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Happy Market Update!

As I begin this week’s newsletter, I am watching Kevin McCarthy be removed as Speaker of the House. Believe it or not, this is the first time in history that this has happened. There are instances in our history when Speakers resigned due to threats of a possible removal, but never an actual vote to remove one. So, congratulations to former Speaker McCarthy. You did actually make history!

The real question is, will this help us or hurt us as a country? Does this further polarize us or help bring us closer together? It took some Republicans to vote with Democrats after all. I wonder what the rest of the world is thinking. Do you think they are looking at us as if we have our collective you know what together? I seriously doubt it. But hey, they already think we are a shit-show. Par for the course.


Meanwhile, back in the Jackson world, he turned 5 this week. I called him that morning and he answered, “Hi Dad.” “Hi Jackson. Happy Birthday!!!” “Thanks” – but like really quiet and unimpressed. So he is 5 going on 14? Alrighty then. Fun times.

Meanwhile, the disaster our government is continues to impress me. I’m deep in all the weeds on this, and I’m still amazed at the things I run across. Take this update on SPR: this is the number of days we have in reserves. It shows the average to be somewhere around 33 days…that is now down to 17, of basically half of that. Wow. This is not good. In times of war, you rely on this reserve. This is the one we were supposed to fill back up at a specific price point….and didn’t. I don’t want to say it’s because our leaders hate us…I think they have no freaking idea what is happening and only do things to get re-elected.

What else won’t help politicians to get re-elected? How about housing affordability. Below the mid-price, and lowest on this chart dating back to 1990. Some of the people on my team weren’t even born yet. Think about that. I won’t.

How much is this not helping re-election hopes for Biden next year? This is a chart from ABC News and 538. Like him or not, this will not get him re-elected.

And I think it gets worse for him and all elected officials. This next chart shows excess savings has all but vanished…officially. And this month, student loans are back! If you have some and they were variable rates, it’s going to look a lot worse than it did in Feb of 2020.

And that higher rate is due to the very high (relative to recent times) treasury yields. Typically, a high rise, quickly, does not bode well for our economy.

But good news??!! It could be way worse. Here is a chart showing we are coming off 5000 year lows. Hahahaha. Sweet.

In a former life, I worked in trucking. So I watch this closely. If we didn’t move freight, we knew bad news was coming. It’s a leading indicator, in my opinion…sort of like housing for me now. This is job’s week…so we shall see what happens, but this chart suggests we are not improving in the freight system:


10yr: All of that to say…yikes. Remember when we thought the highest back in October of last year made us unhappy? I would be happy about those now. The markets are funny that way. As the meme stocks might say, “To the moon!” This is why I drink people.

MBS: This is not as dramatic. But it hurts. The candlestick today suggests further pain. Most think we are headed for much worse. Buckle up.

Remember, things can always be worse. Over the weekend, a man named Greg Beckett jumped to his death. I’m sure this happens every day. So why bring him up? He was a Wells Fargo executive responsible for internal controls to protect the bank form risk. He jumped from the Delaware office 14th floor. Why? No note. He was stressed and working late. So are a lot of us, and we are not jumping out of a window (I also made sure to have my main office on the 1st floor). Maybe he lost the bank’s money gambling. Or maybe, just maybe, we are about to find out the bank crisis is not over.


Prayers to Mr. Beckett's family.


Tim



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