interest-rate forecast would have the effect of an improved overall outlook by offering more support for growth and suggesting less concern about inflation. It also would lower borrowing cost projections at a time of rising worries about the US deficit and debt.
Let’s see what the Troika have to say about the quits rate.
Yes, it is the Ides of March. No, not Nikki Haley trying to sabotage Donald Trump’s campaign after Nikki got clobbered in all but two state primaries. So in a sour grapes move, Haley didn’t endorse Trump. But the Ides of March refers to the stabbing of Julius Caesar (led by Brutus).
Once the darling of the small banking crisis comeback, New York Community Bancorp has crashed 45% to fresh 30 year lows after The Wall Street Journal reportsthe bank is seeking to raise equity capital in a bid to shore up confidence in the troubled regional lender.
According to people familiar with the matter, NYCB has dispatched bankers to gauge investors’ interest in buying stock in the company.
There’s no guarantee there will be a deal, or that one would succeed in addressing the bank’s challenges, which as of Wednesday morning had led to a roughly 80% decline in its stock price since January.
This is not a good picture for a bank… Would you hold your deposits there?
Last month, DiNello laid out a series of options the bank could explore to bolster its balance sheet, including selling assets from certain non-core businesses. The bank has also considered turning to newfangled financial instruments that would share the risks of those loans with outside investors, people familiar with the matter said.
As WSJ reports, finding takers for those assets, at least at prices that would make a deal worthwhile, has been challenging and U.S. officials have expressed reservations with banks pursuing credit-risk transfers that would shift the burden of potential losses to entities outside of the regulated banking system.
Finally, as a reminder, NYCB is not alone. The red line below shows ‘small banks’ are in trouble absent The Fed’s BTFP facility…
Let’s start with gold. Extending their run of the last few days, spot gold prices just exceeded their all-time highs, topping $2140 for the first time in history…
Source: Bloomberg
A longer view.
Source: Bloomberg
What is gold pricing in about future Fed action? Real rates dramatically negative? As Luke Gromen noted on X:
“When gold rises in your currency DESPITE positive real rates, the gold market is saying ‘Your government will have a debt spiral if real rates remain positive’.“
Source: Bloomberg
Bitcoin just hit $68,567.57, also an all-time high.
The Alt-Assets (gold, silver, Bitcoin) have counterattacked!!
Or as Bonnie Beecher almost sang in a Twilight Zone episode, “Come wander with China Joe Biden.” On The White House lawn. Or wander with The Federal Reserve!
The USA is a runaway train with a dead man (China Joe is about as dead as one can be) in the engineer’s seat.The conductor goes through the cars assuring the passengers that everything is fine. . . never mind the screeching wheels on the curves. . . or the blinding strobe effect of low sunlight passing through the trees out the window at a hundred and forty mph. . . or the bump that made half the stuff in the overhead luggage rack jump out. More than half the people on-board are at tachycardia levels of fright — some are screeching — but the other less than half just remain fixed on their phones and laptop screens. They can’t be bothered to look out the window…
Okay, that’s a metaphor.
But if you’re a citizen of our country and care about it, these are the matters you’d better pay attention to, because they are all going off the rails.
The war in Ukraine. We started it in 2014 to mess with Russia and Russia is going to finish it. Who knows what our real motives were. A resource grab? A desperate ploy to erase our national debt by creating a global fiasco? Sheer psychopathic hatred of this Putin fellow? We can’t bring ourselves to acknowledge the failure of this ill-conceived venture. Instead, our feckless allies in Europe are foolishly rattling their sabers, apparently forgetting that you don’t bring a sword to a nuclear missile fight.
Mr. Macron in France affects to offer up his army for slaughter on the blood-soaked plains of Ukraine, just as the Ukrainians offered up a half a million of their young men so that Victoria Nuland could feel good about herself. Mr. Macron is insane, but the society he presides over is collectively insane, so perhaps he represents them well. Similarly, Olaf Scholz in Germany, whose top generals were caught on a leaked recording last week discussing their plan to blow up the Kerch Bridge that connects Crimea to Russia. Do you understand that this would be a direct attack on Russia, an act of War by NATO? And what the obvious consequence would be?
The phantom government of “Joe Biden” is too weak and mindless to join any negotiation. Ukraine and Russia are up to some kind of cross-talk down in Riyadh with Prince MBS. Even Mr. Zelensky went down for a day, though video appears to show him coked-up, sniffling and snarfling, not a good sign. If ever there was a time to end this stupid conflict, it’s now, before the Russian election. After that, terms will only be more difficult for Ukraine, up to direct custodial supervision instead of remaining a nation. It was never any of our business (though the Biden family, BlackRock, and the CIA saw fabulous opportunity to profit there).
