Not exactly the economic report that the Biden Administration and The Federal Reserve were hoping for. To quote The Rolling Stones, “You can’t always get what you want.” Actually, the Conference Board’s Leading Economic Indicator is more of a BLEEDING economic indicator as we enter 2024.
NEW YORK, Jan. 22, 2024 /PRNewswire/ — The Conference Board Leading Economic Index® (LEI) for the U.S. fell by 0.1 percent in December 2023 to 103.1 (2016=100), following a 0.5 percent decline in November. The LEI contracted by 2.9 percent over the six-month period between June and December 2023, a smaller decrease than its 4.3 percent contraction over the previous six months.
“The US LEI fell slightly in December, continuing to signal underlying weakness in the US economy,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Despite the overall decline, six out of ten leading indicators made positive contributions to the LEI in December. Nonetheless, these improvements were more than offset by weak conditions in manufacturing, the high interest-rate environment, and low consumer confidence. As the magnitude of monthly declines has lessened, the LEI’s six-month and twelve-month growth rates have turned upward but remain negative, continuing to signal the risk of recession ahead. Overall, we expect GDP growth to turn negative in Q2 and Q3 of 2024 but begin to recover late in the year.”
The annual growth rate of the LEI remains deeply negative.
On an annual basis (YoY), the LEI is down -6.9%.
Am I surprised that the LEI is bleeding so badly? Not with “Vacation Joe” Biden at the helm! Or his eloquent Climate Envoy John Kerry!
Ukrainian President Volodymyr Zelensky has lashed out at former President Trump over his Ukraine stance and recent rhetoric, particularly the GOP presidential front-runner’s claim that he can negotiate peace between Kiev and Moscow within 24 hours. This terrifies Zelensky since his family and friends are addicted to the billions of dollars sent by Biden, Pelosi and Schumer. And crazed warhawks like Icki Haley.
Trump’s persistent statements saying he would intercede diplomatically and end the war has been met with mockery among top Ukrainian officials. Zelensky in a fresh interview with UK’s Channel 4 News has called Trump’s rhetoric “very dangerous”. Primarily since Zelensky and his family/friends are gorging like hogs at a trough over Biden’s Billions.
“Donald Trump, I invite you to Ukraine, to Kyiv. If you can stop the war during 24 hours, I think it will be enough to come,” he said in the interview publishedFriday. And place deposit $50 in our checking account for more mansions.
“(Trump) is going to make decisions on his own, without … I’m not even talking about Russia, but without both sides, without us,” Zelensky continued. “If he says this publicly, that’s a little scary. I’ve seen a lot, a lot of victims, but that’s really making me a bit stressed.”
The Ukrainian leader added: “Because even if his idea (for ending the war) – that no one has heard yet – doesn’t work for us, for our people, he will do anything to implement his idea anyway. And this worries me a little.” It was within this context Zelensky followed by saying this is “very dangerous.”
Trump has repeatedly pledged while doing campaign rallies, “I will have it solved within one day, a peace between them.”
The Biden White House has so far resisted any serious efforts to get Moscow at the same table talking to the Ukrainian side, given that realistically it would involve having to make territorial concessions.
The US has only supported Zelensky’s plan, which demands that Russian troops immediately given up all seized territory in eastern Ukraine, relinquish Crimea, and pay war reparations to the Kiev government.
Zelensky and his top officials were at the World Economic Forum (WEF) in Davos this past week pushing for more countries, and especially representatives of the Global South, to get behind the plan.
Last week, Ukraine’s presidential chief of staff Andriy Yermak said that Kiev now believes it is crucial for China to be at the table for future talks on its peace formula. “China needs to be involved in talks to end the war with Russia,” the Ukrainian top representative said following diplomatic meetings related to the WEF. China remains the most influential Global South country widely viewed as squarely in Russia’s corner, having refused to rebuke Moscow or join Western-led sanctions after two years of the conflict.
That makes sense. Biden is a Chinese asset and will do what his bosses in Beijing order him to do. They don’t call him “Beijing Biden” for nothing!
Is the Obama, I mean Biden, Administration playing Electric Boogaloo? Or is it Electric Boondoggle?
The average price of a used Tesla has declined 18 months in a row, moving from a record high of $67,900 in July 2022 to a record low of $35,844 today (-47%).
Hertz is selling a third of its EVs globally, with 20,000 in the US and will use some of the money to buy more Internal Combustion Engine (ICE) gasoline-powered cars.
In yet another example of Biden incompetence, the administration is setting up rules making it harder to deliver EV charging stations.
Like insects that the World Economic Forum wants us to eat (while Kerry, Gore, Klaus Schwab and other elites eat wagyu beef and slurp champagne in their private jets), people apparently don’t want to be forced into buying an EV. Only 6 Percent in the US want an EV for their Next Vehicle.
I will wager that Obama/Biden (not even including VP Harris since she has seemingly been disowned by O’Biden, wish that they could COMMAND EVs been bought. Look at China’s share of EVs: 33%!
