The Consumer Just Crashed! Credit Card Spending Unexpectedly Cratered In September At -10.8% While Bank Credit Growth Goes Negative For 9th Straight Week

Coping with inflation caused by Federal spending (and excessive Fed stimulus) is difficult and eventually consumer max out their credit cards. Like now!

Credit card useage nosedived by -10.8% in September, according to Citi. This is the fifth straight month of spending decleration.

Leading the decline was electronics. The leader on the positive sign was … jewelry?? Hey, I thought mobs of people were robbing stores because they were hungry!!

In terms of bank credit, rising rates to fight inflation, bank credit growth Bank credit growth has been negative for nine straigth weeks.

Then we have unrealized losses on bank balance sheets, expected to surge to $700 billion with soaring interest rates.

On a different note, Homeland “Security” head Mayorkas now claims the US has to build a wall to combat the out-of-control immigration on the southern border. Wait! I thought Mayorkas and Congressional members (angrily) claim the border was secure! It doesn’t matter, Mayorkas is simply signalling to blue states that he will build a wall. But how fast is a different question.

Here is a video of tHe Biden Administration arranging for the border wall to be consructed. Mayorkas will likely call O’Reilly the builder to build the border wall.

Slowdown! ADP Jobs Added Slows To +89k As Credit Card Delinquencies At Small Banks Hit Highest Level Even Recorded (7.51%)

The US is experencing a slow down.

The massive Federal government and Federal Reserve Covid stimulus has worn out and we are left with a sagging jobs report and soaring credit card delinquencies.

After ADP’s reports printed almost perfectly in line with BLS last month (+177k vs +187k), all eyes are on today’s print, which was expected to decline to +150k. Instead it plunged to just +89k – that is the lowest jobs addition since Jan 2021.

Credit Card Delinquency rates at small banks have reached 7.51%, the highest level ever recorded.

Bidenomics is taking the 10Y rate higher.

Boom shaka laka.

Fear The Talking Fed! Treasury Rates Keep Climbing To Multiyear Highs As Fear Of More Rate Hikes Surfaces (Treasury Yields Decouple From Sinking Manufacturing Numbers)

Fear the talking Fed! Various Fed Presidents are talking this week and when they do. WATCH OUT!

The latest fear mongering will be … inflation is persistent and they might have to keeep raising rates.

The two-year Treasury remains above 5% and the 10Y-2Y T-Curve remains inverted.

Treasury 30-year yield rose to 4.856%, HIGHEST SINCE 2007.

The likelhood of another Fed rate hike is growing.

While inflation is cooling (but still elevated), The Fed could choose to rate hikes again.

Treaury yields have decoupled from US manufacturing data.

Best picture of Lael Brainard, Director of the National Economic Council of the United States and former Federal Reserve member and talking head. Or screaming head.

US Excess Savings Depleted For Bottom 80% Of Households To Cope With Bidenomics (Home Affordability Hits All-time Low!)

Wasting away again with Bidenomics, code for massive Federal subsidies to green energy donors. And incentives to buy impractical EVs. Imagine in an emergency and your car only goes 200 miles (and then you have to wait for an available charger to come open). Well, the top 1% are doing fine. But the bottom 80% of households by income are seeing rapid deplection of savings to cope with the rising costs of Bidenomics.

And then we have shrinking home affordability, now at a record low.

Making America Unaffordable Again (MAUA)? US Home Prices Rise 1% YoY In July (After 0% Growth In June) Las Vegas Leads Downturn In Home Prices Followed By Zuckerburgh (San Francisco)

Thanks to rampant Federal spending and overstimulus by The Federal Reserve, US housing prices are simply unaffordable for many. Particularly since the Covid epidemic (Wuhan China Flu).

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 1.0% annual change in July, up from a 0% change in the previous month.

Yes, home prices grew in July despite rising mortgage rates. As CS Lewis wrote “That Hideous Strength” but this is about how The Fed doesn’t understand what they have done.

At the metro level, Las Vegas leads in YoY price declines at -7.2%. In a close second is San Francisco at -6.2%. Portland and Seattle also declined.

Here is Screamin’ Joe Biden. You know Biden is lying when he gets angry.

Making America Last Again (MALA)? US Paying Salaries For Tens Of Thousands Of Ukrainians As 5.8 Million Illegals Enter US Under Biden

Donald Trump was famous for his “Make America Great Again!” campaign. Joe Biden seems to want to make America LAST again (MALA).

A newly aired “60 Minutes” segment entitled The unexpected way American tax dollars are being used in Ukraine has uncovered that the US government is paying the salaries of some 57,000 Ukrainian civic services personnel.

The report details the various ways non-military aid is being spent at a moment GOP Congressional leaders are intensely debating whether to move forward with a proposed defense budget that includes Biden’s push for $24 billion more in military assistance for Kiev.

“The U.S. has spent just over $43 billion on military aid to Ukraine since Russia invaded. That’s equivalent to about 5% of the American defense budget. European countries combined have contributed around $30 billion,” the 60 Minutes report narrates.

