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April 14, 2021 | More Signs of Cooling Demand: Mortgage Applications to Purchase a Home Drop Below 2019 for First Time in Pandemic Housing Craziness amid Higher Interest Rates

he index for mortgage applications to purchase a home in the week ended April 9 fell by 3.7% for the week, and by 20% from peak-frenzy in January this year, and thereby edged below the same week in April 2019 for the first time since this Pandemic housing boom started, according to the Mortgage Bankers […]

April 6, 2021 | Bank of Canada Now Owns 40% of Government of Canada Bonds. Fed a Saint in Comparison. Taper on the Table

The Economics and Strategy shop at the National Bank of Canada, the country’s sixth largest bank, sent a missive to clients today that would be hilarious if it weren’t pointing at such a serious and massive issue: It celebrated “40,” referencing a 40th birthday, but instead of a birthday, it referred to the Bank of […]

April 1, 2021 | The Explosive Surge of Mortgages for “Second Homes”: Housing Bubble Math

That the housing market has gone nuts is now in the news on a daily basis with click-bait reports of silly bidding wars with ludicrous amounts paid over already high asking prices, powered by the new pandemic of FOMO – the fear of missing out. Bad deals are made in good times, as bankers say, […]

March 23, 2021 | Bank of Canada Announces Balance Sheet Reduction, Suddenly Worried about “Moral Hazard”

The Bank of Canada will unwind its crisis liquidity facilities, will further reduce its purchases of Government of Canada bonds, which it already started tapering in October, will let short-term assets “roll off” the balance sheet when they mature, and will as a result reduce its total assets from C$575 billion now to $C475 billion […]

March 16, 2021 | Can Retail Sales Only Grow if Americans Get Permanent Stimulus Payments in this Era of Free Money? That’s the Question Now

ere is the thing: Retail sales in February dropped 3.0% from January to $562 billion, seasonally adjusted, according to the Census Bureau this morning, much lower than “expected.” What gets blamed for the discrepancy? The weather, which in February was nasty in much of the country. But if these economists had looked at anything at […]

March 9, 2021 | Signs Are Everywhere: Businesses Have Changed Permanently as a Result of the Pandemic

One of the biggest permanent changes coming out of the Pandemic is that businesses have invested in technologies that have long been available, but that hadn’t been deployed because there was no visible need to deploy them, and because businesses were stuck in a rut, and change is hard and costly – and the rules […]

March 6, 2021 | Consumers Paid Down Credit Cards Again! By Most Ever. But Cash-Out Refis Spiked to Highest since 2005/6 Peaks. What Gives?

There is no monolithic American consumer. Each does their own thing. And the folks with credit card debts and other revolving credit such as personal loans – all of it high-interest rate debt – paid them down by record amounts in January, possibly using their stimulus money to do so. And in the opposite direction, […]

February 23, 2021 | Macy’s Brick & Mortar Sales -35%, Digital +21%. Walmart Online +69%, US Ecommerce +32%. Online Furniture, Grocery, Clothing Sales Explode as Brick & Mortar Melts Down

Macy’s, when it reported earnings this morning, confirmed its own brick-and-mortar meltdown, and it showed the benefits of Macy’s decision years ago to go after ecommerce in a serious way, knowing that its brick-and-mortar stores – despite what it was telling the public – were on the slow way out, attested to by its countless […]

February 16, 2021 | In-Your-Face Inflation: AutoNation Brags About Huge Jump in Per-Vehicle Gross Profit on Soaring Prices Despite Declining New-Vehicle Unit Sales

AutoNation, the largest chain of franchised auto dealerships in the US, reported fourth quarter earnings this morning – and even as the total number of new vehicles sold in the quarter fell from a year earlier, the company bragged about a number of records, all of them related to higher prices and stupendous growth in […]

February 10, 2021 | Dollar’s Purchasing Power Drops to Record Low, Despite Aggressive “Hedonic Quality Adjustments”

The “Purchasing Power of the Consumer Dollar” – part of the Bureau of Labor Statistics’ Consumer Price Index data released today – is the politically incorrect mirror image of inflation in consumer prices, as measured by the Consumer Price Index (CPI). By wanting to increase consumer price inflation, the Fed in effect wants to decrease […]

February 3, 2021 | Inflation Pressures Heat Up Even in Services

Big parts of the services sector – such as restaurants, entertainment, lodging, and travel – have been hit hard during this crisis. Other parts of the services industries – such as real estate, services related to ecommerce, transportation services, video games, streaming services, etc. – have boomed. And other segments in services have muddled through. […]

January 26, 2021 | The Most Splendid Housing Bubbles in America: Dollar’s Purchasing Power Swoons, January Update

We’re not talking about miracles, such as the same house getting bigger somehow or fancier, but about how many dollars it takes to buy the same house. According to the National Case-Shiller Home Price Index for October, released today, it takes 9.5% more dollars than it took a year ago to buy the same house, […]

January 15, 2021 | “Seasonal Adjustments” of Retail Sales Gone Awry in Weirdest Economy Ever? Americans Cut Back

