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Wolf Richter

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On his site WOLFSTREET.com, Wolf Richter slices into economic, business, and financial issues, Wall Street shenanigans, complex entanglements, debacles, and opportunities that catch his eye in the US, Canada, Europe, Japan, and China. He lives in San Francisco.

Wolf Street - When Canada’s Consumer Price Index for May was released a couple of days ago, it was – “as expected,” I would say – a lot lot worse than expected, and exceeded once again by a huge margin the inflation forecasts by the Bank of Canada. According to the exasperated economists at the National Bank of […]

Wolf Street - Inventories of new vehicles at dealers are still desperately short, even as sales have plunged due to vehicle shortages. That has been a given now for over a year, and it hasn’t gotten better, and depending on who is talking, it might get a little better, or it might get worse, if that’s even possible. […]

Wolf Street - The home price data released today by the S&P CoreLogic Home Price Index represents the three-month average of closed home sales that were entered into public records in January, February, and March, reflecting deals that were agreed to a few weeks earlier, roughly in December, January, and February, funded with mortgages that were pre-approved before […]

Wolf Street - Sales of new single-family houses in April plunged by 16.6% from March and by 26.9% from a year ago, to a seasonally adjusted annual rate of 591,000 houses, the lowest since lockdown April 2020, according to the Census Bureau today. Sales of new houses are registered when contracts are signed, not when deals close, and […]

Wolf Street - Pieces of evidence are lining up in increasing density. The number of potential future homebuyers that need a mortgage has been thinning out for months. Today, another milestone: Applications for mortgages to purchase a home dropped 12% from the prior week and were down 15% from a year ago. In its report, the Mortgage Bankers […]

Wolf Street - The total amount of leverage in the stock market is unknown and takes many forms. The only form that is tracked and reported on a monthly basis is margin debt. The other forms, such as Securities Based Lending (SBL) and hedge funds leveraged at the institutional level are not tracked. Not even banks and brokers […]

Wolf Street - Credit card balances ticked up 1.9% in March from February, not seasonally adjusted, to $1.036 billion, according to the Federal Reserve today. Compared to three years ago, March 2019, the last March before the pandemic, this was up by only 3.0%. In other words, credit card balances are now just 3% higher than there were […]

Wolf Street - Spiking mortgage rates multiply the effects of exploding home prices on mortgage payments, and it has taken layer after layer of homebuyers out of the market for the past four months. And we can see that. Mortgage applications to purchase a home fell further this week and were down 17% from a year ago, hitting […]

Wolf Street - The rate of inflation in Canada spiked to 6.7% in March, from 5.7% in February. The Bank of Canada hiked its policy rates twice so far this year, including by 50 basis points in April, and announced that QT would start on April 25. Government of Canada bond yields have spiked. And home buyers, after […]

Wolf Street - The spike in mortgage rates – a result of the Fed’s widely telegraphed future crackdown on inflation – would sooner or later have to impact the crazy housing bubble. We knew that. Now the average 30-year fixed mortgage rate has spiked to well above 5%. For example, the Mortgage Bankers Association reported this morning that […]

Wolf Street - The Bank of Canada, after telegraphing it for weeks, hiked its overnight rate by 50 basis points today, the first 50-basis-point hike since 2000, after having hiked by 25 basis points at its March meeting. This brought its overnight rate to 1.0%. “Interest rates will need to rise further,” governor Tiff Macklem said in the […]

Wolf Street - We just knew this would be coming, given the sky-high home prices and the spike in mortgage rates: Homebuyer sentiment deteriorated further to a new low. The percentage of people who said that now is a “bad time to buy” a home jumped to 73%, another record-worst in the data going back to 2010, according […]

Wolf Street - We’ve seen the headlines in recent days. “Worst Bond-Market Drawdown on Record.” Drawdown means drop in prices. “Global Bond Market loses $2.6 Trillion,” was another one. This was based on the Bloomberg Global Aggregate Bond Index, which tracks total returns of government and corporate bonds. And this index of global bonds has plunged 11% from […]

Wolf Street - So now we have a new snapshot of the incredibly spiking home prices, topping out at over 30% year-over-year in Phoenix and Tampa, according to the S&P CoreLogic Case-Shiller Home Price Index today. But these prices predate the Great American Mortgage Rate Spike. What time span are we talking about? The “January” home price data […]

Wolf Street - The average 30-year fixed mortgage rate tracks the 10-year Treasury yield, running roughly in parallel but higher. It tracks the 10-year yield because the average 30-year mortgage gets paid off in just under 10 years, either through the sale of the home, or through a refi. But they don’t move in lockstep, and the difference […]

Wolf Street -   The inventory of new single-family houses for sale rose to 407,000 houses in February (seasonally adjusted), the largest unsold inventory since August 2008, up by 40% from a year ago. This represents 6.3 months of supply at the current rate of sales, according to data from the Census Bureau today. A problematic mix. Homebuilders […]

Wolf Street - The Bank of Canada’s interest rate repression and QE during the pandemic have done a marvelous job on Canada’s epic housing bubbles that had started to wheeze. But crazy money-printing fixes everything. But having gotten increasingly nervous about the raging-mania it fueled, the Bank of Canada started to exit some of its money-printing programs in […]

Wolf Street - Folks kept saying for many months that the Fed is “trapped,” that it can never raise interest rates, that it can never end QE, that it can never-ever shrink its balance sheet. And now the Fed has ended QE, and it has hiked its key policy rates by 25 basis points today, and it indicated […]

Wolf Street - The Bank of Canada today hiked its overnight rate and its deposit rate each by 25 basis points, to 0.50%. It cited 5.1% CPI inflation that it expects to rise further and faces one of the worst housing bubbles anywhere – both of them fueled in part by two years of interest rate repression and […]

Wolf Street - Canada’s housing bubble had been waning before the pandemic, particularly in Vancouver, but then came the crazy monetary policies of the pandemic, the tsunami of global free money, including from the Bank of Canada, and BOOM goes the housing bubble in Vancouver and some other markets – but not in all markets. A year ago, […]

Wolf Street - The only measure of stock market leverage that is reported monthly is margin debt at brokers, via FINRA. Much of the stock market leverage isn’t reported, such as Securities Based Lending, and even banks and brokers that fund this leverage don’t know the leverage in the overall market, or even the leverage of their client […]

Wolf Street - Used car and truck wholesale prices that had gone berserk last year were essentially flat in January, the first hesitation since August, at ridiculously high levels, as pricing resistance in face of this craziness is finally setting in. Two months ago, I noted the first signs of softening of some of the beneath-the-surface pricing-dynamics. And […]

Wolf Street - Potential homebuyers and speculators in Canada are now looking at rising interest rates coming their way, which is a dreadful sight with house prices at these ridiculous levels in the big markets. As is typically the case early in rate-hike cycles, there is now a mad scramble underway to buy a house now, no matter […]

Wolf Street - The broadest Consumer Price Index (CPI-U) jumped by 0.5% in December from November, and by 7.04% from a year ago, the highest since June 1982, according to data released by the Bureau of Labor Statistics today. But there’s a big difference between now and 1982. Now, the inflation index is spiking, and has been getting […]

Wolf Street - Super-inflated asset prices such as housing, stocks, and bonds; massive inflation; and central banks that have started to react. Many central banks have started pushing up interest rates; others have ended asset purchases. And Quantitative Tightening (QT) – central banks shedding assets – is on the table. Rising interest rates in the US won’t catch […]
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