I. JVM Sends Commandos Into SF Bay Area CrossCountry Mortgage Offices
On Friday of last week, JVM sent commandos into all of CrossCountry Mortgage’s offices in the SF Bay Area (we were concerned about their nuclear powered Loan Origination Software).
The raid was very successful, as we shut down all of CrossCountry’s Bay Area operations.
While CrossCountry is none too happy, JVM is very happy because we can now charge 1/4% higher rates in the Bay Area – now that all that competition is out of the way.
II. President Trump Roils Markets While Calming Markets
Last night, President Trump gave a much-anticipated speech that was intended to calm the markets.
And … the markets freaked out, as both oil prices and interest rates shot through the roof.
And – I went to bed very worried … again.
But then, after I woke up, my concerns about rates shooting up turned out to be much ado about nothing… again.
Mr. Trump roiled the markets by telling the world the Iran war will continue without a definite timeline and that Iran will continue to get hit hard.
This signaled to the world that oil supplies will remain constrained and threatened. West Texas Intermediate (WTI) shot up from just over $100 per barrel to $112 per barrel.
III. But – This Is What Is So Interesting.
I have been blogging about oil prices and repeatedly explaining that higher oil prices mean higher rates.
But rates are now down marginally from yesterday – despite an enormous surge in WTI prices.
Even more interesting is the fact that American oil prices (WTI) are now higher than international oil prices (Brent Crude).
Brent Crude prices have been far higher than WTI since the war started (because the war threatened international oil supplies, not U.S. supplies), but are now lower for the first time.
One of the reasons WTI climbed so much was because Trump copied JVM’s playbook – after he saw us take over CrossCountry by force to wipe out competition.
Mr. Trump effectively told the world to start buying American energy rather than Middle Eastern energy, and he’s already working on enormous energy deals.
So, it was partly the increased demand for American energy that pushed WTI so much higher, rather than just concerns about an escalating Iran war.
If it were only the latter, rates would likely be much higher right now.
IV. It Was either Really Smart or We’re All Going to Die!
Mr. Trump’s supporters say the increased demand for WTI was part of Trump’s ingenious plan all along, which is why he increased U.S. energy supplies so much prior to the war.
Trump’s detractors say that this is just an accidental benefit that Trump stumbled upon, and that Trump is an impulsively insane moron who eats babies and will soon destroy the world.
I suspect we’re somewhere in between.
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