Tag: @bizsuperstar

US Treasury 10Y Yield Up 8.5 Basis Points To 3.91% As Expectations of Fed Rate Hikes Escalate To 5.23% By June 2023 FOMC Meeting

It is the start to a trading week after yesterday’s pause for President’s Day. And with a new start, we see the US Treasury 10-year yield jump 8.5 basis points to 3.9%. Bankrate’s 30-year mortgage rate is up to 6.83% and the implied Fed Funds Target rate at the June 2023 Fed Open Market Committee meeting is now 5.23%.

Prince Imhoptep (aka, the Minneapolis Fed’s Neel Kashkari) thinks that The Fed will keep raising their target rate to slow down the economy and help The Fed’s green agenda.

Shot Through The Heart! US Bankrupties Had Worst Start To 2023 Since 2010 (US Credit Card Delinquencies Growing At Fastest Rate Since 2010 Too)

The US economy, despite the tight labor market, has been shot through the heart by Biden’s economic policies. The Biden Administration (aka, Obama’s third term as President) is giving government a bad name.

On the corporate side, US bankruptcies in 2023 had the worst start to a year since 2010 and the financial crisis.

On the personal finance side of the ledger, the delinqueny rate on credit cards is growing at the faster rate since 2010.

Throw in 22 straight months of negative REAL wage growth, and have a scary situation facing middle America.

And the shate of outstanding subprime auto debt (30 days or more delinquent) is up to the highest rate since … well, you know when. The financial crisis of 2009-2010.

The US middle class is living on a prayer, because Washington DC doesn’t care.

But don’t worry. Mayor Pete, the EPA and Ohio governor Mike DeWine claim the air is good to breath and the water safe to drink in East Palestine Ohio.

Why isn’t Greta Thunberg racing to Ohio to protest the dumping of toxic chemicals?

Is Biden’s Economic Plan Working? Real Disposable Personal Income Down -6.4% YoY In 2022 (Worst Since The Great Depression)

President Biden touts his economic plan as being a great success. But the data says otherwise. Real Disposable Personal Income, for examplge, was down -6.4% year-over-year (YoY) in 2022. That is the WORST reading since The Great Depression.

And to cope with inflation, Americans have expanded their credit useage, but credit card delinquencies are through the roof.

So much for “Middle Class Joe” and The Forgotten Man. Biden hasn’t forgotten, he just doesn’t care.

US Treasury 6-Month Yield Back Over 5% (Back To 2007 And The Financial Crisis As The Fed Withdraws Liquidity)

Well, here we are again. Back to 2007 and the housing bubble and subsequent financial crisis. The US Treasury 6-month yield is back over 5%, a yield we haven’t seen since August 8, 2007.

Well, there is one notable difference. The Fed’s balance sheet is still at $8.4 TRILLION whereas it was only $866 billion on August 8, 2007.

The US Treasury yield curve? It remains deeply inverted as The Fed withdraws liquidity.

And then we have this diddy. US household debt balances increase, the largest nominal quarterly increase in 20 years.

Also, we have the year-over-year EPS growth has turned negative for the first time since Covid.

MIA. Transportation Secretary Pete Buttigieg.

Not Always Sunny! Philadelphia Fed General Business Conditions CRASH (So Much For Strong Economy)

It’s not always sunny in Philadelphia. Particularly The Philadelphia Fed’s General Business Conditions Index. It just crashed to -24.3 for February.

Here is the breakdown of the Philly Fed numbers.

Joe Biden reminds me of Dennis Reynolds from Always Sunny in Philadelphia with his rages.

US Budget Deficit Projected To Be -$20 TRILLION Over Next 10 Years (Biden Ignores The Inflation Tax, Interest Costs On US Debt Forecast To TRIPLE Over Next 10 Years)

President Biden loves to demonize his opponents like Republicans over spending and the Federal budget. Biden argued that his budget won’t increase taxes on Americans making less than $400,000 a year and will ultimately cut the deficit by $2 trillion over the next decade. The president has yet to release his budget plan but has promised to do so by March 9.

