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The Truth is Out There

Happy Market Update!

I’m sorry this is coming so late in the week. I feel like I’m being pulled in so many ways, so I appreciate the grace and patience. Let’s get into it!


Recently, my son’s school started a WATCH DOGS group. For those of you unfamiliar, let me briefly explain. DOGS stands for Dads of Great Students. About a month ago, nearly 50 Dads got together in a room to pledge to volunteer our time in watching our kids, our neighbor’s kids, hell, maybe your kids, during the school day. We are around from before drop-off until needed, and then again around lunch/recess time until needed. The high school has a watch too. Yes, there is security and a deputy sheriff on site all day, every day. But the way I see it, the more eyes, the more strength, the better. We call our group Lions Watch (Lions are the mascot).


When I first heard about this, there was never a second thought. It was just meant for me to volunteer. I don’t tell you this because I want a pat on the back. Knowing when I head out that nothing occurred on my watch, and knowing that nothing occurred during the other Dad’s watch is all I need. My pre-K kiddo has a long way to go. As long as I am vertical on this earth, I will do whatever it takes to make sure he has a proper and safe education. I do the same for your kid too. And be assured, when I am horizontal, I will haunt to protect.


I mention this because in the past I have spoken about community, and I believe there can never be enough. Sometimes it gets in the way of fun or making money…but if you believe in something, it won’t get in the way. I am an early riser (it’s 6:05am as I write this in my office), so taking the early shift is easy for me. I have an amazing staff who will cover for me for the early daily meeting. (Thank you!) Whatever is there will be there…so go ahead, find some time to give back. If you have one of these groups, go join it. Meet other people like you who will do what it takes to protect. And yes, I get to look menacing. You’re damn right, I like that. And when he is in high school, I will do it then too. It’s a joy to know I’ll be able to embarrass him in front of his friends. I was going to do it anyway, right?


What else is menacing? The trainwreck this Fed has been all year. I know, I know. I talk a lot about this, but it is a financial newsletter. And honestly, I look forward to the days when I write this as a perma-bull. It will come…but my research tells me now is not this time. So yes, this is more info that I feel is meant to protect you. Let’s go.


First one has a creative title. I don’t even need to say anything else. But I will. I have been talking about this recently, and there is a surge on social media about the increase in bankruptcies. Is CNBC talking about this? Bloomberg? Maybe…but I haven’t seen it. You can believe a soft landing is coming, but these people won’t see it. And the longer this goes up, the less likely the rest of us see a soft landing.

Why the increase? I’m sure the Fed raising rates had nothing to do with it. Oh wait…but let’s give them some credit. They did tell us it was coming. Now they don’t know what to do, in my opinion. Open that textbook, Fed Presidents. Or better yet, maybe chat with the real people out there. It’s difficult to see, I know. But this chart begins in 1994. Let that sink in. This is 30 years…and we are way higher than even an average would suggest. And yeah…that slope is still rising. Stop buying things you don’t actually need. I have to explain to my 4 year old the difference between want and need.

Another thing you can’t control? Gas prices. I’ve said it before, the people with oil, who are allowed to actually dig for it, don’t like us…and they don’t like the Biden Admin. I’m not saying Trump, or any other person would be better. I’m just saying that this isn’t going away. But as this chart suggests, recessions come after rising gas prices.

How does that look now? This is a chart starting in Feb ’22. Remember last summer when we were paying ridiculous prices for gas? And everyone was worried about inflation? Well look at the yellow lines on the right. Since July of this year, oil prices have been on a tear. Yesterday they hit $95 a barrel. Why the horizontal orange lines? That’s where a lot of oil economists are saying oil is going. So a slow down globally, and oil prices rise? That is not a good formula. Those are what we call headwinds…well, I do, anyway.

But wait, there’s more! Have you heard about this government shutdown looming? Don’t be fooled. They don’t care about you, your kid, me, my neighbor. No one. The are full of…well, you know. Once again they continue to puff out their chests and spread their feathers (for you bird lovers). I understand that a two party system will be like this. And yes, we “voted” for them. But people will not have a job to go to Monday. Stocks? Don’t care. Right now Nasdaq futures are up 1%. Alrighty then.

Let’s talk some more about Congress. This chart will piss you off, sorry. I’ll let you figure this one out while I complain…I’ll complain about my path choices. Clearly, I should have ran for office. Where else can you help make a decision that directly impacts your stock portfolio…not called insider trading. Someone should pardon Martha Stewart. I’m sure Congress just makes really amazing choices without knowing anything. Sure. Yeah, okay.

Meanwhile, this is really what they know about money. They can increase their net worth but financially destroy this country. Man, what a job. I thought being a weather man (and being wrong all the time) was the cream on the corn job. Nope. Making money while destroying the entity you are running, that’s the cream on the corn. (Yes, I’m from the south originally.)

And they boast about how amazing a job they are doing. This meme is to remind you inflation is still rising. But believe it’s under control.

Finally, I want to be clear about my position on communism, because we have a lot of socialists running around in this country…even in Congress. This says it all:


10yr: Yesterday our 10yr hit 4.668%. That’s the highest since Friday Sep 21, 2007. That was 6 months before Bear Stearns was purchased by JPMorgan…and a year before Lehman Brothers collapsed. The Fed used our tax money to cover losses for JPM to buy Bear Stearns…just like we did (we are the financers) again earlier this year. For the mortgage and real estate world, pain continues. But I’m not going anywhere. I’m just too damn stubborn.

MBS: I’m not even going to show you this chart. You get it.


Look, the reason I started this newsletter 3 years ago is because I wanted to be your Financial Lions Watch. I didn’t know it then, but looking back, I just wanted people to know that the truth is out there. It takes many hours to sift through it all…and I don’t even get close to breaking the surface. But someone needs to help. Imagine if I had been around writing this in 2008. You might have had time to protect some profits, retirement, whatever. No, I could not have stopped the decline in home prices. But if you had been “here we go” mentally, you might have weathered that storm a little better. That’s all I am trying to do at this point in my newsletters…help you prepare for the storm.


What doesn’t kill us, makes us stronger.


Tim


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