Just play some accordian music to relax. Like “Cabbage rolls and coffee.” At least cabbage rolls and coffee don’t use meat, a no-no from the World Economic Forum.
Al Gore, former Clinton VP and Senator from Tennessee, has made millions of dollars from his hysterical film about global warning called “An Inconvenient Truth.” For that, Gore (undeservedly) won a Nobel Prize. Then again, Obama won a Nobel Prize for Peace then proceeded bombing people. You can’t make this stuff up.
Well, here are 8 inconvenient truths about electric vehicles that Globalist Democrats like Obama, Biden, Gore and Kerry have been hawking like carnival barkers.
EVs are more expensive
EVs are inconvenient for anyone who needs a public charger
EVs are inconvenient for anyone who drives long distances
Insurance costs are higher
Maintenance costs are higher
Repairs take longer and parts are in short supply
Minor accidents can be very costly requiring a new battery
Consumers don’t want the damn things and rightfully so
Then we find out that Ford loses $36,000 on each EV, and announced cuts in production of the Electric F-150 pickup trucks. Only government would try to force car manufacturers into producing a product that loses so much money per unit.
The price of a Ford F-150 Lightning starts at about $50,000 and is eligible for $7,500 in federal EV tax credits. Even with the tax credits, the price remains higher than the $34,000 base price of the gas-powered truck.
As a result, 3,900 auto dealers wrote a letter to President Biden, warning:
“Electric vehicles are stacking up on our lots which is our best indicator of customer demand in the marketplace.”
Plus, high auto loan rates and vehicle prices add to affordability concerns. Folks don’t want $1,000 payments for vehicles that come with “range anxiety.” Not to mention BATTERY anxiety.
$2 billion in subsidies, only 2 EV stations opened, the holdup is social justice. The FHWA issued a rule requiring that workers for most projects be certified by the electricians union, or another government-approved training program. States have also blasted the program for its lack of flexibility. Florida’s Transportation Department said projects were stifled by guidance that stations be 50 miles apart. Pennsylvania lamented restrictions on building stations with fewer than four charging ports. Half of the grant money is set aside for “disadvantaged communities that are marginalized by underinvestment,” which by the agency’s description includes Alaskan and Arizonan Indian tribes and urban parks and libraries.
Speaking of charging stations (or the lack thereof), there was the fiasco with EVs in Chicago with the polar vortez. While Tesla is the highest profile EV manufacturer, other EVs and hybrids were turned into frozen bricks when the electric batteries froze/degraded in the cold.
Remember, Obama and his aging, demented sock puppet Joe Biden are profoundly pro-union and pro-idiotic woke policies. The EV push is mading made by the World Economic Formum who don’t even want you to own your own car and take mass transit (electric no doubt).
Why is the US government funding the anti-US WEF?? Why was SecState Antony Blinken attending the WEF in Davos where his plane broke down in the cold??
Confession: I own a hybrid car that had trouble starting due to the cold. Not to mention that the windshield wiper motor burned out while trying to wipe away the dusting of snow on the windshield. BUT it does have great acceleration!
And the scariest thing about EVs is that Biden apppointed a small town Mayor from South Bend Indiana to be Secretary of Transportation. Pete Buttigieg. Here is Mayor Pete in Ukraine visiting with Zelenskyy. WHY is our Transportation Secretarty in Ukraine?? Bagman for Biden’s Boodle??
Auto sales, mostly internal combustion engines (ICEs) are still growing. Just not EVs.
Existing Home Sales fell 1.0% MoM in December, worse than the +0.3% expected, leaving sales down
Source: Bloomberg
Total Existing Home Sales in December 2023 were 3.78mm – the lowest SAAR since 2010…
Source: Bloomberg
But, on an annual basis, this is the worst year on record (back to at least 1995)..
Source: Bloomberg
“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”
Existing Home Sales were flat in the Northeast, lower in the MidWest and the South, and up marginally in the West (driven by single-family-home sales as condo sales declined)…
Source: Bloomberg
Last month, the number of previously owned homes for sale dropped to 1 million, the lowest since March.
At the current sales pace, selling all the properties on the market would take 3.2 months.
Realtors see anything below five months of supply as indicative of a tight resale market.
That lack of inventory is helping to keep prices elevated.
The median selling price climbed 4.4% to $382,600 in December from a year ago, reflecting increases in all four regions. Prices hit a record of $389,800 in 2023.
Source: Bloomberg
But, with mortgage rates having tumbled (and given the lagged responses), are sales about to start rising again?
Source: Bloomberg
So The Fed managed to kill sales, collapse inventories, send home prices higher, destroying affordability… and now what is going to happen?
As only Clueless Joe can do, Biden brags about something that he has nothing to do with: falling mortgage rates.
