ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
April 27, 2023 | Fed’s Balance Sheet Plunges $171 Billion in Five Weeks since Peak Bank Bailout as QT Continues and Liquidity Support Cools
The Federal Reserve’s balance sheet, released today, dropped another $30 billion for the week, to $8.56 trillion, bringing the plunge in the five weeks since peak bank bailout to $171 billion, as quantitative tightening (QT) continued at the normal pace and liquidity support shifts and unwinds, though First Republic seems to be sucking hard on […]
April 20, 2023 | Housing Market Takes Another Step Back: Home Prices Drop Year-over-Year for Second Month. Already Dismal Sales Fell
The median price of all types of previously owned homes – houses, condo, co-ops – whose sales closed in March, fell year-over-year by 0.9% to $375,700, according to the National Association of Realtors. This was the second year-over-year decline in a row since February 2012, when the market emerged from Housing Bust 1 (historic data […]
April 15, 2023 | The Most Splendid Housing Bubbles in Canada: Spring Selling Season in a Housing Bust
he spring selling season is now in full swing in Canada. So let’s see. Sales of all types of homes rose by 1.4% in March from February, after the 1.4% increase in February from January, so on a year-over-year basis, sales plunged by only 34% from a year ago, the smallest decline since September. And […]
April 12, 2023 | Services Inflation Rages, Durable Goods Prices Rise Again after 6 Months of Declines. Food Inflation Backs Off, Energy Plunges
he Consumer Price Index (CPI) for March, released today by the Bureau of Labor Statistics, was marked by plunging energy prices and surging services prices. Food inflation slowed, and month to month actually dipped for the first time in nearly three years. But durable goods inflation month-to-month suddenly rose again, after having been negative for […]
April 6, 2023 | Fed’s Balance Sheet Plunges by $101 Billion in Two Weeks, as QT Continues and Bank Liquidity Support Begins to Unwind
The Federal Reserve’s balance sheet plunged by $101 billion in two weeks – by $74 billion in the current week and by $27 billion in the prior week – as quantitative tightening (QT) continued at the normal pace and as banks have started paying back the liquidity support offered by the Fed when Silicon Valley Bank […]
March 28, 2023 | Battle for Deposits: Tired of Getting Screwed by Banks, People Yank their Cash Out, Forcing Banks to Pay Higher Interest Rates. Treasury Yields Are a Mess Though
People – and I mean massive numbers of people – have finally figured out that they’ve been getting screwed by near-0% interest rates on their bank deposits, and they’re moving huge sums of money around, as deposits have suddenly turned into hot money, forcing banks to respond by offering better deals. And the land is […]
March 22, 2023 | Powell Explains the Fed’s New Regime: Rate Hikes & QT to Fight Inflation while Offering Liquidity to Banks to Keep them from Toppling
It makes sense in this era of high inflation, QT, rising policy interest rates, and high financial fragility in the banking system, after years of money printing and interest rate repression. The new regime was already tested successfully by the Bank of England last fall: Tightening through rate hikes and QT while simultaneously providing liquidity […]
March 19, 2023 | The Most Splendid Housing Bubbles in Canada: March Update on the Housing Bust
This is the beginning of spring selling season. So let’s see. Home sales in Canada rose by 2.3% in February from January, but that was less of an uptick than it should have been, and on a year-over-year basis, sales plunged 40%, compared to the 37% plunge in January. Prices of single-family houses in February […]
March 14, 2023 | Services Inflation Rages at Four-Decade High: Fueled by Rents, Auto Insurance, Repairs, Airfares, Hotels, Pet Services, Food Services, Delivery
The Consumer Price Index (CPI) for February showed once again that inflation rages in services at the worst levels in four decades, while inflation in many goods categories continue to back off: Services without energy services: annual inflation jumped by 7.3%, a four-decade high, driven by housing, food services (food away from home), auto insurance, […]
March 11, 2023 | RIP Silicon Valley Bank: Shut Down by California Regulator, Taken Over by FDIC, Shareholders Bailed In, Insured Depositors to Get their Cash by Monday
Silicon Valley Bank, a California state-chartered bank that was uniquely exposed to the massive all-encompassing startup bubble during the Free Money era – a bubble that is now imploding spectacularly amid what is called a mass extinction event among startups – was shut down and taken over Friday morning by the California Department of Financial […]
March 4, 2023 | Housing Bust #2 Has Begun
This is the transcript of my podcast on Sunday, February 26, THE WOLF STREET REPORT. The housing market in the United States has turned down, and in some big markets very dramatically so. Other markets lag a little behind. That’s how it went during the last Housing Bust, that I now call Housing Bust #1. […]
February 16, 2023 | The Most Splendid Housing Bubbles in Canada: February Update on the Housing Bust
ome sales in Canada plunged by 37% in January, compared to a year earlier, amid rising inventory. Home prices dropped by 0.5% in January from December, by 12.6% year-over-year, and by 17.8% from the peak in March 2022, the 10th month-to-month decline in a row, according to the Canada Composite Home Price Index by the […]
February 9, 2023 | EV Sales Spiked in California. Share Hit 17%. ICE Vehicle Sales Plunged. First Uptick in Electricity Sales after 13 Years of Decline
