From Business Insider:
The Great Recession misled millennials: It made them think high home prices will eventually come down
History often repeats itself — but when it comes to the current housing market, don’t hold your breath.
If you were a homebuyer in the mid-2000s, today’s hot market might look eerily familiar. Like many of your fellow Americans, you might be wondering when this housing cycle will come to a close and bring prices back down to earth.
It won’t be that simple this time around.
That’s because the US housing market is in uncharted waters and it’s throwing homebuyers for a loop.
A typical real-estate cycle occurs in four phases: expansion, hyper supply, recession and recovery. This is the pattern that gave rise to the housing bubble of the mid-aughts, a time when a combination of cheap debt, predatory mortgage lending, and complex financial engineering led to a foreclosure crisis as well as a credit crisis among investors — and by 2008, a global recession.
During the Great Recession, US home prices — which had soared during the housing bubble of 2006 and 2007 — tanked to a 17-year low. This created a chance for many Americans to afford a home if they had managed to escape the crash financially unscathed.
As some of the factors that contributed to the housing crash of 2008 reemerge, many Americans, especially millennials — the largesthomebuying cohort of the 2020s who witnessed their parents navigate the rocky real-estate landscape of the 2000s — are expecting a similar outcome. However, the current housing market is a vastly different beast. Although the US is bracing for a possible recession in 2023, home prices won’t be crashing anytime soon.
As Axios’ Nathan Bomey recently wrote in a newsletter, “As an older millennial, the financial crisis trained me to think that housing prices that go up must come down. But this has the makings of a softer landing.”
The U.S. is likely to fall into recession in 2023, says survey of economists
A U.S. recession is all but unavoidable for next year, according to a majority of leading economists in a new poll.
Nearly 70% of 49 respondents expect the National Bureau of Economic Research to declare a recession next year, according to the FT survey conducted with the Initiative on Global Markets at the University of Chicago Booth’s School of Business that published Sunday.
The Atlanta Fed’s GDPNow forecast now sees economic growth in the second quarter coming in at 0.9%, following a 1.5% contraction during the first quarter.
A third of those surveyed — results were gathered between June 6 and June 9 — see the NBER’s recession call holding off until the second half of next year, while about 40% see it during the first or second quarters of 2023. The survey was conducted before Friday’s U.S. consumer price inflation data which showed May headline number unexpectedly surging to a new cycle high of 8.6% year-over-year.
First non grim
Any questions?
https://tinyurl.com/4xnvy5mf
That sound you hear is the Ten hitting 327
The extra stimulus in early 2021 was a huge mistake.
Biden needs to start student loan repayments immediately.
Don’t blame Biden.
It’s all part of a Russian plan. You must always fear the Russians.
Even if there is only one of them and ten million of you.
Then, when the last Russian is gone, fear something else. Always live in fear of something.
How could we have known? 😙
Rates going up, monthly mortgage payments increase, stock market down, prices on everything have risen, this inflation is permeating everything, recession coming and we may already be in a technical one, with recessions unfortunately come job losses and on we go. But do not fear, housing prices will not go down, even with that last 20 plus percent increase in a year, housing prices will not go down. Period. End of story.
3b
Never let a good crisis go to waste. It’s going to be a blood bath in the streets once this really gets going.
WFH. It’s much safer. Big increase where I work in criminal type injuries. Good practice for me as in the past haven’t seen it much before, drips and drabs. Now it’s just about weekly. Plenty of job security for me.
Donate to your local Red Cross.
Hey remember when COVID was a hoax but Trump shut economy down, printed trillions in free socialist money never to be repaid then told us to drink bleach then it will be by Easter. Yes, gas was 1.99 at that time. UK paying $9 a gallon. How is Biden to blame? Please enlighten us.
Bystander: Chgo noted it before, that last round of stimulus should not have happened. And, away from that the reality is if the economy is good or bad the ruling party owns it, whether it’s right or wrong. That’s how it’s always been.
I’m like LW. I believe in less government. But this is what happens when you have less government. These corporations have BiLLIONS. Why so cheap? What should have happened is when the inspectors came back after a year the place should have been spotless. America is not a place where you can trust due to capitalistic greed vs morality:
“U.S. regulators have historically inspected baby formula plants at least once a year, but they did not inspect any of the three biggest manufacturers in 2020, according to federal records reviewed by The Associated Press.
When they finally did get inside an Abbott Nutrition formula plant in Michigan after a two-year gap, they found bacterial contamination, standing water and lax sanitation procedures.
But inspectors offered only voluntary suggestions for fixing the problems, and issued no formal warning.
Inspectors would return five months later after four infants who consumed powdered formula from the plant suffered bacterial infections.
Earlier this week, it was reported by the Washington Post that the FDA has been investigating Abbott since March 2021 following the deaths of the children. “
” last round of stimulus should not have happened.”
Stimulus? What stimulus?
What I received I barely noticed. I’m sure most of the middle class and the poor did either.
So who got the massive stimulus money that caused all of these problems? Was it the small businesses?
Cause no way did a 2k check to a poor person cause all of this. That’s for sure.
We went from a Patriot to a puppet in the White House. People are now saying, what’s the president’s plan to fix everything? There is no plan… that IS the plan. The plan is to let it all collapse and force greater dependency.
Hope someone reminds him to pack his chapstick, knee pads, and Aricecpt.
“President Biden was asked by reporters if had any plans to go to Saudi Arabia. The president said that he had not decided but seconds later he confirmed that he was in fact going on a trip that would see him visiting Saudi Arabia and Israel. Biden is expected to approach the Saudis, one of the world’s largest oil producers, in an attempt to improve diplomatic relations and help bring down U.S. gas prices at home.”
3b,
That is fine but showing charts of 1.99 gas..cmon. Context matters. Biden is doing a sh^t job but this was years in making and stimulus money is gone. Why is soda now being sold in minis and 4 packs? Corps have now taken over trying to squeeze situation.
Phoenix,
Did you know that none of the formula was found to have bacteria, none of the bacteria the babies were sick with matched the bacteria found at the plant, meaning they got sick from another source, and that the bacteria found at the plant wasn’t located in the production area?
All very relevant info the producer of your quote purposefully evaded to support a political worldview.
Perhaps it’s a federal bureaucracy that does more harm than good, again?
The plan is to let it all collapse and force greater dependency.
Next best thing to bringing back slavery.
Bystander: You are right, but that’s how our screwed up system works. That’s why both parties blow!
Formula maker Abbott continues to firmly deny that its infant formulas sickened four babies, killing two. The denial is despite the same dangerous bacteria that sickened the infants—Cronobacter sakazakii—being found at the company’s formula factory in Sturgis, Michigan, which the Food and Drug Administration alleges was producing formula “under insanitary conditions.” And at least one container of Abbott’s formula tested positive for the same Cronobacter sakazakii strain found infecting one of the infants.