Next is the border. You saw last year how the blob elite greeted the transfer of illegal immigrants to their happy little island of Martha’s Vineyard. (They were not amused by Governor DeSantis’s prank, and off-loaded the mutts post-haste.) But that same smug demographic doesn’t care if hundreds of thousands are distributed to the big cities, which are now fiscally destabilized by them to an extreme, probably to bankruptcy.
Of course, that is not the main thing to worry about with what altogether amounts to millions of border-jumpers flooding our land. The main reason to worry is what the blob that invited them here intends for them to do, which, you may suspect, is to unleash mayhem in the streets, malls, stadiums, and upon our infrastructure just in time to derail the election — perhaps even to make war on us right in our homeland. The US government is paying for this whole operation, you understand, funneling our tax money to international cut-out orgs who set up the transfer camps in Panama, and buy the plane tickets for the mutts to cross the ocean, and coordinate with the Mexican cartels to shuttle this horde of mystery people among us to work their juju for the Democratic Party. The pissed-off-ness of the public has passed the red line on this.
A third FUBAR is the lawfare campaign of the Democratic Party and its regime in power against the citizens of this land. This folder includes overt and obvious political prosecutions by DA’s and AG’s who make election promises to “go after” individuals without such niceties as probable cause. It includes the gigantic new scaffold of inter-agency censorship and propaganda. It includes the psychopathic struggle sessions mandated by “diversity and inclusion” policy. It includes election-rigging directed by the likes of Marc Elias and Norm Eisen, getting states to fiddle laws on voter ID and mail-in ballots. It includes the political protection of rogue groups ranging from looter flash-mobs to Antifa anarchists who bust up things and people and burn buildings down. It includes state officials who peremptorily kick candidates off the ballot. It includes a nakedly biased judiciary, and especially the use of the DC federal district court to punish people extralegally, unjustly, extravagantly, and cruelly. In short, lawfare is the complete perversion of law, and we-the -people are entreated by reprobate officials such as Merrick Garland and Letitia James to accept it.
A fourth item on this list is the US economy which has been overwhelmed by maladministration of an overgrown monster bureaucracy, and the gross (perhaps fatal) mismanagement of the government’s money. The people of this land are not being allowed to do business, to find a livelihood, to transact fairly. “Joe Biden’s” shadow string-pullers are messing as badly with the oil and gas producers as they have messed with Ukraine. And they are doing it in pursuit of a laughable mirage: their “green new deal.”
John Podesta, the “clean energy czar” who replaced the Haircut-in-search-of-a-brain called John Kerry, sits on a $370-billion slush fund that can be used to just dole out to anyone and everyone a political patronage payoff, especially to janky “community” orgs and NGOs with fake agendas. This really just amounts to an asset-stripping operation that will leave the American people busted and with broken supply chains for everything. Instead of annual budgets, Congress raises the US debt ceiling by “continuing resolutions” to keep the government from shutting down. The national debt races to the $35-trillion mark. As interest rates on debt rise, our debt payments now exceed our military spending. You can be sure that our country will break down financially very soon.
The capper on today’s list is the nation’s health, the racketeering system we’ve set up to care for it, and the public health agencies of the government that enabled the Covid-19 operation to happen. The CDC continues to push vaccines that have killed millions of Americans and more millions around the world, and has probably compromised the well-being of millions more going forward. Corporate medicine — that is, your doctor, and your hospitals — is a sinking Titanic of grift and chaos. Try to get an appointment to even see a doctor for an emergency. Try to avoid being bankrupted by your treatment. Try to get out of a hospital alive. Yeah, it’s that bad.
The doctors have surrendered your trust in them with their lying and their bullshit. The current director of the CDC, Mandy Cohen and her predecessor, Rochelle Walensky, have knowingly presided over the mass killing and injuries imposed on the mRNA vaccinated. Hundreds of their deputies should be liable for prosecution, and so should many of the other prominent characters in the Covid Saga: Fauci, Birx, Collins, Baric, Bourla, Daszak, Califf, Woodcock, Hahn, and many more.
