The Green Slime! The global movement towards Green Energy (or global Marxist movement) is really The Green Slime! Or maybe it should be renamed “The Red Slime.”
And then we have Hertz dumping its inventory of EVs. A slew of used Teslas have hit the Hertz car sales website after the company announced Thursday it planned to sell off 10,000 more electric vehicles from its fleet than originally planned, bringing the fire sale’s total to 30,000. Perhaps one of the reasons you can get such a good deal on a Tesla at Hertz right now is that the outlook for EV value retention is pretty grim at the moment.
Given the incidents of electric cars catching fire, perhaps saying its a fire sales is a bad choice of words. But what it says is that DESPITE massive incentives to buy EVs, consumer demand stinks. Although Transportation Secretary Pete Buttigieg will claim the market is booming.
How bad is the trainwreck that is the Biden Regime? China is bailing on US Treasuries.
The Biden Regime is hereafter known as The Green Slime, given their horrible policies. Unfortunately, The Green Slime is here already … and Hertz knows customers don’t want them at least on a temporary basis.
President Obama selected Slow Joe Biden as his Vice President because 1) he was white and 2) an alleged foreign policy wizard in The Senate. Between Afghanistan, Ukraine, Israel, Taiwan and every other foreign policy disaster under his leadership, I am beginning to doubt Biden’s foreign policy acumen. For example …
While we are acutely aware of the fact that ‘correlation is not causation’, one would find it hard to argue that the practically perfect concomitance of China’s Treasury holdings and the yield of the US 10Y Treasury note over the past three years makes us wonder (in our out-loud voices), if – away from The QT, The FedSpeak, the macro-economy, the geopolitical crises, the AI-hype, the growth scares – if it’s not just all a well-managed (slow and steady) liquidation of China’s (still massive) US Treasury holdings…
Source: Bloomberg
It’s hard to argue they don’t have an incentive to a) de-dollarize, and b) not liquidate it all at once, shooting themselves in the face.
While the de-dollarizing has been steady in Treasury-land (enabled by a vast sea of liquid other players), things have been a little more ‘obvious’ in the alternative currency space – i.e gold.
And in case you wondered, it’s not just China and Russia, world reserve Treasury holdings are ‘relatively’ flat (based on Fed’s custody data) while according to The IMF, the world’s sovereign nations have been buying gold with both hands and feet…
Source: Bloomberg
…happy to take whatever retail-ETF-sellers are offering into their physical vaults…
Source: Bloomberg
Finally, as we note in the chart, this all started to ‘escalate quickly’ when Washington really started to weaponize the dollar.
Assuming that all the US gold is still in Fort Knox (and assuming that China and Russia are honest about their holdings), the world’s ‘other superpowers’ are rapidly catching up to the US’ holdings…
Source: Bloomberg
Who could have seen that coming? With mortgage rates hitting 7.5%, the home price to median household income ratio just hit an all-time high.
The 10Y Treasury yield just hit 4.519%.
And we have The Federal Reserve posting record losses.
Did we REALLY elect this fool Biden as President??
Bidenomics is really about insane money printing after Covid and the installation of Biden as President. Biden and The Federal Reserve are both pushin’ too hard. Biden to fundamentally change the US and The Fed trying to cope with the inflation reaction. With Covid and then Biden’s selection as President, Federal outlays exploded (blue line) and remain elevated under Biden. To help finance the (outrageous) spending The Federal Reserve massively increased the M2 Money supply (green line). Now, The Fed has withdrawn some of the excessive monetary stimulus, but there is a staggering amount monetary stimulus still swimming around the economy like a Great White Shark.
The problem with Federal policies (energy, government spending, government debt) is that there are unpredictable factors that undo the best laid plans of mice and men. And rats such as crop blights and changes in consumer habits.
A good example is the Strategic Petroleum Reserve, which can be drained if craven politicians want to manage oil and gasoline prices for political purposes. Unfortunately, the promise of replenishment is made difficult by rising crude oil prices. The Biden admin cancels plan to refill emergency oil reserve amid high prices (some caused by factors such as war, often caused by government).
In fact, spot crude is up 73% under Biden. Partly, because of Biden’s promised war on fossil fuels and international disasters like war, blights, etc. This is why I cringe when I hear politicians and “economists” discuss why inflation will fall.
On the food side, we have cocoa prices rising 136% under Biden. Again, not predictable when policies were being made. Combine crop blights were rising transportation costs and DC, we have a problem! But this is one reason why The Fed, etc, focus on core inflation (excluding energy and food prices).
There are many examples of rising prices and how they hurt consumers, particularly middle-class and low wage workers.
