US Mortgage Rates Plunge for a Second Week, Hit Two-Month Low, Purchase And Refi Applications Rise (But Purchase Apps Down 86% YoY, Refi Apps Down 41% YoY)

The global economic slowdown has one nice unintended consequence: as the 10-year Treasury yield softens, mortgage rates decline.

US mortgage rates retreated sharply for a second week, hitting a two-month low and providing a bit of traction for the beleaguered housing market.

The contract rate on a 30-year fixed mortgage decreased 23 basis points to 6.67% in the week ended Nov. 18, according to Mortgage Bankers Association data released Wednesday. 

Rates have plunged nearly a half percentage point in the past two weeks, the most since 2008, as recession concerns mount, inflation shows signs of cooling and a number of Federal Reserve officials say it may soon be appropriate to slow the pace of monetary tightening.

The slide in borrowing costs helped stir demand as the group’s index of applications to buy a home climbed 2.8%. That marked the third-straight increase since the gauge stumbled to the weakest level since 2015.

The pickup in demand allowed the overall measure of mortgage applications, which includes refinancing, to rise for a second week, but it still remains depressed. The index of refinancing activity edged up from a 22-year low.

The Refinance Index increased 2 percent from the previous week and was 86 percent lower than the same week one year ago. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 41 percent lower than the same week one year ago.

But you need an electron microscope to see the increase in both purchase and refi apps.

One indicator of a slowing global economy is the decline of FANG (Facebook, Amazon, Netflix, Google) with declining liquidity.

The Deep! The US Treasury 10Y-2Y Yield Curve Keeps Going Deep Into Inversion As M2 Money YoY Collapses

The US economy is in “The Deep.” Deep into yield curve inversion, that is.

The US Treasury 10Y-2Y yield curve swam deeper into inversion at -75 basis points. The deepest inversion since just before The Great Recession and housing market crash.

Alarm! Yesterday’s PUT/CALL Ratio Was Highest In History (1.46, Higher Than 2001 And 2008!) REAL M2 Money YoY Plunges To Lowest Since 1980 And Jimmy Carter

Alarm!

Yesterday’s PUT/CALL ratio was the highest in history at 1.46. That is higher than 2001 and 2008.

REAL M2 Money YoY has crashed to its lowest level since 1980 and Jimmy Carter.

And the train keeps on rollin’.

Instead of Little Games, The Federal Reserve is making this BIG GAMES.

Inflation Nation! Producer Price Index (PPI) Final Demand At 8% YoY In October (Cryptos Rallying On Isolation Of FTX)

The US is an inflation nation.

Today, the PPI Final Demand YoY index printed for October was it was still agonizingly high at 8% YoY (The Fed likes to see 2% for inflation).

True, PPI Final Demand YoY is down from its recent peak of 11.7% YoY in March. But notice that M2 Money YoY (liquidity) has collapsed following the Covid surge (green line).

Then I have this update on Sam Bankman-Fried of FTX and Alameda Research notoriety.

As Sam Bankman-Fried’s crypto empire imploded last week, costing him effectively all of his $15.6 billion fortune, other digital-asset billionaires sought to make clear that their steep losses in 2022 wouldn’t be similarly fatal.

Cameron Winklevoss, 41, who along with his twin brother Tyler founded cryptocurrency exchange Gemini, posted an 11-part series of tweets emphasizing that Gemini “has no exposure to FTT tokens or Alameda and no material exposure to FTX,” referring to Bankman-Fried’s trading house and crypto exchange.

And despite Spam Bankman-Fried’s disaster for his investors like Tom Brady, Steph Curry and the Democrat party, the crytpo market has done some recovery with most cryptos this morning.

Here is an interesting interview with Jeffrey Tucker on SBF’s debacle.

And why is Joe Biden following Canada’s Justin Trudeau wearing a Chairman Mao jacket? And why did Biden select the same color Mao jacket as Dr. Evil?

Or like WEF’s Klaus Schwab (aka, Dr. Evil)?

Bidenflation Strikes Again! S&P 500 Worst Performance In REAL Terms Since 1872 (Worst Since President Ulysses Grant!)

Between Biden’s green energy mandates and the spendathon by the Pelosi/Schumer led Keynesians in Congress (or Kongress), we saw a 40-year high in inflation.