Still, Abbott argues that the link hasn’t been confirmed, and its formula isn’t to blame. In a lengthy Twitter thread on May 13, the company made the blunt assertion: “The formula from this plant did not cause these infant illnesses.”
But that is a brazen and misleading claim, according to the Food and Drug Administration. In a press briefing Monday evening, agency officials thoroughly dismantled Abbott’s defense.
Phoenix: The money was released into the system and went somewhere. Some we are told used it towards down payments on a house.
No one suffers more from inflation then the poor.
Yea, stimulus blew up the housing market….
Face it, supply and demand fundamentals went to hell due to the shutdown of the economy. Oil went below zero, no where to even store it, and then led to the prices we see today. I can’t stand listening to people blame stimulus for the current inflation. The entire supply chain was destroyed….this is the reason.
3b says:
June 13, 2022 at 9:14 am
Phoenix: The money was released into the system and went somewhere. Some we are told used it towards down payments on a house.
No one suffers more from inflation then the poor.
But it’s much easier to blame Biden and the FED. Never can acknowledge that business owners f/ed up big time…
O’Biden’s one and only accomplishment: Proving to people that Trump was a very good president.
3b,
So how much did people get that it was enough to put on a downpayment of a house?
Was it the shady small businesses that received large checks? No way 2k is going to make a dent in a house purchase.
Anyone know? Was it the loans to small businesses that did this? Cause I’d bet it’s not the checks to the workers that did.
How’s everyone’s Crypto and DNA?
11am, we find out more about how our former patriot president planned the riot, incited the crowd then ate cheetos while his minions attacked cops. The ‘big lie’ will be shift to how to Rs and Fox tried to cover up their culpability. Trump allies and family will continue to throw him under bus just by basic truth..
Bystander says:
June 13, 2022 at 8:53 am
“…How is Biden to blame? Please enlighten us.”
Here’s a brief summary from ‘Bidenflation For Dummies’; the perfect gift for all of the Dem stooges in your life…
Joe Biden’s Progressive Energy Agenda Is Soaring Prices – https://www.realclearenergy.org/articles/2022/06/08/joe_bidens_progressive_energy_agenda_is_soaring_prices_836156.html
This was the result of MASSIVE stimulus on top of this.
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
Phoenix, the majority of the country lives check to check. When you lob 10K at a family averaging 55K per year, it will cause this to happen. And it was almost completely unnecessary.
Proving to people that Trump was a very good president.
Or just proving that he is worse than the Cheetoh.
Look in PA, they just elected a quack Dr OZ.
America likes electing geriatric television celebrities. It fits the boomer demographic.
Great buying opportunities…bear market won’t last forever.
Libturd says:
June 13, 2022 at 9:22 am
How’s everyone’s Crypto and DNA?
When you lob 10K at a family averaging 55K per year,
Still missing the logic.
Living paycheck to paycheck. On 55k.
Suddenly 10k allows you to buy a 600k house?
Am I missing something?
So a mortgage originator says:
Yeah, you make 55k combined. You are barely above water. But thanks to your one time 10k government check, you just qualified to by fat Mary Muppets overpriced cape on a 4 lane highway for 460k.
There has got to be more to it than that.
I’m no MBA-
But I’d bet that its more about wealthy investors and hedge funds putting their money into solid investments like housing.
Or individuals with high net worth not trusting Yee Stock Market and buying a second home for themselves or their children.
we find out more about how our former patriot president planned the riot…
I’m sure they intend to milk it even longer than the Russian Hoax.
No. It doesn’t buy you a house. But you will blow that 10K and fast. Increasing demand for nearly everything all at once. Add in the savings from the Pandemic when no one went anywhere and boom, the recipe for massive inflation. This is also why I expect the economy to bounce back quickly afterwards. Taming the inflation is key here. The recession will be short lived. But the recession isn’t going to happen unless interest rates go much higher (which can later be lowered). Or, the FED can do nothing, and let inflation cause the recession, only, there will be less the FED can do to kickstart the economy afterwards and as we all know, prices rarely come down. Rather see the cost of credit dent the growth than the cost of toilet paper and bread. Trust me on this one.
Nah, Ed..just as long as Benghazi hoax. Oh wait, the Senate approved investigation and spent millions on it over 3 years.
Phoenix: I am only pointing out what some people supposedly did with their stimulus money and with money that they would have paid towards student loan payments. The fact is when you flood the system with money, inflation happens.
Also, apparently a lot of the stimulus money the Feds gave to the states has not been spent yet, what happens when that money hits the economy.
Cramer: Tech CEOs tell me they’re sick of spoiled Silicon Valley employees
“Cramer, who has spent the week in San Francisco, said he’s hearing that “many of the CEOs out here have had it with younger workers who’re telling them what to do and when and where they want to work.””
““They’re tired of the San Francisco workforce, which they think is full of spoiled nitwits who are there one day and gone the next,” Cramer added. He did not name these executives whom he said he talked to off-air.”
https://www.cnbc.com/2022/06/09/cramer-tech-ceos-tell-me-theyre-sick-of-spoiled-silicon-valley-employees.html
I took down a big tree with my big stimulus money..ooh/ahh. My father’s boomer exec board got 2m each because of Dumpy’s free money in 2020. There is your inflation. Wealthy easily paying more for constrained manual labor pool while knowledge labor competing against third world.
The extra stimulus in early 2021 was a huge mistake.
Biden needs to start student loan repayments immediately.
And they wanted even more
The Benghazi hearings may have had a propaganda value similar to the J6 show but we’re certainly not a hoax. Hillary and bama got people killed with their indifference and then tried to cover it up.
The Russia hoax was sedition. The Dnc tried to orchestrate a plot to destroy a candidate and eventually an elected president. There is no comparison between that and bengazhi. The Russia hoax is much closer to water gate.
But you will blow that 10K and fast. Increasing demand for nearly everything all at once.
So what did they buy with a lousy 10k? Maybe replaced a 2003 Honda with a 2012?
Bought some clothes from a foreign country? New set of tires? More booze and drugs?
Doctor visits?
Still doesn’t fly. Sure some demand, maybe fix up a house, but 10k doesn’t go that far with plywood at seventy a sheet.
Exactly how is everyone coming up with enough money to buy every overpriced house in America with 10k?
My guess, and it’s a guess, it’s more the PPP loans. Much bigger. Rife with fraud.
A few K to a struggling family is just a scapegoat to the real crimes being committed.
“My father’s boomer exec board got 2m each because of Dumpy’s free money in 2020. There is your inflation.”
