We Have Push-Button HELOCs
Now that it is clear rates will stay “higher for longer,” I want to remind readers again that we have a Home Equity Line of Credit (HELOC) that is insanely easy to apply for.
Underwriting uses an AI-based algorithm that requires no documentation or appraisals. Borrowers simply fill out an application and get an answer almost instantly.
Borrowers can close and get cash in as quickly as 5 days. Borrowers can often qualify even when they have no traditional income documentation. And, applying costs nothing, so there is nothing to lose.
When we first got access to these HELOCs, we were extremely skeptical (“too good to be true”).
But now they are one of our most popular loan products because they definitely are true – reminding us that AI will take over all lending at some point.
Iran Heats up & Inflation Is Way Up, but Rates Aren’t – Why?
I was very worried about skyrocketing rates today, as I was reading headlines about a blazing hot CPI inflation print (4.2%! Highest since 4/23) and Mr. Trump promising renewed attacks on Iran (“We are going to hit Iran hard today…”).
CPI came in as expected, but Core Inflation (stripping out food and energy – the main cause) was LOWER than expected. So, rates did not shoot up in response to hot inflation like they often do.
War drums are not pushing rates higher either, as markets seem to have priced in all of this volatility. Oil prices (which drive rates) are up a bit, but as long as they stay in the $87 to $95 band, rates do not seem too impacted.
In other words, jaded bond traders consider today’s conditions the new normal and have largely priced them in (already accounted for them in bond prices/yield demands).
In summary – no surprises = no rate increases.
What Should Scare Us All: Steven Hanke’s Anger!
The most accurate predictor of inflation (by far) over the last 5 years has been economist Steve Hanke – who focuses solely on the money supply (the primary influence on structural inflation).
And he is blazing angry lately because increased bank lending has pushed the money supply way up – and the Fed and everyone else are ignoring this. Hanke expects much hotter inflation now, irrespective of energy prices.
This was something I was blissfully unaware of (along with Iran) in early February when I predicted rates would fall to 5.5% by year’s end.
I will now be delighted if we’re at 6.5% by year’s end.
