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What Kind of Bubble?!

Happy Market Update.

It’s been a long week. Ever have one of those? You already know my sleepless habits…now know I am always thinking about work. I would imagine they are not related. But I’m no doctor, so I guess we will never know.


Our company here has been growing over the past 9 months after restarting Bear officially on June 2. So there has been a lot of start-up, marketing to get the word out, hiring of sales people…all while the mortgage world is in what has been called the deepest recession for mortgages…which came right after a biggest mortgage ever. Sounds like a bubble…not a housing bubble mind you…a work to be done on mortgages bubble. But I am determined to make a better place for loan originators to come and re-learn (if not learn for the first time) the habits of strong loan officers from sales and building files.

 

Speaking of bubbles, if you have had a long President’s Day weekend (from earlier this week in case you didn’t have a holiday like our world), then you might not know that the stock market only believes in one thing now…Nvidia. I’m not kidding. The markets were headed down, and then Boom! Wednesday, after the market closed, Nvidia had a stellar earnings report. The markets just ignored everything, and “to the moon” they went! Check out this chart…Yesterday, Thursday, Nvidia had the best single day market cap addition. That’s $277 BILLION in a day. This morning it went over $2 TRILLION in value. That’s one company. Larger than most country’s GDP’s on the planet.




Does this mean a bubble? No. But usually things that go straight up in finance don’t end well. See Tech-Bubble and Housing-Bubble if you want some insight. But if we are talking about a bubble, check out this chart. The Mag-7 is fitting right in with some other bubbles in the recent past (I see Bloomberg left our housing).



Just in case you are unfamiliar with the housing bubble (some of you are young), and you haven’t read or see The Big Short, here is what that looked like in a few cities. Bubbles pop.



That doesn’t impact you? It’s old? You don’t own any stocks (and you ignore your 401k)…okay then. This next one is for you if you like to eat.

 

From our good friend NOD at Capricorn Consulting Limited comes this chart. You knew it…you felt it in the wallet, now you can see the chart confirming: you are spending more money as a percentage of your disposable income on food than you have in 30 years. I remember the last time this happened…we didn’t eat fresh green beans. Hell, everything was frozen or in a can. Ahhhh the good ol’ days are coming back.



Not everything is bad…go look at your retirement accounts. I bet a high percentage of you have Nvidia in it. Go take a look t it from year to date. Smile and enjoy your weekend. Here’s Nvidia in case you have it. What are your thoughts? Let me know!



10yr: So yeah, it’s moving up. Bummer. But not as high as October! Yeah! More interesting? The two sort-of horizontal lines I drew. If this moves sideways, maybe it’s a head and shoulders move with the head being Oct and the two shoulders being August and right now. That would be a bearish signal, meaning lower rates. Yes, I am trying to manifest this to the universe! Our industry could use a break…right about………now!


MBS: I’ll try and manifest this one too! Remember, up here means lower rates. This looks like a possible INVERSE head and shoulders. That would be bullish on MBS…mean lowering rates. No whammies!


Everyday I get a list of the National Holidays. Today had several including Dog Biscuit Day and Banana Bread Day. So go make some bread and be kind to the dogs you see. They are people just like you and me. (You slobber and let out gas when you think no-one is around…and you know it!) And the dogs never lied to you about inflation or made political promises they were never going to keep. So go pick up some biscuits on your way home. They deserve better than us.

 

What doesn’t kill you, makes you stronger.

Tim

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