This is more logical to me. Once again, no MBA.
At end of the day, wages have not kept up with inflation. Inflation numbers are also lies bc govt tries to keep narrative/control masses. We all know 8% is a joke when everything up 30-40%. The Great Resignation is also not helping most people so this is about a giant reduction in lifestyle for America while trying to keep from internal violence/war. Govt’s social conditioning is being put to test.
10K
Biden and his family spend more than that for lunch.
That’s Trumps fuel bill for his helicopter to hover for 30 seconds with his overweight pannus fighting against gravity.
If you didn’t get an 8% hike or more you are being paid less. You really needed a 10-11% hike to even feel like you really got a raise. It is honestly unmotivating at the moment to know I had way less, while having a good review and working hard… etc
The stimulus and monetary policy is the fuel for the inflation fire but Biden lit the match with his green energy BS. The debacle in Ukraine the that he did a large part in architecting was throwing gas in the fire. He’ll take the blame for that. And we are Nowhere near out the woods.
We got 3% where I work.
and cold pizza.
Freedom isn’t free:
“The debacle in Ukraine the that he did a large part in architecting was throwing gas in the fire.”
Yeah, all of the gas that we are paying north of 5 dollars for.
I love when the rich tell me (oops, garnish from my taxes) as to what I should have to pay for my “supposed” freedoms.
Mike S
Agreed. And worse if you didn’t get the “work from home” tax break.
That one is a biggie.
Supposedly western resolve in helping Ukraine is declining. The Russians are grinding down the Ukrainians in the Donbas region and have conquered most of it. Of course it’s destroyed, but I guess they don’t care.
Biden’s favorite movie.
Bet he wakes up in the middle of the night shouting “Wolverines!”
Red Dawn
The film depicts a United States that has been invaded by the Soviet Union and its Cuban and Nicaraguan allies.[4] However, the onset of World War III is in the background and not fully elaborated. The story follows a group of American high school students who resist the occupation with guerrilla warfare, naming themselves the “Wolverines”,
If you got outside of the propaganda echo chamber, the likeliest outcome can’t changed. The Russian view was that it’s an existential war. Ukraine had to enact martial law to stop fighting age men from leaving. Who do you think would fight with more resolve?
Now that Biden gave zelensky a “you’re dead to me “ moment last week, it’s all but certain. Time to save face.
329
Analyst predicts 6% 30 F by end of week.
Chgo: I think we hit 7 by year end or before.
Are you guys referring to 30 yr. mortgage rates?
“Ukraine had to enact martial law to stop fighting age men from leaving.”
Well, their young pretty wives are sending them Dear John letters and hooking up with wealthy European men.
Yeah, that would make me want to fight.
https://youtu.be/imZ52DHBtug?t=170
Eric Adams 5 months into his term of office as NYC mayor is off on a cross country fund raising tour, including stops in Chicago and Beverly Hills.
The city is falling apart and riddled with crime, and he is off raining money. They all blow!!
My job is less than 1% at the top of the guide. Inflation is not sustainable. I do not know know of many people that received an 8% raise or higher. Unless people start getting 8% raises….recession and deflation of pricing is coming.
Mike S says:
June 13, 2022 at 10:11 am
If you didn’t get an 8% hike or more you are being paid less. You really needed a 10-11% hike to even feel like you really got a raise. It is honestly unmotivating at the moment to know I had way less, while having a good review and working hard… etc
Mike S,
Exactly but fact is people were getting 0,1, 2% in face of 2.5% inflation for years so falling behind for a long time. Now it is getting worse. This is a problem with corp greed. Keep giving more with no strings attached and they keep shipping jobs elsewhere. Here is prime example, BoA in NYC can’t hire people. Have they changed pay strategy? No. They are farming it out to third party who now lie about ‘no rate limits’. I called his BS and said I would need rate. It comes back at 65-70/hr. There is the problem. Now, mass hiring days are hot. Have employees work Saturdays to interview 12 people in a day. We are doing it. Did it 6 Saturdays last year and employee reward was zilch.
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SP500 hits 22% off ATH.
GP,
Just double the rent on your poor tenant. You are a winner.
You can easily make more than 8 percent. Embrace your capitalism. You will be fine pumpy!
Don’t worry, the Russians won’t come after you in Wayne.
Trump’s tax law is no different than stimulus money….that added a “huge” amount of money to people’s pockets, esp the wealthy. Why it gets ignored is beyond me. It was also paid for by blue state taxpayers….maybe why blue states didn’t see as high of price rise in housing as those red states getting the huge tax break (flood of money).
Every single state in the top 5 is a red state. There is def a connection. Part of it is also people leaving the blue states to take advantage of the trump tax law in those states driving up their real estate to blue state levels. Again, tax cuts targeted at red states have consequences. Like lowering the mortgage rates…no different.
https://www.washingtonpost.com/business/2021/10/27/states-regions-where-home-prices-rose-most/
Today, the Nasdaq crossed the sloped growth line representing the pace the market was increasing under Trump. It also signifies the complete return of every dollar made since Trump lost the election. Now back in November, I predicted we would return to Obama level, but only after giving back the artificial Biden and Trump debt-infused growth. That would take the Nasdaq down to 7,800. It usually will overshoot and bounce back to where it should be valued quickly, so I would not be surprised by Nasdaq 7K.
I am dancing in my sleep!
I haven’t raised rent once since my tenants have moved in. All have been with me since at least 2019. It def is time for me to raise the rent. Can’t hold off anymore. I’m too nice and getting raped. Highest rent being paid is $1650…lowest $1000. Big time gifts by me, and now it’s time to raise to push them out so I can get market rates. Prob losing 500 -600 a month on each unit. Maybe will just sell.
Phoenix says:
June 13, 2022 at 10:55 am
GP,
Just double the rent on your poor tenant. You are a winner.
Pumpy:
Socialist public worker by day.
Capitalistic landlord by 3pm.
Best of both worlds!
My mother-in-law is in the same boat. Only charging 1700 when she should be getting like 2300. People have it really good….they will never find a 3 bedroom for 1700.
1650 apartment by me is 3 bedroom….getting raped.
So when people characterize landlords as greedy dirtybags….point them my direction. I am subsidizing four families with ultra low rent out of my pocket.
Phoenix . . .
Re the question of how does $10k per low- and middle-income family create massive housing price inflation.
Below is a link to M2 money supply. Note that it went from $18.3T in August 2020 to $21.7T in April 2022. Use that as a proxy of “demand” and realize that “supply” has been reduced by supply chain problems. More importatnly, on top of the “demand” from those “printed” dollars, I’d need to look it up, but I imagine bank reserve requirements are still looser than February 2020 – so, the banks can lend more if they want to (when a bank lends, it creates more “demand” also). There’s bank lending for consumer stuff like purchasing houses, cars, as well as heloc’s and personal loans which are used for whatever; plus commercial loans to expand manufacturing lines, expand inventory, buy efficiency software, more forklifts, or to renovate an existing storefront, etc.
