- Total Bank Credit (TOTBKCR): -28B (-0.16%) w/w. New low.
- Fed Balance Sheet (WALCL): -25B (-0.32%) w/w. New low.
- Durable Goods (DGORDER): +13.2B (+4.45%) m/m. Approaching new high.
- Auto/Light Trucks (ALTSALES): +378K (+2.4%) m/m. Lower high.
- Median New Home Sale Price (MSPNHSUS): -14k (-3.41%) m/m. Down 75k from high.
- Housing Starts (HOUST): +89k (+6.55%) m/m. Bounce off a 3-year low.
- 30 Year Mortgage (MORTGAGE30US): 7.79% (+16b) w/w. Multi-decade high, +60 bp over 5 weeks.
- Gross Domestic Product (GDP): +560B (+2.03%) q/q. A new all-time high.
- Strategic Petroleum Reserve (WCSSTUS1); unchanged.
My summary: the housing market appears to be getting crushed by sky-high mortgage rates, Total Bank Credit & the Fed Balance Sheet continues to contract, those unrealized losses in the banks (most likely) continues to increase, and yet GDP (unadjusted for inflation) “looks fantastic”. What’s the context for those mortgage rates? Below, I provide a yearly chart dating back to 1990. A friend’s Mom long ago once told us kids, “it’s all fun and games, until Someone Loses an Eye.” And after just two years of rate-increase fun & games, 40 years of down-trending rates have come to an end. We now have the highest mortgage rates since 2000, and now, the Banksters have lost a whole lot of eyes.
The Great Reset = cover for a Global Debt Default. “You’ll Own Nothing.” But who is gonna Be Happy?
Anecdote: I looked at buying some new workout shoes the other day. The prices were up about 80% (to $200!!) since I last went shopping. I immediately ran home and applied more glue to my ancient running shoes. That’ll keep ’em working for another month or two. Glue is cheap. Related: how come Wolf Richter calls the US consumers “drunken sailors” (source – wolfstreet)? Well, they are spending money like drunken sailors ashore. Why? One reason – it turns out, there has been a massive wealth transfer:
‘Excess mortality’ continuing surge causes concerns (Source – insurancenews.net); “Capgemini just published its World Life Insurance Report that revealed the upcoming largest inter-generational wealth transfer in history that is expected to cause a massive outflow of nearly 40% of life insurers’ assets under management (AUM), totaling $7.8 trillion, by 2040…For example, younger adult mortality rates are up more than 20% in 2023, the CDC said.
by bsv