Sales of battery-electric vehicles (EVs) in California spiked by 62% in 2022, to 285,199 vehicles, according to registration data released by the California New Car Dealer Association (CNCDA). And the market share of EVs nearly doubled to 17% of total new vehicle sales: Overall vehicle sales in California, ICE vehicles and EVs combined, fell by […]
January 31, 2023 | The Most Splendid Housing Bubbles in America, January Update: Now Phoenix, Las Vegas, San Francisco, Seattle, San Diego Plunge Fastest
Housing Bubble 2 continues to deflate relentlessly, no matter what data set we’re looking at. Today we got the S&P CoreLogic Case-Shiller Home Price Index for “November,” which is a three-month moving average of home sales that were entered into public records in September, October, and November, reflecting deals made largely in August through October. Prices in all […]
January 26, 2023 | Bank of Canada: “We’re Pausing to Assess Whether We’ve Done Enough,” Hikes by 1/4% to 4.5%, QT Continues
he Bank of Canada hiked its policy rates by 25 basis points on Wednesday, the 8th rate hike in a row, totaling 425 basis points in 10 months, bringing the target of the overnight rate to 4.5%. QT will continue and “is complementing the restrictive stance of the policy rate,” the BOC said in the […]
January 15, 2023 | Hangover Time for Used-Vehicle Dealers. For Buyers, Patience Will Pay Off
The used-vehicle market now has a huge hangover: The price spike from August 2020 till early 2022. Over this period, retail prices spiked by mind-boggling ridiculous amounts – 40% per the average used vehicle listing price, according to Cox Automotive; 53% per the used-vehicle CPI, according to the Bureau of Labor Statistics – though there […]
January 8, 2023 | Wild Ride of US Auto Sales in 2022 below 1977. Charts for GM, Toyota, Ford, Stellantis, Hyundai-Kia, Honda, and Nissan oh Dear
The thing about new vehicle sales in the US is that even in good years, they’re bad, and in bad years, they’re terrible. In 2022, total new vehicles delivered to retail customers and fleets (dominated by rental fleets), fell by 8% from the already terrible 2021, to 13.7 million vehicles, below where deliveries had been […]
December 31, 2022 | 2022, Year of Face-Ripping Bear-Market Rallies that Got Crushed
The year 2022 ended with: S&P 500 Index: -19.4% from a year ago, -20.3% from its high on January 3, 2022. Nasdaq Composite: -33.1% from a year ago, -35.4% from its high on November 22, 2021. The whole mess started in that infamous February 2021, with the popping of the bubble of the most ridiculously […]
December 22, 2022 | How Strung-Out Are Households with their Debt Service & Financial Obligations as the Miracle of Free-Money Fades?
hat is the burden on households from servicing their debts and other financial obligations, in terms of their disposable income? That’s perhaps the most important debt measure, and the question we’re going to grapple with in a moment. The pandemic-era policies left households flush with money, allowed them to catch up with past-dues, and allowed […]
December 17, 2022 | The Most Splendid Housing Bubbles in Canada: December Update on a Housing Bust
The Canada MLS Home Price Index, which tracks all types of homes, dropped by 1.3% in November from October, and is now down 16.4% from the peak in March 2022, according to data from the Canadian Real Estate Association (CREA). This brought the year-over-year decline to 4.4%. In Canadian dollars, the composite benchmark price dropped […]
December 14, 2022 | Fed Pivots even More Hawkish, Sees Peak Rate above 5%, No Rate Cuts in 2023. Powell Brushes Off Raising Inflation Target
This has now been the rule for Fed meetings since the fall of 2021, when it stopped brushing off inflation. At every meeting since then, the FOMC pivoted more hawkish than at the prior meeting: Each “dot plot” projected a higher peak interest rate than the prior dot plot, and it projected staying there for […]
December 9, 2022 | How Big Are the Fed’s Losses and Where Can We Go See Them?
A collapse-chart has been making the rounds in the social media, financial blogs, and the like. It’s being handed around without context, as if self-explanatory, sort of like, look, the world is collapsing. It’s from the St. Louis Fed’s data depository. The title of the chart says, among other things, ominously, “Liabilities: Remittances Due to […]
November 20, 2022 | The Most Splendid Housing Bubbles in Canada, November Update: Fastest 5-Month Plunge on Record
The overall 11-City Teranet-National Bank House Price Index dropped 0.8% in October from September, and is down 7.7% from the peak in May, the largest five-month drop in the history of the data going back to 1997. It slashed the year-over-year gain to 4.9%, from the 19% range in March and April. Nine of the […]
November 18, 2022 | Home Sales Plunge, Investors Pull Back Too, Prices Drop 8.4% in 4 Months, Active Listings & Price Cuts Rise Further
Sales of all types of previously owned homes – houses, condos, and co-ops – fell by 5.9% in October from September, the ninth month in a row of declines, to a seasonally adjusted annual rate of sales of 4.43 million homes, just a hair above the lockdown-month of April 2020, according to the National Association […]
October 26, 2022 | “No Easy Outs to Restoring Price Stability”: Bank of Canada Hikes by 50 bpts to 3.75%, More Hikes to Come, QT to Continue, as “Unsustainable” Home Prices Plunge, GDP “Stalls”
The Bank of Canada hiked the target for its overnight rate for the sixth time in a row, today by 50 basis points, to 3.75%, the highest since 2008, following the 75-basis-point hike in September and the 100-basis-point hike in July. Since it started the rate-hike cycle in March, the BOC has jacked up its rate […]