Yes, prices of turkey (that we eat) and gasoline (used to drive to family/friends) have declined a little recently. BUT turkey prices are still up by 235% since Biden was sworn in as President. And gasoline prices are still up 47%. One of Biden’s “economists” came out and said gasoline is now lower than it was in 2020. WRONG! Look at the chart below from The Federal Reserve of St. Louis.
Being politicians, The Biden Administration take credit for RECENTLY declining prices, but failing to mention that declining prices have more to do with declining M2 Money growth (now -3.6% YoY) after the enormous burst in Federal spending with Covid.
With turkey prices up 235% under Biden, I will be eating turkey SPAM tonight. And a small portion at that!
The US is experiencing a fiscal inferno thanks to out of control Federal spending and debt issurace.
The US government collects about $2.5 trillion per year in personal income taxes. Of that about $1 trillion per year (40%) is being consumed by interest on the national debt. REAL Federal interest payments of the debt is skyrocketing!
Interest on the debt is growing as old cheap debt matures and gets refinanced at the new higher rates. Plus new debt added every year.
Within a few more years, at this pace, 100% of personal income taxes will be going to pay interest on the US nationaldebt.
Yes, US national debt is at $33.75 trillion and growing awfully fast. Of course, that is small potatoes compared to the $211.7 TRILLION in unfunded Federal promises (entitlements). That means that unfunded promises are 6.27 times the current national debt. There isn’t enough taxable income from individuals to pay for the promised entitlements.
NY Senator Chuckles Schumer: “We did it Joe! We broke the back of the US economy!”
Biden’s economic Dance Macabre! Or Biden’s Mortgage Macabre! Mortgage purchase demand actually fell -1% from the previous week (WoW) and is down -20% from the previous year (YoY).
Mortgage applications increased 3.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 17, 2023.
The Market Composite Index, a measure of mortgage loan application volume, increased 3.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 0.1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week and was 4 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 4 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 20 percent lower than the same week one year ago.
And MBA mortgage refis
Not surprising since most homeowners have locked in low borrowing costs prior to the Biden/Congress Covid spendathon and the inflation that followed.
After all, we are seeing the worst home sales data since the 1970s.
Yes, even KJP is finding it difficult to sell Bidenomics to the public (only talking heads like The View and Morning Joe are still trumpeting the greatness of Bidenomics). And now KJP and the Administration are selling Biden’s age of 81 as a treasure trove of experience. Except that Biden’s record in the Senate is an embarrasment. And Biden keeps shuffling and falling and mumbling through his speeches. Watch Biden’s handlers make sure he doesn’t fall again before the election.
Even Biden’s press secretary Karine Jean Pierre admitted that all the slogans and hype about Bidenomics is a losing message. The economy is terrible for the middle class and low-wage workers. But excellent for the 1% donor and political elite class. But housing is very important to the middle class … and housing is simply unaffordable.
With housing affordability at its lowest since at least the early 1980s, (and homebuilder sentiment slumping as mortgage rates rose), it’s no surprise that analysts expected existing home sales in October to tumble 1.5% MoM.
Sales actually fell 4.1% MoM (far worse than expected and down for the 20th time in the last 23 months) with September’s 2.0% MoM decline revised even lower to -2.2% MoM. That decline left existing home sales down 14.6% YoY.
Source: Bloomberg
The total existing home sales SAAR plunged to 3.79mm – the lowest since the tax credit expired in Aug 2010…
Source: Bloomberg
Sales fell in three of four regions, while they were unchanged in the Midwest. They hit a record low in the West and matched an all-time low in the Northeast
Finally, the percentage of homes that are vacant fell to the lowest level on record in August, and ticked up only slightly in September…
Ever the optimistic,Lawrence Yun, NAR’s chief economist, suggested that:
“Fortunately, mortgage rates have fallen for the third straight week, stirring up buying interest,” adding “though limited now, expect housing inventory to improve after this winter and heading into the spring.”
Good luck with that idea Larry!
Yun added that nearly a third of homes sold above their list price, indicating that multiple offers are still occurring with the median selling price climbed 3.4% from a year earlier to $391,800, the highest for any October in data back to 1999.
Even though the number of homes for sale ticked up from a month earlier to 1.15 million, it’s still the lowest for any October in the series.
Finally, first-time buyers made up a historically low 28% of purchases in October.
After all, the US economy and housing markets are addicted to goverment. (Addicted To Gov!)
Bidenomics is the economy’s Highway to Hell! Massive, staggering misallocation of scare resources to fund endless wars, green energy fraud, and massive wealth transfers to immigrants while disabled veterans suffer. Now we see that the US leading economic indicators is down -7.6%, definitely smelling like a recession.
On a year-over-year (YoY) basis, the Leading Economic Indicators is down 7.6% (down YoY for 16 straight months) – close to its biggest YoY drop since 2008 (Lehman) outside of the COVID lockdown-enforced collapse.
