Recesion Alert? ISM Manufacturing New Orders Sinks To 44.3 In March (Lower Than During Trump) As Count Powellula Sucks Blood From Economy

Not only did the ISM Manfacturimng Report on New Business Order fall to 44.3, but price PAID also fell as The Fed hikes rates (yellow line) and slowing M2 Money growth (green line).

Office REITs are really hurting as Count Powellula sucks the blood (liquidity) from the market.

Count Powellula. “I vant to suck the blood from your economy.”

Sparkless! M2 Money Growth Crashes To -3.13% YoY As Fed Slams On Monetary Brakes To Fight TLFTL (Too Low For Too Long) Policies And Insane Federal Spending Spree (Fed Funds Effective Rate UP >5,000% YoY)

I love how the Supernatural character Dick Roman, a Levianthan, referred to Joe Biden as replaceable and having no spark. BUT Biden, Pelosi and Schumer did go on a historic spending spree helping to create massive inflation (so Biden and the gang did spark inflation).

To show you how Yellen/Powell’s Too Low For Too Long (TLFTL) monetary polices coupled with Biden/Pelosi/Schumer’s (add McConnell to this foul-smelling witches’ brew), Powell and The Gang (aka, The Fed) slammed on the monetary brakes. On a year-over-year basis, M2 Money growth has crashed tl -3.13%. The shocking number is The Fed Fund Effective Rate which rose over 5,000% YoY.

Actually, the US has been on a money printing spree since 1995, but it was Covid spending and monetary expansion in 2020 that crushed M2 Money Velocity (GDP/M2).

Here is Supernatural’s Leviathan monster Dick Roman handing an award to sparkless President Joe Biden. But Biden did spark massive inflation that crushed the US middle class and low wage workers.

Turnaround Jay! One Small Rate Hike Expected In May, Then A Turnaround With Fed Rate Cuts To 4.28% (Too Bad Taylor Rules Calls For A Target Rate Of 10.29%)

Turnaround Jay!

Fed Funds Futures are pointing to one more rate hike at the May FOMC meeting, then a turnaround with The Fed cutting its target rate.

Too bad the Taylor Rule is calling for a target rate of 10.29%.

The Fed Funds Target rate (upper bound) is STILL negative at -1.0356%.

Soaring rates to fight inflation is causing unrealized losses to plague US banks.

Like the film, “He Never Died”, The Fed never died. And neither did quantitative easing.

St Louis Fed Financial Stress Index Soars To Highest Level Since Covid Outbreak As Bond Volatility Soars With Fed Rate Hikes And Bank Failures As US Treasury 10Y Yield Rises 12 Basis Points (Flight To Safety)

The US economy got beaten to a pulp by the Chinese Wuhan Covid virus outbreak in early 2020. The Fed intervened with massive money printing along with massive spending by Congress and the Administration. Result? 40-year highs in inflation and a Fed counterattack in terms of rate hikes.

The result of Fed rate hikes? Failing regional banks trying to cope with duration extention and scared depositors. And then we have the St Louis Fed Financial Stress index reaching its highest level since the Covid outbreak of early 2020. And with that, bond volatility is higher than that found during the Covid crisis.

With the expectation of MORE rate hikes, the 10-year Treasury yield jumped 12 basis points.

The architect of The Fed’s “too long for too long” is also the US Treasury Secretary, Janet Yellen.

Yellen: “It wasn’t my fault!”

The Fed’s “Doomsday Machine”! Catching Up From Bernanke/Yellen’s “Too Low For Too Long” Policies (US Treasury 2-Year Yields UP 16.1 Basis Points)

I feel like I am watching the Star Trek original series episode “The Doomsday Machine” as former Fed Chair and current US Treasury Secretary effectively just guaranteed ALL US bank deposits. Aka, a massive bank bailout. The episode was about a robot space vehicle that destroy planets … and anything in its path. And if it changed course to destroy something, it gradually returned to its original destructive path. Like The Federal Reseve.

But after a few days of declining Treasury yields because of the mess created by Bernanke/Yellen’s too low for too long policies, and the Biden/Congress insane spending, the US Treasury 2-year yield is up 16.1 basis points.

