Connect with us

MORTGAGE LENDING ACROSS U.S. DROPS AT FASTEST PACE IN ALMOST THREE YEARS DURING FOURTH QUARTER

Overall Loan Activity Down 11 Percent, Marking Third Straight Quarterly Decrease; Lending Down at Fastest Rate Since Early 2019; Refinance, Purchase, Home-Equity…

Published

2 years ago

on

MORTGAGE LENDING ACROSS U.S. DROPS AT FASTEST PACE IN ALMOST THREE YEARS DURING FOURTH QUARTER

Overall Loan Activity Down 11 Percent, Marking Third Straight Quarterly Decrease; Lending Down at Fastest Rate Since Early 2019; Refinance, Purchase, Home-Equity Mortgages All Down Quarterly

PR Newswire

IRVINE, Calif., March 3, 2022

IRVINE, Calif., March 3, 2022 /PRNewswire/ -- ATTOM, a leading curator of real estate data nationwide for land and property data, today released its fourth-quarter 2021 U.S. Residential Property Mortgage Origination Report, which shows that 3.27 million mortgages secured by residential property (1 to 4 units) were originated in the fourth quarter of 2021 in the United States. That figure was down 11 percent from the third quarter of 2021 and 13 percent from the fourth quarter of 2020.

The total number of mortgages issued was down for the third quarter in a row while the annual decrease marked the largest since late 2018. The overall drop-off resulted from across-the-board quarterly declines in all three categories of conventional loans - purchase, refinance and home-equity. Only purchases lending remained up from a year earlier.

Overall, lenders issued $1.06 trillion worth of mortgages in the fourth quarter of 2021. That was down quarterly by 9 percent and annually by 7 percent. Both decreases in the dollar volume of loans were the largest since the early part of 2019.

On the refinance side, 1.81 million home loans were rolled over into new mortgages during the fourth quarter of 2021, a figure that was down 11 percent from the third quarter and 23 percent from a year earlier. The total number of refinance mortgages decreased for the third straight quarter while the annual drop was the largest in three years. The dollar volume of refinance loans was down 9 percent from the third quarter of 2021 and 18 percent annually, to $578 billion.

Refinance mortgages, while still a majority of residential lending activity, decreased again as a portion of all loans during the fourth quarter of 2021. They represented 55 percent of all fourth-quarter mortgages, down from 56 percent in the third quarter of 2021 and 62 percent in the fourth quarter of 2020.

The number of purchase loans also declined in the fourth quarter of 2021 as lenders issued 1.22 million mortgages to buyers. That was down 11 percent quarterly, although still up annually by 3 percent. The dollar value of loans taken out to buy houses and condominiums dipped to $439 billion, down 10 percent from the third quarter of last year but still up 14 percent from the fourth quarter of 2020. As a portion of all lending, purchase loans slipped from 38 percent in the third quarter of 2021 to 37 percent in the fourth quarter 2021, while still up annually from 32 percent.

Home-equity lending also dropped quarterly, by 5 percent, to about 230,700, although that number represented a slight increase in the total portion of all loans.

The decrease in all three mortgage categories during the fourth quarter, as well as the third straight drop in total lending, represented another sign that the near-tripling of lending activity from 2019 through 2021 has ended, at least temporarily. The latest numbers likely reflect several trends coming together at the same time. They include homeowner appetite for refinance loans finally getting satisfied and mortgage rates ticking upward. In addition, a tight supply of homes for sale throughout the Coronavirus pandemic has helped drive prices up but purchases down.

Historical Residential Mortgage Originations Graphic

"The receding volume of business for the residential mortgage industry is now showing up across all major categories of loans and appears to be more than just a temporary slide. The ebbing wave of refinance loan that started in early 2021 has fully spread to home-purchase and home-equity lending," said Todd Teta, chief product officer at ATTOM. "No doubt, total lending levels are still up over normal amounts over the past decade. And the drop-off in purchase loans seems to flow from a lack of housing supply rather than the housing market boom ending. But declining business for lenders remains a key point to watch in assessing the state of the market, especially with interest rates likely to climb this year."

Total mortgages drop at fastest pace in three years
Banks and other lenders issued 3,266,907 residential mortgages in the fourth quarter of 2021. That was down 10.7 percent from 3,656,892 in third quarter of 2021 and down 13.5 percent from 3,775,894 in the fourth quarter of 2020.

The quarterly and annual declines were the largest since the first quarter of 2019 or the fourth quarter of 2018, respectively. The latest total also was 18.1 percent less than the peak hit in the first quarter of 2021.

The $1.06 trillion dollar volume of all loans in the fourth quarter was down 9 percent from $1.17 trillion in the prior quarter and 6.5 percent less than the $1.14 trillion lent in the fourth quarter of 2020.

