The Consumer Just Crashed! Credit Card Spending Unexpectedly Cratered In September At -10.8% While Bank Credit Growth Goes Negative For 9th Straight Week

Coping with inflation caused by Federal spending (and excessive Fed stimulus) is difficult and eventually consumer max out their credit cards. Like now!

Credit card useage nosedived by -10.8% in September, according to Citi. This is the fifth straight month of spending decleration.

Leading the decline was electronics. The leader on the positive sign was … jewelry?? Hey, I thought mobs of people were robbing stores because they were hungry!!

In terms of bank credit, rising rates to fight inflation, bank credit growth Bank credit growth has been negative for nine straigth weeks.

Then we have unrealized losses on bank balance sheets, expected to surge to $700 billion with soaring interest rates.

On a different note, Homeland “Security” head Mayorkas now claims the US has to build a wall to combat the out-of-control immigration on the southern border. Wait! I thought Mayorkas and Congressional members (angrily) claim the border was secure! It doesn’t matter, Mayorkas is simply signalling to blue states that he will build a wall. But how fast is a different question.

Here is a video of tHe Biden Administration arranging for the border wall to be consructed. Mayorkas will likely call O’Reilly the builder to build the border wall.

17 Days Later? Mortgage Demand Decreased -6% WoW In Weekly Survey, Purchase Apps Lowest Since 1995 (Only 17 Days Left For Strategic Petroleum Reserve)

Another week under Biden, another economic disaster. This time, its the mortgage market with mortgage demand (applications) down 6% from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 29, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 11 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 22 percent lower than the same week one year ago.

The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market. ARM loan applications picked up over the week and the ARM share increased to 8 percent, as some borrowers searched for ways to lower their payments.

The US 30-Year Mortgage Rate Tops 7.5% for First Time Since 2000.

On the energy front, where we are represented by former Michigan governnor Jennifer Granholm and former South Bend Indiana mayor Pete Buttigieg, we see that the Strategic Petroleum Reserve is down to only 17 days left.

Fear The Talking Fed! Treasury Rates Keep Climbing To Multiyear Highs As Fear Of More Rate Hikes Surfaces (Treasury Yields Decouple From Sinking Manufacturing Numbers)

Fear the talking Fed! Various Fed Presidents are talking this week and when they do. WATCH OUT!

The latest fear mongering will be … inflation is persistent and they might have to keeep raising rates.

The two-year Treasury remains above 5% and the 10Y-2Y T-Curve remains inverted.

Treasury 30-year yield rose to 4.856%, HIGHEST SINCE 2007.

The likelhood of another Fed rate hike is growing.

While inflation is cooling (but still elevated), The Fed could choose to rate hikes again.

Treaury yields have decoupled from US manufacturing data.

Best picture of Lael Brainard, Director of the National Economic Council of the United States and former Federal Reserve member and talking head. Or screaming head.

US Excess Savings Depleted For Bottom 80% Of Households To Cope With Bidenomics (Home Affordability Hits All-time Low!)

Wasting away again with Bidenomics, code for massive Federal subsidies to green energy donors. And incentives to buy impractical EVs. Imagine in an emergency and your car only goes 200 miles (and then you have to wait for an available charger to come open). Well, the top 1% are doing fine. But the bottom 80% of households by income are seeing rapid deplection of savings to cope with the rising costs of Bidenomics.

And then we have shrinking home affordability, now at a record low.

Bidenomics And The BIG Corporate Bias! Smaller Companies Paying Record Interest Without Boost From Interest Income (US Treasury Yield Curve Remains Inverted With Massive Fed Stimulus Outstanding)

We know that the horribly-flawed Bidenomics doesn’t work, unless you are a large corporate donor in green energy. For the rest, particulary small companies, Bidenomics is a total bust.

Under Bidenomics (the Soviet-style command economy), small companies are paying reconrd interest expense WITHOUT a major boost from interest income. Well, ain’t that a kick in the head … to most companies.

Pension funds that invested in “safe” MBS are finding that MBS isn’t so safe under inflation.

Look at the 10Y-2Y yield curve since Covid. I had a slight surge by March 2021, then has flattened then inverted as The Fed’s balance sheet still remains above $8 trillion.

