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Am I Sick or is it Just Bad Rates?

Happy Market Update!

I know it seems like it’s been a month…well, it’s only been a few weeks. I have been sick, going on day 19 now. Some sinus infection. The first week I didn’t even come to work for 4 days. The last time was a mandatory covid quarantine (remember those days?), and before that was like 2 decades ago. Last week we had some team members out and even though I worked, it was like pulling teeth getting my brain to work. This week I’m just really pissed off about it. Sinuses are still awful, but it’s just enough to keep my blood pressure up. So thanks for your patience. I will try not to be overtly angry in my typical “the sky is falling” newsletter.

On top of all that, from our 2 feet of snow in my neighborhood, I probably lost a good portion of one of my trees and it looks like 2 large shrubs in the back. I guess I supposed to be happy that my roof didn’t collapse. See? I’m already more positive!

There is more good news! The mortgage industry has picked up some steam being that it is Spring (officially around 9pm local time tonight). So our team and our LOs are seeing some more pre-approvals and contracts coming in. It’s like coming out of the storm…while still being in the storm. Rates have not helped us, but there is still limited supply for homes. Regardless, we will take what we can get. If you know anyone thinking about using some equity to pay off some debt, or they are shopping for a home this year, now is the right time for us to help. Let me know!

But Tim, where would someone buy a home? Thanks for asking! Check out this map. If you don’t know, I am a map nerd. Back in the 70s and 80s, we did not have GPS or any handheld devices telling us where to turn. (When we finally got the Walkman, it was none of that while also being all that!) So I stared at maps anytime we got in the car. And yes, you are damn right that I am teaching Jackson. When the government uses an EMP to turn off all of our devices at once, I will still be able to get anywhere in the country! (assuming I can steal one of NASA’s pre-computer chip cars they are hiding) Anyway, everyone seems to be moving around. Where are they going? ID, UT and MT apparently. I’ve been to all 3…and it doesn’t sound bad.

Why move? It could be a jobs issue. I know…I know. The government says jobs are fine. At least not a lot of layoffs. How does one avoid laying off people to prevent them from filing for unemployment…or being counted in jobless numbers? How about reduce their hours to zero…but keep them on staff. As Yakov Smirnoff always said, “What a country!” If you ever needed visual evidence of a fix being in….here you go.

Manufacturing is still struggling. Not that we are a manufacturing country…I know. We are service oriented. But this has to have some impact…We have not had expansion in over a year. Expansion would be above 50…and our last one was in the fall of 2022. Think about that…today is spring 2024.

If we don’t make anything, at least we can import! As Lee Corso says, “Not so fast, my friend.” This shows that the traffic in the Panama Canal is really low (due to drought) and the Suez continues to lose traffic. Yes, the Cape of Good Hope is increasing, but that adds a lot of time to transportation. You have to go around Africa. Some of you are just nodding. Get a map…I’ll wait. Thanks to Apollo for this chart.

By the way, speaking of goods, inflation is NOT under control as we have preached about here. Yes, even I think I’m preaching. But here are two charts that prove it. First, from Apollo, this shows inflation, the one the Fed watches to be hovering at 3%. I’m not math genius, but that sounds higher than the 2% target.

Okay, how about the producer costs? Well we git that number last week. It was twice as high as expected. That means the cost of goods will rise. Contrary to what some politicians would have you believe, businesses will pass this through. Not because they are greedy…because they need to pass on cost to survive. Yes, I know some businesses are making a lot of money. People like to point out oil for example. Well, there was a time a couple of years ago when the price of a barrel of oil was under $0. Yes, negative. How do you think that business did then? IT’s not good, then it’s good…then it’s not…then it is. That’s economics. Regardless, costs are rising, so inflation to consumer will to.

The Fed meets today and tomorrow. I am forecasting no movement in rates, but more talk about higher for longer. Why? See inflation conversation above. So rates will not be coming down soon. Yes, I know it’s an election year (when isn’t it?) but I just don’t see how they can lower rates at this point before the election, let alone this year at all. Still, right now, there is still a strong belief the Fed lowers in June or July. I think tomorrow is an important time to listen. This may push out further. At least we are not bored!


Need a reason to be pissed like me? Not get sick. This will make you sick as it is. This comes from the Twitter account @FrogNews. Bottom line, less than 5% of our population is paying 76% of the taxes. This is a real problem. Our country cannot survive a long time if everyone isn’t paying taxes…or at least their share. I’m in the top 5%, I am sure of it. You probably are too. We need more people to contribute. Socialism is not a real thing for the long term. But that’s just my politics coming out I guess. Sorr, not sorry. But I believe in capitalism. We just need everyone to get on the bandwagon. We would be awesome if they jumped on it with us!

But hey, maybe you invested everything in Bitcoin of NVDA this past year. Well, why are you reading this? Get that yacht and head to Santorini! What could go wrong with an straight upward move? Oh wait. It didn’t work with Tech in 99 or housing in 08. hhhhmmmmm

Okay, that’s probably enough for this week. I have a ton, but I’ll wait until next week.

10yr: We are clearly in a recent uptrend in interest rates. The other day Freddie Mac reported rates had dropped. Fake news! We are near a strong resistance area of about 4.35%. WE break above that and we might see 4.60 in a hurry. Let’s hope we hold these levels after the Fed tomorrow. Hopefully they can hold and not be too hawkish.

MBS: Looks similar in reverse. Remember down here means higher rates. So we want this one going up. We have some support around 98.40, so hopefully that can hold. But we shall see if our “efficient” market is prepared for tomorrow.

Don’t get whatever I’ve had the past 3 weeks. It’s more annoying than when you gave your kid his first drum set. Okay, I don’t know. But Jackson tells me he wants to play the drums. I said, music is dumb. And that’s coming from a long line of musicians (myself included…don’t tell Jax). I’m guessing tomorrow I wake a little better than today. And then I get to have nausea just in time for lunch. Thanks, Fed, for delivering this message for us at lunch in Mountain time! Maybe it won’t be so bad. Maybe all of my predictions will be wrong too. And maybe pigs will fly.


What doesn’t kill you, makes you stronger.


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