How did The Federal Reserve react to the inflation Biden helped create? They raised The Fed Funds Target Rate (Upper Bound) by 2,100% to combat Bidenflation. Freddie Mac’s 30-year mortgage rate is up 156% helping to crush homeownership aspiration for younger households.
And then we have Congress/Biden shoveling more than $10 billion in subsidies to Intel, even though Intel has an incentive to develop chips using borrowed funds and Intel retained earnings. But why put your shareholders at risk in case the chip gamble doesn’t payoff. Just shift the risk to US taxpayers!
As The Federal Reserve continues to support bad Bidenomics policies, they … like millions of Americans … are suffering catestrophic losses.
The #Fed said on Tuesday that it officially saw a net negative income of $114.3 billion in 2023, a record loss tied to expenses related to managing the U.S. central bank’s short-term interest rate target. The loss last year follows $58.8 billion in net income in 2022, the Fed said.
The good news? Bank credit growth is ALMOST back to 0%!
I wonder if KJP or Jared Bernstein will tout almost 0% credit growth as a sign that economists were wrong about Bidenomics?
A new $1.2 trillion government spending package Congress is trying to ram through faces significant headwinds in the House, where members are expected to vote on it later this morning.
The 1,012-page bill was introduced at around 3am Thursday morning – just 48 hours before a midnight Friday funding deadline. It must pass both the House and the Senate, after which President Biden will sign it (with crayons at the ready, we’re sure).
The package accounts for approximately 70% of discretionary government spending – and consists of six out of twelve total bills that Congress must pass each fiscal year to fund the government. The six others, around $460 billion in spending, were passed earlier this month.
According to Fox News, multiple GOP sources, two GOP lawmakers and one senior GOP aide think the package will pass, but by a tight margin.
On Thursday afternoon, however, the bipartisan deal hit turbulence – with one GOP lawmaker citing absurd pork contained within – including funding for LGBTQ centers and facilities that provide late-term abortions.
Pork City
As usual, Democrats slipped in as much pork as possible, including:– $850k for a gay senior home- $15 million to pay for Egyptian’s college tuitions- $400k for a gay activist group to teach elementary kids about being trans- $500k for a DEI zoo- $400k for a group to gives clothes to teens to help them hide their gender
$60,000,000,000 for Ukraine (of course). NOTHING for US border.
$1,140,000,000,0000 for pork barrelling
1.2 trillion in inflation, an increase of the money supply by 2% in a single spending bill.
The US Dollar’s purchasing power is down -16% under Gaslight Joe.
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.
The Hollies said it best: Stop, stop, stop. FIAT Money Printing that is.
Typically, we look at M2 Money Velocity (GDP/M2) as a measure of how much the economy grows by expanding the money supply.
M2 Money Velocity is currently at 1.344, and still below where we were under Trump prior to Covid. After Powell printing palooza after Covid, M2 Money Velocity collapsed and is slowly rising, but remains low by historic standards.
Perhaps a more interest velocity is DEBT velocity (GDP/DEBT). Under Biden’s Reign of Error, Federal debt has increased by $6,539,359 million while real GDP has increased by only $1,948.731 billion (or roughly $2 trillion in GDP growth after $6.54 trillion in debt). Or a DEBT velocity of 0.3. Yikes! No wonder China is bailing on US debt!
This chart makes debt issuance look better than it really is. Again, the DEBT VELOCITY of 0.3 is terrible meaning that for every $1 of Federal debt, we get 30 cents in Real GDP under Biden. One of my macroeconomics textbooks stated that debt growth is fine as long as real GDP growth rises faster than debt growth. Apparently, Treasury Secretary Janet Yellen didn’t read that textbook! Real GDP has grown by 9.43% under Biden while Federal debt has grown by … gulp .. 24%.
Yes, the US is borrowing like the proverbial drunken sailor while they “invest” in green energy, wars in Ukraine and the Middle East, and massive social welfare programs (like the old breads and circuses from the dying Roman Empire). When watching the media’s obsession with Taylor Swift and Chief’s Tight End Travis Kelce at The Super Bowl, it reminded me of “Breads and Circuses” as our nation is collapsing like a dying star. (That is why I Iike Gold, Silver and Bitcoin!)
What about The Federal Reserve? It was created in 1913 after signed into existence by President Woodrow Wilson. Since The Fed’s inception, consumer purchasing power has declined by 97%.
And under Biden, inflation has been so bad that consumer purchasing power is down 16%.
In summary, The Federal Reserve has been printing like crazy (I would say Batshit Crazy, but I actually think bats are adorable). And Treasury (under former Fed Chair Janet Yellen) has been borrowing like crazy too. While politicians claim the economy is in great shape, it is really because The Fed is printing wildly, Yellen is borrowing wildly, and much of US GDP is not due to the private sector, but Federal government spending … to the donor class. This is NOT a sustainable and will eventually crash into a ravine.