But with roaring Bidenflation, we have the S&P 500 index experiencing, in real terms, the worst performance since 1872.

That is, the worst since President Ulysses Grant.

President Biden is dressed in his Mao outfit with Canada’s Justin Trudeau.

And the WEF’s Klaus Schwab.

At least Biden, Trudeau and Schwab are wearing different colored Mao jackets.

Is Sam Bankman-Fried Another Bernie Madoff? Buyer Beware Or Rely On Government For Protection? (FTX Held Less Than $1bn In Liquid Assets Against $9bn In Liabilities)

Like the disastrous Bernie Madoff debacle where investors lost millions of dollars, Sam Bankman-Fried has apparently cost investors like Steph Curry, Shaq and Tom Brady considerable sums as well.

What do Bernie Madoff and Sam Bankman-Fried have in common? Greedy investors who apparently didn’t bother to monitor what was going on.

Yes, had they monitored FTX, Bankman-Fried’s company, they would have noticed that FTX held less than $1bn in liquid assets against $9bn in liabilities.

Generally, with buyer beware, the onus falls on investors to monitor what is going on. But The Fed’s completely dropped the ball on Bernie Madoff where investors didn’t seem at all curious about earning supercharged returns. The same is the case for FTX.

FTX had partnered with Ukraine to process donations to their war efforts within days of Joe Biden pledging billions of American taxpayer dollars to the country. Ukraine invested into FTX as the Biden administration funneled funds to the invaded nation, and FTX then made massive donations to Democrats in the US.

The SEC’s Gary Gensler blew it again. After his agency failed to warn investors about Terra and Celsius—whose collapses this spring sparked a trillion-dollar investor wipeout—the Securities and Exchange Commission chair allowed an even bigger debacle to unfold right under his nose. I’m talking, of course, about the revelation this week that the $30 billion FTX empire was a house of cards and that its golden boy founder, Sam Bankman-Fried, is the crypto equivalent of Theranos’s Elizabeth Holmes (Stanford University is where Holmes was an MBA student and Stanford Law School is where both SBF’s parents are professor).

To be fair, Gensler was not the only one suckered by SBF. Nearly everyone else fell for the narrative that SBF, with his cute afro and aw-shucks demeanor, was exactly the savior crypto needed to shake off its dodgy reputation and emerge as part of the mainstream financial system. The problem is that cop-on-the-beat Gensler not only failed to spot the crime—he appeared set to go along with a legislative strategy that would have given SBF a regulatory moat and made him king of the U.S. crypto market.

While it is easy to blame Gensler, the onus still falls on investors (and their managers) to MONITOR. Buyer beware.

What will happen to Sam? Likely nothing. He is a golden child of Democrats and was the second biggest donor to Biden and the Democrats after America-hating George Soros. Just like Biden’s son Hunter will never pay for his many inappropriate antics, I doubt that Merrick “Double Standard” Garland will do much to Sam.

Steph Curry, Shaq and Tom Brady should fire their investment advisors and possibly sue then for failure to monitor. No one noticed $1bn in assets against $9bn in liabilities??

Gary Genslar is more like Inspector Clouseau than a serious regulator.

Here is the SEC’s Gary Genslar interviewing Sam Bankman-Fried about FTX.

Maybe Sam’s Stanford law school professor parents didn’t tell him that it is against the law.

US Treasury Yield Curve Slips Into Darkness (Implied Yield On 3M T-Bills In 18 Months – 3M T-Bill Yield Inverts) Slippin’ Into Darkness

The US economy is Slippin’ Into Darkness.

The Fed’s favorite yield curve measure, the implied yield on 3-month T-Bills in 18 months less the 3-month T-bill yield has inverted. Note that this curve inverts prior to a recession.

The new face of reckless Fed policy and Federal spending. 19 straight months of negative REAL earnings growth as America re-elects the same irresponsible fools that are turning the US into Venezuela.

Bankrupt FTX Hit by Mysterious Outflow of About $662 Million (Yellen Calls For Regulation But Ignores Obvious Inflation and Debt Crisis) At Least Dogecoin Is Up Today

Sam Bankman-Fried’s bankrupt digital-asset exchange FTX was hit by a mysterious outflow of about $662 million in tokens in the past 24 hours, the latest twist in one of the darkest periods for the crypto industry.

