Interest rates are up again this morning–the 10 year treasury yield is up 3 basis points to the 4.26% area–of course we are at levels not seen since 2008. Equity futures are off about .4%.
I’m ready for the weekend–it provides 2 days for mental restoration after getting beaten up by rising interest rates all week. The past week has been fairly brutal with my accounts hitting lows for the year–by just a little. On the other hand the end of the month is near so accounts will experience a bit of a boost when dividends and interest hit the accounts around the end of the month.
Today economic news is light with just the ‘index of common inflation expectations’ being released at 11 am (central). This index is released quarterly by the FED and is an ‘experiment’–a research project–whether it is meaningful or useful I don’t know, but it is worth paying attention to because I assume even though it is a research project the FED must look at it (at least a little?).
My appraisal work is slowing considerably — finally. Business is off 20% YTD, but all of that came in January and February. Home equity work has been heavy this year–essentially no refinancing. The ‘haves’ are still spending plenty on houses that are kind specific to older folks (like me)–patio houses (built on a slab–no basement). In my semi rural area new patio home subdivisions have sprung up and the upscale houses are typically $400,000 on the low end to maybe $800,000 for the larger very upscale properties. I just completed a report on a 2100 SF property with a cost of about $700,000 and I was shocked by all the cash deals happening in this new subdivision. Of course the ‘have nots’ have been on the sidelines for quite a while as there are no properties below the $200,000 area (unless you want a tiny condo). I am very much looking forward to having little appraisal work once the snow flies–with interest rates where they are once the snow flies in Minnesota we will likely see meaningful value drops and little activity. That means more time to get some long planned website work done.
Being a bit uncomfortable with some of the junk in my portfolio that I should have offloaded last December, I decided to try tax loss selling for the first time. RilyL has held up a bit better than it’s fellows so I traded out of that into their term bonds (sell at 24 and buy at 22)-a slight light at the end of the tunnel, and T, which has been a pain since they spun off WBD, had a huge run up so their yield was less than the yield on T-C so I swapped a few for .50 “profit”. A few Sach-A got swapped for SCCG. Going to consider more over the weekend. Poring over the losses at 3am is not sleeping well.
Tim..WE are looking forward …to this weekend…..but, most People are spending there Money like their No, tomorrow… p.s. Enjoy!! Georges
For a lot of people who are “savers”, spending their money now makes some sense. The government driving up inflation makes their savings worth less and less every day.
When I was in grad school, I was asked by the university to catalogue a big donation of a man’s papers/books/etc. (took a whole year). Fascinating guy – helped write the constitutions of the post WW I German Republic and of Czechoslovakia, among other fascinating things. I ended up reading a lot of it. Some of the things written during the hyperinflation in Germany after WW I really stuck with me. High inflation can drive behaviors that seem irrational when you aren’t in the middle of it (we obviously aren’t in hyperinflation, but it is spiking and causing interesting reactions). It was enlightening to read the collection chronologically because I could see how attitudes and thinking shifted over time.
Of course we won’t get to experience inflation like I read about because we have the Fed, which will guide the economy to a soft landing and everything will be wonderful. They have mastered the art of doublethink*.
*“Doublethink means the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.” – George Orwell
Dow futures just went from down 222 to up slightly. Only possible reason I can find:
Russian Defense Minister Shoigu Held Phone Call With U.S. Counterpart Austin
Tim, thanks for all your work here on III. I’ve been investing in interest rate products exclusively since 1974 and your site is the best I’ve been around by far. You are greatly appreciated. Steve
Thanks for your kind words Steve.