From Bloomberg:
Fed Mulls ‘Game Changer’ to Jolt Inflation: Decision Day Guide
Federal Reserve Chair Jerome Powell, who’s carefully telegraphed interest rate hikes over four years, looks likely to abandon gradualism and move more forcefully to stamp out inflation along with growing concerns that it will persist.
The Federal Open Market Committee is expected to raise rates 75 basis points by Wall Street firms including Goldman Sachs Group Inc., JPMorgan Chase & Co. and Barclays Plc, who cite rising inflation expectations among Americans in looking for the largest increase in nearly three decades. Citigroup Inc. and Bank of America Corp. economists are among those who still think the Fed will shift by 50 basis points as previously planned.
The Fed will announce a decision and publish fresh forecasts at 2 p.m. Wednesday in Washington. Powell will hold a press conference 30 minutes later.
“The usual rule is, if you are worried about how your moves are going to affect financial markets, you move gingerly,” said Barclays senior economist Jonathan Millar, among the first to call for 75 basis points. “You worry about the risk of breaking something. In this case, it’s worth breaking something. We are at a very critical point where it looks like their credibility is starting to erode.”
From Mortgage News Daily:
Mortgage Rates Continue Higher Into The 6’s
The average lender is quoting top tier 30yr fixed rates in the 6.25-6.375% range, but as we discussed yesterday, it’s cheaper than normal to buy one’s rate down. That means rates in the high 5’s are still being quoted, but those quotes imply higher upfront costs (aka “points”).
Isn’t today the day the Fed stops buying new agency MBS and only reinvest
Existing purchase operations money?
Taper down to only 13 billion a month?
That is only a few hundred million a day in reinvestment bids for agency MBS.
June 14, 2022 – July 14, 2022
The Desk plans to purchase approximately $13.0 billion in its reinvestment purchase operations over the noted monthly period. The next release of tentative reinvestment purchase amounts in agency MBS will be at 3 p.m. on July 14, 2022.
Not going to be a Volker moment yet. Remember they will cause unemployment to go way up and will need to jawbone about it.
This was posted yesterday, but happened last week.
Per Louis Barnes when MBS went to auction and got a no-bid, it instantly jacking rates up to 6%.
Rates are likely headed higher. Who wants to buy MBS? Well at low rates nobody really, except for the Fed and other funds that are required by their charters to keep buying bonds no matter what, but even they have limits.
Feds plan is what exactly? Drain the Reverse Repos and Money Markets into buying MBS by driving rates higher and higher?
https://www.cherrycreekmortgage.com/lous-credit-news
Housing is 15% of GDP.
It’s going to take it on the chin first. Realtors will go back to being hairdressers all those mortgage shops that popped up everywhere, that retail space will soon have for rent signs.
We have a chain of them down here, “Advisors Mortgage Group”
Just look at the Map.
https://tinyurl.com/yrb38xtu
So I guess this morning I have some empathy for the utter revulsion those opposed to Trump felt….
Biden sends a threatening letter to the major oil CEOs a couple hours ago over production. In it he persistently references “Putin’s Price Hike”.
Meanwhile, recall that on his very first day in office he shut down the Keystone pipeline which was to bring nearly one million barrels of crude daily into the US.
Below find direct quotes from that Executive Order.
“…the Department of State and the President determined that approving the proposed Keystone XL pipeline would not serve the U.S. national interest. That analysis, in addition to concluding that the significance of the proposed pipeline for our energy security and economy is limited…”
“The Keystone XL pipeline disserves the U.S. national interest.”
The man is not just old and senile, he is a cheap, incompetent political hack who lies through his teeth every time he speaks. Can’t get him out of POTUS soon enough.
Full EO here: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-environment-and-restoring-science-to-tackle-climate-crisis/?utm_source=link
“There are 125.9 million Americans aged under 30 years.
That means 0.00002 of people under age 30 succumbed to covid.”
Fear. One of the best ways to control a population. Or an individual.
It’s what my ex did to my child. Told her when she was 7 that if she talked to the investigators that they “worked for the state and she would be taken out of her house and made into an orphan and would never see her mom or dad again.”
Yeah, that’s a real quote. It’s how one manipulates.
My kid still won’t swim in the pool where I live, her mother told her it’s nasty and everyone who lives there pees in it. But it imprinted on her brain.
Media (and not by accident) has made Americans a fearful lot and now they operate and act like a herd of deer. One runs, they all do. It’s pathetic. But it works.
Stock market, housing , Covid, #metoo. Pound it out there and get everyone afraid.
Read an article, they mentioned online dating and dic pics. They mentioned the high percentage of women who received them. Someone commented- it’s all bragged about the fact that most women get them. Has anyone checked to send what percentage of men send them?
Social media is an amplfier-that’s how it works.
“The man is not just old and senile, he is a cheap, incompetent political hack who lies through his teeth every time he speaks. Can’t get him out of POTUS soon enough.”
What are we going to replace him with.
Notice I said what and not who, it’s not my typical typo.