$10k to the $55k family didn’t make that family able to afford a $600k house, but it potentially DID allow them to buy a $250k house out there in the parts of the USA that are not fancy, like, say, Central Western Arkansas. Especially, when mortgage rates were down to historical lows, student loan payments suspended, and the Fed was (probably) basically eliminating bank reserve ratios. On reserve ratios, I didn’t look it up, but the Fed probably loosened them as loose as possible.
Even if it the $10k to the $55k family did not make the family able to afford a $250k house, they might have taken that $10k to the jet ski store. The jet ski store owner made an extra $100k in profit and thus upgraded HIS house.
Someone can articulate this better than me. But, the Fed is probably off-base on the level of interest rates, the level of QT versus QE, and on bank reserve ratios. The fiscal $xT in covid intervention was very bad, too, but the blame is moreso on the FEd, in my opinon.
https://fred.stlouisfed.org/series/M2SL
For those playing along at home. I am upping my position to 40long/60stable from 30long/70stable at the close. At 9.300, I’ll add another 25% move to 65/35. Then between 7,800 and 7K. I’ll move much of the rest hopefully.
The rest of you should put it all in crypto. It’s really, really cheap now.
Pumpkin, I don’t know the condition of your rental property, but yes in Clifton, rent should probably be something like:
Studio . . . $1,250, at least
1 Bedroom . . . $1,550, at least
2 Bedroom . . . $1,800, at least
3 Bedroom . . . $2,100, at least
Assuming the units were renovated about 20 years ago, but are in good condition, assuming no yard access. Depending on your location, you should be charging separate for parking. Clifton is rent control for 7+ units, right? So, what’s the probelm??
If your tenants in 2 bedroom or less are staying more than 2.2 years on average, then you are maintaining longer tenancies than industry standard. If so, that means either your price is too low or your service/soft factors is better than market.
On the other hand, I believe it is totally valid for a smaller landlord to maintain slightly below-market rents to keep long tenancy terms, because you suffer less turnover and whenever you get a new tenant, you do not know how they will act (they might drive off your good tenants, they might complain about nonsense, they might call the inspector all the time, etc etc).
11:05 on MIL charing $1700 for a $2300 apartment . . .
Urban NJ’s economy is fueled by this. Every small multi for sale has the wrong (too low) rents being charged. Somehow the realtor or whoever makes it so that the owner still wants $600k for that $2,500 rent roll, though, haha.
Crushed. Exactly right. Too much money floating around caused inflation.
“Spending leads to economic growth, so a central bank might cut interest rates, making money cheaper, so that individuals will buy more goods, such as houses and cars, increasing overall spending. As consumer spending increases, companies increase output and hire more workers to meet the increase in demand. The increase in employed people means more wages and, therefore, more people spending in the economy, leading producers to increase output again, continuing the cycle.”
But what happens when output can’t be increased? What happens to the price of the limited supply. Go buy a car or a house and you’ll get your answer.
Crushed.
Sure, some supply was constrained. But I’d bet the supply issue was less of a shortage of new construction vs concentration of multiple homes by institutions and individuals using this as a stream of revenue.
Someone owns 10 houses, that’s nine houses not for sale.
Just my opinion.
“I imagine bank reserve requirements are still looser”
I’d agree with this statement. Remember George Bush ” A home of your own?
And sure, some people did the “jet ski” example. But I’d bet plenty that many just paid their bills-or drank and smoked much of it away. Cause in the grand scheme of things 10k is a drop in the bucket. I open hip implants that cost more than that.
If 10k is enough to upset this economy, then this country has a much bigger problem that hasn’t been solved yet. Like a festering boil, it’s gonna pop.
11:19 . . .
Sorry, in my comment at 11:19, I meant “what’s the problem” in a pre-covid world. If Passaic County still isn’t evicting at a normal rate (it isn’t), raising the rent can be dangerous. One might anger a tenant who then doesn’t pay. No eviction still for months and if judgment-proof, then one never gets a recovry fo the lost rent.
Crushed, 3 out of 4 units were renovated in the past 12 years….one as recent as 2019. I am getting raped. With the pandemic, didn’t want to hurt my tenants. Now I have no choice. Getting absolutely raped. Losing at least 14k minimum a year on conservative estimates…
“Now I have no choice. Getting absolutely raped.”
Now you know how taxpayers feel when they have to pay your salary.
Phoenix, that 10k juiced consumer spending, which went bonkers hence the big earnings disappointment recently with target/amazon/walmart. The PPP loans were abused and that was a shot in the arm to the economy as that money pulsed through. The biggest thing was the interest rates being so low caused a lot of money to go into housing.
On the baby formula thing, I don’t believe the FDA. They are now saying the babies got the bacteria from the factory so they can pivot away from being responsible for causing a dangerous shortage and claim righteousness for shutting down the plant. Now don’t get me wrong I’m sure a corporation took every shortcut they could find. The bigger thing is the government was made aware of the factory’s issues before the kids were sickened by a whistleblower. Why wasn’t this place being inspected in 2021? The incompetence of our government entities is astounding. But regardless this bacteria is an issue for powdered baby formula worldwide, so perhaps the bigger issue is the widespread use of a flawed product?
I was under market rate as well with my multi. One month’s vacancy more than eats up any rental increase. Do the math. A $200 month increase is $2,400. That’s what I charged for one unit. When tenants turnover, you have to paint, clean, deal with all of the whims of the new tenant and spend way too much time with realtors and banks dealing with leases and escrows and them screwing up the utilities and so on and so on. Much cheaper to leave rent $200 under market value, saving on turnover costs and creating and incentive for them to stay. On initial leases, I often offer tenants a locked in rate for two years if they are willing to sign a two-year lease. I always give it anyway, but they don’t know that.
People seem to be getting Food/Gas, Inflation and Rates all confused.
Inflation does to take into account Food and Gas for the calculation. Why, because they are volatile. If you want to track those use the CPI metrics.
Fed raising the rates is pointless until they drain the liquidity out of the banks. That is the big issue. The main levers of monetary policy wont work until that happens.
We are Japan.
We agreed that it was necessary to blast through 3800-3850, not just move through it. This morning qualifies as the first attempt…….we’ll see what happens….
” I’m sure a corporation took every shortcut they could find. The bigger thing is the government was made aware of the factory’s issues before the kids were sickened by a whistleblower. Why wasn’t this place being inspected in 2021?”
