Good Friday AM,

Mouth still agape from yesterday. In my decades-long career (defining my success by time, clearly showing my age) I can pinpoint less times than I have fingers where the market has moved equally violently. Mortgage bonds sold off so deeply that pricing/locks at many investors was just frozen. Access denied. The last time that it rained like this, Noah built a boat. So where are we in this brave new world? The 10-yr is now comfortably at 1.50%. Mortgage bonds are 300bps from where they were 2weeks ago and rates are sitting .375% higher than where we were. There will be a bounce. I can shareall the technical reasons why, I just can’t share when. One pundit shared that, “At this point the bond market is lashing out against the Fed for not putting his money where his mouth is. Powell repeatedly speaks of economic and job concerns and vows to stabilize the markets, including purchasing bonds, yet we saw no changes. There will come a point of capitulation and even the most aggressive sellers will stop and the bottom feeders will buy. This is why I am absolutely certain there is a near term bounce coming, however, as I have said, when we do get a bounce, you must be swift and lock all you can because the coming wave up, will be followed by another wave down. This is normal. The down wave will likely be the start of a five wave move, ultimately taking bond prices higher. As I have continued to say, do not assume we have seen bottom until we see a clear break in the downward trend.”

Curious how distance learning will affect our kids and country? Yikes… $25 trillion to $30 trillion — The projected loss of future economic output over the next century, according to Stanford economist Eric Hanushek, due to a “skill shock” resulting from the past year’s disruptions to education. The pandemic has seen millions of students lose critical days of reading and math learning, which could create learning lags that persistently drag on their school performance and, eventually, job prospects and income.

Please remain safe and healthy, enjoy the weekend, and make today great.