Leftwing – Biden is asking Energy Secretary Jennifer Granholm to use her magic wand and lead this effort to refine more gasoline before the election.
Magic wand is what she described it to be six months ago.
“That is hilarious. Would that I had the magic wand on this,” Energy Secretary Jennifer Granholm told CNBC, laughing out loud when asked what her plans were to increase oil production in the U.S.
Wouldn’t anyone with an ounce of rational thinking learn from their errors instead?
Not if you’re a democrat.
As for that letter from O’Biden to oil execs; I’d tell the senile bastard to go fuck himself.
We are way above the norm for drownings this summer, news reports there were 8 this week alone at the beaches and lakes and it’s only Wednesday.
Too out of shape to swim because of Covid lockdowns and lack of exercise perhaps?
“As for that letter from O’Biden to oil execs; I’d tell the senile bastard to go fuck himself.”
As much as I despise Biden, I have a problem with this statement.
American oil companies are basically a monopoly-and no un elected CEO of a corporation should be able to hold the entire American population hostage.
That’s a problem in itself.
Phoenix – re: “Read an article, they mentioned online dating and dic pics”
Cumon dude you are being sexist here women are equal opportunity offenders and pretenders when it comes to that it is now an enshrined dating ritual.
“We are way above the norm for drownings this summer, news reports there were 8 this week alone at the beaches and lakes and it’s only Wednesday.”
Think positive.
They don’t have to be worried about the upcoming recession, or how they will pay their bills.
European Central Bank holding an emergency meeting today. Inflation killing Europe. Italy on watch again.
Fed needs to go all in and do 1 point increases for the next 3 meetings. We need real interest rates, not negative. If the economy can’t handle real rates it’s a sham
economy.
Presser is going to be fun today….lotsa questions to come from left field. Let’s see how adept JPow is at covering large expanses of grass in the outfield with ripping line drives.
3B – Meanwhile China cutting rates to encourage growth.
The five-year loan prime rate, a reference for home mortgages, was lowered to 4.45% from 4.6%, according to a statement by the People’s Bank of China.
They have never done ZIRP for a decade either.
3b – re: “sham economy” Nah that is not the right word for it.
Wait until they wheel out wage and price controls again. You know the Democratic Socialists in Congress will call for it. Prices and wages not set by supply and demand but determined by a well-meaning bureaucrat.
Juice Return to the 70’s?? As for China and lowering rates, the US won’t be lowering rates any time soon, they have to clean up this mess. Stock market hit, crypto hit, and next up real estate. 25 percent of all listings currently have had a price cut, and there will be more. Also seeing a few listings that closed end of 2020, trying to add 50 to 75k to what they paid and get out. The party is over.
“If the economy can’t handle real rates it’s a sham economy.”
If the economy needs extraordinary government borrowing to fund your personal expenditure it’s a sham economy also.
Wasn’t going to raise it yesterday as it was Lib’s comment and I felt that I was beating him up a bit which is never my intention but…
The claims that GDP was ‘not really impacted’ by COVID in 2020 are specious…
Such statement is of course technically correct, GDP is simply the sum of C+I+G expenditures…..but….if G (government) borrows 20% of annual GDP and hands it non-recourse to C (consumers) and I (business) to spend that is most definitely not GDP in any real sense…
What is it? It is the equivalent of a recent college grad telling you he is earning ‘tons’ of money because his father maxed out $150k on his personal credit card and gave the proceeds to the kid to spend…
Technically, did the kid receive $150k and did he actually rent that great apartment and lease that new car? Of course.
Were those earnings illusory, are the parent and kid both worse off, and is it simply an unsustainable scam? Of course…..
For a group of people here who are generally debt adverse, asset heavy, and somewhat frugal we certainly proactively ignore the basic tenet that borrowing long term to fund current expenditures at high levels of leverage is an unsustainable road to financial disaster…regardless of whether the entity doing so is an individual, an S&L, or our government.
How to get a discount mortgage. It’s still possible. Join the academy today.
https://nj.gov/dca/hmfa/consumers/docs/hb_policefireretire_fs.pdf
“First responders” also get great deals on mobile…not just rates but coverage.
No de-prioritization, ever.
Was with family last week who had such a setup…I was bitching about what I believe is harder de-pri for me at T-Mobile than at Verizon and they let me in on their deal….
Similar to filtered searches you won’t ever see these rates and coverage to even know they exist.
Left – I think most of us know “unsustainable road to financial disaster” means.
The question is will we live long enough to see it, and do we want to?
We take lessons from Japan for example. They now are firmly convinced government debt does not matter and MMT is they only way to go forward. They firmly believe countries that issue debt denominated in their own currency, like the U.S. and Japan, won’t ever need to default on debt because they can simply print more currency to pay it back.
Japan is now at 266% Debt to GDP and they are going to keep the presses running until well the politicians that made these decisions won’t live to see the results.
“regardless of whether the entity doing so is an individual, an S&L, or our government.”