The government shouldn’t have to tell a corporation how to do the right thing in the first place. That’s like cops and robbers.
Second, I know first hand how incompetent and corrupt govt is, I lived it. You can’t expect them to do anything right.
I am all for smaller govt. Problem is Americans can’t be trusted to do the right things on their own. So then you need another corrupt lazy entity to keep them in check.
How inefficient is that?
Yes we did. And again, the lack of volatility and the orderly nature of this bear has been reassuring.
Some would ask, why am I putting money back in if I think we’ll see an additional 30% drop? That’s easy. I could be wrong. :P
We can argue the impact of $10K. I happen to disagree with you, but regardless, it is the magnitude of giving $10K to virtually everyone….. along with everything else.
At least now the MMT has been thoroughly debunked. It was an insult to us in the first place.
Phoenix says:
June 13, 2022 at 11:25 am
Crushed.
If 10k is enough to upset this economy, then this country has a much bigger problem that hasn’t been solved yet.
Economists expect 50bp increase this week, and then for Powell to open the door for more aggressive hikes going forward. After Friday s CPI number there are no Doves left on the Fed board.
Again, 50 is not enough and still IMO, makes my predictions more likely to come to fruition.
Lib : I agree. I think they should do a full point this week. Rip the bandage off and get it over with.
Looking at prices for Key West in December, and they are staggering!!
It wasn’t just 10k, it was $600 a week on top of that with no obligations to pay rent or student loans. A lot of people continued to work under the table. There are people out there who’s disposable income rose by 500% in that scenario.
My brother was working 3 cash jobs, collecting the $600 + Unemployment. If he had kids, it was extra deposits on top of that. At the time, I posted that I saw people from the inner city dropping $1000 for the families to cut the line. We sat in line for hours while hundreds of them jumped the line. I saw people dropping large bills all over AC as well June last year.
This year…it’s crickets.
3b, I’m doing Key West in July. It’s almost as expensive as Disney. I’m staying in Ft. Lauderdale on the Saturday because the rooms in the keys were like $600 on the weekend.
BRT,
That is very few people as most Americans are not that ambitious. Not seeing this as driver of inflation from my view. I see this mostly oil trying to recoup losses from 2019/2020 and businesses using inflation expectations to get people to accept less and hedge any hourly labor increases. It amazes me how quickly businesses were able to get smaller boxes, bottles plus advertising completed in such short time.
Speaking of AC. I’ve noticed something a little peculiar. The casino restaurants have not increased their prices or at least not significantly. Of course, they were always significantly overpriced since most patrons pay with comps earned from gambling. On the other hand, we ordered Indian from a very inconspicuous restaurant that opened recently near us. One order of naan, one cheap cauliflower appetizer, tandoori chicken, chicken tikka masala and a vegetarian entrée was $75. The quality of the food was mediocre at best. It was also prepared thirty minutes after their promised pick-up time.
By the way, I kid you not. One of the best Italian meals I’ve ever eaten was had in Jerry Longo’s at Bally’s. They have a new owner and they have sunk a lot of thought and effort into this restaurant. Great drinks, black jack tables in the restaurant, a DJ spinning Sinatra and others and the food is outrageously good. The servers are top notch as well. If you are down there, definitely ask for a comp. :P
I agree. So many businesses not experiencing supply chain issues quickly used the “supply chain” as an excuse to raise prices. How much excess profits were created by raising prices or making the product smaller? Oil….come on, they are trying to get every single dollar they lost back and some. Human nature is a bitch. Greed always takes down every cycle…
Bystander says:
June 13, 2022 at 12:28 pm
BRT,
That is very few people as most Americans are not that ambitious. Not seeing this as driver of inflation from my view. I see this mostly oil trying to recoup losses from 2019/2020 and businesses using inflation expectations to get people to accept less and hedge any hourly labor increases. It amazes me how quickly businesses were able to get smaller boxes, bottles plus advertising completed in such short time.
BRT: That’s crazy! The cheapest I am seeing is about 3500 per person hotel and airfare leaving Dec 27, coming back Jan 2. At those prices I will at alternatives, perhaps Miami Beach.
It was like a light bulb went off over every business owner’s head…..whoa, we can easily raise prices right now and blame it on supply chain inflation. Everyone is doing it, why not. And then inflation went to work….like dominoes. Eventually it crashes it all as it simply is a game of musical chairs, and when the music ends (consumers pockets empty)only a few chairs left that survive the consumer going broke.
Bloomberg article saying there are “ small pockets” of traders and others on Wall Street saying the Fed will go all in with a one point increase this week.
335
So mortgage rate of 6% today that means on a $400,000 mortgage you are now paying $6000 a year more just for interest
Last fall, as container ships piled up outside the Port of Los Angeles, it looked as if inflation was going to be with us for longer than many had predicted. Curious how C.E.O.s were justifying higher prices, my team and I started listening in on hundreds of earnings calls, where, by law, companies have to tell the truth. While official statistics on inflation such as the Consumer Price Index can tell you that prices are rising, earnings calls provide rich, qualitative data that speak to why and how.
Executives from the nation’s largest publicly traded companies had a lot to report to their shareholders about supply chain snarls, product shortages and rising prices — mostly that they were very good for business. What was striking in the earnings calls was not the supply chain shortages or companies’ typical profit motives; it was the plain old corporate profiteering. The Economics 101 adage that “inflation is just too much money chasing too few goods” doesn’t come close to the full story. This raises the question: When companies are exploiting consumers in a time of national crisis, when should government step in?
Companies that historically might have kept prices low to pick up profit by gaining additional market share are instead using the cover of inflation to raise prices and increase profits. Consumers are now expecting higher prices at the checkout line, and companies are taking advantage. The poor and those on fixed incomes are hit the hardest.
As Hostess’s C.E.O. told shareholders last quarter, “When all prices go up, it helps.” The head of research for the bank Barclay’s echoed this. “The longer inflation lasts and the more widespread it is, the more air cover it gives companies to raise prices,” he told Bloomberg. More than half of retailers admitted as much when surveyed.
Executives on their earnings calls crowed to investors about their blockbuster quarterly profits. One credited his company’s “successful pricing strategies.” Another patted his team on the back for a “marvelous job in driving price.” These executives weren’t just passing along their rising costs; they were going for more. Or as one C.F.O. put it, they were “not leaving any pricing on the table.”
The Federal Reserve chair, Jerome Powell, said that sometimes businesses are raising prices just “because they can.” He’s right. Companies have pricing power when consumers don’t have choice. Sometimes this is because demand for consumer staples like toilet paper, toothpaste and hamburger meat is relatively inelastic. If you need a box of diapers, you need a box of diapers. Other times pricing power comes from concentrated market power. In industries like meatpacking and shipping — in which giants have over 80 percent of market share at times — it’s easier to take big markups when there aren’t major competitors to undercut you.
