Greetings mortgage market participants,
WARNING: This ‘commentary’ contains little to no useful information about mortgages, interest rates or the economy. Read on only if it’s close enough to Christmas that you’ve already started ‘fake working’.
It’s been many moons since my last posting. After promising the task masters from marketing that I’d provide a ‘Year in Review’ commentary I realized what ridiculous task it was and instantly regretted it.
It’s been an entire year and honestly, who can remember what happened. Since January bond rates fell 40% from their peaks only to climb 55% of the way back up. The yield curve steepened, then inverted, then flattened. How and why did all these things happen? Simply put, it’s too much to explain so let me summarize in a few words. Trump. Headlines. Volatility. You can find additional details in the Globe & Mail.
So instead of trying to decipher the riddle wrapped in an enigma that is ‘the market’, I’ll hit you with some facts in the form of a table of rates and spreads (in such a small font you won’t be able to read them anyway) so we can look back and agonize over the choices we made in 2019 and swear to ourselves that we’ll be smarter next year. The fact is, it’s all history now. There is nothing we can do about it anymore.
A table filled with tiny numbers:
Here’s a poem I wrote for the occasion…
‘Twas the fortnight before Christmas when all through the house
Not a creature was stirring, neither underwriter nor mouse.
The mortgage apps were hung by the chimney with care
In hopes that Treasury Guy soon would be there.
Our borrowers were nestled all snug in their beds
While visions of inverted yield curves danced in their heads.
And Poloz in his ‘kerchief, and Powell in his cap
Had suspended monetary policy for a long winter’s nap.
When out on the street there arose such a clatter
I sprang from my Bloomberg to see what was the matter.
Away to the window I flew like flash
Tore open the window and threw up the sash.
The shadow of cranes on the breast of new fallen snow
Gave the luster of development and new mortgages below.
When, what to my wondering eyes should appear,
But a Mercedes Benz and eight tiny reindeer.
With a little old driver, so lively and quick
I knew in a moment it must be Stephen Smith!
And then, in a twinkling, I heard in the hall
The clanking of bottles … his tell-tale call.
As I drew in my head and was turning around,
Through my door Moray Tawse came with a bound.
He was dressed all in fur from his head to his toe
But his clothes were all stained with Gamay and Pinot.
A barrel of wine he had flung on his back
And he carried a cheese tray in case of a snack.
Stephen appeared at his side and they went straight to work,
And filled out our paychecks, then turned with a jerk.
They both lay their fingers on the side of their nose,
And giving a nod, up the chimney they rose.
They sprang to their limos and the engines roared to life,
But I heard them exclaim, as they drove out of sight,
“Happy Christmas to all, and to all a good night!”
Here’s a quick wrap up of the top Google Search items in Canada this year.
- Topic: Toronto Raptors
- Person: Kawhi Leonard
- Song: Old Town Road
- WHO…should I vote for?
- HOW…do I register to vote?
- WHY…is Toronto called the 6?
My take away? We all piled on the Raptors bandwagon and we need serious help with the democratic process.
My biggest concern? The second most searched “How...” question was “How old is Dolly Parton?” Really Canada? JEEZ! (The answer is 73).
Well folks, that’s it for now. There are only 9 days left until Christmas and my parting advice for the year is…don’t count the days…make the days count!
Carpe Diem and my sincerest best wishes for health and happiness in 2020,
Treasury Guy…aka, el Presidente.