ECB Official Fabio Labels Crypto As “Deleterious” With “No Societal Benefits” In Scathing Speech (The Fed And ECB Are The Deep State’s Own Printing Presses And Don’t Want Competition!)

Yes, the ECB’s own Fabio … Panetta wants to ban any competition to Central Bank printing presses. Of course, like Elizabeth Warren (D-MA) and SEC’s Gary “The Ghoul” Genslar, he wants to protect The Deep State’s monopoly on money printing by banning competition.

According to Fabio Panetta, crypto volatility and aspects of blockchain technology made digital assets only suitable for gambling…

Fabio Panetta, an executive board member of the European Central Bank (ECB), has suggested a dark future for cryptocurrencies, in which digital assets may be used for little more than gambling among investors.

In written remarks for a panel at the Bank for International Settlements Annual Conference on June 23, Panetta said crypto’s perception among investors as a “robust store of value” began to dissipate in late 2021 and into 2022, when the total market capitalization fell by more than $1 trillion. According to the ECB official, the “highly volatile” nature of crypto assets made them suitable for gambling, and should be treated as such by global lawmakers.

“Due to their limitations, cryptos have not developed into a form of finance that is innovative and robust, but have instead morphed into one that is deleterious,” said Panetta.

“The crypto ecosystem is riddled with market failures and negative externalities, and it is bound to experience further market disruptions unless proper regulatory safeguards are put in place.”

He added:

“Policymakers should be wary of supporting an industry that has so far produced no societal benefits and is increasingly trying to integrate into the traditional financial system, both to acquire legitimacy as part of that system and to piggyback on it.”

Panetta claimed the “security, scalability and decentralisation” of crypto transactions was “not achievable,” saying the immutability of blockchains is a negative aspect of the space due to transactions often being unable to be reversed. He cited the collapse of FTX, as well as a recent lawsuit brought by the United States Securities and Exchange Commission again Binance, as “fundamental shortcomings” of the ecosystem.

“Crypto enthusiasts would do well to remember that new technology does not make financial risk disappear,” said the ECB official.

“It is like pressing a balloon on one side: it will change in shape until it pops on the other side. And if the balloon is full of hot air, it may rise for a while but will burst in the end.”

Panetta has previously backed parts of the ECB’s plans for a potential digital euro, currently being researched by the central bank.

He has also proposed banning crypto assets with an “excessive ecological footprint” as part of efforts to address risks to the environment.

Panetta is similar to anti-competition Statists like Senator Elizabeth Warren and SEC’s Gary “The Ghoul” Genslar who don’t want competition for The Fed’s massive printing press.

We know that Bitcoin along with Gold and Silver have done well the September 2022 when the US Dollar began to lose value.

Today, we are seeing a slight up-tick in Bitcoin (+0.05%) and Ethereum (+0.60%).

Not this Fabio.

Fed Inferno! US M2 Money-Supply Growth Falls To Depression-Era Levels For Second Month In April (As M2 Money Velocity Remains Near Historic Lows)

It is truly a Fed Inferno!

Money supply growth fell again in April from Jerome Powell And The Fed, plummeting further into negative territory after turning negative in November 2022 for the first time in twenty-eight years. April’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years.

Yes, The Fed is printing money like it is going out of style! The war on Covid was similar to other wars fought where the US printed boatloads of money to pay for WWI. WWII, Korea and Vietnam wars. And the war against the middle class (known as The Best Depression). Apparently, The Fed is still waging war against the middle class.

US M2 Money VELOCITY (GDP/M2) is near an all-time low after The Fed went berserk with money printing to combat the Covid economic and school shutdowns.

Then with The Fed’s massive monetary expansion and sudden contraction, we have REAL average weekly earnings growth YoY in negative territory for 25 straight months.

The Walking Dead’s Negan, the poster child for The Federal Reserve.

Weekend Update! Bitcoin UP 61%, Gold UP 18%, US Dollar DOWN -10% Since 9/26/22 (Mortgage Rates Hover Around 7% As 10Y-2Y Yield Curve Inverts To -100 Basis Points)

Well, with Jerome Powell And The Fed tightening monetary policy (about half way there!), we have seen competitors to the US Dollar Bitcoin and Gold have soared since September 26, 2022. Bitcoin is up 61%, Gold is up 18% and the US Dollar is down -10%.

Mortgage rates hover around 7% as the US Treasury 10-2Y curve inverts to over -100 basis points with M2 Money growth crashed and burned.

Cryptos today are down. Bitcoin down -1.17%.

Buying more gold and silver!! And cryptos!

50 Shades Of Joe! Misery Indices All Point To Americans Being Almost Twice As Miserable Under Biden Than Pre-Covid Trump (25 Straight Months Of Negative Weekly Wage Growth)

I could have used 3 shades of Joe, but 50 shades of Joe sounds better!

