Mortgage applications decreased 10.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 16, 2024.
The Market Composite Index, a measure of mortgage loan application volume, decreased 10.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 8 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 10 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was13 percent lower than the same week one year ago.
The Refinance Index decreased 11 percent from the previous week and was 0.1 percent higher than the same week one year ago.
One reason why mortgage demand is so low is that mortgage rates are up 155% under Biden.
Is it sundown for the US mortgage market? And when will it improve?? Probably won’t improve in New York City after Judge Engmoron’s idiotic fine of Donald Trump and family for non-crimes.
When Arnold Schwarzenegger was Governor California, his budget chief, a former high school pal of mine, called me to look at California’s budget. He sent me his spreadsheets with forecasts and asked me what I thought. Even back then, I called back and said “California is on an unsustainable fiscal path and seems to be committing suicide.” He agreed, but noted that Schwarzenegger would not like that conclusion. I told him to blame me for the report, as an unpaid consultant to The Golden State. But even back then, I could foresee the absolute mess that the California State legislature would make, particularly if they elected a Democrat governor.
California’s budget deficits look a lot like Biden’s (call him Newsom’s elderly intellectual grandpa) budget deficits where Biden and Congress went on a spending spree from “the honey pot” (US Treasury) and borrowed funds.
California’s budget crisis is projected to expand more than previously thought and could hit a record deficit of $73 billion, according to a new report from the state’s nonpartisan Legislative Analyst’s Office (LAO).Her
“The actual increase in the state’s budget problem will depend on a number of factors, including formula-driven spending changes, most notably Proposition 98 spending requirements for schools and community colleges,” the report said.
H.D. Palmer, the deputy director of the California Department of Finance and Newom’s spokesperson on budget matters, responded to the new LAO report by telling Fox News Digital that their budget shortfall differs from the $38 million they estimate.
“From now through April, more than $51 billion in income and corporate tax receipts are forecast to come in,” Palmer said. “No one can say today with certainty how those numbers may change the budget estimate of a $38 billion shortfall.”
“A responsible step would be for the Legislature to act now on the early action budget measures needed for $8 billion in solutions to help close this gap,” he added.
The projected bad news comes as Newsom has worked to increase his profile nationwide. It also occurred as California experienced a mass exodus.
California saw its first-ever population decline in 2020 when the state imposed rigid lockdowns during the COVID-19 pandemic. From January 2020 to July 2022, the state lost well over half a million people, with the number of residents leaving surpassing those moving in by almost 700,000.
Census data has shown that Texas is the most popular destination for residents fleeing the state, followed by Arizona, Florida, and Washington. (Of course, Arizona where I used to live has flipped from a Red state to a Blue state with immigration and Democrats are working hard to flip Texas to a Blue state. Washington, has already flipped Blue. Florida remains a Red state under Ron DeSantis).
Here is Biden’s budget deficit chart under the hilariously termed “Bidenomics.” Ah, so maybe Governor Newsom is a perfect fit for the wild spenders in Washington DC.
Lest we forget, Biden/Congress can borrow endless funds and stick the bill to Gen Zers and the unborn.
And remember, US politicians have promised $213 TRILLION in unfunded payments that will require cuts (LOL!) or a massive increase in Federal debt.
Biden and Newsom could sing “Fiscal inferno” together! “Here is my demented, doddering grandfather!”
The biggest positive contributor to the leading index was stock prices (again)at +0.10
The biggest negative contributor was average workweek at -0.18
This is the 22nd straight MoM decline in the LEI (and 23rd month of 25) – equaling the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008)
“While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024).
As a result, the leading index currently does not signal recession ahead.
While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”
While the Conference Board seems optimistic, we are struggling to see any signs of hope! tumbling back below the peak in March 2006…
And on a year-over-year basis, the LEI is down 7.0% (down YoY for 19 straight months) – still close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse (but starting to inflect)…
The annual growth rate of the LEI remains deeply negative and decoupled from Real GDP…..
Finally, the massive easing of financial conditions in the last few months suggests a turn in LEI is imminent…
And hence the ‘soft landing’ mission is accomplished… so no need for rate-cuts? (Except for the banking crisis that looms in March).
An example of the Sisyphus economy? The top 1% of earners (blue line) have seen an incredible increase in net worth, particularly after Fed Chair Alan Greenspan’s big rate cuts (green line) from 2000 to 2004. Each subsequent rate cuts under Bernanke (2007-2008) and Yellen (who just kept rates too low for too long). The end result? In the red box, the top 1% made out like bandits.
