Jackson Browne appartently knew that the Biden/Harris economic recovery would run out of gas as soon as Federal spending started to slow down. The US economy is running on empty.
Evidence? The Chicago Fed National Activity Index (CFNAI) decreased to –0.28 in September from –0.01 in August. Two of the four broad categories of indicators used to construct the index decreased from August, and all four categories made negative contributions in September. The index’s three-month moving average, CFNAI-MA3, decreased to –0.19 in September from –0.14 in August.
The USD Swaption Surface is steeply sloped to 1 month.
Total sales SAAR dropped to 3.84mm, the lowest since 2010…
Source: Bloomberg
Even with the weaker September sales figures, “factors usually associated with higher home sales are developing,” Lawrence Yun, NAR chief economist, said in his ubiquitously optimistic statement.
“There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy.”
First-time buyers made up 26% of purchases, matching an all-time low.
Some 1.39 million homes were for sale in September, up 23% from a year earlier, the NAR report showed. The supply of homes still remains below pre-pandemic levels.
At the current sales pace, available inventory would last 4.3 months, the longest in more than four years.
The median sales price rose 3% in September from a year ago to $404,500.
Around the country, previously owned home sales dropped in three of four regions, including a 1.7% decline in the South to the slowest pace since the start of 2012.
Closings fell 2.2% in the Midwest to a 13-year low, and 4.2% in the Northeast. Sales rose 4.1% in the West, driven by California and Arizona.
While the short-term (lagged) may bring an improvement in existing home sales (based on the lagged impact of declining mortgage rates), as the chart below shows, since The Fed unleashed its rate0cutting cycle, mortgage rates have risen aggressively once again…
Source: Bloomberg
…not a good sign for the housing market’s affordability.
However, inventory problems could persist since “84 percent of mortgaged homes have a rate below 6%, so the number of sellers that would be financially incentivized to sell would remain limited,” Odeta Kushi, deputy chief economist at title insurance giant First American Financial Corp. said in the report.
Mortgage applications decreased 6.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending October 18, 2024.
The Market Composite Index, a measure of mortgage loan application volume, decreased 6.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 5 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 3 percent higher than the same week one year ago.
The Refinance Index decreased 8 percent from the previous week and was 90 percent higher than the same week one year ago.
Implied volatility in Treasury yields has risen to the highest since December.
SF Woman. That is my name for Kamala Harris, the ultimate political changeling, taking full credit for the economy, then trying to distance herself from Biden. As the US economy continues to contract.
Weakness in factory new orders continued to be a major drag on the US LEI in September as the global manufacturing slump persists. Additionally, the yield curve remained inverted, building permits declined, and consumers’ outlook for future business conditions was tepid. Gains among other LEI components were not significant enough to offset weakness among the four gauges mentioned above. Overall, the LEI continued to signal uncertainty for economic activity ahead.
*Changeling, in European folklore, a deformed or imbecilic offspring of fairies or elves substituted by them surreptitiously for a human infant. According to legend, the abducted human children are given to the devil or used to strengthen fairy stock.
Tennessee Ernie Ford sang it best. $36 tons of debt. Another day older and deeper in debt. Notice virually no political candidate will acknowledge or discuss.
The federal government spent $1.8 trillion more than it collected in tax revenue in fiscal year 2024, according to figures released Friday by U.S. Treasury Department.
Congress has run a deficit every year since 2001. In the past 50 years, the federal government has ended with a fiscal year-end budget surplus four times, most recently in 2001.
The deficit for fiscal 2024 was $1.8 trillion, or $138 billion higher than the prior year’s deficit. As a percentage of GDP, the deficit was 6.4%, an increase from 6.2% in fiscal 2023. The 2024 deficit is $196 billion lower than in 2023, excluding the effect of the Supreme Court’s 2023 decision in Biden v. Nebraska regarding student loan programs, according to year-end data from the September 2024 Monthly Treasury Statement of Receipts and Outlays of the United States Government.
And then we have the REAL disaster in the form of unfunded liabilities of $220 TRIILLION (or $651,000 per citizen). For a family of 5 citizens (like my household), that amounts to $3.26 MILLION per household of 5.
Imagine Kamala’s filibustering a response to a question about the national debt and unfunded liabilities. Other than “Donald Trump.”
After surprising top the upside in August, Housing Starts and Building Permits disappointed in September, declining more than expected (-0.5% MoM and -2.9% MoM respectively)…
Source: Bloomberg
Under the hood, multi-family permits plunged 10.8% MoM (and multi-family starts dropped for the second straight month). Single-family starts rose 2.7% MoM and permiots inchjed higher by 0.3% MoM…
Source: Bloomberg
Rate-cut expectations appear to have taken the excitement out of the building market…
Source: Bloomberg
Housing Completions also dropped (but the BLS thinks construction jobs continue to rise non-stop)…
Source: Bloomberg
So, The Fed cuts short-term rates… mortgage-rates rise… and builders slow their building plans… that’s not how it’s supposed to work!
I would like to see Kamala Harris explain why mortgage purchase applications are down -60% under Biden/Harris Presidency. Other than a word salad answer. Or Cottage Cheese.
Mortgage applications decreased 17.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending October 11, 2024.
The Market Composite Index, a measure of mortgage loan application volume, decreased 17.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 17 percent compared with the previous week. The seasonally adjusted Purchase Index decreased 7 percent from one week earlier. The unadjusted Purchase Index decreased 7 percent compared with the previous week and was7 percent higher than the same week one year ago.
The Refinance Index decreased 26 percent from the previous week and was 111 percent higher than the same week one year ago.
Housing prices are up 34.2% under Biden/Harris while mortgage rates are up 138.6%.
Perhaps Harris/Walz should adopt the Imperial March from Star Wars as their theme song. Between Biden/Harris uncontrolled immigration disaster helping to destroy New York City, Harris’ statement that she won’t do anything differntly from Biden/Harris is alarming.
The NY Empire survey crashed from +11.5 to -11.9 – the lowest since May. That is the biggest MoM drop since January…
A measure of current new orders plunged nearly 20 points to -10.2 after climbing a month earlier to the highest since April 2023.
The index of shipments decreased almost 21 points to minus 2.7.
The employment index, however, rebounded to 4.1 – the first expansion in a year – while a measure of hours worked also climbed.
Meanwhile, the New York Fed’s gauge of prices paid for materials increased to a six-month high of 29, while an index of prices received by state manufacturers also accelerated.
And with this awful news, the US Treasury yield curve remains downward/upward sloping. I call this the schizophenic yield curve.
There have been to significant jumps in the Federal Debt. The first coming after the financial crisis of 2008 and election of Obama/Biden in 2008. The second with the outbreak of Covid in 2020 and the election of Biden/Harris in 2021.
The Federal (public) debt was just over $10 million when Obama/Biden were elected and it now stands at a staggering $35.7 trillion. That represents over a tripling of the Federal debt under Obama/Biden/Harris. So when asked what she would do diffeerent than Biden, Harris replied “Nothing comes to mind.” That means MORE spending, MORE debt and MORE unproductive Government jobs.
Here is a chart of public debt and GDP under the triumvirate of Obama, Biden and Harris. No, not Julius Caesar, Pompey, and Crassus). But it is feeling like the Roman Empire prior to its collapse.
Here is a chart of government jobs and government expenditures. Great for government workers, bad for everyone else.
Of course, SOMEBODY has to pay the growing gov’t debt burden. Rest assured it won’t be Obama/Biden/Harris.
Confounded Interest - Anthony B. Sanders 
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