Of course, Biden ignores “the inflation tax” which is crippling American households (negative REAL hourly earnings growth for 22 straight months). And while he won’t raise taxes on Americans making less than $400,000 (he doesn’t have the authority), he loves to spend money like most of Congress. Without tax increases, The Federal Government will have to issue MORE debt and run budget deficits in perpetuity.

Here is the sickening forecast of Federal budget deficits. Budget deficits are forecast to keep rising and are project to hit -$20 TRILLION over the next 10 years.

Here is the spreadsheet of projections from the Congressional Budget Office.

The US is already experiencing irresponsible growth in Federal debt and interest payments on the Federal debt.

Interest costs will nearly triple in the next decade. The Federal Reserve has increased interest rates eight times since early 2022 to combat high inflation — which has contributed to the significant increase in the federal government’s cost of borrowing. In CBO’s projections, such costs would rise from $475 billion in 2022 to $1.4 trillion in 2033. Over the upcoming decade, CBO projects that net interest payments will total $10.5 trillion; relative to the size of the economy, net interest would grow from 2.4 percent this year to 3.6 percent in 2033. In 2030, the ratio of interest to GDP would total 3.3 percent, the highest recorded since 1940 (the first year for which such data are reported).

And don’t forget that the Federal government (meaning taxpayers) are on the hook for $181.6 TRILLION in unfunded liabilities.

Here is my black German Shepherd listening to me talk about the dangers facing the US economy.

Final Destination? US Housing Starts Drop -21.4% Year-over-Year In January As The Fed Continues To Tighten (PPI Final Demand Remains Elevated At 6% YoY)

I feel like I am in the film “Final Destination” but I can’t get off the aircraft.

First, US housing starts are now down -21.4% year-over-year (YoY) and down -4.5% month-over-month (MoM) in January 2023 as The Fed removes its massive monetary stimulus.

PPI Final Demand PRICES are still elevated at 6% YoY, so expect more Fed tightening.

Today’s data dump.

On a final note, I am appalled at the Biden Administration’s “response” to the East Palestine Ohio derailment. Where is Mayor Pete, the US Transportation Secretary??

US Mortgage Applications Decline 7.7% From Last Week As Fed Continues Their Counterattack On Inflation (Purchase Apps Down 43% From Last Year, Refi Apps Down 76%)

US inflation is causing The Federal Reserve to raise interest rates, and mortgage applications are suffering.

Mortgage applications decreased 7.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 10, 2023.

The Refinance Index decreased 13 percent from the previous week and was 76 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 5 percent compared with the previous week and was 43 percent lower than the same week one year ago.

The MBA contract rate rose 3.4% from 6.18% to 6.39% as The Fed tightens.

And if you believe the Taylor Rule (as opposed to The Fed’s current politically-based decisions), The Fed’s target rate should be 10.15% and The Fed is less than half way there at 4.75%.

The Fed is expected (by investors in Fed Funds Futures) to rise to 5.283% by the July FOMC meeting, then decline to under 5% by January ’24.

Speaking of Fed rate hikes, January’s red hot retail sales (up 3% MoM) is surely going to drive inflation UP and The Fed will keep raising rates.

Inflation Nation! US REAL Average Hourly Earnings Negative For 22 Staight Months In January As Inflation Heats Up … Again (CPI Rises 0.5% MoM, Food Rises 11.3% YoY)

The January US inflation numbers are out and they were grim.

US REAL average hourly earnings fell … again … to -1.8% year-over-year (YoY) from a revised -1.6% YoY in Deember. That makes 22 straight months of negative hourly earning growth.

CPI Month-over-month (MoM) was revised upward for December, and increased from 0.1% in December to 0.5% in January. CORE CPI remained unchanged from the upward revision in December to 0.4% MoM.

Components of inflation include FOOD AT HOME (up 11.3% YoY), utility (piped) gas service (up 26.7% YoY) and shelter (up 7.9% YoY). So, the middle-class inflation tax (food, heating, housing) remains high.

Do I detect a trend in shelter inflation??

Hey, I thought Treasury Secretary Janet Yellen said inflation was transitory. 22 straight months of negative hourly earnings growth seems more permanent than transitory.