Face it. The Biden Administration and Congress are owned by BIG corporate interests. BIG defense, BIG tech. BIG Pharma, BIG banking, BIG auto, BIG Union, BIG anything.

No wonder the Obamas were seen snorkeling in The Med with Tom Hanks and Steven Spielberg. BIG Hollywood!

Freddie Mac’s 30Y Rate Rises To 7.31%, Highest Since Dec 2000, 10-year Treasury Yield Up To 4.67% (Mortgage Rate Up 69% Under Biden)

Freddie Mac’s mortgage rate is up to 7.31%, the highest level since December 2000. That means that mortgage rates are up 69% under Biden.

That is in spite of $2.5 TRILLION in agency MBS being held on The Fed’s balance sheet.

As the 10-year Treasury yield is up to 4.67%.

Bidenomics In Action! US New Home Sales Crashed -8.7% MoM In August As Mortgage Rates Surge

Biden’s press secretary Karine Jean-Pierre said that Biden was laser focused on reducing inflation. At least he isn’t laser focused on little girls … for the moment. But he still does seem laser focused on providing Ukraine with billions of dollars.

After months of soaring in the face of higher mortgage rates (and higher prices), new home sales hit a wall in August, crashing 8.7% MoM – the biggest drop since Sept 2022 (and four times worse than the -2.2% MoM expected)…

But at least new home sales were up on a YoY basis.

hat is the lowest SAAR since March…

The median sales price of a new home edged lower to $430,300 (average home price rose), according to the Commerce Department’s report.

Despite the decline, that’s still well above pre-pandemic levels.

As a reminder, according to a report released Friday by Redfin Corp, nearly 60,000 deals to purchase homes fell through in August (roughly 16% of homes that went under contract last month, the biggest share of cancellations since October).

“I’ve seen more homebuyers cancel deals in the last six months than I’ve seen at any point during my 24 years of working in real estate,” Jaime Moore, a Redfin agent, said in the report.

“They’re getting cold feet.”

A potential silver lining is the rising in supply (but now much that is driven by a decline in the denominator – homes sold – vs numerator – homes available; is unclear)…

Is the catch-down to reality about to begin?

Source: Bloomberg

They should, given that homebuilders can’t be filling this gap – between the current 30Y mortgage rate and the effective rates that borrowers are currently paying on their home loans – (i.e. subsidizing new home sales) forever…

Source: Bloomberg

And investors are starting to wake up too…

Is Jay Powell about to get the ‘affordability’ compression he was hoping for?

Making America Unaffordable Again (MAUA)? US Home Prices Rise 1% YoY In July (After 0% Growth In June) Las Vegas Leads Downturn In Home Prices Followed By Zuckerburgh (San Francisco)

Thanks to rampant Federal spending and overstimulus by The Federal Reserve, US housing prices are simply unaffordable for many. Particularly since the Covid epidemic (Wuhan China Flu).

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 1.0% annual change in July, up from a 0% change in the previous month.

Yes, home prices grew in July despite rising mortgage rates. As CS Lewis wrote “That Hideous Strength” but this is about how The Fed doesn’t understand what they have done.

At the metro level, Las Vegas leads in YoY price declines at -7.2%. In a close second is San Francisco at -6.2%. Portland and Seattle also declined.

Here is Screamin’ Joe Biden. You know Biden is lying when he gets angry.

Making America Last Again (MALA)? US Paying Salaries For Tens Of Thousands Of Ukrainians As 5.8 Million Illegals Enter US Under Biden

Donald Trump was famous for his “Make America Great Again!” campaign. Joe Biden seems to want to make America LAST again (MALA).

A newly aired “60 Minutes” segment entitled The unexpected way American tax dollars are being used in Ukraine has uncovered that the US government is paying the salaries of some 57,000 Ukrainian civic services personnel.

The report details the various ways non-military aid is being spent at a moment GOP Congressional leaders are intensely debating whether to move forward with a proposed defense budget that includes Biden’s push for $24 billion more in military assistance for Kiev.

“The U.S. has spent just over $43 billion on military aid to Ukraine since Russia invaded. That’s equivalent to about 5% of the American defense budget. European countries combined have contributed around $30 billion,” the 60 Minutes report narrates.

