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DC is Worse than a Swamp

Happy Market Update!

What did the Buffalo say to his kid when he left for college? Bison.


I wanted to one, make you wonder what the hell (nailed it…thank you, Tate) and two, start with something easy. What’s happening in the Middle East is nothing short of awful. But it has been going on for millennia or two. I will not use this as a platform, like so many others have, to tell anyone who they should side with, support, hate, etc. My goal is to bring you information from an economic perspective. And yes, Political Science is a huge factor in finance. If you didn’t know, I have a major in Poli Sci and enough credits for minors in Business and Psychology. Interesting fact, 3/4s of my credits towards the Psychology minor were specifically about the Psychology of Terrorism. So you might say I have an opinion…but because I am an educated and kind person, I am open to hearing both sides in a proper discussion. So I’m happy to chat if you need to do so. But it won’t be in this newsletter. (I’m considering starting another newsletter where I just rant about things, I can’t stand…and another one regarding politics. But right now I need to keep my business going…my people like to get paid. It’s really annoying.)


Football season is in full swing, but Jackon’s fall football is coming to an end. It’s been fun watching him grow over the past 3 seasons (spring, summer and fall football). The brain is an amazing thing. But he regressed last week, reminding me that while he is the best kid ever in history, he still needs to learn about emotion. He scored two touchdowns last week and really wanted to stay on the field to play iron man football. For those who don’t know, that means playing offense and defense. At 5….it’s not like playing in college on both sides of the ball. But we have to start somewhere. Well, he was told to sit out and had a complete melt down.


It was not a proud moment for me as a coach or Dad. In fact, all the kids were not playing well in the first half. We were only up 8-6 at halftime. It was the first time this year that I thought we might not win. I don’t care for that feeling. What? Yeah, yeah, yeah. I know it’s about kids having fun. Sure it is. 3 touchdowns later and without giving up points to win 25-6 was fun! Haha. I think the colder weather for 4-6 year old's was our issue. This Saturday (against my…I mean our archrivals) will be fun. Ask me some time, and I will tell you about that archrival thing.


Why is that important? Because I felt like DC and the Fed continue to be our archrival…us citizens. They tend to forget who is in charge. Spoiler, it’s the People!

Let’s start where we normally do and talk about how a person (or government agencies) can manipulate numbers to get to their narrative. Not the truth…because they need to get re-elected or re-assigned a post from the current leadership (be it right or left…and I use leadership loosely). For example, the jobs report came out last Friday. It was strong! SUPER STRONG! Everyone was super confused about it…but great! “Bidenomics” at work! But wait! Let’s dig in a bit…


Job growth reported was 336k in September. Completely blowing away the expectations of 170k. As I’ve stated before, we have a growing problem in this country with full time versus part time jobs. And yes, full time employment is shrinking. This chart shows the decline since late spring. This is right from the US Bureau of Labor Statistics. But DC gets up and pounds their chest about job creation. This is not healthy.

Not only are we seeing an increase in retired boomers getting jobs, but we are also seeing a huge spike in people who have two full time jobs. Let me say that again, 2 FULL TIME JOBS. And you hated only working 36 hours a week. These people have to pay bills…it’s not something to be celebrated, DC. Morons.

Not only are we seeing an increase in retired boomers getting jobs, but we are also seeing a huge spike in people who have two full time jobs. Let me say that again, 2 FULL TIME JOBS. And you hated only working 36 hours a week. These people have to pay bills…it’s not something to be celebrated, DC. Morons.

How about striking workers? They aren’t getting paid. This is the highest numbers since 1983. Know what happened in 1983? We were trying to get out of the last terrible inflation period. Huh.

And yes, we continue to see the growing delinquencies in commercial real estate loans. How can this be good?

One quick note in case it was buried during the Middle East you are seeing…a 2nd pipeline was “sabotaged” (not my words). Smells of Biden like the last one was…

Just a couple of last minute thoughts. First, how many pies can you make with this pumpkin? Would it even taste good? I guess with enough sugar…

Finally, in case you have read these and you are still thinking I am crazy (first, thanks for not trolling), let’s leave you with this note. This is confirmed from the San Francisco Fed’s website too. Now do you believe they are all full of shit?



10yr: Finally, some good news. Those red lines are the distance between each of my yellow lines. Those are called fan lines. Rule of thumb, 90% of the time a fan line breaks and becomes resistance from support, the next fan line will be hit. We broke one, tested it, and then immediately moved to the next one…testing that support today. Yield is down today from Friday’s highest yield since summer of 2007 to 4.575% right now. That’s a move of 30bps in just days. Why? Yes, I believe that the Middle East conflict has something to do with this. Our US Treasuries are a “safe-haven” for money.

MBS: In similar fashion, we are moving up from Friday’s lows in MBS (low means higher rates). That gap is an M for Monday. The bond market was closed for trading for Columbus Day. On the 10yr there is a candlestick…that’s the 10yr moving in “futures”. Long way to go here with all those colored lines above (moving averages which act as resistance when we are below trying to move up).

I will finish with my prayers going out to all the innocents stuck in the middle of any war and chaos. I pray that we do not see this on our shores, but I am also not confident with our southern border open and ignored by DC for 3 years. My request to you is to stay alert and vigilant. If you think we are invincible internally…even if you are deep in the heartland, then you are part of the problem. Be prepared to help others and stand your ground if needed. This country was built by strong people who wanted freedom above all else. I hope it is not our time to be called, but if it is, history will remember how we responded.


What doesn’t kill us, only makes us stronger.


Tim

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