Mortgage rates (30-year conforming rate) are up 392 basis points or a whopping 142% under Biden. Mortgage rates are down from the 2023 peak of 7.83% to 6.69% as of yesterday. One reason that mortgage rates are stable is that M2 Money GROWTH has been negative since the end of 2022.
Of course, it is The Federal Reserve acting to slow down inflation caused by excessive Federal government spending that is leading to mortgage rates declining, not Biden’s open border policy or his green agenda.
But for the future, does Biden know something that we don’t know? Like is Biden buying into the hypothetical Disease X (20 times worse than Covid) that was discussed in Davos at the World Economic Forum. If a major pandemic is unleashed (again) in the election year, The Fed would have to cut rates (again) to offset the damage done by another round of goverment economic shutdowns. Not to mention the shutting down of schools again.
Or did Biden just tell us that he knows the US economy is slipping and The Fed will come riding to the rescue of Biden (or Newsom or Michelle Obama) like in an old John Ford western with John Wayne. That would also lead to declining mortgage rates in 2024.
But all is not well in the banking sector. Use of Fed funding tool jumps most since April to fresh record: Banks borrowed record sum of $161.5bn from Fed’s Bank Term Funding Program, w/demand at $14.3bn climbing the most in 9 months as they piled into a reliable arbitrage trade just weeks ahead of its scheduled closure.
The availability of mortgage credit remains VERY TIGHT.
Whether its Disease X (unleashed The Kraken!) or just a slowing economy, The Fed (the master manipulator) will likely cut rates in 2024. Making mortgage rates come down.
More worrying is the fact that hope appears to be dwindling fast as the six-month-forecast for the survey plunged back into contraction (from +12.6 to -4.00)…
Source: Bloomberg
Philly Fed’s demise is consistent with the collapse of hope as ‘soft’ survey data has slumped in the last month, back to its weakest since July (as ‘hard’ data improves relative to expectations)…
Source: Bloomberg
On the bright side for the doves, the dis-inflationary trend remains in tact as priced paid and prices received both plunged in January. However, we highlight the fact that Philly businesses expect price pressure to return in the next six months…
Source: Bloomberg
Overall, the ‘bad news’ in this report should buoy stocks and bonds (lower inflation and lower growth enables sooner and faster cuts)… But will it.
While the Nestea plunge was meant to be refreshing, the housing starts plunge is not refreshing at all. Just another warning about the shortcomings of Bidenomics.
Analysts were right in direction but wrong in magnitude – too bearish. Housing starts declined 4.3% MoM (vs -8.7% MoM exp and +10.8% MoM in November, a big downward revision from the initial +14.8% MoM). Building permits also rose more than expected (+1.9% MoM vs +0.6% exp but saw November’s 2.5% MoM decline upwardly revised to -2.1% MoM…
Source: Bloomberg
On a SAAR basis, Housing Starts and Building Permits are higher YoY
Source: Bloomberg
Under the hood, single-family permits rose for the 12th month in a row (i.e. every month in 2023) but single-family home starts plunged 8.6% MoM after surging 15.4% MoM in November… that is the biggest monthly decline since July 2022…
Source: Bloomberg
Perhaps the optimism among homebuilders about future sales is a little overdone given their actions?
Source: Bloomberg
And why would starts be down so much if rates are tumbling?
Source: Bloomberg
Still along way to go for mortgages to be affordable…
Source: Bloomberg
Will less supply of new homes do anything to help the Shelter component of CPI (hint – no!).
The yield on the 10-year Treasury note was recently up 4 basis points at 4.108% after briefly getting to 4.117%, the highest since Dec. 13. The 2-year Treasury yield rose by around 11 basis points to trade at 4.335%.
December’s retail sales data indicated strong consumer demand at the holidays. Retail sales increased 0.6% for the month, above economists’ estimates of 0.4%, as compiled by Dow Jones. Excluding autos, sales rose 0.4%, which also topped a 0.2% estimate.
On Tuesday, yields jumped after comments from Federal Reserve Governor Christopher Waller, who suggested that while the central bank will likely cut rates this year, it may take its time.
At the World Economic Forum in Davos, more European Central Bank members indicated that markets were getting ahead of themselves on rate cut projections.
The president of the Dutch central bank, Klaas Knot, told CNBC Wednesday that the euro zone’s central bank looked at overall financial conditions, and that “the more easing the market has already done for us, the less likely we will cut rates.” Knot was referring to the fact that higher stock and bond prices in the fourth quarter of last year acted as the equivalent of easier interest rate policy, while lower prices act as the equivalent of tighter policy.
Rising interest rates are going to bite a big chunk out of The Fed’s massive ass (I mean balance sheet). Of course, The Fed sends the bill to Treasury. Gee, no wonder Biden/Yellen want so much money!
There is something wrong with letting aging politicians like Biden (81), Grassley (90), Pelosi (83), etc. borrow vast sums of money to spend when they will likely not be around for another 10 years.
Confounded Interest - Anthony B. Sanders 
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