Preparation is Imporant!

Happy Market Update! 

Jackson is well into his football season now. We are three games deep. The first one was cancelled. The second one his team lost. This fall, we are the 49ers and we played the Chiefs. I know a lot of my readers just threw up a little in their mouth. I’m sorry we lost to the Chiefs. They ran some double reverses that our D was just not ready for. Sneaky sons of….anyway, we lost. 0-1. So we headed into the next game against the Commanders determined to not get beat by some stupid double reverse. And yes, I practiced “staying home” with Jackson. It was then discussed with the other 5 and 6 year old's.

Also, no. This is not what “staying home” means in football. I know someone of you were like…hey, you don’t have to teach me to stay home! Okay, circle back with me. Staying home on D means whichever side of the line you defend, you cannot overcommit to the chase of the player. For example, if you are a defensive end….which is a person on D who is on the end (gotta be clear with my non football people). That person would need to still make sure no one is running back his way if the play is moving the other way. Did that make sense? Maybe? Cool. Try being a coach of 5-6 year old's and explaining that. Well…we tried. And the first play??? Pass! Okay, wait what? That was not expected…by me. But you wanna know who did expect it? 

That is Jackson making sure he has more career interceptions than his old man. Well, congrats, 6 year old! And yes, he did catch it and return it. His flag got pulled just before the goal line by the QB ( who was now at 0 TDs and 1 INT on the day). So close to that pick six. Thanks to Amy who filmed this. I grabbed that still from a video of the complete interception. What an awesome treat to have forever now. Anyway, we won 26-12. So 1-1 on the season. He did not score any TDs, but had 2 fantastic runs setting up TDs. Teamwork is important…which I had to remind him when he was upset about it. Lastly, he does not understand how to pull flags (kind of). Now, you are thinking people run by him. That’s not true either. Instead, he just runs them over. He crushed a couple of kids. Oops. My struggle now is trying to make sure he at least reaches for the flag as he steamrolls them over. Tore up his knee and cried for about 7 seconds. Then got mad. That’s what we call future linebackers. I made sure my health insurance premiums were up to date…

Know what I wish was up to date? My own personal gold reserve. Look at this move. Not bad in the last year or two. This chart goes back to the 70s when we removed our gold standard in the USA. I think this chart is trying to show us that the recession debate isn’t over, especially if the recent move gets up to +50%. We shall see. In the meantime, I wonder if I need to try and stay up past my 830 bedtime to buy some of that gold on tv at 1am. Thoughts?

Okay, stay with me through this one. The MOVE index is a Merrill Lynch Option Volatility Estimate index. SPX is your S&P500 index. In this chart, the MOVE index is inverted...so MOVE inv. Okay, now you know that part. This is showing a disconnect between the S&P500 and the inverted MOVE…recent history suggests they move similarly. When they get far apart, one of them moves to the other (or both at the same time). This is suggesting the S&P500 might need a move down. That would make sense considering Sept and Oct are typically the worst for stocks each year. But so far, that has not been the case in 2024. So perhaps volatility calms down? We shall see. But something has to give here, based on history.

Let’s check back in with our 10-2 yield curve. Reminder, we finally un-inverted after the longest inversion…well, ever. But when we look all the way to the right…it looks like our un-inversion may be short lived. What does that mean? I’m guessing it continues to push the narrative that the recession is coming. I guess we shall see.

This chart was posted by ZeroHedge after this past week’s jobs report. I’m sticking with my whole narrative that part times jobs increasing while full time jobs are decreasing is not a healthy economy. I’m going to keep this narrative ongoing…because it’s true, regardless of what DC wants us to believe. 

If you are the government, and you want your narrative of job growth working, what would you do? How about do what this chart says our government did! Biggest job jump for a September on record…posting in October…one month before elections. Weird, huh? That’s what in sports we would call “fixing”. Disagree? Great. Let’s grab coffee. I would love to hear the counter argument there. If you’ve ever spent time at a government facility, I can assure you that they are way overstaffed. Why? Jobs = votes. Fixed. And yes, I would love to see if we could run the government on 80% less as Elon Musk suggests. Again, I lean right fiscally. Stop spending my freaking money!

While we are on the subject of jobs, how about the number of multiple jobholders? I drew a red line so you can see just how high we are now…we have eclipsed the previous high set back before the pandemic. And it doesn’t look like it’s going to stop. We know that part time jobs get counted in the BLS survey…how is this a strong economy? This tells me we can’t afford the “strong economy” we have. That will prove itself at some point, imho. 

Sometimes, charts just fall into my lap. I’m guessing this is based on conversations happening in our country. This one is a timeline for US citizenship. This is not political…just something I thought was interesting considering the open border discussion happening for this election. This shows the timeline for citizenship has been declining since 2021, and really decreased significantly starting in 2022. Right now, it’s at the lowest levels in at least a decade. You tell me why you think that would be the case for now? Again, I did not go looking for this one. It arrived in my inbox on Sunday morning. Yeah, I know that’s a lot of politics this week. Well, we’ve got 4 weeks.

I keep hearing that the economy is strong. So what are we actually buying? Food at exorbitant prices? Services like massages? (I will accept gift cards for these from all fo you in 2 months). Well, it’s not on housing or cars. These charts indicate that there are not a lot of plans to buy these large ticket items. Housing is a huge contributor to GDP growth. So what next?

(P.S. – Heath Ledger was the best Joker. Period.)

10yr: It’s been moving up since the Fed meeting 3 weeks ago. And over the past week, has really spiked. Interest rates are moving back up. The question is why? Are we worried about inflation again? Oil had been moving up too. Today we have 8 or 9 Fed members speaking along with Fed minutes from their 50point move meeting. So we shall see. We gotta hold at that purple line (100 day moving average) or we might be in trouble for the coming months and rates.

MBS: I’m hoping we are seeing the sideways move here in MBS as a sign of a change in momentum. (Remember up means lower rates.) CPI and PPI are coming out this week. That should help us with direction on inflation numbers. 

Like prepping for double reverses and then getting a pass on the first play is a sign that we should be prepared for anything. Luckily, Jackson and I have been throwing the ball over and over and over. Teaching him to look at my chest when he throws and watching the ball to his hands when he catches. There are very specific rules to prepare for that interception he had…even if he doesn’t know it. The same can be said about your needs and finances. This letter is always set to prep for something coming. I still see signals that all is well (check your 401ks) but I also see the front of the GDP with the housing industry I am in. Something doesn’t add up. So I prep…I’m working on the double reverse and the pass. What are you working on?

What doesn’t kill us makes us stronger.

Tim