Mortgage Rates Up?

Mortgage Rates Rise Even After Rate Cuts, Amazon Is Cutting Over 10k Managers Globally, And Borrowing Just Got More Expensive...

Economic Ninja
October 08, 2024

The Daily Ninja 10/8/24

The Best Mortgage Rates Just Went Higher As Housing Market Gets Pummeled

🏠 Mortgage rates experienced a record-breaking single-day increase of 27 basis points to 6.53% on Friday, potentially causing buyers to withdraw from the housing market due to $200-$250 monthly payment increases.

💼 The Mortgage Bankers Association predicts long-term rates to remain relatively stable over the next year, with strong employment indicating robust customer demand for mortgages.

📊 A recent 50 basis point rate cut led to a 30% drop in mortgage rates but caused bond investors to shift to stocks, resulting in increased 10-year bond rates.

🎓 The Mortgage Master course, available at an 80% discount, teaches refinancing strategies and how to avoid losing $5,000-$18,000 in unnecessary fees.

🏦 The Federal Reserve's 50 basis point rate cut in 2022 paradoxically caused mortgage rates to skyrocket due to investor behavior in the bond market.

THIS Is Bad News

🏢 Amazon plans to cut 13,835 managers in 2024, potentially saving $3 billion, as CEO Andy Jassy aims to reduce bureaucracy and change the ratio of individual contributors to managers.

💰 Costco's surge in gold, silver, and platinum bar sales suggests widespread preparation for potential hyperinflation, coinciding with the Federal Reserve's plans to lower interest rates and bail out banks.

📊 The Economic Ninja claims the Federal Reserve's September jobs report was a "100% lie," citing consistent downward revisions of previous months' numbers after initially boosting markets.

🏦 The 2023 bank crash was reportedly larger on a dollar basis than the 2008 financial crisis, indicating significant economic instability.

🚨 The Ninja suggests a pattern of government agencies releasing inflated economic data to boost markets, followed by subsequent downward revisions, potentially misleading investors and the public.

Be VERY aware of what is happening in the treasury and bond market

📈 Treasury yields rise with the 10-year yield at 3.9% and 2-year yield at 3.6%, indicating higher borrowing costs and potential economic downturn.

🏦 The Federal Reserve historically cuts rates by 50 basis points during economic crises, but only 25 basis points when the economy is strong, suggesting rate cuts correlate with economic downturns.

🏘️ Recession indicators include falling home prices, stalled home sales, rising gas prices, layoffs, and consumer spending decline, with discount stores like Dollar Tree and Big Lots feeling the impact.

🏠 Interest rates of 7.5% in 2007 and 6.5% in 2020 for 30-year mortgages led to stalled home sales despite rate cuts, demonstrating the significant impact of rates on the housing market.

⏱️ The Federal Reserve typically lowers interest rates 1-2 quarters before a recession is officially announced, as seen in 2006 and 2020, indicating the Fed's awareness of impending economic downturns.