Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
According to the Atlanta Fed’s GDP Now REAL time model, Q3 Real GDP is 5%.
The subcomponents of GDP growth are as follows:
So much for the doom and gloom of Trump’s tariff “war” or Trump’s Iran “war.” 5% Real GDP growth is outstanding!
And The Fed keeps on printing money (M2)! Keep on printin’!
Large bank mortgage originations have crashed and burned since 2022. The Fed has raised rates following the Covid outbreak and have not cut rates in a significant manner.
Another problem facing the US economy is that housing prices have over doubled since 2015.
My reaction to the Fauci testimony in Congress.
I am surprised that no one in Congress asked Dr, Fauci about how Covid crisis impacted the housing market.
US home prices are clearly unaffordable for younger households, given the dearth of true starter homes. As of Q1 2026, REAL US residential property prices fell -2.1% YoY.
China’s real residential property prices are declining even faster than the US.
The US Federal Reserve is printing money M2 at a 5.6% YoY pace. Slower than during the Covid outbreak, and slower than the decade prior to Covid.
China is printing money at a gutwrenching pace (10.5% YoY as of August 2019). Note that China has historically printed money faster than The Federal Reserve.
Global Central Banks are the Neegans of the global economy.
The inflation numbers are out for April. Consumer prices rose 3.8% annually, higher than The Fed’s target rate of 2%.
To be fair, The Federal Reserve pumped up the money supply (M2) by 4.6% in March.
According to the BLS, gasoline prices rose 28.4% annually in April while shelter rose 3.3% annually.
It used to be that a debt-to-GDP (Gross Domestic Product) ratio above 1.0 would be disastrous. Yet, the US Debt-to-GDP ratio rises during and after most recessions. Why? The old Keynesian model called for increased government spending and debt to pull the country out of a recession. But the Keynesian model called for debt to be repaind after the recession ended. But after most recessions, the Federal government keeps spending and borrowing. Following the Covid outbreak of 2020, the US debt-to-GDP ratio exceeded 1.0 and has remained fairly constant since.
As of today, the US Federal debt load is $39.204 trillion while GDP is $32.090 trillion resulting in a debt-to-GDP ratio of 1.22.
The leader in the debt-to-GDP race is … Sudan! Followed by Japan and Singapore.
As lowest debt-to-GDP ratio nations are energy-rich Brunei (2.3%) and Kuwait (3%).
March housing starts hit their highest level since December 2024 but permits fell sharply to a seven-month low.
Yesterday’s Fed meeting left interest rates unchanged but 2y Treasury yield jumped 10bps to 3.94%.
Here is the Illinois Congressional map that Ill Governor JB Pritzker approved. Almost looks like a psychedelic map of R Crumb.
It almost looks like artist R Crumb drew the Congressional map of Illinois.
More than half of major U.S. metropolitan areas posted year-over-year home price declines in February, with Denver (-2.2%) displacing Tampa (-2.1%) as the weakest market, according to data from the S&P Cotality Case-Shiller Index released Tuesday.
Los Angeles (-0.8%) and Washington, DC (-0.1%) also joined the list of markets with falling home values, signaling weakness that expanding out of the long-suffering Sunbelt region.
kkk
Mortgage employee headcount has fallen to lowest level since the housing bubble and mortgage crisis of 2005-2008.
US New Home Sales dipped 1.7% MoM in December (after a 15.5% MoM surge in November)…
…but ended the year at 745k – the highest SAAR since 2021…
“New” home sales have notably decoupled from “used” home sales in the last few years as homebuilders incentivize buyers (reducing margins) and lower prices (reducing revenues)…
Lower mortgage rates support modest further improvements in sales…
So much for the leftist fearmongers claiming that Trump Tariffs will kill US manufacturing, In January, US industrial production rose 0.7% MoM. And 2.28% YoY.
Capacity utililzation rose in January to 76.22%.
Pass the Save Act and don’t listen to leftist propaganda that women won’t be allowed to vote. Then get a passport and show that.
Higher housing prices and higher than normal mortgages produces rising average homeowner tenure.
And Americans aren’t moving.
The ratio of home prices to median household income is the highest since “The Big Short” home price collapse.
Confounded Interest - Anthony B. Sanders 
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