Goals Are Important!

Happy Market Update! 

How often do you reflect on your goals? I’ve spent a lot of my years in coaching. Business coaching, recruiting coaching, sales coaching, mortgage coaching, trading coach…and that’s just in this decade. I’ve also coached, as anyone reading this in the spring and fall will testify too. One of my largest takeaways, and one that I should follow more often, is to list out goals. I have always believed that if you decide where you want to be, you can walk it backwards from there, turn around…and the path is laid out in front of you. I know, I know. Things will get in the way. It can’t be perfect, Tim. I know that all too well. This is what my path has looked like at times over the years:

But you need a destination. So what is that for you? I know I need to revisit mine. Owning a mortgage company has been trying for the past couple of years. Hell, being in the mortgage business has been rough for the past 2.5 years as rates skyrocketed. But was my goal to start a mortgage company? Was it to help homeowners, present and future? Was it to help teach the next generation of LOs the correct way to help others? I can tell you the goal was not to just start a mortgage company. That would be dumb. What I wanted to do was build a mortgage company that educated its people; something most companies won’t do now. Why? It costs money. A lot of money. Don’t ask me how I know. 

But that brings me to another goal. It is to build long lasting relationships with LOs who would then help me to pay off the debt the company put itself in so that they would stand beside the same strong company that stood besides them when no one else would. I did not open this to have Bear Mortgage traded on the stock market. I opened it to give opportunity to people who could not get it anywhere else. In this business, and maybe in yours, we see a lot of people tossed to the side. I was told to remove people from my team at a previous employer, so I did just that…starting with me. I stood beside people in the bad years who helped me in the good years. This is what my mission is for Bear. It’s to make a strong place with excellent people who make Bear an elite place to work through their education. Afterall, great sales…great relationships...great mortgages…great paychecks - it’s all about the education. Every…damn…one.

So that brings me to this email…my goal here is to educate as many people as possible about what is really going on behind the curtain.

There has been a lot of development in the markets the past 2 weeks (since the last newsletter). But a lot in just the last two days with Jerome Powell (JPow) testifying in front of Congress. More on that later. Let’s start with all of us…the consumer. This post on X from @Charliebilello is a reminder about that credit card debt. Remember how it was rising? Well as one my suspect, if we have people who run them up without the intent on paying for them (who would do that!?!?!??!) then we will get some delinquencies. Sure enough, credit card delinquency in the US is rising…and is as high as it was in 2011 when we were attempting to recover from the Great Financial Crisis. (I always hear those three words in my head as a scary, loud, billowing voice echoing.)

Maybe some of that was due to the increase in mortgage rates the past few years. Maybe…if they bought a home. Bare with me on this graph. This graph shows the CHANGE in mortgage rates for a 30 year fix rate mortgage, on average, in the US, year over year. That huge peak in late 2022 and the slow move back to 0 the following two years has been rough. But the good news is that we are headed back to 0. Hopefully that trend will continue into the negative territory. Any day now, please.

Economy still strong? As Lee Corso would say, “Not so fast, my friend.” This is the monthly chart for job growth (or lack there of) that comes out when the jobs report (which was this past Friday). Those two red arrows? Those are pointing to the DOWNWARD revisions. Look to the left over the past 12 months…we see a lot of revisions down. But the markets go up. Are people lying to us to get things to move in their favor? Maybe that’s THEIR goal. 

Our good friend @NOD008 (on X) said it best. Let me ask you this…how long could you be this wrong in your job and still have a job?

But the big number? The unemployment rate moved up, again, to 4.1%. So that’s two months in a row at 4% or higher. Uh oh. But this brings some possible good news!

Yes! You read this correctly…this 4.1% in unemployment tells economists (according to the Wall Street Journal) that we won’t be waiting until 2025 for a rate cut. And yes, I’ve been saying that we won’t see one until 2025 because JPow wants inflation at 2%!

But wait! This is where it gets REALLY interesting today, July 10th. JPow told Congress, today, that he no longer is seeking 2%. Why would he tell them that? Because he is going to make me wrong…and the economists right. That rate cut is probably coming in September. I’ll take the “L” on this one. Why? Because I know he is selling out. He’s moving the goalposts. Because all DC does is lie to us, folks. First 2 examples that come to mind (for this newsletter)….1) inflation is transitory (not!) and 2) we won’t lower rates until we get this back under 2% (not!). Wanna know the real reason? BECAUSE THEY ARE NOT IN CONTROL. And that should be terrifying the shit out of all of us. He can’t do it…probably because he didn’t raise the rates high enough before he stopped. So he is throwing in the towel. Nice work, a-holes. You might be thinking, isn’t this good? In some ways yes…but it means inflation did NOT come down where we hoped. So your prices will continue to rise faster than in the past decade or two (ignoring the past two years). Enjoy.

Just one last comment on this above slide…what cooling job market? The one they’ve been telling us is great? See? Even JPow is telling us the Labor Department (controlled by the Executive Branch) is lying to us.

But it’s not all bad this week…or good depending on how you look at a lower Fed Funds rate (i.e. credit cards and HELOCs would get lower rates directly). Check out this average seasonality chart for the S&P 500. July looks to be the low point, on average – seasonally, for the remainder of the year. Good news is that this might run strongly into Oct (pre-election). So maybe our 401ks will like it?! This chart does not know about JPow’s concerns about the job market…aka recession.

Moving on…here is our new, continuing series on how politicians make things worse. This week, Seattle, Washington! Congrats to the politicians who put this in place. They thought they were sssooo clever. I could have told you that orders would drop.

10yr: Still in that downward channel from April. We did go back up to touch the uptrend in early July, but that didn’t hold. We also appear to be below a resistance/support line (kinda horizontal red line – hey, you try drawing with a mouse). There is potential for more downside meaning lower rates. Yoo-hoo!

MBS: This one is more messy. You can see that we are in a downtrend here as well (which means higher rates), but also coming up from a bottom in early May. We are getting squeezed right now…hopefully we break to the upside (meaning lower rates). But only time will tell.

Look, goals are important. And yes, goals can change (like the Fed ignoring 2%). But is it because you are not going to make it? Did you quit too soon? Are you weak? We gotta push through the trying times. I have to believe that those of us who push hard enough for the right reasons will get where you want to be. Otherwise, what would be the point? What goal are you pushing off? Are you trying to do it the easy way? That almost never works…and you know it. But you have to know where you want to be first. So step back a second…have a look at one goal. Just one goal. That’s it. Make it small and accomplish that. Success is a great motivator to create bigger goals over time. But when you make one of those big goals, remember how to eat the elephant. Oh…and don’t choke on it like our Federal Reserve.

What doesn’t kill you makes you stronger.

Tim