But the fact remains that Americans are far more miserable under Biden than they were under Trump before the Chinese Wuhan Covid virus was unleashed. 9.03 today (Core CPI YoY + U-3 Unemployment) than it was in February 2020 under Trump (5.86). While not twice as bad, inflation is continues to cause serious problems for America’s middle class and low-wage workers.

Speaking of the middle class and low wage workers, let’s look at the Renter’s Misery index (CPI Owner’s equivalent rent YoY + Unemployment rate). It was 6.78% in February 2020 under Trump and before Covid struck and is now 11.75% under Inflation Joe.

Speaking of misery, how 25 straight months of negative REAL wage growth? Real weekly wage growth went negative in April 2021, just a few months after Biden was installed as President.

Now, there was winners under Biden. Green energy donors, the big banks, big pharma, big tech, but media … essentially any big donors from big entities got massive payoffs. The middle class and low-wage workers? As Jerry Reid once sang, “They got the coal mine and we got the shaft.”

Living La Vida Biden! Fed Emergency Bank Bailout Facility Usage Hits New Record High (Regional Banks Still Suffering From Deposit Outflow) Bitcoin Above $30k, Gold/Silver Rise

The US is Living La Vida Biden (living the Biden life!) Which means you are making millions if you are a political elite, but suffering if you live on Main Street.

And regional banks (not the TBTF national banks) continue to suffer. The Bank Term Funding Program (1 of 2) is skyrocketing as The Fed cranks up rates to fight BidenFedflation (a combination of excessive monetary stimulus by The Fed and Biden’s lousy economic policies) and M2 Money growth crashes.

The regional banking index continues to fall as bank deposits shrink (like me when I used to jump in the Pacific Ocean in Santa Cruz).

Cryptos down this morning. But Bitcoin is above $30,000 … again.

Oil is down this morning but gold and silver are up slightly.

The 10Y-2Y US Treasury yield curve just dipped below -100 basis points (steep inversion) as M2 Money growth crashed and burned.

Living la vida Biden!

Living La Vida Biden! US Existing Home Sales DOWN -23.16% YoY In May As Fed Pauses And Prices Tumble Most Since 2011 (Inventory For Sale STILL Missing In Action)

Like a bad good news, bad news joke, the good news is that US existing home sales ROSE 0.2% in May. The bad news? Existing home sales are DOWN -23.16% on a year-over-year basis.

And the median price of existing home sales fell -3.44% YoY as inventory for sales remains missing in action (like Biden debating Democrat challengers).

We are living la vida Biden.

I propose that Puerto Rican crooner Ricky Martin replace Janet “Transitory” Yellen as US Treasury Secretary.

Fed’s Powell to Double Down on Hawkish Message to Markets (Double Shot Of Rate Hikes … No Sugar Tonight?) Cryptos Rise, Commodities Down

Fed’s Powell to double down of hawish rate message. Or banks and consumers can expect no sugar tonight.

Expect a hawkish Fed Chairman Jerome Powell to double down on the Fed’s commitment to vanquish inflation at his semiannual testimony before Congress on June 21-22. While the immediate audience will be lawmakers, the message will be aimed at markets, which remain unconvinced the Fed will hike by another 50 basis points, as indicated in the dot plot from the June FOMC meeting. Powell may raise his hawkish tone to push back against such views.

Even as Powell is putting on a hawkish performance, confirmation hearings for World Bank Executive Director Adriana Kugler — as well as to extend Fed Governor Lisa Cook’s term — could reinforce the dovish faction on the Fed, somewhat diluting Powell’s message.

What we expect at the June 21-22 hearings:

