In the last 8 decades, savings as a percentage of national income has ONLY contracted three times:
2008 - Great Recession. 2020 - Covid Pandemic Crash. 2023 - The Everything Bubble. Source: Whalewire
BREAKING: Average interest rate on a 30-year mortgage rises to 7.93%, its highest since July 2000
Since January 2021, less than 3 years ago, interest rates have gone from 2.65% to 7.93%. This means that homebuyers just 3 years ago would see their interest rate TRIPLE if they decided to move. This is exactly why existing home sales are at their lowest since 2010. The average new home is about to cost LESS than the average existing home for the first time since 2005. You know something is wrong when old costs more than new. Why sell if your mortgage rate triples? From The Kobeissi Letter
Looking at the September US payroll numbers through another lens
Unadjusted total payrolls rose by 585K and yet private payrolls dropped by 399K. All of the unadjusted jobs in September came from the government, which added a whopping 984K jobs (mostly teachers). What if all the mess in Washington (shutdowns, political gridlock in Congress, etc.) and rising cost of debt put a cap on the fiscal support? Where are the jobs going to come from? Source: www.zerohedge.com, Bloomberg
Robin Brooks tweet: "In the first 8 months of 2023, German exports to Kyrgyzstan were up 1400% from the same period in 2019
A lot of these goods - mostly cars and car parts - never ends up in Kyrgyzstan, but go directly or indirectly to Russia"
U.S. Mortgage Rates surpassed 8% this week for the first time in more than 23 years
Source: barchart
The construction sector in Germany is really crashing. The German PMI Construction Index fell to 39.3 in Sep from 41.5 in Aug, and the lowest level since statistics began
Source: HolgerZ, Bloomberg
Is ADP the start of something big or an anomaly, knowledge_vital asks as ADP report for September saw a huge drop in new jobs to just 89k vs. 150k forecast, & down from +180k in Aug
The 89k is the softest number since Jan 2021. Large comps drove downside, they shed 83k jobs in September. Souce: HolgerZ, Bloomberg
IS THE US ENTERING A DEBT SPIRAL LEADING TO A SOVEREIGN DEBT CRISIS?
Goldman, JP Morgan and BofA pull the alarm US debt is going parabolic! Total US debt rose by $275 billion in just ONE DAY. The US has added $32 billion in debt per day for the last 2 weeks. At the current pace, the US will add $1 trillion of debt in a month. Meanwhile: - David Lebovitz of JPMorgan Asset Management says something will break if rates continue to rise at the pace they've been going - "Fed hiking cycles always end with default & bankruptcy of extended governments, corporations, banks, investors." - BofA - Goldman Sachs: "There is a significant risk that FCIs continue to tighten until something breaks… (...) All roads appear to be leading to a continued sell-off in US + DM Rates as the market struggles to find the right clearing level for bonds (...) Risks are growing of a sharp, impulsive negative feedback loop in to other markets Source: Max Keiser, www.zerohedge.com