On a monthly basis (MoM), leading economics indicators are down -0.8%. It has been going down for 16 straight months. Here are the components.
Most of the components are in red and need to be back in black for economic growth.
Treasury Secretary Janet Yellen, a mega pro-China elitist, acknowledges that Bidenomics isn’t popular but she attributes that to people not understanding how good Bidenomics is! It is good for the 1% elitist, donor class. But not for the US middle class.
At least Argentina elected AC/DC guitarist Angus Young as President!
Rubino says, “If the U.S. government is running crisis level deficits, which it is right now, borrowing money and paying interest on it means we are in a financial death spiral…”
“The debt goes up, the interest on the debt goes up and that raises the debt even further, and you just spiral out of control.
We are there right now. The official U.S. debt is $33.5 trillion. It’s growing by $1.7 trillion a year, and $1 trillion of that is interest costs.
Interest costs are rising as the overall debt goes up. Then throw in this incredibly reckless military spending in the guise of foreign aid, and you get a society that has completely lost control.
That’s where we are now.
We are in the blowoff stage of a 70-year credit super-cycle.
Those things do not end with a whimper, and they certainly do not end with a soft landing. They end with a bang, and the bang is going to be centered on the currency.
People are going to look at this and say, ‘Do I really want to hold the currency or bonds of a country that is destroying its finances at this trajectory and this scale?’ The answer will be ‘No.’
At that point, it is game over for a deeply indebted economy. We are headed that way fast, and these wars are taking us that way even faster.”
If the Fed keeps raising interest rates, the economy tanks, but you protect the dollar. If you cut interest rates, you spike inflation even more, and the U.S. dollar tanks.
Rubino says in the end, we get a “massive reset,” and the everything bubble explodes.
Rubino says the dollar is going to decline and, at some point, it starts to go into freefall in terms of buying power. Rubino explains,
“If a currency starts to decline in a disorderly way, then you have a massive financial crisis on your hands.
That is definitely where Japan is right now. The U.S. is headed that way fast.
So, once we reach that point, there is no fix.
Then it is only a matter of time that everybody realizes that there is no fix, and they just bail on the whole experiment, and that’s where we are headed.”
Rubino talks about plunging home prices, more trouble coming in the commercial real estate market and why you need gold and silver as core assets during a currency reset.
Riots, already happening in American cities (not to mention looting in New York City, Chicago, San Francisco and Los Angeles), will accelerate if Congress attempts to curtail entitlements (now at $211.65 TRILLION).
The S&P 500 real estate sector is now just 5% of the entire S&P 500.
Even at the 2008 low, in the worst real estate crisis of all time, this percentage barely dropped below 6%. Meanwhile, demand for commercial real estate (CRE) loans is now at 2008 levels.
Office building prices are down ~30% over the last year and apartments are down ~15%.
Also, Delinquent commercial real estate loans at US banks have hit their highest level in a decade.
The strength of the housing market is masking the weakness of CRE.
Speaking of the housing market, the US is overly dependent on the lopsided 30-year fixed-rate mortgage. Where under inflation and rising rate, the lender (investor) loses. If inflation cools and rates fall, the borrower refinances.
But these consumer benefits to the 30-year mortgage have costs. It is costly to provide a fixed nominal interest rate for as long as 30 years. And the prepayment option creates significant costs. If rates rise, the lender has a below market rate asset on its books. If rates fall, the lender again loses as the mortgage is replaced by another with a lower interest rate. To compensate for this risk, lenders incorporate a premium in mortgage rates that all borrowers pay regardless of whether they benefit from refinance. Exercise of the prepayment option in the contract also has significant transactions costs for the borrower and imposes additional operating costs on the mortgage industry.
Another major reason for the FRM’s dominance is government support and regulatory favoritism. The FRM is subsidized through the securitization activities of Fannie Mae, Freddie Mac and Ginnie Mae.
Their securities benefit from a government guarantee that lowers the relative cost of the instrument, which is their core product. These guarantees have a significant cost as the government backing of Fannie Mae and Freddie Mac has exposed taxpayers to large losses. Are the FRM’s benefits worth its costs? Would the FRM disappear if Fannie and Freddie stopped financing it? Are there mortgage alternatives that balance the needs of consumers and investors without exposing the taxpayer to inordinate risk?
The instrument’s supporters point out that it is easier for investors than consumers to manage interest-rate risk. It is true that lenders and investors have more tools at their disposal to manage interest-rate risk. But managing prepayment risk is costly and difficult and many institutions have suffered significant losses as a result (e.g., savings and loans in the 1980s; hedge funds and mortgage companies in the 1990s and 2000s).