The updated dot plot from the June FOMC meeting shows a majority of FOMC participants anticipate at least 50 bps more of rate hikes this year. Markets aren’t convinced – as of the time of writing, futures point to a 74% chance of rate hike in July and only a 10% chance of an additional rate hike in 2023.
Powell’s main task at the testimony will be to convince markets that officials stand behind the dot plot and anticipate multiple hikes.
Powell will likely be asked why the FOMC didn’t hike in June if inflation remains a threat. He’ll say that 500 bps of hikes to date allow the central bank to moderate its pace while gauging economic conditions, and will appeal to the Fed’s dual mandate as warranting a cautious approach. That will be music to the ears of Democrat lawmakers.
Powell said a decision on whether to hike at the July FOMC meeting will be “live.” We take that to mean the bar not to hike will be high, but it’s not a done deal. Powell will likely clarify that comment at his testimony.
The published semiannual monetary policy report offers a preview of how Powell will make the hawkish case:
- While the labor market is still “very tight,” it has been softening gradually — and by some measures, labor-market tightness has eased “more substantially over the past year.”
- Some outside studies are arguing that wages did not contribute to or lead inflation, but the monetary-policy report notes that “prospects for slowing inflation may depend in part on a further easing of tight labor-market conditions.” Thus, the Fed still stands by the conventional economic wisdom that the Phillips Curve is well and alive – and that a tradeoff exists between inflation and the unemployment rate.
- Powell will probably reiterate that low inflation is a necessary condition for achieving the Fed’s mandate, as he has many times before: “Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run.”
Our view is that if inflation remains as high as the FOMC projects, it would be appropriate for the Fed to hike by at least 50 bps more. But the latest batch of indicators show some encouraging progress on goods and housing disinflation; as a result, our baseline is for inflation to fall short of the median FOMC participant’s forecast.
The Senate Banking Committee hearing on the nominations of Cook, Kugler and Vice Chair Philip Jefferson will likely be less eventful. During this period of high inflation, nominees will need to lean more hawkish in their public statements than they otherwise would.
Nevertheless, if the full slate of nominees is confirmed, it will add one more dove to the board of governors, heightening discord on the FOMC.
- Jefferson’s nomination to the vice-chair post vacated by Lael Brainard won’t affect policy direction, as he’s already serving on the board. He previously was confirmed by a vote of 91-7, and we expect his confirmation as vice chair to be similarly easy.
- Though we have yet to hear much from Kugler on her monetary-policy outlook, her research focus on labor markets creates a likely bias toward the maximum-employment element of the Fed’s dual mandate.
- In addition to Jefferson and Kugler’s nominations, Cook — whose term is slated to end in January 2024 — would see her governorship extended for the full 14-year term. If confirmed, it would keep her dovish voice on the FOMC longer than before.
- Cook, who is perceived as more dovish and more political than the other nominees — she’s a former adviser to the Biden transition team – saw her previous nomination barely confirmed 51-50, with Vice President Kamala Harris casting the tie-breaking vote. It’s unclear if she’ll have enough support this time to clear the confirmation hurdle.
Bottom line: The hearings present an opportunity for Powell to bring market pricing in line with what has been put forth in the FOMC’s Summary of Economic Projections. We are doubtful that he will succeed.

The most recent Fed dots plot suggests rate declines in future years.

Cryptos are up this morning.

Commodities are down this AM.

So, like in the film Blue Velvet, we have the choice between Michelob or Pabst Blue Ribbon. Powell is choosing …. PBR!!

Bidenville! Restaurants Face Unappetizing Slowdown As Consumers Buckle Amid Two-Year Bidenflation Storm (Biden Gets 1 Star Review)

This morning I wrote about the Renter’s Misery index with rents spiralling out of control for the middle class and low wage workers. Now let’s switch focus to the restaurant business which are suffering under Biden’s reign of economic error.

Two years of negative real wage growth, depleted savings, mounting credit card debt, and soaring interest rate payments put pressure on consumers’ wallets. This might lead to some consumers trading down to cheaper quick-serve restaurants, ditching casual-dining chains in the second half of this year, according to a new report.

Bloomberg Intelligence’s Michael Halen penned a new note titled “2H Restaurant Sales: Inflation Killing Appetites.” It outlines, “Consumer spending finally buckles under more than two years of inflation and price hikes,” and the likely result is a trade-down of casual-dining chains like Brinker and Cheesecake Factory for quick-service chains like McDonald’s and Wendy’s.

The trade-down, which could start as early as this summer, is expected to dent consumer spending in restaurants such as Cheesecake Factory, Texas Roadhouse, and at brands operated by Brinker and Darden, Halen said.

Casual-dining industry same-store sales rose just 0.9% in May, according to Black Box Intelligence, as traffic dropped 5.4%. We expect cash-strapped low- and middle-income diners to cut restaurant visits and checks through year-end due to more than two years of real income declines and ballooning credit-card balances.

Halen provides more details about quick-service restaurants to fare better than causal-dining ones as “consumer spending finally buckles.”

Quick-service restaurants’ same-store sales could moderate with consumer spending in 2H but should fare better than their full-service competitors. Results rose 2.9% in May, according to Black Box data, as a 5% average-check increase was partly offset by a 2% guest-count decline. Check- driven comp-store sales gains are unsustainable, and we think inflation and menu price hikes will motivate low- and middle-income diners to reduce restaurant visits and manage their spending in 2H. On Domino’s 1Q earnings call, management said lower-income consumers shifted delivery occasions to cooking at home. Still, a trade-down from full-service dining due to cheaper price points may cushion the blow.

McDonald’s, Burger King, Wendy’s, and Jack in the Box are among the quick-service chains in Black Box’s index.

