Vital Statistics:
Last | Change | |
S&P futures | 3,910 | -20.25 |
Oil (WTI) | 105.91 | 0.19 |
10 year government bond yield | 2.86% | |
30 year fixed rate mortgage | 5.51% |
Stocks are lower again on Fed fears. Bonds and MBS are up.
It looks like the “risk off” trade is beginning to positively affect bonds. Bonds are rallying, however MBS are lagging (as usual). The S&P 500 is within spitting distance of official bear market territory, which would be 20% off the high set in January. The Nasdaq entered that territory long ago.
Inflation at the wholesale level rose 0.5% in April, according to the Producer Price Index. This is a deceleration from the 1.5% we saw in March and 1.1% we saw in February. On a year-over-year basis, the PPI is up 11%. The core rate rose 0.6%, which was a deceleration from February and March. It is up 6.9% on a year-over-year basis. While the deceleration in month-over-month increases is welcome, the Fed is probably going to stick to is schedule and hike rates another 50 basis points at the June meeting.

Wages are rising, however they are not keeping up with inflation. Real (inflation-adjusted) wages fell 0.1% month-over-month in April, according to BLS. On a year-over-year basis, real wages fell 2.6%. Separately, initial jobless claims rose 203,000 last week. Overall the labor market is exceptionally strong, although the big question comes out to where inflation plateaus. That will determine whether we get the dreaded wage-price spiral that the Fed is trying to prevent. The low unemployment rate gives the Fed some breathing room to raise rates more aggressively.
With rising rates, ARMs are making a comeback. Last week the 30 year fixed rate mortgage was 5.53%, while 5/1 ARMS were 4.47%. “Despite a slow start to this year’s spring home buying season, prospective buyers are showing some resiliency to higher rates. Purchase activity has now increased for two straight weeks,” said Joel Kan, an MBA economist, in a release. “More borrowers continue to utilize ARMs to combat higher rates. The share of ARMs increased to 11% of overall loans and to 19% by dollar volume.”
ATTOM reported that 45% of mortgaged residential properties were considered equity rich, compared to 32% a year ago. “Homeowners continue to benefit from rising home prices,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Record levels of home equity provide financial security for millions of families, and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market.”
Filed under: Economy |
This story makes me laugh and laugh.
https://www.axios.com/2022/05/12/gop-panics-pa-senate-wild-card-kathy-barnette
We have to wait until the second half of the 7th bullet point to get to the real lede of the article:
but being unmanageable for McConnell should he return as Senate majority leader next year.
The Republican leadership absolutely despises their voters. Has there ever been anything like it?
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The Republican leadership is retarded. Here’s an important bullet point:
Barnette is also the uncommon Black Republican candidate.
But no, they’d rather have a celebrity doctor who I feel fairly confident will be one of those guys who comes out of the senate way richer than he went in, and that that’s the point to his candidacy.
At the same time, a cursory review of her Twitter account, @Kathy4Truth, turned up tweets like this one: “Just confronted a Muslim today.”
Uh-huh.
he joins Missouri Senate candidate Eric Greitens
Guilt by association with someone not even really associated with her. ALWAYS COMPELLING.
They not only create the potential of blowing winnable seats but being unmanageable for McConnell should he return as Senate majority leader next year.
Good. Why should I be worried if Mitch has a tough time “managing” the senate?
Neither rival nor their backers have put serious money on TV to promote her history of comments that would ordinarily disqualify a candidate in a general election, if not a Republican primary.
Uh-huh. Like “Its not a choice, it’s a life” and “I confronted a Muslim today”. What else do they have? Certainly the reporter could have done some harder hitting Twitter investigation to find out. And maybe mention it in the article.
Best case: She’s elected and ends up a thorn in the side of Senate leadership. She’s already signaled hesitancy about backing McConnell as the Republican leader.
Not seeing the problem here.
Ric Grenell, a Trump ally who’s also endorsed Oz, has been spreading around a video of Barnette’s past comments about “white racism.”
Which is the exact opposite of what this article is implying, which they have to know, but they are letting the implication sit there. So basically they are lying. Journalism!
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I think that I’ll shall never read a poem as lovely as an aborted fetus.
https://www.dailykos.com/stories/2022/5/11/2097485/-Poet-Laureate-Amanda-Gorman-Gives-Amazing-Speech-on-Roe-v-Wade
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Why did all these companies only start overcharging when Biden came into office?
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The left was going to start with jawboning, and if it can’t get inflation down it will move onto price controls.
The left is running its playbook.
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Brent, what’s with the crypto meltdown?
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all assets correlate when markets are selling off.
That said, the stablecoin issue is contributing.
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With an already constrained supply chain that’s going to make the stores look like North Korea.
You get what you vote for I guess.
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Even the Post’s Op-Ed writers are calling them on it:
“An inflation conspiracy theory is infecting the Democratic Party
By Catherine Rampell
Today at 6:10 p.m. EDT”
https://www.washingtonpost.com/opinions/2022/05/12/democratic-conspiracy-theory-on-inflation-makes-things-worse/
The Republican counter narrative, that this is being caused (or exacerbated) by Biden’s spending programs has two advantages over the Democrats’ talking points:
1. It’s a lot easier to understand and to correlate to the timing of the price increases.
2. It’s true.
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This point exemplifies the hubris.
The answer is important, because it determines what policymakers can or should do about it.
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“It’s not quite as self-sabotaging as the horse-dewormer-cures-covid false theory that swept up many Republicans last year”
Right at the start. Just can’t help themselves. Got to demonstrate they are part of the cult and know all the shibboleths by heart.
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They are evil, no further explanation needed.
Want to bet whatever they are doing to help smaller meat processors makes things worse?
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Scott, you might appreciate this:
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Twilight zone.
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Lol!
https://www.pbs.org/newshour/science/less-polluted-air-is-essential-for-health-but-its-also-driving-more-atlantic-hurricanes-study-finds
Climate change data? Rock.Fucking.Solid.
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Best of hands.
https://twitter.com/RNCResearch/status/1524842122330923009
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Koskidz not happy with a week’s delay of 44 BILLION dollars of aid to the most corrupt country on earth.
https://www.dailykos.com/stories/2022/5/12/2097714/-Rand-Paul-delays-Senate-passage-of-critical-40B-aid-bill-for-Ukraine-upsetting-Schumer-McConnell#comment_83569634
Or did Ukraine stop being corrupt the moment Russia invaded? If so, maybe we should think on that for a while.
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Also there are more actual fucking Nazis in Ukraine than there are in America (and the only real Nazis in America are also Ukrainian) but never mind all that.
Which is not to say I don’t support Ukraine but fucking hell why do we have $44 billion to just send to them to maybe beat Russia, maybe not who knows.
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I think either you didn’t paste the correct URL or the tweet has been deleted.
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I have no idea about this broad’s bona fides but this is savage.
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Neither do I but from what I know about that contest I’d 100% vote for her. Primary and general.
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