Rate Drops and Silicon Valley Bank Collapse

More drama in the market this week. The collapse of two banks last week dropped mortgage rates and will have an impact on the Fed’s plans for subsequent rate increases. 


Until late last week, most economists and financial experts were expecting the Fed to continue to raise rates over the next several meetings, until they topped out at 6%, or brought inflation to its knees. The relatively strong jobs report, continued pressure on inflation, and Powell’s strong message against inflation, had most believing he would raise rates another .5% on March 22nd.

The sudden collapse of Silvergate Capital and Silicon Valley Bank may have changed the game and may likely cause the Fed to adjust their game plan. No one wants to get back to the runaway inflation issues of the 70’s but the failure of these banks was directly correlated to the rapid raising of rates and the corresponding market turmoil. 

Last week the street was forecasting an-80% probability of a .50bps rate increase, now it is calling for a 60% probability on a 25-basis-point increase. That would take it from the current rate of 4.50% to 4.75%, according to the  CME FedWatch site . For the long term… the projection is for three consecutive .25 bps increase and a potential pricing cut as early as November.

Last week the 10yr dropped to 3.7 down from 4.07 on March 1st. 

Interesting times!! The big question is if last week’s rate decline will continue to adjust ahead of the Fed meeting and will Powell yield to the concerns of a hard landing?. In my opinion, a lot of that will have to do with how the FDIC handles the defunct bank’s assets and how the market responds to the solution. Expect bumpy markets ahead. Forward Commitments and long-term locks are tough to predict right now. If you are advising clients in this area, proceed with caution!


Bank number 3 collapsed today: this bank was also a crypto bank.  https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html 

Run on banks https://youtu.be/kxcwn7xoXhU  this video explains how the two banks collapsed and how it was correlated to Crypto and the Fed funds rates

Good article explaining the dilemma this will cause for the Fed:  https://nypost.com/2023/03/11/silicon-valley-banks-failure-is-a-warning-for-the-fed 







Notes that Resonated:

  • Whenever you run someone else’s race the best you can do is second place

  • You can lift a lot more if you loosen your grip

  • Rest your gratitude and release your need to control

  • God uses adversity in our lives to reset our level of gratitude and release our tight grip of control.

  • Moments of friction and discomfort give you the best lessons in life…. embrace them

  • Lessons repeat until you learn them.

  • Great money is made in real estate during a market correction

  • Run strong, run confident, run with purpose

  • Financial freedom leads to all freedoms

  • Change isn’t easy but it’s always worth it

  • Are you the architect of your life or is it just yielding to what you encounter?

  • Ignore the noise and find the numbers

  • Short form video now accounts for 80% of the video traffic (are you capitalizing on it?)

  • Before you get a new blessing, God is giving you a new baseline






Where do you need to reset your gratitude and release your control? I came across this video, and thought the message was good. It’s about going through adversity, the pandemic etc… and relating it to the Israelites leaving Pharaoh. His lesson resonated with me on how God uses adversity in our lives to reset our level of gratitude and help us release our tight grip of control.  https://youtu.be/-xdO49Ta03M 







Things to read:

How Big Things Get Done: This book gives ideas and secrets on how to plan for and accomplish big project successfully.

Things you will learn:

  • Understand the rate of failure and overrun and how to plan for it.

  • “Plan slow, act fast” Getting to the action quickly feels good but its wrong.

  • “Think right to left” Start with your goal, then identify the steps to get there.

  • Find your Lego. Scale comes from modularity.

  • Be a team maker. You can’t go it alone

  • Master the “unknown unknowns”. You can actually figure these out and develop a plan around them

  • Project Leadership will make or break you. He will give you ideas of where you can improve here







Productivity Stuff:

Productivity check point mapping https://youtu.be/inPnvN6PyLg  (this video shares ideas on solid direction on what you want to do, why you want to do it and how you can accomplish it. And use a notebook as a tool to pull it all together. The best idea here is starting backwards from a very specific goal and list out the steps on at a time until you are at the beginning

Franklin Covey daily task planning ideas: Method explained :  https://youtu.be/j21jphA1Q0M 

Journaling ideas: Journaling is great for mental health, long term mental agility, and idea creation. This method gives you a place to start :  https://youtu.be/5DqXHg52H1g 







Top Quotes:

“Some people are so poor all they have is money” - Bob Marley

Warren buffet says: “Every once in a while, the economic skies darken, and the clouds begin to rain gold”

The higher you rise the sharper the knives -Christian Horner (Red Bull F1 Principal)







Food:

Going Greek: With the warmer weather calling for patio dinners and outdoor dining… Greek seems like the way to go







Cool Stuff:

EDC gifts for men… even when they are hard to shop for 😀

 https://youtu.be/1POp9bJrzyU 


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