What we learned on these earnings calls was quickly reflected in data. Despite the rising costs of labor, energy and materials, profit margins reached 70-year highs in 2021. And according to an analysis from the Economic Policy Institute, fatter profit margins, not the rising costs of labor and materials, drove more than half of price increases in the nonfinancial corporate sector since the start of the Covid pandemic.
Despite clear evidence that a majority of price increases are not justified by rising costs, there is a fierce debate in Washington about what, if anything, policymakers should do to address it. This debate primarily stems not from questions about the cause of price increases but from differing viewpoints on whether policymakers should play a role in ensuring fair and just prices.
Most economists believe that markets are efficient allocators of scarcity and that governments should have little, if any, role in guarding against unfair pricing. They argue that price hikes will help cool demand and alleviate scarcity by efficiently rationing goods by consumers’ ability to pay. If sellers take price hikes too far, customers will just go to a competitor across the street. But what if there are no competitors? Not to worry: Truly exorbitant markups will all but guarantee new businesses entering the market. Many economists even argue that publicly traded companies have an obligation to shareholders to bring in as much profit as possible. If they see any interventionist role of government, it is in suppressing demand through interest rate hikes by the Federal Reserve, a blunt policy tool with a high likelihood of throwing the country into a recession.
https://www.nytimes.com/2022/05/05/opinion/us-companies-inflation.html
This is interesting. With today’s jump in the ten year. It is back to where it was when I nailed the lock timing on my amazing first mortgage in 2003. This number held until the fiscal crisis of 2008 and was last seen in 2013. It went lower for the next 9 years.
Of course, I refinanced my first mortgage down to a 20 in 2011 when I purchased my GR home with a 20. Refinanced again at the absolute bottom in 2020. This time I combined the remaining debt on my multi and the remaining debt on my primary into one mortgage at an astounding 1.9% for a ten year term. I am already down to paying 82% principle and 18% interest and have already paid off the first ten percent of the principle.
The amount of money I saved in interest over the last 18 years through refinancing into shorter term loans at lower interest rates is immeasurable. I only share these lessons with all of you as it is a huge money saver that many, many, many overlook. Even better than clipping coupons.
Juice, I think your math is slightly off.
I think at around 400K, you pay close to 1K in interest for every 2% increase. So you are looking at people paying $1,500 more today than they would have in 2020 as interests are approaching a 3% increase. Now when interest rates go up to 6% people will be paying $3,000 more in interest than they would have in 2020. That’s a spicy meatball.
The Great Resignation is also not helping most people so this is about a giant reduction in lifestyle for America while trying to keep from internal violence/war.
Like hell it’s not – I think it’s probably the biggest driver low-end wages in recent history. It’s the equivalent of a huge labor strike. Certain markets/job types have been forced to ratchet up wages to even stand a chance at competing for labor right now.
You better be ready to pay about $18/hr if you are looking to hire right now – unskilled, in a physical location.
I mentioned this the other day, my nephew (in college) got a part time job as a entry level forklift operator for UPS – $22 an hour.
Stu’s nearly going to fall off his chair. I can’t imagine what they are paying press shop operators these days.
It is impossible to hire someone in NJ right now at minimum wage, $13. Sorry, maybe a senior in high school would take a pt job at that rate. Realistically – NJ minimum wage right now is probably $17-18ish.
All the places that still have signs up about being short staffed – it’s not that people don’t want to work, they just won’t work for what they are willing to pay anymore.
BREAKING NEWS
Bill Barr suggested Donald Trump had grown “detached from reality” on his election fraud claims, as multiple aides testified to the Jan. 6 committee that they told him he’d lost.
Monday, June 13, 2022 12:31 PM ET
LIB – was quoting CNBC story on the mortgage interest survey today. I am wrong payment is well actually higher. Survey was quoting rates in a range of 5.58 to 6.35 etc but anyway a simple online calculation says it’s not $6,000 a year more in interest it’s actually $8,626..
400,000 @3.25 30 yr fixed is 1,741 a month
400,000 @6.25 30 yr fixed is 2,463 a month
So $719 a month more in just interest x 12 = $8,628
Did not break it down was driving in the remake of Deathrace 2000 on the Turnpike when I posted earlier. I was certain there was going to be a crack up up between the SUVs doing the jersey slide racing in and out of traffic and the motorcyclist who used the shoulder to avoid traffic while going about 120 mph..
Juice: I remember when 8 percent mortgages were considered a good deal. We may revisit those rates.
Speaking of the Orange one, spent an hour listening to various talk radio on my drive this morning. Trump is either under grand jury investigation or he is not. The news people cannot have it both ways for the next two years claiming Garland can charge him now based on the criminal referrals being made by the Jan 6th committee. Nobody wants to listen to another two years of this from cable and talk news radio either. Charge him or move on we don’t need to have this dangle until November 2024. I won’t be listening anyway, but for the rest of the country and mental stability of everyone we don’t need another long drawn out multi million dollar investigation that ends with no charges.
The last time the Fed hiked .75 was 1994! Back when markets were markets!
Any one recommend spots in Florida away from Key West for December. We did Captiva Island some years ago in February. It was great, but a little too quiet.
The Great Pumpkin says:
June 13, 2022 at 11:27 am
Crushed, 3 out of 4 units were renovated in the past 12 years….one as recent as 2019. I am getting raped. With the pandemic, didn’t want to hurt my tenants. Now I have no choice. Getting absolutely raped. Losing at least 14k minimum a year on conservative estimates…
Pumps, Does the state ever come by and make you do repairs?
Wendy’s is paying $16 an hour in Easton PA. Visited Lafayette on Saturday. It’s an impressive little school.
Should be a blood bath in the markets tomorrow if we are paying forklift operators $22 an hour now as the PPI release is coming @ 8:30 AM and as a leading indicator it is expected to move much higher.. Sleepy Joe knows the news already and is acting gloomy for sure. He was telling Exxon to pump more oil and is now calling it “Putinflation” because he does not like the “Bidenflation” label that will go down in the History books.
Nice read here on how they misread the tea leaves down in Washington DC.
https://www.wsj.com/articles/inflation-economy-federal-reserve-11655134682
Wendy’s is paying $16 an hour in Easton PA.
That’s more than 2x the PA min.
closed at 366.6
Chicago says:
June 13, 2022 at 1:09 pm
335
336.6 yikes …sorry
Perfect for today’s discussion.
https://www.nj.com/entertainment/2022/06/joe-gorga-of-rhonj-gets-in-screaming-match-with-tenant-over-rent
Jeffries says the Fed will do 75bp this week.