Customers still coming to terms with the platform’s Friday plunge into Chapter 11 proceedings were subsequently confronted with what the general counsel of its US arm, Ryne Miller, described as “abnormalities with wallet movements.”

Miller said on Twitter that FTX had begun moving digital assets into cold storage — wallets that are unconnected to the internet — following its bankruptcy filing on Friday. The process was later expedited “to mitigate damage upon observing unauthorized transactions.”

Blockchain analytics firm Nansen, which gave the overall estimate of $662 million in withdrawals, said the coins flowed out of both FTX’s international and US exchanges. A separate analysis by Elliptic stated that initial indications showed almost $475 million had been stolen from the exchange in illicit transactions, with the stablecoins and other tokens that were taken being rapidly converted to Ether on decentralized exchanges — “a common technique used by hackers in order to prevent their haul being seized.”

And like that, O’Biden’s Treasury secretary Janet Yellen FTX Debacle said that it shows need for crypto regulation. Or Yellen could suggest a “buyer beware” tactic, but she is part of the most aggressively regulatory administration in history, MORE regulation is needed! /sarc

Regulate, regulate, dance to THEIR music!

At least Yellen is noticing Bankman-Fried (a new twist on Kentucky-Fried) and FTX since she is seemingly oblivious to the harm being done by The Federal Reserve and The Federal government with regards to inflation and debt growth. She is a Bird of War.

Like this chart of the Purchasing Power of the US Dollar CPI. Janet?

Or how about this chart of US Public Debt Outstanding and Real GDP growth per capita? The Fed and Federal government broke the bank, so to speak, by bailing out the banks in the financial crisis (pink box) and then again for the Covid crisis (orange box). Janet?

Damn it, Janet. Why don’t you discuss the Medicare and Social Security crisis (remember Joe Biden said Republicans may try to fix it which Biden turned into a nasty attack claiming that Republicans were going to take away your Social Security).

Lastly, the US has $172.6 TRILLION in unfunded Federal promises. Janet? A least FLA Senator Rick Scott tried to address the problems with Social Security, but Nasty Joe Biden “yelled Republicans are going to take away your Social Security!” I argue that O’Biden, Yellen and Democrats are going to let SS blow-up rather than take on politically challenging issues. Social Security liability is $22.23 trillion yet O’Biden just promised $500 billion per year to third-world countries and keeps sending billions to Ukraine. Janet?

On the crypto side (that Yellin’ Yellen wants to regulate), at least Dogecoin is up 10.37%.

They call Yellen “The Breeze” because she breezes by the hard decisions and focuses on the easy problems like calling for regulation of cryptos.

Perhaps Sam Bankman-Fried could be ordered to do KFC ads as “The Colonel.”

Double Whammy! Mortgage Holders Lose $1.3 Trillion in Equity in Q3 As Price Correction Continues (Nationally, Homes Shed 2.6% of Value Over Past Three Months As Treasury Yield Curve Remains DEEPLY Inverted)

Yes, this is an economic double whammy!

First, according to Black Knight, US home values declined -2.6% over the past three months.

Second, the US Treasury 10Y-2Y yield curve remains near 1980s low.

There is a third whammy, rising utility costs (highest in a decade).

Yes, its a double whammy!

Next US Inflation Report After Midterm Elections Likely To Remain High (Projection For Headline Inflation = 7.9%, Core Inflation = 6.5%) As Diesel Prices UP 102% Under Biden And Inflation UP 486%

The US midterm elections are Tuesday. I was denied an absentee ballot for some reason, but I will get my disabled body over to the local precinct to cast my ballot.

Fortunately for Democrats, the next inflation report is not due out until November 10th. Because the forecast for the next inflation report is ugly.

Headline CPI YoY = 7.9%

Core CPI YoY = 6.5%

These numbers are slightly lower than the last inflation report, but Americans are still suffering mightily under Biden’s Reign of Error.

Diesel fuel prices, the lifeline of the food industry, is up 102% under Biden’s mandates with the inventory of diesel fuel down 36%.

Inflation is relentless like Jason from Halloween.

Inflation is UP 486% under Inflation Joe, The Bully of DC.

I am going for a few Tequila shots on Wednesday.