And this includes the following stunning detail:

American taxpayers are financing more than just weapons. We discovered the U.S. government’s buying seeds and fertilizer for Ukrainian farmers… and covering the salaries of Ukraine’s first responders – all 57,000 of them.

That includes the team that trains this rescue dog – named Joy – to comb through the wreckage of Russian strikes looking for survivors.

Political commentator Collin Rugg has noted in relation to the potential government shutdown looming for Oct. 1st: “Yes, your tax dollars will be used to fund Ukrainian salaries while American citizens are forced to wait for their pay while the government remains closed,” he said on X.

Rugg is referencing the fact that the Biden administration and Pentagon have declared that Ukraine aid will remain exempt from any potential government shutdown. This means Ukrainian salaries will still be paid, even while federal employees aren’t, in the event of a shutdown.

Here’s more from the 60 Minutes video, featuring a Ukrainian woman “thanking” US taxpayers for footing the bill for Ukrainian employees, thanks to USAID funding:

Tatiana Abramova: Especially in the condition of war, we have to work. We have to pay taxes, we have to pay wage– salary to our employees. We have to work, don’t stop.

Holly Williams: Why does that help Ukraine win the war?

Tatiana Abramova: Because economy is the foundation of everything.

American officials from USAID – the agency in charge of international development – helped Abramova find new customers overseas. In the midst of war, her company is supporting over 70 families.

Meanwhile, a fresh Newsweek headline: US Will Pay Salaries to Thousands of Ukrainians During Government Shutdown…

“US taxpayers will pay the salaries of thousands of Ukrainians, even as the country faces a government shutdown at the end of September.”

But as noted above, this is more like tens of thousands of Ukrainian salaries.

“A federal government shut down will effectively begin on October 1 if Congress isn’t able to pass a funding plan that Biden signs into law,” Newsweek underscores. “If that happens, federal agencies have to stop all nonessential work and will not send paychecks for as long as the shutdown lasts.”

Appropriately, the 60 Minutes episode invoked memory of the late John McCain…

In total, America’s pumped nearly $25 billion of non-military aid into Ukraine’s economy since the invasion began – and you can see it working at the bustling farmers market on John McCain Street in central Kyiv.

The late senator is revered in Ukraine because he pushed the U.S. government to start sending arms to the country… back in 2014.

Here’s how 60 Minutes presents bipartisan support for Biden’s blank check for Ukraine:

While in Kyiv, we learned that three of McCain’s former colleagues were also in town: Democratic Sens. Elizabeth Warren and Richard Blumenthal and Republican Sen. Lindsey Graham. They don’t normally agree on much – together, though, they’re some of the staunchest supporters of U.S. funding for Ukraine’s resistance.

Indeed Zelensky himself while meeting with US Senators in Washington last week said something similar – that without continuing American funds, the war effort is doomed. He urged Congress to keep the billions in aid flowing, and sought to present that Moscow will one day expand aggression beyond just Ukraine.

* * *

Meanwhile, the “aid from the heart of every ordinary American person” will continue (whether those ordinary Americans like or not)…

While Biden seems obsessed with protected Ukraine’s sovereign border, he has left the US southern border wide open. There have been OVER 5.8 MILLION illegal crossings of our southern border.

So, Old Joe Biden is Making America Last Again (MALA)!

Alarm! 3rd Consecutive Year Of Negative Returns On 10-year Treasuries Which Has Never Happened In History (10Y Yields Up 308% Under Biden, Mortgage Rates Up 156%)

Alarm! US 10-year Treasury yields are soaring along with mortgage rates.

The US Treasury market is witnessing another significant selloff, pushing the 10y UST yield close to the 4.50% mark. The surge in real rates is remarkable, reaching 2.12% for the 10y, a level not seen since 08’. While this might appear attractive in real terms compared to historical benchmarks, could we be on the brink of a third consecutive year of negative performance for US Treasuries? To put this into perspective, such a scenario has never occurred in history.

The conforming mortgage rate is at 7.3%, up 156% under since Biden’s coronation as El Presidente of the United Banana Republics of America. Where political opponents are indicted prior to elections.

In Biden’s Banana Republic economy, the US Treasury 10y-2y yield curve remains inverted.

And then we have Mish’s chart on debt as a percentage of GDP from CBO. Remember, we used to worry about the US breaking the 80% debt to GDP level. It is now projected to be 181%. Wow.

This isn’t good!

El Presidente Billions Biden.

Is Bidenomics The Highway To Hell? US Existing Home Sales Declines 17 Of Last 19 Months As Fed Slowly Shrinks Balance Sheet (Federal Debt Exceeds $33 Trillion As Unfunded Liabities Exceed $194 TRILLION)

Is Bidenomics the proverbial “Highway to hell”?

The most recent report on US exisiting home sales showed that sales decreased in 17 of the last 19 months as The Fed tightens monetary policy to combat inflation caused by … 1) The Fed and 2) Bidenomics spending on green energy.

The US housing market will be “back in black” once Biden and Congress stop their reckless spending and borrowing. Biden has added $5,352,202 to the national debt since being selected (not by me!). That is a 19% increase in The Federal debt in just 33 months!

