Business

The cracks are starting to show in the housing 'recovery'. With Starts and Permits already rolling over, New Home Sales printed a disappointing 511k (vs 520k expectations), dropping 1.5% MoM. This is the 3rd monthly decline in a row - the longest such streak since July 2011. While positive for affordability, the decline MoM and YoY in median home prices (-$9,400 and -$5,400 respectively) will do nothing for The Fed's wealth-creation mandate. The West saw New Home Sales plunge 23.6% MoM while The Midwest surged 18.5%.

In the US is most assuredly moving into, if not already in a recession.

The media trumpeted the amazing 2.0% growth rate initially forecast for the first quarter of 2016. That forecast has since collapsed to 0.3%. This is the same game Government beancounters have been playing for years: a great initial forecast that is then revised lower and lower.

The above suggest the US economy is flatlining. However, other data are far worse. We’ve seen 16 straight months of declines in Factory Orders (this never happens outside of recessions)

On Friday we wrote our latest take on how the ECB's CSPP, or corporate bond buying program, in which we explained how this ECB's latest market manipulating adventure is about to crush the fundamentals of the European (and soon, courtesy of the ECB's "SPV" loophole, global) bond market. We showed how the ECB, in its latest attempt to become an even more market-moving hedge fund, is set to buy billions in corporate bonds and not just European but also international, as long as they have a European-domiciled (read Ireland or Netherland) SPV holdco.

Submitted by Tony Sagami via MauldinEconomics.com,

My college-aged kids love him. I’m not talking about Stephen Curry or Justin Bieber (although they love them too); I’m talking about Bernie Sanders.

Whether you support him or not, my guess is that most Americans my age are very surprised about his popularity. However, it shouldn’t be a surprise given the economic stress many Americans face.

Despite oil's rebound off cyclical lows and the world's exuberance that the energy space may be saved (on the basis of headline-reading algos pumping momentum into commodity futures products that only leveraged Chinese speculators could find value in), something ugly is occurring in Saudi Arabian money-markets.There appears to be a growing funding squeeze in The Kingdom as 3-month interbank rates spike above 2% for the first time since Jan 2009 prompting King Salman to approve a 'post-oil economic plan'.