JVM’s Here to Stay; Backup for Banks Pulling Out
JVM was officially founded in 2006, and effectively founded in 1999 under another name by my wife, Heejin – with much of her operation carrying over to JVM in 2006.
All this is to say that we are definitely here to stay, as we have ridden through several very serious downturns with nary a scratch, and we are now stronger than ever.
This is also a reminder that we are happy to step in as a backup lender for any borrowers who are concerned about their potential financing with a regional bank.
We can still close faster than almost any other lender, and our service remains top-notch.
I should add here though that we are not trying to openly exploit someone else’s misfortunate; we have many close friends at regional banks, and we sincerely hope the banks are able to pull through – for our friends, for all of the employees at the banks, and for the economy as a whole.
Rates Plummet After Fed Raises Rates
I have repeated the above subheading so many times now, it is making me sleepy. But – I persist because the media continue to mislead the world that the Fed controls ALL interest rates.
The Fed only controls short-term interest rates, and not long-term rates like 30-year mortgages.
The Fed RAISED the Fed Funds Rate 0.25% yesterday, and mortgage rates FELL a solid 0.25%.
Why Did Mortgage Rates Fall So Much?
Even though Mr. Powell (the Fed Chairman) said that there would be no rate cuts in 2023 and that the Fed still needs to fight inflation, the mere implication that the Fed would slow down or stop its rate of Fed Funds Rate increases resulted in a steep drop in mortgage rates.
Or – at least that is the official story.
By implying that he needed to slow down or stop rate increases, Mr. Powell was also tacitly acknowledging the many headwinds our economy currently faces – which concerned investors.
And – more importantly, as Jeff Snider reminds us over and over, the “smart money” investors (bond investors) are very concerned about an upcoming recession, as indicated by myriad data, and yesterday’s rate drop was just another indication of that fact.
You Ain’t Seen Nothing Yet!
Per Jeff Snider, bond investors not only think a bad recession is looming, but that significant rate cuts by the Fed are likely this year as well.
Snider focuses on recessions and global macro issues, while Barry Habib focuses heavily on inflation numbers.
Habib repeatedly points out that inflation is falling, and that May 10th is the big day when we will see the sharpest drop in inflation this year (due to lagging data finally working its way through the inflation reports).
And macro analysts like Stephanie Pomboy think a major stock market correction and a major recession are inevitable this year.
Anyway – when you combine recession concerns, banking crises, stock market corrections, and falling inflation numbers, it is easy to see why some analysts expect rates to drop another 2% or more this year.
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