The end result? The top 1% of earners now have more wealth the the middle class.
Of course, asinine Federal government policies (like open borders and making donors wealthy with green energy spending) and the lack of a serious approach to corruption have complicated matters.
So the working class, middle class and low wage workers, are the ones pushing the boulder up a hill while government insiders like Biden make millions through influence peddling. So, unlike the Sisyphus legend, the middle class and low wage workers are being punished by simply existing.
The Fed’s balance sheet has had a similar effect, particularly since the financial crisis of 2007-2008 when The Fed truly became unhinged under Janet Yellen. So of course, Yellen was made Secretary of Treasury, the largest honey pot in the world, so she could continue growing the elites power while minimizing the wealth of all others.
Should we end The Fed? Of course! But we can’t even have a rational discussion on why we are funding a war in Ukraine (to protect their border?) while we leave our borders open to invasion?
Here is one of the 1% who made a fortune by simply having a big mouth and being in politics.
The Federal Reserve (aka, The Keep) is back in the saddle again. The Fed has been unable to control inflation since Federal government spending was so fast and furious after Covid that little thought was given to the long-term ramifications of insane spending. Not to mention The Fed’s overreaction to Covid.
Example?
Home price growth is rising again. Home prices in traditional “bubble cities” out west were cooling, but are reaccelerating. Even Detroit and Cleveland are seeing rapid home price acceleration.
Yes, housing inflation is sticky.
In retrospect, this wholesale dovish euphoria may have been rather short sighted, because after several strong economist reports hit the tape (with the Nov 2024 election growing closer by the day, that should hardly have been a surprise), March rate cut odds collapsed from over 100% in late December, to just 12% currently…
… as first the January CPI printed red blazing hot– with core coming in at 3.9% far higher than the 3.7% expected, with the 3-month annualized rate jumping to 4% from 3.3% and the 6-month annualized rate spiking to 3.7% vs 3.2%, but the biggest highlight was SuperCore CPI (i.e., core CPI services ex-Shelter) which soared 0.7% MoM, the biggest jump since Sept 2022…
… and then the January PPI print come in even hotter, with a core component surging in January by 0.5%, smashing expectations and beating estimates by the most since Jan 2021.
The result: not only has the market rapidly priced out what if formerly saw as many as 6 rate cuts in 2024, but growing speculation that a rate cut may not come at all unless the Fed tightens some more first (and with the S&P500 now over 5000, it is pretty clear that the market has already priced in virtually all rate cuts and has cornered the Fed).
Of course, the mass migration across the Mexican border (who knows? could be up to 11 million under Biden’s Reign of Error). While Paul Krugman, the resident lunatic economist for the New York Times, extols the virtues of mass immigration for driving up GDP, fails to recognize that mass migration is helping drive up prices. This is inflation that The Fed can’t control. And Biden/Mayorkas want even MORE mass immigration.
The Biden administration is reportedly considering easing tailpipe emissions regulations, a move that was designed to force Americans from gas and diesel-powered vehicles to electric vehicles, according to The New York Times, citing three people familiar with the plan. This potential policy adjustment is in response to concerns from major automakers and labor unions and comes amid sliding EV demand, recently prompting companies such as Ford Motor Company to reduce EV production and lay off workers.
“Instead of essentially requiring automakers to rapidly ramp up sales of electric vehicles over the next few years, the administration would give car manufacturers more time, with a sharp increase in sales not required until after 2030,” the people said.
This policy change comes after 3,900 auto dealers penned a letter to President Biden at the end of 2023, warning the president to reconsider the pace of EV mandates, citing a severe decline in demand for these vehicles.
“Currently, there are many excellent battery electric vehicles available for consumers to purchase. These vehicles are ideal for many people, and we believe their appeal will grow over time. The reality, however, is that electric vehicle demand today is not keeping up with the large influx of BEVs arriving at our dealerships prompted by the current regulations. BEVs are stacking up on our lots,” the dealers said.
They warned: “Already, electric vehicles are stacking up on our lots which is our best indicator of customer demand in the marketplace.”
Last month, Ford Motor’s electric vehicle sales ran out of juice as the automaker was forced to slash production of its all-electric F-150 Lightning to April “to achieve the optimal balance of production, sales growth and profitability.”
“Key takeaways thus far from earnings season are that the EV slowdown is not showing any evidence of an inflection, Level 4 autonomy headwinds continue to persist, and fears over supplier inventory overbuild are likely overblown.”
The EV bubble is no match for elevated interest rates, and no fiscally conservative American is trying to survive the era of failed Bidenomics with a +$1,000 EV car payment.