The latest inflation data shows consumers have endured the 26th straight month of negative real wage growth. What this means is that inflation is outpacing wage gains. And bad news for household finances, hence why many have resorted to record credit card usage.

And the personal savings rate has collapsed to just 4.4%, its lowest level since Sept. 2008 (the dark days of Lehman). And why is this? To afford shelter, gas, and food, consumers are drawing from emergency funds due to the worst inflation storm in a generation.

As revolving consumer credit has exploded higher and the last two months have seen a near-record increase…

… even as the interest rate on credit cards has jumped to the highest on record.

With record credit card debt load and highest interest payments in years, plus depleted savings, oh yeah, and we forgot, the restart of student loan payments later this year, this all may signal a consumer spending slowdown at causal diners while many trade down for McDonald’s value menu. Even then, we’ve reported consumers have shown that menu items at the fast-food chain have become too expensive.

Biden’s Mortgage Market! Mortgage Demand Down -35% Under Biden, Refi Demand Down -90%, Mortgage Rates Up 128% (Renter’s Misery Index Now 11.75% Versus 6.78 Pre-Covid Under Trump)

The good news? Mortgage purchase demand fell only -0.05% from last week. The bad news? Mortgage purchase demand is down -35% since Resident Biden was sworn in. And mortgage refinancing demand is down a whopping -90%. Reason? Mortgage rates are up 128% under Clueless Joe.

Mortgage applications increased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 16, 2023.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1 percent compared with the previous week. The Refinance Index decreased 2 percent from the previous week and was 40 percent lower than the same week one year ago. The seasonally adjusted Purchase Index increased 2 percent from one week earlier. The unadjusted Purchase Index decreased 0.1 percent compared with the previous week and was 32 percent lower than the same week one year ago.

And as Paul Harvey used to say, here is the rest of the story.

And the renter’s misery index, CPI for owner’s equivalent rent YoY + U-3 unemployment rate, is now a staggering 11.75% verus 6.78% in February 2020, the last month before the Chinese Wuhan virus led to economic and school shutdowns. And we have Donald Trump as President instead of this corrupt clown.

What is the difference between baseball legend Shoeless Joe Jackson and Clueless Joe Biden? While both sold out their teams for personal wealth, at least Shoeless Joe was good at baseball. Clueless Joe is a corrupt bully. Shoeless Joe was allegedly stupid, but so is Clueless Joe.

US Housing Starts Surge Most Since 2016, Exceed All Estimates (The Pause That Refreshes As Fed Dot Plots Suggest Return Of Zorp [Zero Outrageous Rate Policies!)

Well, not really unexpected since the housing sentiment index for home builders was above 50 yesterday. But with The Fed pausing rate hikes, housing starts are soaring!

US housing starts unexpectedly surged in May by the most since 2016 and applications to build increased, suggesting residential construction is on track to help fuel economic growth.

Beginning home construction jumped 21.7% to a 1.63 million annualized rate, the fastest pace in more than a year, according to government data released Tuesday. The pace exceeded all projections in a Bloomberg survey of economists. Single-family homebuilding rose 18.5% to an 11-month high.

Applications to build, a proxy for future construction, climbed 5.2% to an annualized rate of 1.49 million units. Permits for one-family dwellings increased.

Metric	Actual	Est.
Housing starts (SAAR)	1.63 mln	1.4 mln
One-family home starts (SAAR)	997,000	na
Building permits (SAAR)	1.49 mln	1.425 mln
One-family home permits (SAAR)	897,000	na

The figures corroborate Federal Reserve Chair Jerome Powell’s comments last week that the housing market has shown signs of stabilizing. Homebuilders, which are responding to limited inventory in the resale market, have grown more upbeat as demand firms, materials costs retreat and supply-chain pressures ease.

The housing starts data will feed into economists’ estimates of home construction’s impact on second-quarter gross domestic product. Prior to the report, the Atlanta Fed’s GDPNow forecast had residential investment subtracting about 0.1 percentage point from gross domestic product. Homebuilding last contributed to growth in the first quarter of 2021.

At the same time, elevated mortgage rates are crimping affordability, suggesting limited momentum in housing demand.

The increase in starts from a month earlier was the biggest since October 2016 and reflected gains in three of four US regions. Starts of apartment buildings and other multifamily projects jumped more than 27%.

The number of homes completed increased to a 1.52 million annualized rate. The level of one-family properties under construction were little changed at 695,000.

Existing-home sales data for May will be released on Thursday, while a report on new-home purchases is due next week.

Now only has The Fed paused, but the most recent Fed Dots Plot reveals that Fed open market committee (FOMC) members see The Fed slashing rates over the coming years. Just in time for creepy, demented Grandpa Joe to be reelected as President. In other words, the return of ZORP (zero outrageous rate policy).