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Rest Easy, Tex

Happy Market Update!

We all live in some pain throughout our lives. Part of the process of growing up and getting older creates the understanding that death is a necessary fact of life. I’m saddened to say, I lost a close friend this past week, Tex, a 12 year old lab. He had essentially been with us since the move to Colorado, and all of Jackson’s existence. It was for the better as cancer and pneumonia were doing it’s worst to his body…but not his mind. Up until the end, I believe that he knew where he was and could understand us. But he couldn’t move his hind legs and gave up on eating. But don’t be sad for me. In dog years, he was in his mid to late eighties. His life? He climbed to the top of at least 10 14ers, swam in glacier water (which sounds cold until you realize he had fur and two layers of skin), and ate more prime rib (and I’m 99% sure he stole some expensive wine one time) than probably any dog ever ate.

He loved Christmas. Some how he knew which presents were his, and he opened only those. He would sit next to me at night and loudly sigh if needed to go out because he wasn’t feeling well. He could high five and play dead (bang!). He was a very good dog, and I believe he had his best life. I’m in the camp that there are no bad dogs, just bad dog owners. So when you get home next, squeeze your dog (or cat for those of you who take care of an animal who hates you). Remember that they are always more excited to see you daily, than you probably were of anyone, ever.

Thanks for listening. I just needed to share as it is a broken spot in my heart.

What else is broken? (See what I did there?) Wrong question. What isn’t broken? Well there is a lot going on…but I, again will stick to finances even with the political opinions I have on everything. Not! I’m sure some will feed through…

Did you see that the AL teen, Natalee Holloway, who “disappeared” in Aruba finally got her day? I’m pretty sure we all knew that Van Der Sloot kid did it. But his Dad was a judge in the Netherlands and somehow the family had to wait 18 years for justice. We knew then, but only really talked about it recently. The elites get what they want, overseas or here. I’m not suggesting an insurrection, but it’s time we started letting these people know they are NOT in charge in the USA. I’ve had just about enough of it. Why did this person get an opinion about what happens on my street in the USA? I didn’t vote for him…hell, he was never on a ballot. Hey Klaus! You are not in charge of me. Come try and tell me different.

Okay, calm down, Tim. It’s not even close to Friday and it’s not Monday. So chill out. Fine. No, wait! Check this graph out, brought to us by @kobeissiletter on X. These are the new probabilities of another rate hike. To be clear, according to this, the chances of another rate hike this year are still close to 50% (42.98%). Give me a break. Enough already! They should be finished. Let’s at least see where things go for a quarter or two. The increase is nuts.

Recession? Here is some good news for you anti-Tim, I mean non-believers. This chart from The WSJ over the weekend indicates that less than 50% of economists surveyed believe that we will have a recession. Okay. It’s easy when you can just change the rules in real time, right? Yeah I’m salty about the last 2 GDP dips not being called a recession (they still need to rewrite every economic college book written).

These same economists say we were finished with rate hikes in July. (next chart) Well that conflicts with the chart above. See how we can always find whichever chart we want to push? You are lucky you have me. I showed you both. What do you think? I keep thinking these same economists listened to the Fed say “transitory” and did not argue. Where is that chart, WSJ?!

Geopolitical impacts will move markets too. But, I don’t believe we have seen much in the Ukraine conflict since it stared, really. And Israel vs the World (other than USA)? I don’t see a whole lot of war moving in the charts. I think markets assume that there will be some mediation to prevent further aggression from multiple fronts. Although sources tell me a second US carrier group is headed there. Hezbollah (in Lebanon) is getting ready to fight. It’s clear to me that countries are taking sides. Here’s a quick history of a very zoomed in area. This battle has been ranging into the Crusades and before, if we are being honest with ourselves. If the USA and other Western Powers get involved, this will be a catalyst for major moves in indices, including the bond market where mortgages live and breathe.

What does this mean for the 10yr? Where is it going? A recent survey (before geopolitical turmoil in the middle east) indicated we were more likely to see down 100 versus up 100 basis points. Huh? Think of 100 basis points being like a dollar or 100 pennies if that helps. 100 move either way is significant. Let's pray the 75% are right. The 4.75% 10yr yield used to survey is still close to where we are now (4.911% - see near bottom).

Over the past few weeks, I have mentioned that we have an older generation returning to work. Why? According to @unusual_whales (a popular FinTwit account), Fidelity estimates from their 401k accounts that…well, you read it:

You think social security and this amount of money with inflation will work for 20-30 more years? I’ll save you the thought…not a chance in hell. This exert is from Yahoo Finance on Oct 17th:

The Social Security Administration (SSA) has announced that Social Security benefits will increase by 3.2% in 2024 to keep up with inflation rates. It’s a relatively smaller adjustment compared with the COLAs that beneficiaries received for 2022 (5.9%) and 2023 (8.7%), when inflation was significantly higher than it has been this year. According to the SSA, starting in January, the average monthly Social Security retirement benefit will rise by $59, from approximately $1,848 to $1,907. The average disability benefit will increase from $1,489 to $1,537, per AARP.

Hey, I would tell you not to spend it all in one place, but that joke died with inflation. You’ll need it to eat every month. Good luck paying your property taxes.

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: Here is a 6 month chart of the mortgage backed securities (down means higher rates). The face speaks for itself. It’s getting old being this angry all the time. Calgon, take me away! (Showing my age)

At the end of the day, these things don’t kill us. The loss of someone, like Tex, is heart breaking enough. I get up and think about him every day, as I do with the first lab that passed, Orion. He was named after the constellation because, well, I thought it was a bad ass name. Tex for a name doesn’t suck either. I like astrology, so if you get up early enough and look for Orion the Hunter in the morning sky, the star to the left, the brightest one in the sky (contrary to what others would have you believe), is Sirius, the dog star. Tell my boys a quick hello. They are watching us (eating steak and drinking wine no doubt).

What doesn’t kill us, makes us stronger.


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