A few months ago I was over at our cabin on Hood Canal. It was a crisp foggy day and I decided to go for a ride in the woods on my mountain bike. What I really wanted to do was have a soak in the hot tub, but that’s another story…oh yeah, I already told you that one. The Hood Canal State Forest lays just across the street from our cabin and that forest ties into the Olympic National Forest. There is a wealth of beautiful riding trails through old-growth and second-growth forest.
Puffing up a hill about two miles into the ride, I came around a corner and found myself eye to eye with a big black bear!
The bear was startled, but he turned away from me and started to run. Then for some reason he stopped and turned back towards me, giving me a good long look.
It’s at times like this that you gain a pure understanding of just how insignificant most material things in our lives are, except for maybe a .44 magnum or a jumbo-sized can of pepper spray, neither of which I had!
The mind does funny things when confronted with unexpected situations such as this. My first thought was “what’s that big dog doing clear up here?” Then, “idiot, that’s not a dog!” Then, “his fur is so black and shiny!” Then, “did I remember to lock-in the interest rate on my Peterson loan?”
Finally, my years of Boy Scout training kicked-in and I remembered that depending on the intent of the bear, I should either curl up like a ball and hope he goes away, or put up a fight. The rule with a black bear is to lay low unless he is stalking you. If he’s stalking you, you’re about to become today’s Blue Plate Special, and you’ll need to fight like hell.
And that got me thinking about another type of bear attack: a “bear market” attack. That’s what the financial world is suffering from right now. Since last summer, the Fed has cut short-term rates significantly, but mortgage rates have not fallen, they have gone up. In 28 years of banking, I have never seen things so volatile. Rates hit a low point on January 23rd…for literally three hours. Then, over the next three weeks they rose by over a full percent! Today, we are back down a bit. Believe it or not, rates are actually pretty good right now. But rates remain extremely volatile and we just don’t know what tomorrow will bring. The market is suffering from a combination of a lack of liquidity, a fear of inflation and a fear of a recession. These forces are working against each other, causing turmoil.
So the question is, when facing a “bear market” attack, is it best to roll into a ball and hope it goes away, or is it best to attack? This may be a good time to go on the offensive and attack by locking-in a fixed rate loan. The best advice I can give to you is to check in with me as often as you’d like. There is nothing stopping you from “re-doing” the “re-do”, and at a very low cost. The key, is to know when to strike!
So what happened with my bear encounter? Well, after staring into each other’s eyes for what felt like about an hour (it was probably closer to about three seconds), I think I may have scared him off. I’m not sure why he ran, but it could have been our uncanny resemblance. After all, I wasn’t wearing a shirt!