Not to mention the ludicrous $194 TRILLION in unfunded liabilities that the geezers in the Biden Administration (Biden is 80 and slipping into dementia) and the Geriatric wing of Congress (the US Senate) is home to fossils like Mitch McConnell (not looking well) and Diane Feinstein (90 and looking poorly). I didn’t forget about Nancy Pelosi (Communist-California) who is 83 and running for re-election. Younger doesn’t necessarily mean better since Pelosi’s nephew California governor Gavin Newsom is 55 years old and helped destroy California’s economy. Of course, the DNC will probably selected Newsom to replace scandal-ridden Biden as the Democrat in order to finish the job Obama started.

Existing-home sales slipped again in August as rising mortgage rates make housing prices the least affordable ever. Despite denials in many corners, a crash is underway.

The National Association of Realtors^® NAR^® reports Existing-Home Sales Decreased 0.7% in August.

Highlights

Existing-home sales retreated 0.7% in August to a seasonally adjusted annual rate of 4.04 million.
Sales dropped 15.3% from one year ago.
The median existing-home sales price climbed 3.9% from one year ago to $407,100, an increase of 3.9% from August 2022 ($391,700). It’s the third consecutive month the median sales price surpassed $400,000.
The inventory of unsold existing homes dipped 0.9% from the prior month to 1.1 million at the end of August, or the equivalent of 3.3 months’ supply at the current monthly sales pace.
First-time buyers were responsible for 29% of sales in August, down from 30% in July and identical to August 2022.
All-cash sales accounted for 27% of transactions in August, up from 26% in July and 24% in August 2022.

And mortgage rates are now up to 23 year highs!

If Biden bows out and Newsom runs for President … and loses, Newsom always has a career in Hollywood in vampire movies. “I will suck your (economic) blood!” – Count Newsom.

Fed’s Dot Plot To Show Fed Pushing Back On 2024 Pricing And Rates Dropping Like A Rock In 2025 To 3.6% (Almost 200 BPS Decline)

The Fed’s Dot Plot, the Open Market Committee’s guesses as to Fed rate policy in the future, despite Treasury Secretary Janet Yellen saying everything is beautiful in the US economy. Then Janet, why is The FOMC siganling a rate cut from 5.6% to 3.6% by 2025?

The Federal Reserve’s dot plot for September will push back on the notion of aggressive rate cuts that the markets are pricing in for next year.

The median of indications will show that policymakers expect a decline in the benchmark rate of as little as 50 basis points or 75 basis points for 2024, compared with the 100 basis points their plot showed in June. I expect the Fed to leave its dot plot for 2023 intact, with the funds rate indicated at 5.6%.

Investors have, of late, swung between pricing rate cuts between the spring and the summer of 2024, which the Fed isn’t in a position to acknowledge based on the current strength of the US economy. The most definitive way of pushing back against that notion is to pencil in less by way of policy loosening than the central bank did in June.

Since that meeting, headline inflation has accelerated, while inflation stripped of housing and energy is still hovering above 4%. Meanwhile, the jobless rate has averaged 3.6% so far this year, around as low as we have ever seen historically — and way below what the Fed estimates will be required to bring the labor market into balance.

The resilience of the job market may, in fact, spur policymakers to pencil in a lower unemployment rate for 2024 than the 4.5% they indicated in June.

Consistent with that outlook, the Fed may be disinclined to revise its 1% growth projection for next year by more than a whisker.

Those revisions are likely to mean that the Fed has reduced scope to loosen policy at the first sign of material weakness in the economy.

Given that James Bullard quit the Fed in August, the new set of projections will be lacking a prescient hawk, whose dot plot has been a rewarding schemata to follow for investors in this cycle. That suggests the skew between the median of the Fed rate projections for next year and top range will be considerably narrower.

An interesting corner of the summary of economic projections to watch will be the Fed’s assumption on the neutral real policy rate, which neither stokes inflation nor crimps output. For several years now the Fed has penciled in a longer-run funds rate of 2.50% predicated on inflation of 2%, thereby projecting a neutral rate of 50 basis points.

However, researchers at the New York Fed reckon that the real neutral rate will reach a staggering 250 basis points by the end of the year, one reason why Treasury long-dated yields have been sticky this late in the policy cycle.

All told, the dot plot and summary of economic projections is what will guide the Treasury market reaction, and from the looks of it, the markets may not like what they see.

Not like what they see? Like Bidenomics??

Homebuilder Sentiment Goes Negative For First Time In 7 Months, Thanks To Bidenomics (Mortgage Rates UP 152% Under Biden)

Bidenomics, the economic gift to big donors and a boot up the backside of middle class and low wage workers, keeps on giving. Now its homebuilder sentiment falling to 45.

U.S. homebuilders are feeling pessimistic about their business for the first time in seven months, thanks to stubbornly high mortgage rates.

Builder confidence in the single-family housing market fell 5 points in September to 45 on the National Association of Home Builders/Wells Fargo Housing Market Index. The decrease follows a 6-point drop in August. Anything below 50 is considered negative.

Mortgage rates are up 152% under Biden’s Reign of Economic Error. Note the big assist the economy got from Covid-related Fed stimulus (red line). The Fed’s balance sheet is still over $8 trillion.