Overall lending activity decreased from the third quarter of 2021 to the fourth quarter of 2021 in 195, or 91 percent, of the 215 metropolitan statistical areas around the U.S. with a population of more than 200,000 and at least 1,000 total residential mortgages issued in the fourth quarter. Total lending activity was down at least 5 percent in 163 metros (76 percent). The largest quarterly decreases were in Provo, UT (down 54.3 percent); Huntsville, AL (down 53.9 percent); Hickory-Lenoir, NC (down 48.5 percent); Pittsburgh, PA (down 43.8 percent) and Peoria, IL (down 40.9 percent).

Aside from Pittsburgh, metro areas with a population of least 1 million that had the biggest decreases in total loans from the third to the fourth quarter of 2021 were St. Louis, MO (down 22.1 percent); San Jose, CA (down 19.6 percent); Birmingham, AL (down 17.4 percent) and Chicago, IL (down 17.1 percent).

Metro areas with the biggest increases in the total number of mortgages from the third to the fourth quarter of 2021 were Buffalo, NY (up 25 percent); Utica, NY (up 13.6 percent); Hilton Head, SC (up 11.6 percent); Shreveport, LA (up 8.2 percent) and New Orleans, LA (up 6.8 percent).

Aside from Buffalo and New Orleans, the only metro areas with a population of at least 1 million and an increase in total mortgages from the third quarter to the fourth quarter of 2021 were Raleigh, NC (up 2.7 percent); Baltimore, MD (up 2.4 percent) and Cleveland, OH (up 1.1 percent).

Refinance mortgage originations down 11 percent from third quarter
Lenders issued 1,812,512 residential refinance mortgages in the fourth quarter of 2021, down 10.8 percent from 2,033,085 in third quarter of 2021 and down 22.7 percent from 2,345,117 in the fourth quarter of 2020. The total was down for the third straight quarter, which had not happened since late 2018 into early 2019. The $578 billion dollar volume of refinance packages in the fourth quarter of 2021 was down 9 percent from $635.4 billion in the prior quarter and down 17.5 percent from $700.7 billion in the fourth quarter of 2020.

Refinancing activity decreased from the third quarter of 2021 to the fourth quarter of 2021 in 193, or 90 percent, of the 215 metropolitan statistical areas around the country with enough data to analyze. Activity dropped at least 10 percent in 101 metro areas (47 percent). The largest quarterly decreases were in Provo, UT (down 55.3 percent); Huntsville, AL (down 52.3 percent); Pittsburgh, PA (down 46.6 percent); Hickory-Lenoir, NC (down 42.9 percent) and Peoria, IL (down 35.3 percent).

Aside from Pittsburgh, metro areas with a population of least 1 million that had the biggest decreases in refinance activity from the third to the fourth quarter of 2021 were Salt Lake City, UT (down 29.8 percent); San Jose, CA (down 23.2 percent); St. Louis, MO (down 22 percent) and San Francisco, CA (down 19.3 percent).

Counter to the national trend, metro areas with the biggest increases in refinancing loans from the third to the fourth quarter of 2021 were Utica, NY (up 62.4 percent); Buffalo, NY (up 25.1 percent); Shreveport, LA (up 14.8 percent); Sioux Falls, SD (up 11.5 percent) and Baton Rouge, LA (up 11 percent).

Aside from Buffalo, the only metro areas with a population of at least 1 million where refinance mortgages increased from the third to the fourth quarter of 2021 were New Orleans, LA (up 10.4 percent); Cleveland, OH (up 10.1 percent) and Baltimore, MD (up 2.1 percent).

Refinance lending still represents at least 50 percent of all loans in three quarters of metros
Despite the continued decline in refinance activity, those loans still accounted for at least half of all mortgages issued in the fourth quarter of 2021 in 155 (72 percent) of the 215 metro areas with sufficient data to analyze. That was the same portion as in the third quarter of 2021 but down from 91 percent a year earlier.

Metro areas with a population of at least 1 million where refinance loans represented the largest portion of all mortgages in the fourth quarter of 2021 were Atlanta, GA (73.1 of all mortgages); Detroit, MI (67.2 percent); New Orleans, LA (64.3 percent); Kansas City, MO (62.3 percent) and Providence, RI (62.2 percent).

Metro areas with a population of at least 1 million where refinance loans represented the smallest portion of all mortgages in the fourth quarter of 2021 were Rochester, NY (43.6 percent of all mortgages); Oklahoma City, OK (43.9 percent); Buffalo, NY (47.2 percent); Salt Lake City, (47.9 percent) and Grand Rapids, MI (49.1 percent).

