As more seniors are vaccinated, families are able to reconnect in person

In Case You Missed It

“A Conversation about Reverse Mortgages”

Last week, we hosted the latest in our series of conversations with specialists in their field. Our guest was Paul Pomeroy of Reverse Mortgage Funding.

Our conversation touched on dispelling some old myths about reverse mortgages, understanding the features of the product and the mechanics of putting one in place, and some examples of how a reverse mortgage can strengthen your retirement plan.

You can view a recording of our conversation with Paul on Springwater’s YouTube channel, or on the Videos page in the Resources section of our website, together with a library of past videos.

Webinar - Reverse Mortgages - Anchor Image

The Convenience – and Risks – of “FinTech”

The “appification” of personal finance continues to proceed, full steam ahead. Most if not all of our readers complete at least some of their financial transactions from a mobile device – be it for shopping (with Amazon, Zappos, and others), online bill payment and banking, money transfers (using apps like Venmo, Zelle, PayPal), or even investing (via Acorns, Robinhood, Betterment, and so on). The speed and convenience is undeniable.

But with convenience can also come a degree of risk.

Yahoo! Finance recently reported that some customers of CashApp, Square’s popular payments platform, had their accounts depleted by hackers, using unauthorized transactions.

The use of mobile payment platforms has increased during the pandemic, and so, too, have the complaints of scam or fraud transactions.

Cash App is unique in its wide range of available transactions – the platform accepts direct deposits for paychecks and government stimulus funds, processes peer-to-peer transfers, offers its own branded debit card, and permits users to buy and sell stocks and cryptocurrency within the app.

Industry data reveals that certain payment apps have been overwhelmed with scams since the pandemic began. App user reviews that mentioned the words “scam” or “fraud” rose 335% for Cash App when comparing February 2021 with the same month last year. PayPal experienced a 191% increase and Venmo, 84%. Zelle, however, declined 9%.

While mentions of the words fraud or scams in reviews don’t perfectly reveal how vulnerable an app is to hacking, the fact that Zelle has the support of large, mature financial institutions might support the data showing less incidence of fraud on its platform.

The Economy

Last week, the Federal Reserve boosted its projection for growth and inflation for the US economy, a reflection of the expectation that a combination of the Biden Administration’s $1.9 trillion relief and stimulus package and an accelerating vaccination program will improve the outlook.

The Fed’s forecast for 2021 economic growth were raised to 6.5% from December’s estimate of 4.2%. If realized, this would be the fastest economic expansion since 1984.

At the same time, the Fed cautioned that a full economic recovery remains far away, and the path ahead is still uncertain. As a result, the central bank believes the economy still requires a very easy monetary policy.

A few members of the government’s Federal Open Market Committee indicated they expect an increase in short-term interest rates in 2022 or 2023, but the overall expectation is still that the “fed funds” rate will not be raised until at least 2024.

Overseas, the picture is a bit darker. Over the weekend, the Financial Times reported that economists are reducing their growth forecasts for the Eurozone economy, as several countries battle a third wave of coronavirus infections. The consensus is that the economy will shrink by 1.5% in the first quarter, and that overall growth for 2021 will fall to 4.1% from a previously projected 4.4%. Only about 12% of the Eurozone population has received a first vaccine dose, with progress impacted by supply problems and a temporary suspension of the use of the AstraZeneca vaccine. However, European Commission president Ursula von der Leyen said last week that the vaccine supply should improve in the second quarter of the year, and she’s confident that 70% of adults will be vaccinated by the end of the summer (see more below).

The Markets

The Dow Jones Industrial Average declined on Friday after the Fed decided not to extend its capital break for banks, which triggered a rise in bond yields and a sell-off in financial stocks. The Dow Jones closed at 32,628, down 234 points or 0.7%. The broader S&P 500 index dropped to 3,913, down 3 points or 0.1%. In contrast, the tech-heavy Nasdaq closed up at 13,215, a rise of 99 points or 0.8%. During the week, the Dow Jones lost 0.4%, the S&P 500 index lost 0.7%, and the Nasdaq fell 0.3%.

Despite the so-so week, US stocks remain near all-time high levels. The chart below shows the extraordinary performance of the S&P 500 index over the past 10 years.

