The 10-year yield continued its ascent upward over this past holiday shortened week. With the FED stating their desire to sell their mortgage backed securities (and reduce their exposure), it appears the overall market believes we are moving toward higher interest rates. Note that when the FED does start selling their bond holdings, this will create upward pressure on interest rates. It is essentially a reversal of quantitative easing. As most of us realize, this is always a case of having one foot on the gas and one foot on the brake. It is not an exact science; and it could cause the overall economy to move toward a recession.
In the graph below, the blue line indicates the next upward resistance line. If that line is broken, then it will become the next support line for the 10-year yield.
This past week I heard about a couple of challenges in meetings I attended. I then recalled how problems are often addressed. For many, most problems go unsolved. Often the approach is to find a way around that problem. Note this can work if it is a very unique issue that will never occur again. However, most of the time these problems continue to show up in slightly different variations.
My concern here is that if you continue to not address your problems, then you will find your daily workflow start to bog down more and more. It is like having a ton of emails in your inbox that go unaddressed because you are overwhelmed and/or greatly disorganized. It all can start to mushroom.
Once you reach a level of frustration that is high enough, then you go out and hire a paid consultant. And then this forces you to hopefully start chipping away at those very problems that are putting you in chaos.
An alternate approach would be to meet with your Centers of Influence and let them know what your top two or three challenges are. Ask them what they would do if they were you and why. Do the same for these folks in return. It is a great way to strengthen those relationships and to help each other. The key here is to actually focus on the top two or three issues that will greatly improve your business. Do not try to tackle all of the issues (as that will usually be too much to handle and nothing will get done).
Problem solvers are a unique breed. Many of them came from the tech world at some point in time. Meet with them and barter to help each other. It really can make a huge difference in resolving your business challenges.
Okay, enough for this week. As always, I welcome any of your strategic financing questions.
Article of Interest:
The Registry reported “OPINION: Silicon Valley Begins to Crack Visibly.” This is an opinion piece on commercial lease space availability in Silicon Valley.
See the table below for approximate interest rates.
| Type | Rate | Fixed Term |
| Apartments | 3.705% – 4.830% | 3 to 10 year (30 yr amortization) |
| Commercial | 4.035% – 4.880% | 3 to 10 year (25 yr amortization) |
| Construction | Call for Rate | Call for Rate |