This week’s issue presented by Ridge Lending Group
What happened…
The Fed’s rate cuts lit a fire under stocks. Nasdaq’s already up 9% this year.
But Ray Dalio’s waving the red flag: this isn’t recovery—it’s a setup.
Takeaways…
+9%: Nasdaq gains since January, mostly on rate-cut hype and AI fluff.
Dalio quote: “The bubble… eventually… bursts.” He’s calling this the exit ramp.
Late-cycle echo: He’s comparing today to 1999. We know how that ended.
Liquidity melt-up: Easy money floods risk assets—until inflation forces a snapback.
Shift to real stuff: Dalio’s move? Rotate into “tangible assets” before the pop.
Explain Like I’m 12…
It’s like jumping on a trampoline right before the springs snap. Feels fun—till it doesn’t.
What this releases…
Watch for panic buys into tech, crypto, junk stocks—signal of a blowoff top.
Track fund flows into hard assets (commodities, farmland, real estate ETFs).
Why it matters…
Retail FOMO = smart money exit. Dalio’s not buying this rally—he’s selling into it.
If inflation comes roaring back, Powell slams the brakes—and markets fall hard.
Backroom breakdown…
The Fed’s pretending it has control. Meanwhile, guys like Dalio and Marks are trimming risk.
This isn’t stimulus—it’s air freshener on a time bomb.
Real estate angle…
If the melt-up ends with a crash, housing won’t be spared.
Equity losses crush down payments. Credit tightens. But if rates drop hard before the bust, there’s a narrow window to lock in real estate with cheap money—before banks flinch.
Move or miss?
If you’re sitting on big gains, consider harvesting now. Then pivot into real stuff—
like cash-flowing rentals or discounted land.
Secure funding (RidgeLendingGroup.com) or get tactical support (CashFlowSavvy.com) before policy and Fed cuts push comps higher.
Lurking in the Shadows:
👟 Marks Spots the “Cockroach” Pattern
Howard Marks says credit markets are flashing early-fraud signals. His latest memo calls out a wave of scammy loans and defaults as the first crack in the cycle, not the last. Quote: “They come in clusters.”
💡 Why you should care:
When credit tightens, refis get ugly. That can torch CRE deals and dry up capital fast.
👟 CRE Debt Bomb Is Ticking Loud
Office loan delinquencies just hit 11.76%, a record high. Nearly $936B in CRE debt matures by 2026—much of it underwater. Lenders are dragging out maturity dates, but the gap between old and new loan rates is killing refi math.
💡 Why you should care:
If banks start dumping assets, you’ll want dry powder for distressed buys.
👟 Fed’s Foggy Cut Sends Mixed Signal
The Fed cut rates again—but called it a “blind” decision due to missing data from the gov’t shutdown. Powell admitted “strongly differing views” on what comes next. Translation: No one’s steering this thing.
💡 Why you should care:
Markets may front-run the Fed, but if they guessed wrong, asset prices could snap hard.
On The Radar…
🗝 First-Time Buyers Now Age 40:
Just 21% of 2025 buyers are first-timers—half the norm. Starter homes may stay stuck.
🔅 Home Turnover Hits 30-Year Low:
Only 2.8% of homes sold this year. Locked-in owners = no inventory = fewer deals.
💔 $37T Debt, Tariffs Won’t Fix It:
Lyn Alden says tariffs are a smokescreen. Deficits still drive long-term rate pressure.
🏦 Rate Cuts Won’t Unfreeze Housing:
Mortgages need to drop below 5%. Until then, sellers won’t budge—and buyers can’t afford.
🦥 Consumer Spending Wobbles Into Holidays:
Food aid cuts + layoffs = slowdown risk. If shoppers stall, housing takes a hit next.
🏘 Rent Relief? Don’t Celebrate Yet:
37% of rentals now offer concessions. Good for tenants, bad for landlords chasing yield.
🖇 The Connection
The Fed’s cutting rates again, and markets are partying like it’s a comeback. Dalio calls it the final rally before the fall—yet the Nasdaq’s already up 9%. That’s not recovery. That’s exit liquidity.
Meanwhile, housing is still frozen. Just 2.8% of homes changed hands this year—a 30-year low. Sellers are stuck with cheap mortgages. Buyers are locked out by high prices and still-high rates. Even with easing, no one’s budging.
On the commercial side, the cracks are louder. Office loan delinquencies hit 11.76%, and nearly $1 trillion in debt comes due by 2026. Banks are extending loans, not because things are fine—but because they’re not ready to eat the losses. And still, the Fed is pumping liquidity into a jammed system.
It’s a weird moment. Capital is flowing, but assets aren’t. Prices are rising, but transactions aren’t. This isn’t how a healthy market works. It’s how things move before they break—or reset.
If markets keep climbing while the real economy stands still, smart money will quietly rotate. From frothy stocks into real assets. From hype into yield. That’s the move hiding in plain sight.
#️Number of the Week
40!
That’s the median age of today’s first-time homebuyer—up from 29 in the '80s.
At this rate, Gen Z will inherit before they buy.
🎯 The Hit List!
✅ Exit early: Nasdaq’s up 9%, but Dalio says it’s the last rally.
Take gains, rotate into stuff that actually cash flows.
✅ Watch office: Office loan delinquencies hit 11.76%—a record.
Distress is building. If you’re buying CRE, price it like it’s leaking.
✅ Ignore the pivot: The Fed cut rates… and nothing moved.
Don’t chase cheap money until sellers show up, too.
✅ Track concessions: 37% of rentals now come with freebies.
If you're a landlord, protect your margins—or offer value renters actually want.
✅ Pressure test: Nearly $936B in CRE debt matures by 2026.
If your lender gets shaky, have your refi backup plan ready.
🚪 Closer
If 40 is now the starter age for buying a home…
Retirement might just be a refinance.