Whether it was politcally motivated to protect Obama/Biden or Obama/Biden’s economic recovery was terrible, The Fed only raised their target rate once before Trump’s election. And then Yellen raised rates like crazy. Only to hand her mess off to Powell who had to drop rates like a rock and massively expand the balance sheet … again … to fight Covid.

The Federal Reserve from a car on Constitution Avenue in Washington DC.

US Leading Economic Indictors Plunge -6.5% YoY In February, Consumer Sentiment Falls (S&P 500 Down -1%)

Apparently, the only thing that is strong in the US economy is low-paying jobs. The economy as a whole is sucking wind as we can see with the Conference Board’s Leading Indictors plunging -6.5% Year-over-year (YoY) in February.

US consumer sentiment fell again … and has not been near 100 (baseline) since Covid struck.

And on the fears that the banking system is not well, the S&P 500 index is down -1.1% this morning.

Argentina Raises Benchmark Leliq Rate By 300 Basis Points To 78% To Fight Inflation Of 102.5% (While Fed INCREASES Balance Sheet To Fight Banking Crisis)

Cry for Argentina! Their central bank boosted its benchmark Leliq rate by 300 basis points to 78%. The monetary authority’s board considered the increase in response to accelerating inflation and after leaving the key rate unchanged for several months.

Of course, the US Federal Reserve is going in the opposite direction to combat the US banking crisis created by inflation and Yellen’s “Too low for too long” Fed policies.

I am beginning to wonder in Treasury Secretary Janet Yellen and Chicago Mayor Lori Lightfoot are the same person. Both complete Statist screw-ups.

The NEW Banking Crisis In One Chart (Hint: Inflation = Fed Rate Hikes = Treasury/MBS Duration Increases = Bond Losses = Bank Runs) Bond Volatility Highest Since 2008

So, the Biden Administration made a horrible error by guaranteeing deposits at Silicon Valley Bank for deposits over $250,000. Essentially, Biden bailed out big tech that kept their deposits at SVB.

But what triggered the run on SVB and other banks? Simple. Biden and Congress spent like drunken sailors with Covid and The Federal Reserve went nuts printing money. Viola! We got inflation. But with inflation came The Fed’s attempt to get inflation back to its 2% target (difficult since Biden/Congress refuse to return spending to pre-Covid levels). But as interest rates rise, duration (weighted average life of MBS) rose dramatically meaning that risk increased. But banks like SVP ignored the risk, or didn’t hedge, or were spending time worrying about non-bank related issues.

So, what happened? Banks are holding Treasuries and MBS (orange line) that are getting clobbered with rate hikes (yellow line).

Talk about volatility. Today, the 2-year Treasury yield is up over 20 basis points as bond volatility hits levels last seen in 2008, just prior to the subprime credit crisis.

So, Biden’s bailout of SVP depositors stopped the deposit run for the moment. But if The Fed keeps hiking rates, banks are going to be hurting worse and worse. They could rebalance their portfolios and/or hedge. But with Uncle Spam (Biden) at the helm, bailouts are always on the table.

Don’t Cry For Argentina! Inflation Hits 102.5% As M2 Printing Hits 80% YoY (Suicide By Printing Press)

Don’t cry for Argentina! Their leaders did this to them.

Argetina’s inflation rate just hit 102.5% as their M2 Money printing hit 80%

Argentina’s central bank is considering raising its benchmark rate on Thursday for the first time since September after inflation data showed prices increased by more than 100% annually last month, according to two people with direct knowledge.

The monetary authority’s board will consider an increase after leaving the key Leliq rate unchanged at 75% for several months, the people said, asking not to be named discussing internal decisions. The board has not yet decided on the size of the hike in case they opt for such move, they said.

A cautionary tale for Washington DC spendacrats and Fed officials.

Brought to the same country that gave us Statist Juan Peron and his wife Eva.

Reversal Of Fortune! Fed Expected To Hike Once By 25 BPS, Then Cut Rates By 125 BPS By End Of 2023

Market now expects FED to hike max. one more time by 25bps followed by 125bps cuts in total by end of 2023.

And bond volatility is up the most since … the last financial crisis.

No, not the Klaus von Bulow “Reversal of Fortune.” Just a Fed/Biden murder of the US economy.