Purchase originations decrease 11 percent in fourth quarter
Lenders originated 1,223,661 purchase mortgages in the fourth quarter of 2021. That was down 11.3 percent from 1,379,671 in the third quarter, although still up 2.8 percent from 1,189,920 in the fourth quarter of 2020. The $439 billion dollar volume of purchase loans in the fourth quarter of 2021 was down 10 percent from $487.5 billion in the prior quarter, but remained up 14.1 percent from $384.6 billion a year earlier.

Residential purchase-mortgage originations decreased from the third to the fourth quarter of 2021 in 186 of the 215 metro areas in the report (87 percent). The largest quarterly decreases were in Provo, UT (down 55.2 percent); Hickory-Lenoir, NC (down 54.1 percent); Huntsville, AL (down 53.5 percent); Sioux Falls, SD (down 51.5 percent) and Pittsburgh, PA (down 48.2 percent).

Aside from Pittsburgh, metro areas with a population of at least 1 million that saw the biggest quarterly decreases in purchase originations in the fourth quarter of 2021 were St. Louis, MO (down 23.3 percent); Atlanta, GA (down 21.6 percent); Rochester, NY (down 21.4 percent) and Chicago, IL (down 20.7 percent).

Residential purchase-mortgage lending increased from the third quarter of 2021 to the fourth quarter of 2021 in 29 of the 215 metro areas reviewed (13 percent). The largest increases were in Buffalo, NY (up 25.3 percent); Lakeland, FL (up 17.8 percent); Salt Lake City, UT (up 17.7 percent); Lafayette, IN (up 13.3 percent) and Brownsville, TX (up 11.7 percent).

Aside from Buffalo and Salt Lake City, metro areas with a population of at least 1 million and the largest increases in purchase originations from the third to the fourth quarter of 2021 were Raleigh, NC (up 8.3 percent); Tucson, AZ (up 6.9 percent) and Baltimore, MD (up 4.9 percent).

Metro areas with a population of at least 1 million where purchase loans represented the largest portion of all mortgages in the fourth quarter of 2021 were Oklahoma City, OK (50.6 percent of all mortgages); Las Vegas, NV (44.4 percent); Miami, FL (44.2 percent); Virginia Beach, VA (42.5 percent) and San Antonio, TX (42.2 percent).

Metro areas with a population of at least 1 million where purchase loans represented the smallest portion of all mortgages in the fourth quarter of 2021 were Detroit, MI (23.7 percent of all mortgages); Atlanta, GA (26.3 percent); Boston, MA (29.3 percent); Kansas City, MO (29.9 percent) and Pittsburgh, PA (32.1 percent).

HELOC lending down 5 percent
A total of 230,734 home-equity lines of credit (HELOCs) were originated on residential properties in the fourth quarter of 2021, down 5.5 from 244,136 during the prior quarter and down 4.2 percent from 240,857 in the fourth quarter of 2020. HELOC activity dropped for the first time since the first quarter of 2021. The $45.6 billion fourth-quarter volume of HELOC loans was down 3 percent from the third quarter and 11 percent from the fourth quarter of 2020.

HELOC mortgage originations decreased from the third to the fourth quarter of 2021 in 68 percent of the metro areas analyzed. The largest decreases in metro areas with a population of at least 1 million were in Atlanta, GA (down 36.1 percent); San Antonio, TX (down 23.3 percent); Houston, TX (down 19.1 percent); Austin, TX (down 18.5 percent) and St. Louis, MO (down 15.9 percent).

The biggest quarterly increases in HELOCs among metro areas with a population of at least 1 million were in Cleveland, OH (up 32.7 percent); Buffalo, NY (up 24.3 percent); Raleigh, NC (up 21.7 percent); Philadelphia, PA (up 13.5 percent) and Detroit, MI (up 10.6 percent).

FHA loan portion up while VA share decreases
Mortgages backed by the Federal Housing Administration (FHA) accounted for 319,334 or 9.8 percent of all residential property loans originated in the fourth quarter of 2021. That was up from 9.3 percent in the third quarter of 2021, although still down from 10.7 percent in the fourth quarter of 2020.

Residential loans backed by the U.S. Department of Veterans Affairs (VA) accounted for 197,313, or 6 percent, of all residential property loans originated in the fourth quarter of 2021, down from 6.4 percent in the previous quarter and 8.4 percent a year earlier.

Median down payments tick down while loan amounts go up
The national median down payment on homes purchased with financing decreased slightly during the fourth quarter of 2021 while the typical amount borrowed rose to another new high. Meanwhile, the ratio of median down payments to home prices stayed about the same.