Retail sales in December fell for the third month in a row, on a “seasonally adjusted” basis, down 0.7% from November, to $541 billion, and down 2.1% from the peak in September, according to the Census Bureau this morning. And even without restaurants and bars – many of which were shut down in December – […]

January 8, 2021 | Update on the WTF Collapse of Gasoline & Jet Fuel Consumption: The Holiday Period

During the holiday shopping and travel period in December and early January, ten months into the Pandemic, gasoline consumption in the US was down about 12% from a year ago, jet fuel consumption was down 38% from a year ago, but distillate consumption – diesel, heating oil, fuel oil – was about flat with a […]

December 28, 2020 | The Most Splendid Housing Bubbles in America: December Update on House Price Inflation Gone Wild

Prices of single-family houses jumped 8.4% in the US, the biggest year-over-year jump since March 2014, according to the Case-Shiller Home Price Index for October, released today. The index is based on the “sales pairs” method, comparing the price of a house that sold in the current month to the price of the same house […]

December 23, 2020 | Majestic Overshoot of Stimulus Money Ended. Faced with Second Wave, Americans Cut Back, Even on Durable Goods

Consumers are starting to run out of artificial steam. The free Pandemic money has been dropping for months and in November nearly faded out. For the first time since April, consumers spent less all around; they spent less on services, nondurable goods, and even on durable goods, which had been spiking in astounding manner. Personal […]

December 16, 2020 | Where Americans Splurged & Where They Cut Back in 13 Whiplash-Charts

Retail sales in November fell 1.1% from October, the second month in a row of declines, and they even fell with restaurants and bars removed from the total. Sales at nonstore retailers, the placeholder for ecommerce, eked out a new record. This is the second month now of what I called a month ago Stimulus […]

December 10, 2020 | The State of American Used Cars & Trucks: Amazing Charts of a Market Gone Haywire and Now in Process of “Normalizing”

The used vehicle market – retail and wholesale – has gone through some history-making gyrations this year, and those gyrations are now being unwound. In the Good Times, about 40 million used vehicles were sold wholesale and retail per year. This year will be quite a bit below that. In November, sales lost more ground. […]

December 3, 2020 | Here Comes the Trucking Boom in the Weirdest Economy Ever

Boom and bust cycles are guaranteed in this business. And now, this is the Weirdest Economy Ever, powered by the $3 trillion the Fed threw at the markets, and by $3 trillion in government stimulus and bailout spending, and by a huge shift to work-from-home and learning-at-home that required all kinds of spending on laptops, […]

November 24, 2020 | The Most Splendid Housing Bubbles in America: Nov. Update

House prices jumped 7.0% across the US, according to the Case-Shiller Home Price Index released today. Other indices have indicated similar price surges. House prices are going nuts despite a terrible economy. They’re being fired up by low interest rates, $3 trillion in liquidity that the Fed threw at the markets, fear of inflation that […]

November 13, 2020 | Volkswagen to Throw $86 Billion at EVs over 5 Years. GM, Ford, Others Plow Mega-Bucks into Shift to EVs. Tesla Instigated It

Volkswagen A.G. – which is in a perennial struggle with Toyota over the crown of being the largest automaker in the world – has gotten the memo a few years ago, after its dreams of diesel domination collapsed into Diesel Gate: The future is going to be EVs. And every year, the company budgets evermore […]

November 4, 2020 | Sales of New Cars & Trucks Through October Fell by 2.4 Million Vehicles, to 1985 Levels. Back to the Future

In October, eight months into the Pandemic, new-vehicle sales in the US recovered roughly, or not quite, to last year’s October level, depending on how the estimate is done — now that we have to rely on estimates — but left the huge hole intact. The Big Three US automakers stopped reporting actual monthly new-vehicle […]

October 31, 2020 | Do We Really Need More Stimulus to Print More Millionaires & Billionaires, Enrich Fraudsters, Balloon the Trade Deficit? Consumer Data Says, “No We Don’t”

Weirdest economy ever, powered by stimulus money, and the now expired extra unemployment money, and money from rents-and-mortgage-payments-not-made, and money from cash-out mortgage refis of at record low interest rates. And folks “in aggregate” – all mixed together, with all inequalities papered over – are spending record amounts on goods, a lot of which are […]

October 23, 2020 | Housing Market Goes Nuts, Everyone Sees it, But it Can’t Last

Another batch of crazy housing data yesterday. Crazy in the sense that the housing market, or rather part of it, namely the higher end of it, has gone totally crazy and that by now everyone knows that this isn’t “sustainable,” that “there’s no way it can last forever,” as Redfin CEO Glenn Kelman told CNBC. […]

October 13, 2020 | Crazy Times Not Only for Consumers Trying to Buy a Used Car but also for Dealers Grappling with the Distortions

Prices of used cars and trucks have been on one heck of a crazy ride since the Pandemic started, with the market freezing up in March and April, and then heating up, with prices soaring but with demand and sales volume still not back where it was before the Pandemic. This – what would normally […]

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