Plus, Toyota’s chairman and former CEO, Akio Toyoda, will likely be proven right: EV cars will never dominate the global market, adding hybrids are the future.
If the alleged climate crisis is as urgent as portrayed by radicals in the White House and woke corporate media, then why does the Biden administration feel the need to move the transition goalposts if banning gas cars saves the planet?
Biden would likely sound more sincere if he dumped his gasoline-powered Corvette for a lousy electric car. On a personal note, I own at Volvo XC-60 hybrid and HATE the damn thing!!!
This headline from Zero Hedge makes me so glad I have eaten heart-healthy Quaker Oats and Cheerios every morning for the last 20 years! Study Finds 80% Of Americans Exposed To Fertility-Lowering Chemicals In Cheerios, Quaker Oats. The chemical (chlormequat chloride) was detected in “92 percent of oat-based foods purchased in May 2023, including Quaker Oats and Cheerios.” But that was nothing compared to this Zero Hedge headline: EU “Suicide Pact” Threatens To Flood Continent With 75 Million More Migrants. Makes me wonder if Biden/Mayorkas are under orders from the UN/WEF/Soros to let immigrants pour across our southern border (including 20,000+ Chinese military age males). But back to the economy.
Both bank credit growth year-over-year (YoY) and bank deposit growth (YoY) are NEGATIVE. Covid resulted in massive Federal government stimulus spending (and Federal Reserve hyper stimulus) in 2020, but as the stimulus wears out, so does bank lending and deposits.
And after the prior week’s miraculous surge in deposits (again, according to The Fed), last week saw total bank deposits (seasonally-adjusted) drop $57BN – the biggest weekly drop since October…
This data is from the week when Regional bank shares shit the bed thanks to NYCB…
Interestingly, on a non-seasonally-adjusted basis, total bank deposits declined about the same as SA -$58BN (and are down $180BN YTD)…
And, excluding foreign banks, domestic deposits dropped $52BN SA (Large Banks -$40BN, Small Banks -$12BN), and tumbled $65BN NSA (Large Banks -$57BN, Small Banks -$$8BN)
As the chart above shows, on an NSA basis, domestic banks have only seen one week of inflows in 2024.
As one might expect, loan volumes shrank during that week by just over $9BN (Large banks -$4.6BN, Small banks -$4.4BN)…
And finally, as a reminder – despite the rebound off the lows again this week in regional bank shares, which must mean everything is awesome, right? – the regional bank crisis is still very much alive as evidenced by the red line below (without The Fed’s imminently expiring BTFP facility)…
…what else are big banks (green line) going to do with all that cash burning a hole in their pockets?
The bottom line is – this looks a lot like a ‘Small Bank’ crisis. The last time this happened, the crisis sparked a sudden $300BN ‘run’ in small bank deposits…
Is The Fed ‘hoping’ for a controlled bank-run this time – so as many small bank deposits are drained voluntarily, before they are drained all at once in a panic (and the Reverse Repo facility is empty, unable to provide any cushion)?
It is looking like a recession in mid-2024 as Covid Stimulypto has run its course. Is the US economy so lame that is requires constant Federal government and Federal Reserve manipulation??
Joe Biden (President of the top 1% of Americans) and his likely replacement “Greasy Gavin” Newsom, wrecker of the California economy. Two economy wreckers on the same stage.
Remember when Democrats were the party of the working man and Republicans (like George HW Bush) were called “Country Club Republicans”? Now Biden and Democrats represent the elitist top 1% of wealth and Trump/Republicans (that Biden snidely calls “Maga Republicans”) represent the bottom 99%. Who woulda thunk??
The asset management arms of JPMorgan Chase and State Street dropped out of Climate Action 100+, home to more than 700 investment firms totaling $68 trillion in assets under management.
BlackRock, the world’s largest asset manager, with more than $10 trillion in assets, distanced its U.S.-based operations from Climate Action 100+ by transferring its membership to BlackRock International.
The coalition, founded in 2017, revealed plans last year to hold members more accountable by encouraging them to disclose more details about their investment decisions. Some high-profile members raised legal concerns about maintaining their fiduciary duties.
State Street said the changes jeopardized the company’s independence. Climate Action 100+ officials say they need the disclosure standards to chart a better course for corporations to reach net-zero emission portfolios by 2050.
“After careful review, State Street Global Advisors has concluded the enhanced Climate Action 100+ Phase 2 requirements for signatories will not be consistent with our independent approach to proxy voting and portfolio company engagement,” State Street spokesman Randall Jensen said. “As a result, we have decided to withdraw from Climate Action 100+.”
