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Are we finally in the storm?

Happy Market Update!

Flag football season has ended. I’m proud to say that Jackson’s team did win all their games and the Championship this past Saturday! 6-0! Obviously, this is for fun, and since I am an understanding guy, there is no need to track anything. Of course, if I did, I’d say something like points for 154 and points against 49. But since I’m not, I’m clearly not saying this. As a super proud Dad, I got to watch him this year start from starting at kids running past him in the spring to scoring over 10 TDs in the fall, and tackle (er…pull flags) like he was heading to the NFL combine as a linebacker. In fact, he even showed off his abilities to celebrate like TJ Watt in this fashion (yes on the field after a “tackle” or flag pull):

Not surprising, our team’s parents approved. As a coach, I had to remind him it’s just a game…but as a Dad…well, if you’ve met me, you know. Excellent season, Jackson!

There was one incident I was particularly proud of. For those of you who don’t watch sports, or who don’t have a competitive bone in your body, there is a need for good sportsmanship. While we were up 18-6 and driving for our 4th TD, it was clear we were in control of the game. Jackson had a carry and was pulled down by his shorts (and not the flags) and both kids crashed to the ground. It was an excellent tackle by the opposing side (even though we are playing flag football). When they got up, rather than give Jackson his flags, the opposing defensive man threw up the flags into the air. Jackson did the right thing and stepped into the kid’s “bubble” and moved past him starring eye to eye. And he did NOT hit him! I thought about throttling the parents of the kid, so I was quick to learn from Jackson. He said something, unintelligible to my ears, to the kid. I’m sure it was kind. I’m 35% sure it was kind.

What’s not kind to the rest of us? The media. What do they say, sometimes fact is stranger than fiction? Well check out this snapshot of my phone from last week. At the exact same time, and while our buddy Jerome was speaking, The WSJ and Yahoo Finance reported the exact same quote from literally two different views. Look at this. The WSJ says Powell says unlikely to raise rates…while Yahoo Finance says inflation is too high and may warrant more rate hikes. Now, yes, they could both be true. But this sort of confusion is not helping the citizens of this country. If you subscribed to one, and not the other, then you’d have that opinion rather than see both and think, hhhmmm, I need more research. It could be worse, you could see this and immediately move to Tik Tok to see what dance is popular to determine which of these statements is more true.

My point here is that you have to research for yourself. The other group we need to re-educate ourselves on? DC. I’m watching this Speaker of the House chaos, expectantly. They really only do things for themselves. They pretend it’s for you…but if they can get the right Speaker, and somehow that pushes Lockheed into contracts, and that politician has shares in that company…well you get the picture. Speakers have a lot of power and get there by making promises, whether or not they plan to keep them.

But hey, it looks like we have a Speaker. Let’s see how long this guy lasts. This is from The WSJ. I don’t know much about this guy. Don’t look at me like that! I bet most of you don’t even know where Louisiana is! You’re right…I’m sorry. I should know that readers of my newsletter are probably experts in Mardi Gras. My mistake. I did enjoy the “GOP Feuding” part. Haha. Is it feuding…or just discussions to find the correct person for the role? We need people who bring others together, not push them further apart.

Hey, it’s not just me upset with DC. Even 50 Cent took some time this weekend to add his…uh…2 cents. HAHAHAHAHAHAHA Oh, I kill me. But not as much laughing as this tweet caused:

Was 50 speaking about overseas conflicts? Or Bidenomics? Both? (I don’t add more here because this is not a culture newsletter.) Well, if he said one or the other, he’d be wrong. It’s both! What I like about all the research I do is if I wait long enough and read enough, I’m going to find people starting to agree with me. The problem is that it’s too little, too late. This is an article from Yahoo Finance just this morning.

I’ll summarize. Tim has been right all this time. Everyone should listen…to…h..what?? Okay, fine! It says that the 10yr-3mo inverted yield curve is a good barometer for recession. Specifically, it speaks about how when it starts to correct itself from the inversion, we are “a perfect 8 for 8 on predicting every recession since World War II”. (Avid readers of this newsletter now that I will now mention the 2022 2 negative quarters of GDP…but that’s it). Anyway, we have spoken about this before, right? Go back and see how we discussed that it happens after we curve back towards flat or “0”. How’s the 10-3 doing? Here is our chart from the St Louis Fed from just before 2020:

See that definitive move up? It’s the red arrow, people. So what does it look like further back? Going back to 1982 (as far back as this Fed goes), you can see we go below, then we break above “0”, and we have a recession. Some economists think we will avoid a recession. Why? I’ll ask again, why in the hell would you suggest that? Because people are still spending? Who cares? We always spend up to the end. Otherwise, the end would be sooner, right? Once again, “authorities” creating a false narrative. Why wouldn’t you just tell people, hey, it’s coming. The sooner we stop over spending, the sooner we can get that down turn over with…and hey, maybe it wouldn’t be as bad?

10yr: That circled area is a breakout above highs, not closes. We closed above the high breakout. That’s not good. If you don’t understand the chart, or it stresses you out to think about it, just see the frown and move on.

MBS: This is just more of the same. MBS moving down means higher rates. Granted we are off our lows from Monday, but again, a strong GDP # may make this move down quickly.

I know I’ve been over this before, but it is something that should be revisited. We are either entering a storm, in a storm, or coming out of a storm. Our industry, along with our sister industry of real estate sales, is clearly in a storm. I'm worried that all the small moves in the Fed Funds rates with pauses is just feeding the storm as it continues to grow. So, batten down the hatches. We could be in for a longer bumpy ride. And God help us if we get involved in wars in Europe, West Asia, and East Asia. I’ve read plenty of books on WW1 and WW2, and I listened to my grandfathers tell stories about the European Theatre in the 1940s. This all sounds very bad and terrible. None of us will be immune. Keep your head up, remain vigilant, and don’t believe anything that the government or media tells you until YOU have confirmed it to be true. Or you can just read here. I’ll tell you the cold, hard facts.

What doesn’t kill us, makes us stronger.

Tim Lindsey

President/Sr. Loan Officer

Bear Mortgage Inc.

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