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"Why Aren't Interest Rates Dropping?!?!"

I am a very patient person. No, no I am not. I didn’t like how long it took me to correct that first sentence. Now that you know this about me…it’s 192 days until college football returns. This is indeed a sad time of year. Most people look forward to warmer weather and parties with flip-flops on. Well I’m raising a man! So of course, we have to be annoyed with something…and the delay of college football’s return is enough to set me off…and Jackson off! Why? Because he likes to ask me how much longer until it’s on tv. Think “are we there yet” in the car…but every night when I walk in the door. Okay, it’s not that bad. It just FEELS like that. But I’m dramatic. (P.S. Montana State plays New Mexico, and if you know my team, I can assure you you will be rooting for New Mexico that day).


Speaking of drama, congrats to Travis Swift on his 3rd ring. (As he made sure everyone knew.) I’m not really a huge fan of cockiness. Be proud…but don’t be a jerk about it (choose a different word there for you non-swearing people). How do I know he’s a jerk? It's because he has no class as shown by his throwing of the Ravens’ player’s helmet in the AFC Championship? Yes…yes it is.


Or maybe it’s because you disrespect your head coach on the biggest football stage there is? Yes…yes it is.


Classless. What the hell is wrong with people these days? Yeah he apologized for the helmet throw probably because he saw the negative attention on social media. Not because his parents raised him to not be an as---er---jerk. No. And in what world do we think it’s okay to scream at a coach this way? If I had an employee act like that, they would not be an employee for long. Respect is earned over time and lost in a moment. What I see here is a guy who takes a bit too much ‘roids. For the love of God, teach your kids and your grandkids to go back to being respectful. I had to explain to my 5 year old that this was wrong. Know what he said? “I know, Daddy. That wasn’t very nice.” P.S. This photo above is what it looks like when you are having a complete meltdown mid-season. Not when you are down by 7 or 10 and win the super bowl. Grow up, Travis Swift.


Speaking of growing up, well at least going up (not my best segway), CPI (inflation) came in higher than normal this week. IF you don’t know, the markets were very unhappy about it. Let’s chat about what this means to you at home.


First, long term rates continue their recent move up. (see bottom for the info on this)


Second, the Fed won’t be lowering that Fed Funds Rate anytime soon. The markets hoped for 6 cuts starting next month. This now shows a possibility of the first rate cut by 25 in June. Seem like a long time from now? Give me a break. College football still has another 70+ days from that. But I digress. Remember “Don’t fight the Fed” and he did say “Higher for Longer”. So that’s on target. The markets may have gotten a bit ahead of themselves. Maybe I’ll ask A.I.’s opinion.


Third, how will this play into Commercial Real Estate? Tim, how does that impact me at home? Well, if you like that store, and their rent goes up…so does their goods. Stop buying there? They go bye-bye. I don’t think we are even close to seeing a solution there. And the banks are exposed to a lot of loans that need to refinance soon. A lot. 


But how bad is it really? This chart from my good friend NOD, @Capricorn Consulting Limited. At least we aren’t in Argentina, Venezuela, or Turkey! (Yeah! That’s the spirit.)


YahooFinance provides this next chart. Of the job creation, there has been a surge in government and healthcare employment. Healthcare is considered a defensive stock, by the way. Those stocks typically do better than consumer staples during downturns. Not saying this has anything to do with it. I’m also not saying it doesn’t. And government? It’s easy to just make jobs in the sector you, as the government, control. “Hey, it’s coming in short!” “Hhhmmm…hire 300k people.” “Yes, sir!”


Again, not all bad. This chart from @Dash_charts again shows seasonality. So we expect to see a dip here…which is sure what yesterday looked like in the markets. But I am always reading the tea leaves. This year is WAY higher, seasonally. Is that bad news? We shall see. It is an election year…and I for one, love it! Not.


And just a quick plug of Bear Mortgage Inc., the below chart from The Wall Street Journal shows the median net worth of 65-74 aged households. You don’t want to live longer than your money, right? It doesn’t have to! Call us about reverse mortgages and put that record amount of equity to work for you and your financial advisors!



10yr: That looks like a smiley face, I know. But that’s not. It’s a base to support higher rates. And the two areas circled are areas that are resistance. If we take that out and it becomes support, we are in for a long end of winter/start of spring.


MBS: Well this is going the wrong way. This price action indicates to me we have seen the best rates for a while. Ugh. Here we go again. The second candle from the right is yesterday after CPI (inflation). Ouch. Remember, down is higher rates. Bleh.


Look, being a coach means to deal with difficulties even when it’s from people like players you have coached to 3 super bowls or just employees you have. I coach weekly in sales, and not everything I say or ask for is met with enthusiasm. But if I was being coached (and I have and still am now), I would want the winners coaching me. Why? Because they have seen it…know it…and deal with it. “IT” is whatever you want to be coached on…or better…NEED to be coached on. Someone recently reminded me that we are the average of the 5 people closest to me. Making that a coach is a good idea…even when it’s hard and makes us grow. Get a coach, be a coach. Give back, and be rewarded. For those of you not listening to the coach…or feel like screaming at him, ask yourself…is the coach the problem? Or you?


Whatever doesn’t kill us only makes us stronger.


Tim

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