Category: Yield Curve

Running On Empty? Chicago Fed National Activity Index Stumbles To -0.28 In September From -0.01 In August

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.

Mortgage Purchase Index Decreased 5 Percent From Previous Week (I’ll Feel A Whole Lot Better If Harris Loses)

I’ll feel a whole lot better … when Kamala Harris is gone.

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.

Surprise! Citi Economic Surprise Index Rises To Highest Level Since April On Crumbling Economy (10Y Treasury Yield Highest Since August)

The US economy is crumbing down under Biden/Harris. No, the economy doesn’t hurt so good.

The Citi Economic Surprise Index just rose to its highest level since April.

The 10Y Treasury yield just rose to its highest level since August.

Changeling! Leading Economic Index For US Declines AGAIN By 0.5% In September (Down -2.6% Over 6 Months)

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.

The Conference Board Leading Economic Index® (LEI) for the US declined by 0.5% in September 2024 to 99.7 (2016=100), following a 0.3% decline in August. Over the six-month period between March and September 2024, the LEI fell by 2.6%, more than its 2.2% decline over the previous six-month period (September 2023 to March 2024).

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.

US Housing Starts & Building Permits Plunge In September (Down -0.7% YoY)

September! Or Get Down!

Housing starts dropped -0.7% YoY in September.

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!

Cottage Cheese? Mortgage Applications Down 17% Since Last Week, Purchase Applications Down -60% Under Biden/Harris (Housing Prices Up 34.2% Under Biden/Harris While Mortgage Rates Up 138.6%)

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 was 7 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%.

The Empire Strikes Out! Empire Manufacturing Index Crashed From +11.5 to -11.9, Lowest Since May (Yield Curve Remains Downward/Upward Sloping)

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.

Thunderstruck! US Unemployment Rate Is 8.7%, More Than Double BLS Estimate Of 4.1% (Mortgage Rates Rising With Declining BLS Estimates)

Thunderstruck! Interest rates should be thunderstruck when realization dawns that the recend BLS jobs reporr was grossly mismeasured.

National unemployment was 8.7% in this month’s Rasmussen Reports Real Unemployment and significantly more than double the 4.1% rate officially reported by the Bureau of Labor Statistics today. 

Mortgage rates are rising again with Friday’s surprising jobs report. But as it just a false election report. If Rasmussen is correct, mortgage rates should FALL again.

Debate Question: How Will Harris Or Trump Deal With $650K Per Citizen In Unfunded Liabilites? Or National Debt Of $36 TRILLION ($271K Per Taxpayer)??

The Presidential and Vice Presidential debates thus far feature weak moderators asking lame questions. For example, there are still 97 hostages stll held by Hamas and what would the candidates do to get them released? (Hint: Trump/Vance would have sensible responses. Harris would just laugh and say she was raised in a middle class family and Walz would look like a deer in the headlights. Then we have national debt of $36 trillion, $271K per taxpayer.

But the hidden bomb that will never be discussed is unfunded liabilities (entitlements) such as Social Security and Medicare. Currently, unfunded liabilities are $219 TRILLION or $650K per citizen.

Of course, Biden/Harris have let the southern border wide open to criminals and uneducated Democrat voters who will voter for MORE entitlements.

So, when will the lame debate moderators ask HARD questions? And can Harris attempt to answer one hard question without laughing or falling back on lame “I was raised in a middle-class household.” etc.