Refinancing mortgages is phenomenally profitable for banks – one of the few growth sectors actually spawned by the Fed’s herculean efforts to force down long-term interest rates through waves of quantitative easing. Banks went on a hiring binge to shuffle all this paper around and extract fees. But now, with rising rates, that business is getting decimated.
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Controlling The Implosion Of The Biggest Bond Bubble In History
by Wolf Richter • • Comments Off on Controlling The Implosion Of The Biggest Bond Bubble In History
In theory, the Fed could continue to print money and buy Treasuries and mortgage-backed securities, even pure junk, until the bitter end. But the bitter end would be unpleasant for those that the Fed represents – and now they’re speaking up publicly. They’re worried that their system might break down. It would threaten their empires. It would be the bitter end.
“The Mother Of All Shorts”
by Wolf Richter • • Comments Off on “The Mother Of All Shorts”
The Dow and S&P 500 are stumbling like drunken but determined sailors from one all-time high to the next, despite lousy employment and economic data, and declining corporate revenues. Bonds have done the same, and their 100-year graph has assumed the terrifying shape of open crocodile jaws, worse even than in 1999 and 2007.
It’s Official: The Consumer (And The Economy) Is Alive and Dead
by Wolf Richter • • Comments Off on It’s Official: The Consumer (And The Economy) Is Alive and Dead
Friday’s plunge in consumer sentiment was hastily ascribed to the Fiscal Cliff. Like Sandy, it’s recruited to explain everything that goes wrong. But over the last few days, one monkey wrench after another has been thrown into the hope machinery, including the collapse of small-business hiring plans to the record low set during the catastrophic post-Lehman days.
The Inexplicable American Consumer Hits A Wall
by Wolf Richter • • 7 Comments
The strongest and toughest creature out there, and maybe the smartest one, that no one has been able to subdue yet, the inexplicable American consumer has hit a wall. It showed up in a prosaic but ugly 8-K filing by Visa—a staggering and sudden shift that pundits tried to explain away somehow by referring to recent changes in debit card regulations. I mean, come on.
Inflation High on the Hog For the Holidays
by Wolf Richter • • Comments Off on Inflation High on the Hog For the Holidays
The season’s ditty: companies announce big profits after they jack up prices. But even the inexplicable American consumer, the toughest creature out there, struggles with these prices as misery spreads into the middle class. Now add HoneyBaked to the list, just in time for the holidays. But there is hope.
The 2021 Creatures of Goldman Sachs: its IPOs, SPACs, Direct Listings Are Imploding after Bonuses Spiked to a Record
by Wolf Richter • • 110 Comments
This is What Mucks Up Housing, Costs Homeowners Dearly
by Wolf Richter • • Comments Off on This is What Mucks Up Housing, Costs Homeowners Dearly
Home prices have jumped around the country, in some cities over 20% on an annual basis. “Recovery of the housing market,” is what this phenomenon is called. Everyone from President Obama on down has taken credit for it, particularly the Fed, whose handiwork this is. But there is a very ugly fly in this illusory ointment.