Every 5 years I have to pass their bs inspection.
“Pumps, Does the state ever come by and make you do repairs?”
Gorga story….those are the losers we are paying to help survive. Guy has been living rent free off the taxpayer since 2018. Grow the f up.
We are officially in a Bear Market.
I have never been inspected. What’s that about?
Grim,
I thought I was clear. It is helping the manual labor market so yes, the fry cooks making $22/hour. The Great resignation is not helping knowledge based non-tech worker who continue to see pressure from outsourcing. Sorry, I stand by it. Not seeing tremendous turnover with my business areas. Very little at all actually.
And it starts. A 2 bedroom house in my town closed at 450k in November, 2020. Just came on the market for 499k less than a year and a half later. They will be extremely lucky if they get what they paid for it. Sadly, for them they paid 30k over the original asking price.
“My guess, and it’s a guess, it’s more the PPP loans. Much bigger. Rife with fraud. A few K to a struggling family is just a scapegoat to the real crimes being committed.”
The real crime was committed by the government, with your consent or encouragement…so let’s get the terminology correct…
I see all over how ‘covid’ caused all these disruptions…not true.
Our RESPONSE to covid caused all the pain we are feeling.
Guys…you shut the fucking world down, literally…turned it off and pulled the key from the ignition…that was your choice. And we all are suffering greatly for it, still. And that suffering will continue for the foreseeable future.
What did you think was going to happen when you went to re-start an entire world economy? You all give more thought to winterizing and restarting your weed whackers and pools than you did to the ramifications of your covid hysteria.
I hope all the panty-waisted frightened little children who were running around shutting everything down because if not “what about my babies!!!” and “you’re killing my grandma you visigoth!!!”
You signed up for what we are living right now when you signed up to the ridiculous covid policies you allowed, and in many cases championed.
Blame whomever you like to make yourself feel better or to blow off some steam…the Fed, fiscal policies under either idiot in the Oval Office…but don’t forget to glance right when walking by that full length mirror in the bedroom.
“For those playing along at home. I am upping my position to…The rest of you should put it all in crypto. It’s really, really cheap now.”
COIN is down 88%! A bargain I tell you! A bargain!
I’m off 0.4% from Thursday through today. Just loaded up on a bunch of premium throughout the afternoon on some favorites,,,META, Z, DIS, TGT, VIX…all new positions today…ran out of time or would have added more names.
What did we shut off? That is an excuse. GDP was impacted for like 4 months in 2020. Really, not that big of a deal. There are a lot of causes. I mainly blame the FED for moving in the opposite direction ahead of this. Instead of putting bullets in the gun, they removed them. Biden’s energy policies didn’t help either. And quite frankly, Pelosi’s refusal to stop trading stocks is a great example of why the government doesn’t really care. They simply don’t. They are all in it for themselves. I laugh at people who think either party cares about them. And the truth is, the timing of Putin’s attack on the Ukraine was intentional.
To blame this squarely on Covid policies is silly and awfully political sounding. Don’t forget, Covid was much more dangerous initially. Each new mutation is more contagious, but significantly less dangerous.
Lib, any dwelling that is 3 or more units has to deal with this. Best part, you have to write a check for the inspection. Man, they hate landlords.
https://www.nj.gov/dca/divisions/codes/offices/housinginspection.html
4:18 – 5-year State DCA inspection is for 3+ family buildings.
“You better be ready to pay about $18/hr if you are looking to hire right now – unskilled, in a physical location.”
Spent the better part of the last week in God’s flyover country, where they actually make real stuff. Big stuff.
Billboard after billboard of adverts driving down the highways competing for entry level labor. Consistent with your $18-22 an hour, will train, 401k, and various sign-on bonuses. Most current was $5k.
Was kind of funny, we noted as we drove you could date the billboards by the fade on the red lettering and the size of the sign-on. Oldest board likely went through a tough late winter, and was at $1k….
The Great Pumpkin says:
June 13, 2022 at 4:04 pm
Every 5 years I have to pass their bs inspection.
How much do they charge you Pumps? per unit?
“Jeffries says the Fed will do 75bp this week.”
Journal broke that earlier this afternoon when you saw the heavy rate move. Many piling on now, including CNBC head economist (usually right about these matters). Consensus seems to be this Fed likes signaling and these ‘rumors’ poking out are such for Wed.
Inflation key drivers
For over a year the US govt boosted net nominal household incomes while Covid policies restricted supply of labor, services, and goods. That in itself would boost avg prices.
Other countries also did similar but less extreme versions of the above.
China has had a lot of intermittent supply cuts, pushing up costs of their goods.
I think legal and illegal immigrant labor is in shorter supply than usual.
Oil px was extremely low 2 yrs ago and has been rising since. “Greenflation” is also real, a form of supply constraint. A form of “let them eat cake” thinking.
All major currencies were paying negative real rates of interest for many years, pushing up values of many assets, bonds, stocks, real estate, crypto-lottery-crap, which boosted the “wealth effect”.
Money supply rose substantially and steeply 2020 and I think 2021.
Anyone who thinks this was only Trump’s fault or only Biden’s fault is blinded by factionalism.
“What did we shut off? That is an excuse. GDP was impacted for like 4 months in 2020. Really, not that big of a deal.”
Entirely disagree. You still have every supply chain issue floating around out there in nearly every industry. That Fed balance sheet chart everyone likes to post? Covid response. $2.oT of checks? Covid response. WFH/the Great Resignation? Covid response. $22 an hour and $5k sign-on for unskilled labor? Covid response.
“Don’t forget, Covid was much more dangerous initially. Each new mutation is more contagious, but significantly less dangerous.”
We knew exactly what it was coming out of Europe. It inflicted the elderly and those with specific risk factors, and especially the elderly with those risk factors.
We had – mathematically – an infinite number of potential responses to covid. We chose one that printed massive amounts of liquidity, at a time when debt:GDP was at a generational high, handed out free fiscal money to everyone, when every supply chain was shut, and they had little goods and no services on which to spend that money. What the hell did you think was going to happen? What happens to your pool when you do nothing to close it in the Fall and then go out in May and just turn everything on?
This shitstorm we are in the middle of is a direct descendant – like first son – of the response we selected for covid.
I was actually cool with shutting down but only paying those impacted with proof of hardship. Big difference.
Left: Only less than a week ago, the talk of .75 increase was pretty much dismissed.
Yeah, 3b, crazy…I’m guessing we get a nice relief pop and vol sucked out of the market by next Monday if that happens, maybe by the end of the week.
Let’s see where we open tomorrow.
how many days are we?