The median down payment on single-family homes purchased with financing in the fourth quarter of 2021 was $26,000, down 1 percent from $26,250 in the previous quarter but still up 18.8 percent from $21,891 in the fourth quarter of 2020.

Among homes purchased with financing in the fourth quarter of 2021, the median loan amount was $293,400. That was up 1.3 percent from the prior quarter and up 10.5 percent from the same period in 2020.

Report methodology
ATTOM Data Solutions analyzed recorded mortgage and deed of trust data for single-family homes, condos, town homes and multi-family properties of two to four units for this report. Each recorded mortgage or deed of trust was counted as a separate loan origination. Dollar volume was calculated by multiplying the total number of loan originations by the average loan amount for those loan originations.

About ATTOM
ATTOM provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation's population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 20TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, property reports and more. Also, introducing our newest innovative solution, that offers immediate access and streamlines data management – ATTOM Cloud.

Media Contact:
Christine Stricker
949.748.8428
christine.stricker@attomdata.com 

Data and Report Licensing:
datareports@attomdata.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/mortgage-lending-across-us-drops-at-fastest-pace-in-almost-three-years-during-fourth-quarter-301494658.html

SOURCE ATTOM

Read More

Related Topics:
Continue Reading

Uncategorized

Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

Published

4 hours ago

on

March 8, 2024

By

Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

Read More

Continue Reading

Uncategorized

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

Published

4 hours ago

on

March 8, 2024

By

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

Read More

Continue Reading

International

Angry Shouting Aside, Here’s What Biden Is Running On

Angry Shouting Aside, Here’s What Biden Is Running On

Last night, Joe Biden gave an extremely dark, threatening, angry State of the Union…

Published

5 hours ago

on

March 8, 2024

By

Angry Shouting Aside, Here's What Biden Is Running On

Last night, Joe Biden gave an extremely dark, threatening, angry State of the Union address - in which he insisted that the American economy is doing better than ever, blamed inflation on 'corporate greed,' and warned that Donald Trump poses an existential threat to the republic.

But in between the angry rhetoric, he also laid out his 2024 election platform - for which additional details will be released on March 11, when the White House sends its proposed budget to Congress.

To that end, Goldman Sachs' Alec Phillips and Tim Krupa have summarized the key points:

Taxes

While railing against billionaires (nothing new there), Biden repeated the claim that anyone making under $400,000 per year won't see an increase in their taxes.  He also proposed a 21% corporate minimum tax, up from 15% on book income outlined in the Inflation Reduction Act (IRA), as well as raising the corporate tax rate from 21% to 28% (which would promptly be passed along to consumers in the form of more inflation). Goldman notes that "Congress is unlikely to consider any of these proposals this year, they would only come into play in a second Biden term, if Democrats also won House and Senate majorities."

Biden also called on Congress to restore the pandemic-era child tax credit.

Immigration

Instead of simply passing a slew of border security Executive Orders like the Trump ones he shredded on day one, Biden repeated the lie that Congress 'needs to act' before he can (translation: send money to Ukraine or the US border will continue to be a sieve).

As immigration comes into even greater focus heading into the election, we continue to expect the Administration to tighten policy (e.g., immigration has surged 20pp the last 7 months to first place with 28% in Gallup’s “most important problem” survey). As such, we estimate the foreign-born contribution to monthly labor force growth will moderate from 110k/month in 2023 to around 70-90k/month in 2024. -GS

Ukraine

Biden, with House Speaker Mike Johnson doing his best impression of a bobble-head, urged Congress to pass additional assistance for Ukraine based entirely on the premise that Russia 'won't stop' there (and would what, trigger article 5 and WW3 no matter what?), despite the fact that Putin explicitly told Tucker Carlson he has no further ambitions, and in fact seeks a settlement.

As Goldman estimates, "While there is still a clear chance that such a deal could come together, for now there is no clear path forward for Ukraine aid in Congress."

China

Biden, forgetting about all the aggressive tariffs, suggested that Trump had been soft on China, and that he will stand up "against China's unfair economic practices" and "for peace and stability across the Taiwan Strait."

Healthcare

Lastly, Biden proposed to expand drug price negotiations to 50 additional drugs each year (an increase from 20 outlined in the IRA), which Goldman said would likely require bipartisan support "even if Democrats controlled Congress and the White House," as such policies would likely be ineligible for the budget "reconciliation" process which has been used in previous years to pass the IRA and other major fiscal party when Congressional margins are just too thin.

So there you have it. With no actual accomplishments to speak of, Biden can only attack Trump, lie, and make empty promises.

Tyler Durden Fri, 03/08/2024 - 18:00

Read More

Continue Reading

Trending