Happy Market Update! |
Well, it’s that time of year again. It’s time for everyone to put away their swim trunks, lower your sprinkler time (this is not landscaping advice), and begin our annual ignoring of baseball. That’s right! Summer is winding down. I know that officially it does not end until mid September, and honestly…it seems like it gets hotter into the fall these days than it did when I was in school. I’m not a climate change crazy person…I just think the weather has shifted…like each season starts a little later than it used to. I have 0 scientific evidence of this…it’s just a feeling. And yes, I do believe that the earth is heating up…it has been since the last ice age (with a few years here or there when it was colder). |
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Anyway, I digress, as usual. Today, Jackson starts kindergarten. Some of you who have read my newsletter are surprised he made it through his repeat of Pre-K. For you newer people to my newsletter, he repeated because of his age…and not because he failed hand painting or jungle gym swinging time. Honestly, if he did fail anything it was nap time. He gave up on that years ago. And as I am 50, I am trying to take that back up as a hobby. I’m too nuts to find peace in the day. Whoa…another tangent. Well, I am already sitting in the office before 6am…my brain is trying to figure out what the hell is going on. Anyway, this kid gets to begin learning something new. My understanding is that Pre-K is just an appetizer to the real meal that Actual-K will be. And I’m excited! I look forward to see the chapter of novels he needs to read at night, the 95 math questions he has to do (odd only please), and the volcano everyone is destined to make in science. Here is one by a kid that I would have given an B+ to. Sorry, kid, but it needs more flying lava. Come on. |
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Regardless of what homework he brings home tonight from Actual-K (I’m hoping it’s algebra), he should learn something…even if it’s interacting with new people he doesn’t know. Hell, my Dad dragged us across the country multiple times, and I didn’t know anyone within a thousand miles. I know some of you had that experience too. It builds character. And you know what? We should all keep learning something. I think that’s the secret to longevity. Not that I want to live to be 150 (I’m no Moses), but I’d like to have my sh*t together as long as I can.
One of our loan officers helped me with learning yesterday. We had a loan officer here turn 23 (I know, I know…everyone here hated him for it too…for a bit), and another loan officer asked me what advice I would give my 23 year old self. Like I do, the first answer is always a joke. One, this sense of humor cannot be turned off, but two, it gives me another minute to think about my answer. My non-joking answer to the 23 year old Tim was to stop having so much anxiety. The amount of wasted time I worried about things that didn’t happen or did happen that I couldn’t control at all is almost astronomical. And yes, this is giving me anxiety. Haha. (See? Jokes.) I have no idea how I would have done it differently…I can’t even figure out how to not have anxiety now. And no, I will not take a pill to help. Tried that…and it killed my sense of humor. That lasted 60 days when I was 20…and goodbye. But the learning is that I can tell my 23 year old self that…but I still do it today. So I guess more time for that reflecting I’ve been doing. Great. What would you tell your 23 year old self?
Know what else I might tell my 23 year old self? Believe in your abilities…math. I love the saying that “the math maths” or “that math doesn’t math”. It makes me smile because I see the charts, I see the report, and I see the lies coming out…and, well, something just isn’t mathing right. We can all see it in The Swamp. Daily. Are you getting that sense that something just isn’t right? Let’s take CPI, for example. Not growing as much as it was. But CPI doesn’t include food or energy. I know I’ve complained about this before…and I will again.
CPI: This does not show any major moves towards 2%. Yesterday’s reading was below 3% for the first time since April of 21. Yoohoo! (See, I’m not always Debbie downer.) But this has taken way longer than I believe it needed…and that’s still not close to 2%...and I don’t see anything forcing it down. Thank God, JPow moved that goalpost to jobs! (Easy to win if you change the rules in your favor as you go. Ask my 5 year old.) |
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But hey, good news! Harris is saying she will fight inflation by putting a “federal ban on corporate price-gouging” on groceries. Sweet! Except that didn’t work in the 70s…and it won’t work now. Don’t be fooled. Costs have to be passed through or the business goes bye-bye. This is a direct attack on the above chart…and while I hate inflation, that math does not math. Go to the Wall Street Journal for more information: |
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By the way…hasn’t she already been 2nd in charge while all of this inflation was going on? So what was she doing before? Oh I see…here she is replying to me: |
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More of that digressing. Oops. But maybe I’m wrong. And my mathing isn’t right. Retail Sales for July just came out. And they crushed the estimates, coming in at 1% after a loss the previous month of 0.2% This chart doesn’t look healthy to me, especially when you add in the revisions (darker lines). A lot of those revisions are down. My larger concern is that Americans continue to spend money like they have a ton of it. Credit card debt continues to rise. |
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But it’s not just my mathing! Even Buffett is taking a sideline approach. Check out this chart from @KobeissiLetter. This shows a huge increase in cash as a percentage of the total assets Berkshire has. I pay attention when the greatest investor of our time is sitting on cash. (My apologies to Pelosi…the REAL investor OG.) |
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But good news! The markets have shrugged off the Japanese issue last week. This chart shows we have recovered all the way back to the “poor” job report from Aug 2nd. The jobs report appears to be ready to help this further up today. Call your financial advisors and thank them for holding steady! I’m still not sold we are out of the woods…but that doesn’t surprise you. |
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10yr: My new trendlines appear to be doing well. That large green candle to the right? That’s today. And it was flat until the retail numbers came out. This is how fast things move in our mortgage world. Instantly. But that’s okay. In a downtrend, we are going to have up and down days. This is where ignoring anxiety helps out. If only I could figure that out… |
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MBS: While that 10yr chart doesn’t look too scary…MBS’s have a way of letting us know what the underlying concerns are. How about that candlestick?! Yeah…that’s what moves rates. This is a 5 day chart…so each candlestick is 30 mins. But that happened, again, instantly. It took out all the work we’ve done in the past 2 days. Ugh. Now, it looks much smaller on a wider scale…like daily. But that would not make you sweat. Remember, down is higher rates. |
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So how does one get rid of anxiety when that one spends life in a world moving so fast and constant? I don’t know. But, while I was not sleeping again last night, I read a note from Jared Dillian that said, “I love nothing more than being at the bottom of a dogpile. Toughens you up.” Yes. This is my kind of statement. Maybe the anxiety is there to toughen me up. I’m almost leather already…but maybe it’s just God preparing me for something…like he has for decades. If I can understand that, then there is no need for anxiety. I just need to hit the ground running. We had some adversity at the office yesterday, and this morning I realize that God did me a favor. So as tired as I am…I am ready to rock and roll. Are you? Get some!
What doesn’t kill you, makes you stronger. |
Tim |
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