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Freddie Mac Mortgage Survey

News Summary

Debt Ceiling Hysteria and Hypocrisy

This week the US government reached its 31.4 trillion dollars borrowing limit, better known as the “debt ceiling.” This led to a showdown among House Republicans, President Biden, and congressional Democrats.

The 1.5 Degree Temperature Target is a Dead Man Walking

Since the early 1990s, climate policy has focused on a number of different metrics around which to set policy goals, including emissions cuts (Kyoto 1997), atmospheric carbon dioxide concentrations (Copenhagen 2009) and global average temperature change from pre-industrial times (Paris 2015). In an earlier post I described the arbitrary and non-scientific origins of the 2 degree Celsius temperature target of the Paris Agreement (2015).

Biden admin appoints doctor who claims obesity is mostly genetic to Dietary Guidelines Committee

President Joe Biden’s administration appointed Dr. Fatima Cody Stanford, who claimed obesity was mostly genetic and not primarily driven by diet or exercise, to the Biden administration’s 2025 Dietary Guidelines Advisory Committee.

Obesity Statistics
Obesity currently affects four out of 10 Americans, according to data from the Centers for Disease Control and Prevention (CDC). While weight and overall health aren’t always connected, obesity is often considered a cause of multiple comorbid and chronic medical conditions, including type 2 diabetes, some forms of cancer and heart disease.

Starter Home Prices Are Soaring and Luxury Is in a Slump
For those navigating America’s residential real estate market, it’s lately felt a bit like an out-of-control cargo train, ever threatening to veer off the tracks—stomach-churning price accelerations followed by interest rate hikes slamming the brakes. It’s little wonder that just about everyone seems to be searching for clues on where housing sales are going this year. But it’s not a one-size-fits-all market. Different kinds of homes—and the diverse people buying and selling them—have been affected in significantly different ways, especially when it comes to prices,

Scientific study concludes that the northern hemisphere will cool over the next 25 years

A scientific study has concluded that the world is in a cooling phase. In the face of the alarmism of global warming and climate change, the work of six renowned Norwegian researchers reveals several signs of this, such as the weakening of a warm water current in the Arctic and the increase of the frozen surface of Greenland. These findings are in addition to the fact that summer sea ice in the Arctic has been recovering for the past 10 years.

Freddie Mac Mortgage Report

Interactive Chart here. 

Employment Picture Not As Rosy as Commonly Reported

The survey of business establishments has shown steady growth in employment and the smaller survey of households has shown virtually no job growth since March.

This pattern held again for the November jobs report released Friday. Employment was up in the establishment survey by 263k, but the household survey dropped 138k. The divergence since March now stands at an enormous 2.7 million jobs.One reason is double counting in the establishment survey, with over 900k of the jobs added in the last year being workers with second jobs, not additional people employed.

To be sure, it is still a hot employment market for workers with some 10 million job openings. Count us as skeptical that this rosy jobs market will continue much longer.

The economy is hemorrhaging full-time jobs – we’ve lost over 2,600 full-time jobs every day since May.

National Debt at $31 Trillion: Does Anyone Care?

Our national debt has soared to a record $31.3 trillion. Yet our federal budget deficit fell sharply in fiscal year 2022. The national debt continued to rise in FY2022 because the government spent more money than it received in revenues.

The budget deficit for FY2022 fell sharply because federal spending to fight the COVID-19 pandemic declined significantly, but it was still a large deficit. The budget shortfall declined to $1.375 trillion, compared to the 2021 deficit of $2.776 trillion.

President Biden has been trying to take credit for the huge decline in the budget deficit, but in fact his policies prevented the budget deficit from falling even further. America's growing national debt is the result of simple math — each year, there is a mismatch between spending and revenues. When the federal government spends more than it takes in, we have to borrow money to cover that annual deficit. And each year’s deficit adds to our growing national debt.

Historically, our largest budget deficits were caused by increased spending around national emergencies like major wars or the Great Depression.

Today, our deficits are caused mainly by predictable structural factors: our aging baby-boom generation, rising healthcare costs and a tax system that does not bring in enough money to pay for what the government has promised its citizens.

Inverted Yield Curve: Largest Gap Since 1981

An inverted yield curve is often seen as a warning that a recession is looming. Longer-term yields are usually higher than shorter-term yields because investors want to guard against the risk of unexpected inflation and rate increases.

The yield on the 10-year Treasury note dropped to 0.78 percentage points below the two-year yield, the largest negative gap since 1981, before easing slightly. The inversion reflects both surprising positive news on inflation as well as the view that the Federal Reserve will continue to raise interest rates and keep them at elevated levels.