JPMorgan suggested that its in-house guidelines for environmental, social and corporate governance, or ESG, investing already exceeded the Climate Action 100+ goals.
Aka, MARXISM.
Ford learned that their ESG Ford F-150 Lightning Electric pick up truck was NOT in demand, so production is being curtailed. Harvard (which should be renamed Harvurd thanks to President Gay’s horrible record of plagiarism) and Biden’s leadership team of unqualified but ESG-friendly faces (“Admiral” Rachel Levine, formerly Richard Levine) symbolizes the failure of ESG.
Analysts were way off. Housing Starts puked 14.8% MoM in January (vs unchanged exp), but December’s 4.3% MoM decline was revised up to a 3.3% MoM rise. Building Permits also tumbled, down 1.5% MoM (vs +1.3% exp) and well down from the +1.8% MoM in December…
Source: Bloomberg
This pushed the Housing Starts SAAR back near post-COVID lows…
Source: Bloomberg
DO NOT BLAME THE WEATHER! It’s January – we know there are weather issues and that should be more than ‘priced-in’ on a seasonal adjustment basis.
Multi-family permits cratered to their lowest since Oct 2020. Permits for one-family homes edged higher after rising consistently throughout 2023
And multi-family starts were even worse, plunging from 489k SAAR to 314k SAAR – the lowest since May 2020 (when the economy was closed)…
The government’s report showed housing starts fell in all four of the nation’s regions, led by the Midwest and Northeast. The number of single-family homes completed plunged to the lowest level since May 2020.
They built it, but no one came… the inventory of new houses for sale remains elevated and suggests builders may be cautious about beginning new projects.
Don’t expect Permits to be reaccelerating anytime soon as mortgage rates have started to rise once again…
Source: Bloomberg
Which is not good news for CPI either as it suggests there is little rent relief coming soon.
And finally, there is a record gap between what the government tells us about construction employment and actual construction activity…
Makes you wonder, eh? Did builders all suddenly get massively less productive? Or is the BLS just making shit up as usual?
After the hotter-than-expected CPI (which has been shrugged off entirely by the stock market), Producer Prices were expected to rebound very modestly MoM but continue to slow on a YoY basis in January. Instead, like CPI, it re-accelerated with headline rising 0.3% MoM (+0.1% MoM exp), which left PPI up 0.9% YoY (down from December but hotter than the +0.6% exp)…
Source: Bloomberg
The picture was even worse under the hood with PPI ex food and energy up 0.5% MoM (vs +0.2% prior and +0.1% exp) and ex-food, energy, and trade up 0.6% MoM (vs +0.1% exp).
This was the biggest ‘beat’ for Core PPI since Jan 2021…
In fact, core PPI reached a new record high (reminder, disinflation does not mean lower prices), now up 17.4% since Biden was elected…
Services PPI soared MoM, and energy continues to be a driver of deflation (but is losing its power)…
Source: Bloomberg
And on a YoY basis, Services PPI is also re-accelerating (+1.47% from +1.14%). Energy continues to be the deflationary driver…
Source: Bloomuberg
This is not good news for the disinflationistas. And it will stop President Biden’s narrative that ‘prices are coming down’…
After they unexpectedly surged in November and December (driven in large part by a jump in Food Services), headline retail sales in January were expected to decline just 0.2%, but BofA nailed it once again with a large 0.8% MoM drop. That dragged the YoY retail sales down to just 0.6%…
Source: Bloomberg
That is the worst monthly decline since March 2023 and worst YoY rise since May 2020.
It wasn’t pretty…
Motor Vehicles and Parts and Building Materials saw the largest decline MoM…
Source: Bloomberg
On a YoY NSA basis, Gas Stations and Building Materials were the biggest drag, while online retailers and Food Services were the biggest upside drivers…
Source: Bloomberg
Core Retail Sales also declined (-0.5% MoM vs +0.2% exp), which dragged the YoY levels down to their lowest since the COVID lockdowns…
Source: Bloomberg
Adjusted (crudely) for inflation, this was a huge drop in ‘real’ retail sales. REAL retail sales have declined for 11 of the last 15 months – in other words, on a crude basis (Ret Sales – CPI), Americans aren’t buying more shit.
Source: Bloomberg
Finally, the control group – used to feed through to the GDP calculation – tumbled 0.4% MoM (vs expectations of +0.2%).
Soft-landing morphing into a stagflationary crash-landing?
Confounded Interest - Anthony B. Sanders 
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