And this includes the following stunning detail:

American taxpayers are financing more than just weapons. We discovered the U.S. government’s buying seeds and fertilizer for Ukrainian farmers… and covering the salaries of Ukraine’s first responders – all 57,000 of them.

That includes the team that trains this rescue dog – named Joy – to comb through the wreckage of Russian strikes looking for survivors.

Political commentator Collin Rugg has noted in relation to the potential government shutdown looming for Oct. 1st: “Yes, your tax dollars will be used to fund Ukrainian salaries while American citizens are forced to wait for their pay while the government remains closed,” he said on X.

Rugg is referencing the fact that the Biden administration and Pentagon have declared that Ukraine aid will remain exempt from any potential government shutdown. This means Ukrainian salaries will still be paid, even while federal employees aren’t, in the event of a shutdown.

Here’s more from the 60 Minutes video, featuring a Ukrainian woman “thanking” US taxpayers for footing the bill for Ukrainian employees, thanks to USAID funding:

Tatiana Abramova: Especially in the condition of war, we have to work. We have to pay taxes, we have to pay wage– salary to our employees. We have to work, don’t stop.

Holly Williams: Why does that help Ukraine win the war?

Tatiana Abramova: Because economy is the foundation of everything.

American officials from USAID – the agency in charge of international development – helped Abramova find new customers overseas. In the midst of war, her company is supporting over 70 families.

Meanwhile, a fresh Newsweek headline: US Will Pay Salaries to Thousands of Ukrainians During Government Shutdown…

“US taxpayers will pay the salaries of thousands of Ukrainians, even as the country faces a government shutdown at the end of September.”

But as noted above, this is more like tens of thousands of Ukrainian salaries.

“A federal government shut down will effectively begin on October 1 if Congress isn’t able to pass a funding plan that Biden signs into law,” Newsweek underscores. “If that happens, federal agencies have to stop all nonessential work and will not send paychecks for as long as the shutdown lasts.”

Appropriately, the 60 Minutes episode invoked memory of the late John McCain…

In total, America’s pumped nearly $25 billion of non-military aid into Ukraine’s economy since the invasion began – and you can see it working at the bustling farmers market on John McCain Street in central Kyiv.

The late senator is revered in Ukraine because he pushed the U.S. government to start sending arms to the country… back in 2014.

Here’s how 60 Minutes presents bipartisan support for Biden’s blank check for Ukraine:

While in Kyiv, we learned that three of McCain’s former colleagues were also in town: Democratic Sens. Elizabeth Warren and Richard Blumenthal and Republican Sen. Lindsey Graham. They don’t normally agree on much – together, though, they’re some of the staunchest supporters of U.S. funding for Ukraine’s resistance.

Indeed Zelensky himself while meeting with US Senators in Washington last week said something similar – that without continuing American funds, the war effort is doomed. He urged Congress to keep the billions in aid flowing, and sought to present that Moscow will one day expand aggression beyond just Ukraine.

* * *

Meanwhile, the “aid from the heart of every ordinary American person” will continue (whether those ordinary Americans like or not)…

While Biden seems obsessed with protected Ukraine’s sovereign border, he has left the US southern border wide open. There have been OVER 5.8 MILLION illegal crossings of our southern border.

So, Old Joe Biden is Making America Last Again (MALA)!

Alarm! 3rd Consecutive Year Of Negative Returns On 10-year Treasuries Which Has Never Happened In History (10Y Yields Up 308% Under Biden, Mortgage Rates Up 156%)

Alarm! US 10-year Treasury yields are soaring along with mortgage rates.

The US Treasury market is witnessing another significant selloff, pushing the 10y UST yield close to the 4.50% mark. The surge in real rates is remarkable, reaching 2.12% for the 10y, a level not seen since 08’. While this might appear attractive in real terms compared to historical benchmarks, could we be on the brink of a third consecutive year of negative performance for US Treasuries? To put this into perspective, such a scenario has never occurred in history.

The conforming mortgage rate is at 7.3%, up 156% under since Biden’s coronation as El Presidente of the United Banana Republics of America. Where political opponents are indicted prior to elections.

In Biden’s Banana Republic economy, the US Treasury 10y-2y yield curve remains inverted.

And then we have Mish’s chart on debt as a percentage of GDP from CBO. Remember, we used to worry about the US breaking the 80% debt to GDP level. It is now projected to be 181%. Wow.