Entries by Wolf Richter

State of the American Debt Slaves: Borrowing More to Buy Less due to Raging Inflation

Estimated Reading Time: 2 minutes

Credit card balances up 3.0% from March 2019, but CPI inflation up 13%, LOL. Auto sales plunged, but auto loans jumped. You guessed it, ridiculous price increases.   Credit card balances ticked up 1.9% in March from February, not seasonally adjusted, to $1.036 trillion, according to the Federal Reserve today. Compared to three years ago, […]

Mortgage Volume Gets Crushed by Spiking Interest Rates: What it Means for Future Home Sales and Consumer Spending

Estimated Reading Time: < 1 minute

The boom is over. And there are broader effects. Spiking mortgage rates multiply the effects of exploding home prices on mortgage payments, and it has taken layer after layer of homebuyers out of the market for the past four months. And we can see that. Mortgage applications to purchase a home fell further this week […]

Stock Markets in China & Hong Kong Dive, Yuan Slides, Crude Oil Drops on Confidence Crisis in China

Estimated Reading Time: 2 minutes

The Shanghai Composite and Hang Seng fall to where they’d first been in 2007 during the run-up of the bubble.   The Shanghai Composite Index plunged 5.1% to 2,928 on Monday, the biggest one-day drop since February 2020, during the Wuhan crisis. The index is now down 20% year-to-date and down 14% from a year […]

Tightening Comes Even to Ridiculous ECB Sooner, Faster as Seven EU Countries Hit by 10%-16% Inflation, Four by over 9%

Estimated Reading Time: 3 minutes

The ECB created the greatest corporate bond bubble ever. Now junk bonds get crushed, yields already doubled, set to double again, and again, cleansing out the zombies.   The end of QE “is very likely to happen in the course of the third quarter with a high probability that it will be early in the […]

WHOOSH, Dollar’s Purchasing Power Goes to Heck as Services Inflation Takes Off, Food Spikes, Energy Explodes, But Used Cars Finally Stall

Estimated Reading Time: 3 minutes

The Fed is still pumping fuel on the fire. The Consumer Price Index today – a measure of how fast the dollar and everything denominated in dollars, including labor, lost its purchasing power – is a horror show, the likes of which the majority of Americans have never experienced in their lives. The reality on […]

My “Wealth Disparity Monitor” of the Fed’s Money-Printer Era: Holy Moly. April Update of the Greatest Economic Injustice in Recent History

Estimated Reading Time: 3 minutes

The wealthy got immensely wealthier. Everyone else paid for it via rampant inflation. The Fed’s own data on the distribution of wealth in the US is a quarterly report card on the Fed’s official policy goal of the “Wealth Effect.” It has now released the data for Q4. The Fed uses monetary policies, such as […]

Mortgage Rates Are Rising Much Faster than Treasury Yields. What’s the Deal?

Estimated Reading Time: < 1 minute

Is this spread heading to what happened in the 1970s and 1980s when the Fed battled blow-out inflation? The average 30-year fixed mortgage rate tracks the 10-year Treasury yield, running roughly in parallel but higher. It tracks the 10-year yield because the average 30-year mortgage gets paid off in just under 10 years, either through […]

Stocks in Germany, the UK, France, Italy, and Spain Plunge Below Year 2000 Levels: Buy-and-Hold Horror Shows

Estimated Reading Time: 2 minutes

Food for thought in light of the biggest stock market bubble in the US ever. Major European stock indices plunged below their bubble highs from over two decades ago. This is not to say that they plunged that much this week, but that they had finally risen past their prior bubble highs from over two decades ago, […]

Inflation Ate their Lunch, But Americans Made Heroic Efforts to Spend

Estimated Reading Time: 3 minutes

Personal Income and Spending under Red-Hot Inflation and Omicron. Not adjusted for inflation, the personal income of all Americans combined, from all sources – from wages, salaries, interest, dividends, rental income, unemployment compensation, stimulus checks, Social Security benefits, etc. but not including capital gains –  was essentially flat (seasonally adjusted) in January from December, fell […]