For those of you who think Biden’s energy policies are the reason the US is not producing more oil:
https://www.bloomberg.com/news/articles/2022-05-05/u-s-shale-s-cash-bonanza-is-about-to-wipe-out-300-billion-loss
“It may have taken an investor rebellion, a pandemic and a war in Europe, but U.S. shale oil and gas producers are now on the cusp of making back their losses from the last decade.
The industry is on course to make $172 billion of free cash flow this year, enough to wipe out 60% of its losses from 2010 through 2019, according to Deloitte LLP. With smaller gains already chipping away at the $292 billion deficit in 2020 and 2021, U.S. shale should be back in the black next year. ”
Fracking lost a lot of money in the 2010’s. Basically oil and gas investors were subsidizing US drivers. Kind of like the way investors in Uber and Lyft have been subsidizing car rides for millenials.
They were not going to start drilling again until it was clear they were going to make a profit.
Left: That is quite likely, I agree. We are 71 days!!
How many NJ contact tracers we still paying $25 an hour for?
Looks like 1200 per the dashboard.
Fed might as well just take all it can at this point. Go for the single move kill shot, market already priced it in.
My son got this from Robin Hood today. Pretty decent write up, though a little too optimistic for me.
Hello bear market
Hi Libturd (ha ha),
We have officially hit a bear market in the S&P 500 Index. As of today’s close, the S&P 500 total return is down -21.3% from its highs at the start of this year, breaching the down -20% mark.
How’d we get here? Two words, in our view: stimulus and expectations.
Soon after Covid hit and the world stopped, the Fed jumped in to stabilize the foundation of our financial system (the bond market) with $4.5T of security purchases. It was followed by an additional $3.6T of US government money, first to businesses and then to the consumer directly through extra unemployment benefits, child-tax-credit payments, and checks in the mail.
Today, we find ourselves in a place where all that helpful stimulus money is unwinding. Since the start of the year, the market has been trying to find the correct expectations of the future.
So while the ignition for this drop was Friday’s inflation report (+8.6% year over year for May), the greater driving factor is still a question centered on valuations.
Let’s unpack that.
The inflation report was a little higher than officially expected (by 0.3%), and with the benefit of near-term hindsight, it seems that unspoken expectations were for inflation to come in lower. So anything at the same level, or even mildly higher, was going to set off the stock market drop we got on Friday, following through to today.
The greater reference to valuation — the value the market agrees to pay today for a company’s future earnings — is that it’s trying to find what businesses should be worth in the future, knowing that the stimulus is gone and inflation is here.
In terms of numbers, the 12-month forward price-to-earnings ratio (P/E) for the S&P 500 Index is now about 16.5x, down from a peak of 23x last year. In a historical context, this is in line to above some of the historical averages: 10-year (16.9), 20-year (15.5), and 25-year (16.5).
So far, all of the fall in valuations this year have come from the drop in the “P” (prices), versus a fall in earnings expectations — the “E.” That’s because earnings estimates for this year and next are still at record highs.
Will the market continue to fall?
Anything is possible. Looking back to 1945, when bear markets occurred, 70% of the time they related to a recession, and the average return during a recession was -30%.
From here, further drops in the market depend more greatly on the “E,” as expectations for the next 12 months and for 2023 are high and likely need to come down. For context, aggregate earnings for the S&P 500 Index are expected to be +10% higher for each of the next two years. That seems inconsistent with rising costs and the related expectation of slowing growth. As a result, it’s reasonable that earnings may actually be lower than current expectations by 5%. Assuming this is about right, in our analysis, it could mean market levels would look closer to fair value if down further, by mid-single digits. Thus, the S&P 500 would come close to 30% down for the year, and in line with the average for a recession.
Will we have a recession?
It’s very possible — led by reassessment of corporate earnings while they cut their costs from higher expenses and softer demand. If that’s right, we are about two-thirds of the way through the market downturn (closer to the bottom than the top).
Could we be wrong about this? (Yes — and we sort of hope we are, to the upside.)
Evidence of better earnings growing, a quicker cooling of inflation than expected, and even ancillary events such as a true shift in Covid policy from China or a ceasefire in Russia’s war on Ukraine, can quickly shift expectations positively.
What does this mean for investors?
Diversification is often the answer to a lot of investing questions. It’s never a bad time to review your positions and your plan (or make one). When looking through your portfolio, consider the balance of holdings — higher-quality or lower-valued areas such as dividend stocks, and those in energy and healthcare can be attractive to some investors and can serve as a balance for riskier growth companies that may take longer than average to recover. In addition, depending on your personal situation and investing style, keeping funds available for a “dip buy” may also be prudent.
Volatility is higher these days, but try not to let it trigger an investment reaction. Staying the course may be the right decision as equity markets have historically provided positive returns over the long term*.
For more on what’s happening in the markets, check out our daily Snacks newsletter.
Sincerely,
The Robinhood Team
Might as well max my 401k contribution at this point.
Rep. Lofgren says Kimberly Guilfoyle was paid a $60,000 speaking fee for Jan. 6 rally intro
Grim: That’s what I said, go all in. Do one point increases and get it over with. The baby steps strategy not working.
One other thing to consider is, oil companies are going to be reluctant to ramp up supply going into a recession. Oil tends to fall very fast once the market realizes we are in contraction.
Trump Officials Awarded $700 Million Pandemic Loan Despite Objections
A congressional report raises new questions about a pandemic relief loan to a troubled trucking company with close ties to the Trump administration.
Mark Meadows, the White House chief of staff, was a “key actor” coordinating with Yellow’s lobbyists, according to correspondences that the committee obtained. The report also noted that the White House’s political operation was “almost giddy” in its effort to assist with the application.
The loan raised immediate questions from watchdog groups because of the company’s close ties to the Trump administration and because it had faced years of financial and legal turmoil. The firm had lost more than $100 million in 2019 and was being sued by the Justice Department over claims that it had defrauded the federal government for a seven-year period. It recently agreed to pay $6.85 million to resolve allegations “that they knowingly presented false claims to the U.S. Department of Defense by systematically overcharging for freight carrier services and making false statements to hide their misconduct.”
Phoenix says:
June 13, 2022 at 9:02 am
” last round of stimulus should not have happened.”
Stimulus? What stimulus?
What I received I barely noticed. I’m sure most of the middle class and the poor did either.
So who got the massive stimulus money that caused all of these problems? Was it the small businesses?
Cause no way did a 2k check to a poor person cause all of this. That’s for sure.
Fed eatin’ crow either way.
Ohhhh that magic feelin’ no where to go…
Grim: Agreed.
And I did make my 10% move across the board. Went into the SPY in my taxable and IRAs.
Will there be Crypto contagion?
Tune in tomorrow to find out if everyone and their mother sells every last valueless string of 1 ands 0s.
Block chain? More like Block head.