I'm Having Such a Great Time!

Happy Market Update! 

Well it happened again. Yes, Jackson did score the majority of touchdowns for our team this past weekend. But that’s not it. What happened again? My ridiculous need to coach 4 and 5 year olds like they are in college. Hey, I’m honest about my internal chaos. Our 2nd game of the season, in 5 weeks, was against the same team we played the last time. This is how much time we have had off. We lost this one. So both of our teams are 1 and 1. I don’t know about the other 2 teams because the system can’t seem to update the standings. Which absolutely drives me nuts. Unless they are considering our first game (which was week 2 mind you) to be an exhibition game.  

In all honesty, my struggle was with the other coach. I’m just going to lay it out there. We do not see the process the same way. Last game I helped out and for the most part controlled the game (the other coach was brand new). This last game, there was another coach, who missed the first game. I was already giving directions to kids…like where out of bounds is and which direction the mountains and houses are (in opposite directions). Why? Because when they start to run the wrong way, I can scream houses or mountains! See? I’m not the worst coach. But this other coach showed up and literally just started directing. I’m guessing by this time, this is how you see me coaching:

Now, I’m just a secondary volunteer, so I stepped back like an asst coach (because I am a good person), and let him do his thing. But the problem was that when I would tell a kid to stand out in the cornerback area on defense because they scored every single time they touched the ball on offense, he would come over and move the child inside. Guess what happened? Yep…the other team ran right where I had the kid to begin with and no one would check them. It’s beyond frustrating. See, once little kids get behind a runner…it’s rare they catch them…and if they do, that they have enough time to pull the flag. Venting over. Thank you for listening. 

I just don’t agree with his style…and we lost. Weird. So what now? Do I show up and help coach the doubleheader on Saturday? Or do I stay on the sidelines and watch the chaos I assume is coming. Maybe I should just stick to what I really do best…scaring the crap out of all of you! Can do!

Let’s start with my industry…mortgages. The 10yr yield is a good projector of interest rate direction. It’s not a perfect correlation, but it’s a good measure. This chart is the 10yr over the past 16-ish months. You can see how events can directly impact the yield…if for long term and short term. I’m paying attention to the far right (that’s current), and how that “missed” payroll worked for us the past week. Rates are lower a bit (see 10yr near bottom of this newsletter). I’ll take what I can get…especially if that “miss” is our double peak from last October. So that would be good for long term rates…if you, or a loved one, was planning to buy a home soon. You might already have a 3% and have decided to die with that rate. Not everyone has that luxury. By the way, everyone was going to stay put in the early 2010s when everyone had rates in the 3s and that didn’t last until we got the 2s. So you’ll move too…probably. 

Where might you move? I know we’ve looked at maps before…but I thought this was interesting. Have a look at the inventory for sale changes per state year over year from April 2023 to April 2024. We are seeing some 2nd homes (think AirBnB sand VBRO homes) getting listed. What will growth like this do to prices? Are we peaking? Time will tell.

Whether you move or cash out equity giving up those low rates will be based on many factors…life events, as we call them. This next two charts are from the Federal Reserve. This first one is an ongoing growth of credit card debt and the, um, non-growth of savings. Yikes! This is scary. I hope YOU are keeping that green from moving further down and red from moving further up.

But maybe this is a reason to celebrate? That circle on the right is the lowest increase in revolving credit (month over month) since basically we ended covid (depending on the state you live in). So this is good. Stop spending. Yes! The unknown is the why. Is it because you are tired of running up that tab? Are you out of room on the credit limit? Or are you broke?

Quick item regarding being broke and still actually spending money. This informational slide is from MBSHighway, and talks about Buy Now, Pay Later. When I was a kid we called something similar “layaway”. This is NOT layaway. This is give it to me now. Americans need instant gratification, and buy now…means take it home. Pay later? Well…see that “heavy users 20+” row? Liz Everett says they saw some people using this 20 or more times a month. Let me say that again…some people are using it almost every day. This sounds like those payday loans. What happens if you don’t pay later? Do they repo it? Are we going to see 6 month old armchairs with cigarette burns in it for sale? Cheap? I don’t know how this can end well. The problem isn’t money. This is a problem with Americans needing things NOW. Yikes. 

Well, we might not have many goods to pay for later soon. This chart shows the average rail carloads over 2022, 23 and YTD 24. Look how it took longer to start moving up on the left (early year timeline) and look at how it’s dropping this year compared to the past. Goods are not coming. Transportation stocks should not be doing well soon…if they are not already. Fed is going to get their slowdown. Mark my words.

So what’s up with the stock market? I’m no expert…but I did see this from our friend, @NOD008 on X. Buybacks on stocks are at least a reason stocks are staying up. Don’t fight it…but understand this is not from you buying more. I might take some time and go through this to compare if the spikes up are when pricing is moving down. Or do you care, as a corporation, since you want to keep your stock price high?

Last one…and I’ll pick on CA for this one. We’ve already seen an exodus of people from this state…and here is a visual of the tech jobs leaving (from Apollo). Taxes and how you manage your state does have consequences. How do you make up state revenue when this is clearly a way to lose tax revenue? Raise taxes again? This too cannot end well.

10yr: Lots of lines…just look for my 3 red ones to the right. We are moving sideways. We held the resistance (line 1) but bounced off support (line 2). We still have that upward trend intact (line 3). So we may see these three merge in the next couple of months. Hopefully we can get a move down that breaks below line 3…and ends this trend. Yes, that was a prayer.

MBS: Remember, down means higher rates. Looks like we may have put in a bottom for now. This move up (lower rates) coincides with the jobs “miss”. Maybe we will see more of this. Yes, that’s a prayer. 

So yeah, I don’t know what to do about coaching. Anyone got any ideas? Maybe I’ll just stand on the sidelines and have Jax do what I tell him to do. But I’d hate someone to do that to me if I was coaching. You are thinking, did you reach out to the coach and talk to him? Maybe do it before the games on Saturday? Ugh. You are probably right. But wait. Because we have a doubleheader, we start early. I was the only one who suggested we meet 30 mins earlier. It was clear to me that we were either really that bad, or the other team practiced in the several off weeks. I’ve heard nothing yet…and it’s Thursday. So I’m going to get there early w Jackson…and hopefully at least 2 kiddos I know. And I’m going to teach them how to contain and not shoot in at the snap when on defense. We’ve all been there…whether it was sports or life. Sometimes you get behind…was it easy to catch up? I didn’t think so. Why start at 4 and 5?

What doesn’t kill you makes you stronger.

Tim