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).
The cumulative number of jobs reported each month was 1,255,000 less than previously thought, with new seasonal and census data affecting total employment estimates, according to data from the BLS calculated by the Daily Caller News Foundation. The huge downward revisions are in spite of a 115,000 upward revision in December, the only month that saw an upward revision to the employment level in 2023.
The biggest revision was for March, which was revised down by a total of 266,000 jobs, followed by January at 234,000 and April at 205,000, according to the BLS. The lowest downward revision was in November, with only 2,000, followed by 11,000 in October.
“Revisions are a normal part of the reporting process, but large changes, or adjustments that consistently move in the same direction, are not normal,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Instead, they’re indicative of something problematic with the BLS’ methodology. That can happen when market conditions change drastically enough to be outside of the assumptions used in their models.”
The revisions are due in part to an overestimate of the number of jobs in the U.S. economy in January 2023 at 155,007,000 instead of the revised 154,773,000, according to the BLS. The job level increased to a revised 157,347,000 by December, totaling an increase of 2,340,000 positions in the year.
The most recent jobs report in February also released an adjustment to the total jobs level, lowering March by 266,000 positions, according to the BLS. The jobs totals were also adjusted to recent census data, throwing off past estimates.
Recent years have not seen the same high downward revisions as 2023, with 2022 only seeing negative revisions in five months, equating to a downward revision of 66,000 for the year. March was the only month that was revised down in 2021, with the total number for the year being revised up by nearly 2 million as the country recovered from the COVID-19 pandemic.
Growth in government positions has bolstered recent job numbers, adding a total of 601,000 jobs to the U.S. economy in the past 12 months. The gains have led to an all-time record for government positions at 23,091,000, outdoing a surge in hiring from the 2010 census collections.
“When the economy was rapidly deteriorating at the onset of the Great Recession, the BLS repeatedly and consistently overestimated job levels, which then had to be revised down,” Antoni told the DCNF. “The worsening economic conditions fell outside of the assumptions used by the BLS statisticians, so the estimates became inaccurate. There could be similar problems today due to fallout from the government-imposed recession in 2020 because the labor market still hasn’t recovered.”
Remember the massive bank bailout of “subprime” mortgage securities back that resulted in the Dodd-Frank banking legislation of 2010? Yes know, where they promised NO MORE BANK BAILOUTS EVER??? Particularly if Disease X is unleashed and we start shutting down economies and schools again. Will we see ANOTHER bank bailout??
Cantor Fitzgerald CEO Howard Lutnick spoke with Fox Business host Maria Bartiromo on the sidelines at the World Economic Forum in Davos, Switzerland, last week. He offered a bleak outlook on the commercial real estate sector, warning a “very ugly” two years is ahead.
“Coming due in the next two and a half years at these higher rates – you’re not going to get proceeds, meaning when you have a $120 million loan on a building, and someone says I’ll give you 90 million at a much higher rate – than it throws the keys back to the lenders – and there’s going to be a lot of them that are going to get wiped out,” Lutnick told Bartiromo.
“I think $700 billion could default … The lenders are going to have to do things with them. They’re going to be selling. It’s going to be a generational change in real estate coming at the end of 2024 and all of 2025. We will be talking about real estate being just a massive change,” Lutnick said.
He warned: “I think it’s going to be a very, very ugly market in owning real estate over the next, you know, 18 months, two years.”
Lutnick noted that loan sales are set to become a major business opportunity with the upcoming maturity of CRE mortgages. He highlighted that an estimated trillion dollars of CRE debt is coming due over the next 2.5 years.
Shortly after the regional bank implosion in March 2023, Morgan Stanley penned a note to clients about a $2.5 trillion wall of CRE debt coming due over five years.
A recent survey of Terminal users by Bloomberg’s Markets Live found most respondents believe the office tower market needs a deeper correction before a rebound materializes.
Lutnick pointed out, “Real estate equity, REITS, are going to be in trouble … a lot of them are going to be wiped out, so many defaults, I think.”
Bloomberg office REITs have been plunging since early 2022 when the Federal Reserve embarked on the most aggressive interest rate hiking cycle in a generation to tame inflation.
“Commercial real estate is experiencing a meaningful repricing as cap rates correlate to long-term to interest rates,” Morgan Stanley told clients in a recent report, adding, “Patience is required while refinancing to higher debt costs gradually triggers valuation adjustments.”
Lutnick’s not the only one with a dismal outlook on CRE.
In a recent interview, Scott Rechler, Chairman and CEO of RXR Realty, told Goldman’s Allison Nathan that the CRE downturn is still in the early innings.
Confounded Interest - Anthony B. Sanders 
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