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Fed! Am I Right?

Happy Market Update!

Jackson scored his first official touchdown this past weekend! But wait. That’s not the most amazing part. The amazing part is that I was not a coach that game, and somehow managed to pace the field without yelling at the kids! How did I do it? I put a sock in my mouth and duct taped it in place. Yes, it was hard to breath. Yes, it was even more hot than the 90 degrees at game time. Okay, so maybe the sock part is not true. But if markets have taught me anything in the past 20 years, it’s to find patience. I did. I did not care for some play calls, and I bit my tongue. I didn’t like that the kids ran up the middle…in flag football…through the other 5 people. If you move the guards in to the center, it forces the runner to go to the outside. I mean, come on! Now you see what I mean right? I just paced. And paced…and walk to the other side of the field and paced. But they won! He’s number 10 in blue. He wanted 5, which was unavailable. I had to convince him with my magic numbering that 10 was a multiple of 5.

And yes, Jackson ran up the middle and literally blew past everyone. I’m not saying he is the next Bo Jackson (I’ll wait for the young people to google best pro athlete of all time). I’m not one of those fathers. I’m the type of guy whose team might win the super bowl, but I’d be in the corner complaining the defense kept it to close. You might think that’s a glass half empty. Well, you are wrong. The glass is empty. Haha

Speaking of glass half empty, this Fed! Am I right? Yes, they increased another ¼ point. What was the point in pausing in June? Are they are going to kick this can all the way to the elections? Hey Fed! That’s not for another 16 months. Pause. Raise. Pause. Raise. What the hell is wrong with you? You started late. Just get it done. My God. It does say “another” but I got the feeling that was plural…especially if warranted (my word not his).

What else is going on? I saw this tweet (or Xeet…yuck) from Bill Gross. Mr. Gross is a bond guru and has seen some things. We’ve spoken a lot about this yield curve that he mentions. Reminder: the 10yr-2yr was negative and the bulls said look to the 10yr-3mo. Then that turned negative and I hear nothing about the curve anymore…until this from Monday.

How is that curve doing? You tell me. I mean…it can’t be good, can it? Can it be ignored this time? Don’t bet against the trend, right? It’s more than double the lowest it’s been in recorded history (that just makes it sound longer than 1980). No way we don’t get a recession…based on this chart. Yes, friends, I will go down with the ship on this recession talk! I mean, you’ve listened to it time and time again. I’m not a bear, I just don’t think DC is smart enough to save us from something they want to happen.

One more chart that relates to our government and how (cough) efficient they are (not). My whole life I’ve heard people complain about how much spending goes into Defense. And yes, the fact that they “can’t” find billions of dollars is an issue (also see Area 51 and probably Area 52 for missing money). Anyway, the interest payment is higher now. Where are those complainers now? They have no idea. Swell. Good Americans just sticking their head in the sand. With so many people with their heads in the sand, one wonders how our Mojave desert isn’t just bodies now.

With all the talk about AI, and how that is helping the Nasdaq prove me wrong, check out the inventory in semiconductors. This is important because semiconductors are a huge manufacturing component in Taiwan’s economy. Remember that tiny island that China and the US are bickering over? Regardless, like everything else I find charts that show previous recessions. The last time we had this much inventory in semis? Dot com bubble. Oops. Take that, Nasdaq!

Last thing, as a follow up to my email last week. Joe Biden this week declared his administration “ended cancer as we know it.” I won’t get into it further, but as a man who lost my father early in life to cancer, shame on Joe Biden. Biden, this is no joke. People listen to you as a leader of this country without research…and you know it. Shame on you. Before anyone gets on me, yes, I heard it in context. Even if it was out of context, which it is not, these people need to think before they speak. But alas, they are politicians. What a joke.

10yr: So after the Fed, we are close to unchanged on the week. But I don’t like that it is above that down trendline again. I’m hoping the not as hawkish Powell has helped our long term rates melt down. Time will tell. But outside that downtrend, I’m locking loans.

MBS: Down seems higher rates. Not a bad day as we keep ourselves in the colored lines (moving averages). But we are in ones moving down…dragging our rates higher. Hang in there.

Believe it or not, my glass is not empty or half empty. It’s half full. I’ve always looked for the positive even when things are glum. So even if I write about potential disasters, I will look for the gold hiding in them. Yeah, I get to lick my wounds for a couple of days. But then I bounce back. If you need support, I’m here. My team is here. Even if you don’t need a mortgage. We are, after all, part unlicensed psychologists. If you are drowning in debt, we can use equity to fix that. If it doesn’t make sense, we’ll tell you that too…and give you a plan of what rate does. Tell us how we can help!

What doesn’t kill us, makes us stronger.

Tim Lindsey

President/Sr. Loan Officer

Bear Mortgage Inc.

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