What are we going to do about any of this? Return to the metaphor. The runaway train is still picking up speed. You can’t just jump off at 150 mph. If you’re one of the passengers watching this in horror, maybe you can decouple your car, or get the conductor to do it by any means necessary. Let’s say that each car behind the engine of this train is a state of the United States. Let the engine up front with the dead man at the controls ride that runaway to its terrible conclusion. Cut loose the cars behind it to take care of themselves, to slow down, get a grip on their situation, and make plans to find a better engine to pull the train. Decouple. Cut loose. It’s the only way.
Cash on the barrelhead. To pay for outrageous inflation and food prices under Joe “Nero” Biden.
President Biden: “Inflation is the lowest it has been in nearly three years. And wages, wealth, and jobs are higher than they were before the pandemic.”
Paul Krugman, Nobel Laureate in economics and propaganda expert (ala, Leni Riefenstahl) pointed to this chart to illustrate that inflation is declining or at least hasn’t doubled under Biden, (although it looks like food prices are up 21% under Biden). Most elites won’t notice since someone does the shopping for them. Can you imagine Joe and Jill Biden at the local Kroger grocery store? Or Barrack and Mike Obama at the local grocery store on Martha’s Vineyard??
A counter to Biden’s and Krugman’s claims of “everything is peachy!” is that the situation is actually dire.
1. Prices have never been higher and are starting to accelerate to the upside again
2. All the jobs created in the past year have been part time.
3. There has been zero job growth for native-born Americans since 2018; all jobs have gone to immigrants (mostly illegal immigrants)
4. Real wages have not only been negative for most of the Biden presidency, they just turned negative again
In addition, food spending’s share of disposable income is at its highest in three decades.
Nero supposedly fiddled while Rome was burning. Joe “Nero” Biden eats ice cream while the USA burns.
The “core services” PCE price index spiked to 7.15% annualized in January from December, the worst month-to-month jump in 22 years (blue line), according to index data released today by the Bureau of Economic Analysis. Drivers of the spike were non-housing measures as well as housing inflation. More on each category in a moment.
The bad behavior of core services inflation that we have been lamenting since June – and which was confirmed earlier this month by the nasty surprise in the CPI – is why Fed governors have said this year in near unison that they’re in no hurry to cut rates, but have taken a wait-and-see approach. And now the concept of rate hikes is cropping up in their speeches again.
For example, Fed governor Michelle Bowman said in the speech yesterday, that she was “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”
Even year-over-year, core services inflation has now reversed and accelerated to 3.5%.
This reversal of fortune may be big enough to lead The Fed to raise rates.
Pending home sales puked in January, tumbling 4.9% MoM (vs +1.5% MoM exp). This was made worse by a large downward revision for December (from +8.3% MoM to +5.7% MoM)…
Source: Bloomberg
That was the biggest MoM decline since August and dragged the YoY sales decline to -6.82%, tumbling back near record lows…
Source: Bloomberg
Realtors gonna realtor…
“This combination of economic conditions is favorable for home buying,” Lawrence Yun, NAR’s chief economist, said in a statement.
“However, consumers are showing extra sensitivity to changes in mortgage rates in the current cycle, and that’s impacting home sales.”
WTF are you talking about Larry?
Earlier this week, a gauge of US mortgage applications for home purchases fell for a fifth week, nearing its lowest level since 1995.
Who could have seen that coming? As rates surged once again…
Source: Bloomberg
The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold.
The index of contract signings decreased 7.3% in the South, the nation’s biggest housing market.
Pending sales also fell 7.6% in the Midwest, but climbed 0.8% in the Northeast and 0.5% in the West.
“Southern states and those in the Rocky Mountain time zone experienced faster job growth compared to the rest of the country,” Yun said.
“As a result, long-term housing demand is increasing more significantly in these regions. However, the timing and number of purchases will largely depend on the prevailing mortgage rates and inventory availability.”
Overall sales are expected to increase 13% this year, according to NAR’s economic outlook, but as the chart above shows, unless rates start tumbling soon, that ain’t gonna happen.
Paul Krugman and others are cheering the defeat of inflation (odd since it is on the rise again). But how does our Federal government “grow” the economy and inflation? Borrow and spend, baby!
I still want to hear Biden (or any other elected official, Democrat or Republican) to explain to me how the US is going to honor its unfunded liabilities (Social Security, Medicare, etc) which is $664,000 PER CITIZEN. Again, this figure does not included the 8-11 million illegal immigrants who have stormed our borders under Biden. Hey, how about an entry fee for each immigrant of $664,000?
“Billions” Biden loves to spend money along with members of Congress and the Administrative State.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.