Don't say we didn't warn you. The name of the game in markets is interest rates. Sure you can look at all kinds of fundamentals and technicals that you want, but if rates are high you are probably in trouble. Conversely, if rates are nice and low, you probably have some nifty things going on. Well rates have been pretty low for awhile. We've had pretty bad stuff going on though. Recently though markets have picked up. Private equity firms are gobbling up banks like crazy because they think the worst is over. Even some folks are saying that the housing market has bounced off its lows. This is all happening due to lower rates. I don't care what the assclowns on CNBC are spewing.
Well, guess what? 30 Year Mortgage rates just went UP from 4.91last week to 5.29 this week according to Freddie Mac. While still low, its the highest since December. And the chart don't look too good. We like to call that a "D-trend" (disturbing trend, a technical term). As the recently deceased Keith Carradine from the "Kung Fu" show back in the 70s might say, "the circle of life is drawn with interest rates, grasshopper." You've read here recently the countless reasons why rates are going higher. We need to pray that this reverses. Otherwise the recovery is going to be long and painful. I believe it was Eric who said to buy the stock ticker TBT in the low 40s. This is a bet on higher rates. Well that stock is at 55 now and I would buy more for the time being. Hope our friends in D.C. are keeping a close eye on this. High rates = bad news. Unless you own TBT of course. Good luck.