Furthermore, borrowers rarely stay in the same home or keep the same mortgage for 15 to 30 years, so one can reasonably ask why rates should be fixed for such long periods (increasing the loan’s cost and risk). Also, the taxpayer ultimately bears a significant portion of the risk through support of Fannie Mae and Freddie Mac.
One of the lingering questions about government loan modification programs is why borrowers are refinanced into longer-term FRMs rather than less expensive ARMs, such as a 5/1 ARM.
ARMs allow protection for lenders (investors) from inflation and interest rate increases. Consider this another entitlement that elected officials give away and refuse to cut. After all, unfunded entitlements are already at $211.65 TRILLION.
But typically we get scare tactics about ARMs (or VRMs), like this one.
Biden’s terrible economic policies and horrid fiscal managment has put stress on The Federal Reserve. The Federal Reserve paid an estimated $76 billion to the Treasury in 2022 while banks’ willingness to lend has plummeted.
One of the key ways central banks absorb liquidity back out of the market is through reverse repo. These are short-term transactions where the Fed sells securities to banks and agrees to buy back at a higher price the next day.
This means banks are being paid to park cash with the Fed instead of injecting it into the economy through loans and fanning the fires of inflation.
That alone is costing the Fed $200M every single day.
In addition, the Fed is spending another $500M in daily interest payments on its reserve policy, i.e. balances that banks are holding in their reserve accounts at the Fed.
Banks’ willingness to lend has plummeted making credit availability increasingly tighter. Current levels have typically ended in recessions.This time is NOT different.
And on the energy side of the market, Biden Invokes ‘Wartime Powers’ to Attack Gas-Powered Furnaces. Of all the stupid things Biden has done, invoking wartime powers to make households use inefficent electric heat pumps instead of gas furnaces in stupid of two levels. First, invoking wartime powers for things unrelated to national defense is reckless and capricious. Second, electric heat pumps in the colder areas of the country is stupid as well. Electric heat pumps are inefficient, unless the goal of Biden and his Idiocracy is to “cull the herd” or kill off people during winter months (I had an electric heat pump in a condo I owned and it was terrible in winter months).
Yes, the Biden Administration and The Fed are economic mutilators!
President Biden reminds me of Cousin Eddie, the dimwitted cousin of Clark Griswold’s wife in the Vacation movies. Except that Cousin Eddie is a nice dimwit while Biden is a nasty dimwit. And politcal stooge.
Given that turkey prices are up 321% under Biden, the famous Thanksgiving line “Save the neck for me, Clark” is most appropriate since we will be forced to eat every part of the turkey.
Of course, year-over-year growh in turkey prices (CPI) are now negative along with M2 Money growth. Note the surge in M2 Money growth (green line) followed by the surge in turkey prices (blue line). Now both are declining.
A Bidenomics turkey!
Here is Biden giving a Thanksgiving turkey a pardon, hoping he gets a pardon for his massive corruption. But which one is the turkey??
The World Economic Forum (WEF) is a leading pusher of the ESG drug, pushed by the elite class intending to control the world. Unfortunately, numerous American politicians and influencers have attended the Davos meetings and have openly praised the WEF and its leader Klaus Schwab.
ESG investing, or sustainable responsible investing (SRI), uses this information about a company to inform investment decisions that prioritize all stakeholders.
Here’s how the Forum’s partners are leading the switch to stakeholder capitalism.
But all is not well with WEF’s ESG drug distribution. In fact, ESG flows into socially consious funds were a big thing during Covid (2020) and the first year of Biden’s Reign of Error. But ESG flows slowed sharply in 2022 and seeing net outflows in 2023.
US borrowers are retreating en masse from the world’s second-biggest ESG debt class.
The $1.5 trillion market for sustainability-linked loans, in which borrowing is tied to environmental, social or governance goals, has seen an overall slowdown in volumes this year as both interest rates and greenwashing fears rise. But nowhere has the decline been as precipitous as in the US, where the number of new sustainability-linked loans is down 80% from a year earlier.
But ESG is still relatively popular in Europe, Middle East and Africa (orange). But taste for ESG is waning around the globe. But the selection of Biden as President in the US marked a surge in ESG -tied loans in 2021 and 2022 (not to mention the insane levels of spending out of Biden and Congress, much tied to the sustainability, green energy fantasy.
Loans with terms tied to borrower’s ESG goals have fallen worldwide.
Several states (largely blue states like California, Minnesota, Illinois, and Colorado have pro-ESG laws) while several states have anti-ESG laws (largely red states like Montana, Idaho, North Dakota, Kansas, Utah, Indiana, Arkansas, Florida, and West Virginia).
And of course, global warning may not be as dire as John Kerry and Greta Thunberg say.
WEF’s Klaus Schwab about to get sniffed by his 80-year old puppet, Joe Biden. In fact, Biden is singing “I’m your puppet.”
Here is Hunter Biden welcoming the Green Energy fairy and all the trillions in misallocated spending it brings.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.