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Don't Stop Running Until the Whistle Blows

Happy Market Update!

This weekend I was able to relive something we might all need to hear on occasion. Don’t stop until you hear the whistle! Jackson had the football and blew through the entire defense with one kid on his heels. He started to slow down, and he and the other kid came to a complete stop. Obviously, I started screaming run! Run! He looked at me (as did most people) and off he went followed closely by the lone defensive back (for lack of a better way to explain 4 year old football). His flag was ripped off just before the goal. After a strong defensive stance, we turned the ball over on downs near the goal line. We lost 13-8.


Why is this an important lesson for all of us? Because sometimes we stop just short of the goal. We’ve probably all seen this meme (for sure you have now):

I told Jax, “if you don’t’ hear the whistle you keep running. Run to Boulder if you have to”, I told him. (He was running north-northwest.) How many times have you stopped running? I know there have been times in my life when I stepped off the gas. This looming economic slow down that I am forecasting may have you thinking about letting off the gas. Don’t do it. More millionaires are made in economic downturns than upturns. Maybe you don’t want to be a millionaire. That’s okay. The point is, don’t give up when you need you the most.


In 2020, mortgage lenders were determined to be an essential worker during covid. You may wonder why. Well it’s because on average, most people’s largest asset with equity is their home. When “they” make you stop working, we have to find money to pay bills. And that’s exactly what we did. We did not miss a beat…there was no "2 weeks at home", there was no "6 months closed doors". I told our team, we are going to help as many people as we can. And we did just that. We closed over 500 mortgages that year, which is 3 times more than we had ever closed before. My point? When sh*t hit the fan, I doubled down to make sure my people got paid, my clients got help with their mortgage rate, and I set some retirement. Double down. But don’t double down like the Swamp…


The economy, in my humble opinion, is teetering. The Fed is doubling down on their soft landing forecast. Oh really? Let’s look at a few updated examples of items we have spoken about in the recent past.

First up - energy.


Oil: As reported by ZeroHedge, US Energy Secretary Jennifer Granholm spoke to the National Energy Administration in China, as reported by Fox News, most likely revealing Biden’s plan to release oil from our Strategic Petroleum Reserve. What in the name of everything that is Holy? China is a communist nation, and not our ally, regardless of what DC might lead us to believe. We buy their goods, and they use that revenue to build warships to prepare to battle the USA. For the love of God, stop telling out non-allies what we are doing. Check out this chart. I sure hope you liked your “low” gas prices. Don’t be fooled. This was done for the mid-terms. It continues today…so we will have an oil shortage…and I hope it’s not when China decides to fight Taiwan (aka USA).

Next up, Banking.


Banks: From Reuters but brought to you by Moody’s! We don’t have a bank crisis looming? Poppycock! These are not all small banks either. New York Melon and US Bancorp are just a few you may have heard of.

Next - Debt.


This is US Government interest payments. This continues to move at it’s fastest pace in US history. That is practically straight up. And the higher the cost, the higher the cost of servicing that federal debt. So how is that good for the Fed?

Consumer debt…credit cards edition. Still moving up over the $1b. Don’t care? Remember the Fed just increased the Fed Funds rate another 0.25% just 2 weeks ago. So everyone’s credit card bills got another ¼ point more expensive…making a new record high average interest rate across the country.

Next - Overseas export/import from China (probably in contact with Vandelay Industries – apologies to Costanza). If they are not taking in goods to create exports, then there won't be anything to ship out either, that’s not a good sign for the global economy. You don't have to like or dislike China. The bottom line is that a major manufacturer is not manufacturing.

Next – earnings are fine!


This is an edited exert from The Daily Rip by Stocktwists from August 7th:


“With about 84% of S&P 500 companies reporting through last week, second quarter earnings are down 4.2% year over year, but beating expectations by 7.7%.” Why is this important? Stock prices move on “beating” the expectations…but they are down compared to last year showing that the slowdown coming (if not already here). Come on…


Next – Seasonality.


Yes, it’s true that we do go through trends that are similar. In fact, I’ve seen some charts like the one below based on the 4 year presidential cycle. Most of the time they help, I would imagine. If this one does help, then we can expect to see down turns in our 401k. But how much is normal will depend on the risk tolerance you approved, sometimes years ago. Go check on it. While you are looking at it, ask your financial advisor about that 401k change for those over 50 years old that congress ended this year. We used to be able to add more to our 401ks once over 50, but no more…and just when I’m 51 weeks away from being 50 (I'm guessing social security age will increase just as I'm nearing those ages too). But I am not a financial advisor. Call yours.

Finally, my ol’ 10yr-3mo spread…still sitting near records lows. We’ve been under the 0 level since roughly late October of last year. This can’t end well.


10yr: This chart is ugly. That’s it. That’s the whole comment. Okay, a little more. Not just a sad face. That move above the 4.10 level deserves a mad face. The Fed is releasing more bonds to sell…which drives yields higher if demand is lower. Yes, demand is lower. Most traders I’m following are anticipating higher rates for longer. Hey Fed, end it already. This ¼ point each meeting is ridiculous. This is the longest band-aid pull off from the arm of a sasquatch. Ouch!

MBS: Hopefully forming a bottom between the two lows recently. Could have been a lot worse with that 10yr over 4.1. But we need to get back above all those colored lines (those are 4 different moving averages and represent resistance from keeping us from moving up). MBS down = higher rates.

So what do we learn here? Tim is doubling down on recession. Haha. Ugh. But seriously, I have not waivered, and I’m not going to now. Just save your money. Start paying more of that debt off. (I’m not a financial advisor…just someone who cares about your well-being.) At the end of the day, I need Jackson to run to the end zone like Forrest Gump. Just put a sign up that reads, STOP! That’s how I’m running my mortgage business, even if the mortgage business is repeating our slow chaos from 2008-2009. I’m not saying we lose values. I’m saying mortgage are expensive and there are a lot of young writers suggesting that the American Dream of owning your own home is dead. It’s only dead if you want it to be. Economic downturns have a knack of turning around…faster than you might feel it. So get to work. Make more calls if you are a salesperson. If you are in operations, find out what the boss needs that's extra. Those are the people who get security. God knows I honor the people who actually try…and try…and try. Run ‘til that whistle blows.


What doesn’t kill us, makes us stronger.



Tim Lindsey

President/Sr. Loan Officer

Bear Mortgage Inc.


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