TE S&P 10 Yr Return

Source: Trading Economics

US government bonds have remained under selling pressure, as investors recognize that higher inflation erodes the attraction of bond interest payments. The yield on the benchmark 10-year US treasury bond started 2021 at 0.9%, but last week traded at over 1.7%. Long-term Treasuries (with maturities of 10 years or longer) were similarly impacted, and are on track to deliver their worst quarter on record since the late 1980s.

The chart below details the 10-year Treasury yield.

TE 10 Year Treas 2021 03 17

Source: Trading Economics

Mortgage Rates

As bond yields have risen, so, too, have mortgage rates. The benchmark 30-year fixed mortgage rate rose to 3.09% late last week. It was 3.05% a week ago, but 3.65% a year ago. Since the start of the year, it has risen by 0.44%.

The Labor Market

Initial jobless claims unexpectedly rose last week to their highest level in a month, despite many states loosening their pandemic-related restrictions on businesses and consumers.

The number of Americans filing for unemployment benefits rose to 770,000 for the week ended March 13th, the highest level in a month and well above market expectations of 700,000. In addition, about 282,000 people applied for help from the Pandemic Unemployment Assistance scheme, which covers workers that do not qualify for initial claims, compared with 479,000 in the previous period.

TE Jobless Claims 20021 03 14

Source: Trading Economics


The Numbers

Across 192 countries and regions, there have been over 122 million cases and over 2.7 million deaths. In the US, we have recorded nearly 30 million cases, and we have lost over 541,000 of our fellow residents.

The Institute for Health Metrics and Evaluation (IHME), an independent global health research center at the University of Washington, is projecting that fatalities in the US will rise to between 585,000 and 657,000 by July 1. The variance is based on the rate of adoption of various mitigation strategies like universal mask wearing, and the spread rate of more transmissible variants. Unfortunately, these figures are measurably higher than the IHME projections just a few weeks ago.

IHME Projection 2021 03 20

Source: IHME

Testing and Positivity

The testing rate has improved steadily since the fall. After a second peak of nearly 15% at the start of the year and a brief spike earlier this month, the positivity rate continues to trend downward.

JHU Testing Positivity 2021 03 19

Source: Johns Hopkins University

Daily Cases

After declining steadily since the start of the year, the 7-day rolling average of daily cases seems to have plateaued. Unfortunately, the plateau is at an unacceptably high level of over 50,000 cases per day.

WID Daily Cases 2021 03 19

Source: Our World in Data


The Biden Administration’s pledge to dramatically accelerate the delivery of vaccine doses is clearly bearing fruit. The US is now one of the world leaders in vaccination per capita. Just a month ago, the US had delivered just one-third as many doses per capita as Israel, for example.

WID daily vaccination per capita 2021 03 19

Source: Our World in Data

Dr. Ashish Jha, MD, the dean of the Brown University School of Public Health, has described the situation in the US as a race between the spread of variants of the coronavirus and the rate of vaccination, noting that, “… for the past two weeks, we’ve been stuck at 50K new cases daily … (and) in that time, we’ve vaccinated an additional 20M Americans. … It’s a race between vaccinations and variants. And we’re running even”.

And former FDA commissioner Scott Gottlieb, MD, has commented that as cases and hospitalizations go down, the COVID variant B-1526 is concerning. He says it’s unclear whether New Yorkers with the variant B-1526 are getting reinfected, or if they’re getting infected after vaccination.

Closing Thoughts

Over the weekend, Dr. Anthony Fauci commented, “History has shown us that when you have that [COVID case numbers] plateauing, that’s usually the forerunner of another surge — we’ve actually seen that in the European Union. The more people get vaccinated, the less likelihood that there is going to be a surge.”

We at Springwater, like all of you, are desperately keen to start spending time together with family, friends and loved ones. We’re hopeful, too, that we can soon begin meeting regularly in person again with our clients and professional colleagues. But we’re aware that until the majority of us are vaccinated, not everyone is safe. Please get vaccinated when you can!

We remain available to support you any way we can.

Keep the faith, get vaccinated when you can, be safe, and stay healthy.


PLEASE SEE important disclosure information at www.springwaterwealth.com/blog-disclosure/.