Except the S&L gets bailed out by the Govt, the Govt gets bailed out by the taxpayer.
The individual- no hope for them.
So there are winners and losers in this.
Left,
Some animals are more equal than others.
Juice: I don’t think Japans model will work for the USA, but we shall see.
In other news retail sales fall, and the NY State manufacturing index contracts again. On the road to recession.
Govt is not the same as personal finance. The FED’s role is unemployment and inflation. They are there to expand and contract the monetary supply to meet their goals. Keep the gears of the economy going…
“For a group of people here who are generally debt adverse, asset heavy, and somewhat frugal we certainly proactively ignore the basic tenet that borrowing long term to fund current expenditures at high levels of leverage is an unsustainable road to financial disaster…regardless of whether the entity doing so is an individual, an S&L, or our government.”
You don’t get it. They will be lowering rates as soon as inflation is in check. It’s all a cycle. Stop thinking it’s going to be an utter collapse and depression. It won’t. They are simply slowing down the economy to get inflation to levels that they deem sufficient. They are NOT TRYING TO ELIMINATE INFLATION. The only way you get a depression is with deflation…not going to happen.
3b says:
June 15, 2022 at 8:20 am
Juice Return to the 70’s?? As for China and lowering rates, the US won’t be lowering rates any time soon, they have to clean up this mess. Stock market hit, crypto hit, and next up real estate. 25 percent of all listings currently have had a price cut, and there will be more. Also seeing a few listings that closed end of 2020, trying to add 50 to 75k to what they paid and get out. The party is over.
Juice: It feels a lot like my old trading days in the floor. Basic bitches are going to see what a real market is going forward.
The Fed is so behind the curve on this it’s just shocking.
3B – We have the more dangerous model than Japan as the world’s main reserve currency. Right now 59% of worldwide currency reserves are in dollars far above the Euro at 20.5%.
The War in Ukraine is one example of what could happen, perhaps even a black swan event. The energy contracts are denominated in Dollars or Euros. Russia has been insisting they get paid in Rubles etc. So far most countries have resisted, but heck it ain’t winter yet.
Going forward it may make less and less sense for global reserve managers to hold dollars for safety especially if sanctioned and frozen, there is resistance to rubles but can that last forever? This war might drag on longer than the the last 8 years since annexation when it started and now escalated this year. I don’t see any replacement materializing soon for the quadrillions of BTUs needed to run the world generated by oil and gas. People are bitching about energy costs now, but the screaming has not started yet, if we head to $185 oil there will be screaming that is for sure. We shall see there are predictions now the war and the sanctions will be with us for a long long time.
Yea, overpriced POS’s. They are not priced correctly.
This does not mean the entire market is going to drop. Again, sales will take a bat to the head, not the price. In hot locations that went up way too much too fast, yes, they will take a bat on price. Not all locations ran that hot. If you are expecting 20% price cut across the board, it won’t happen. My house for example….you think it’s going to take a 20% bat to the head? That would bring it to 700k…no way, no how. Expecting it to go even lower than that, you are insane. Just not going to happen.
Now a montclair house that went up almost double in price….yea, they will take a 20% bat to the head. Florida, Texas, Vegas, Idaho, Colorado, Ariz, and Carolina homes that went up more than double in price, well, these are the places I would be biting my nails.
“25 percent of all listings currently have had a price cut, and there will be more”
Hey, just accept a plea.
I get my pension, cheap mortgage, and qualified immunity.
Guilty until proven innocent in America:
https://dailyvoice.com/new-jersey/morris/news/cybersleuth-proves-nj-responder-was-wrongly-accused-porn-charges-dropped/835192/
Dream on. You think high rates are going to stay? GTFOH. Better chance of seeing negative rates than seeing double digit rates.
3b says:
June 15, 2022 at 9:05 am
Juice: It feels a lot like my old trading days in the floor. Basic bitches are going to see what a real market is going forward.
The Fed is so behind the curve on this it’s just shocking.
Lazy Govt Workers-you have to hire a pro to prove your innocence.
His chances of being reimbursed for his losses- ZERO.
The ”diligent work” of Lucich and his team of forensic techs “determined that the Dropbox account utilizing Mr. Gilbride’s name and email address was created by another individual based in Queens, New York” who uploaded the “illicit depictions” that investigators found, Seplowitz said.
“Furthermore, the claim in the search warrant application that Mr. Gilbride accessed the Dropbox account at his residence in Ramsey turned out to be inaccurate,” the attorney added.
Phoenix: Thankfully, he was exonerated. It must have been hell for him these last 6 months.
“They firmly believe countries that issue debt denominated in their own currency, like the U.S. and Japan, won’t ever need to default on debt because they can simply print more currency to pay it back.”
Works until it doesn’t….if one is to go down that road you better darn well assure your supply chains and production are domestic.
In the last ten years alone the yen’s value relative to the dollar has halved…meaning anything purchased in Japan from the US has doubled in price. BEFORE any inflation or natural increase in product pricing.
With recent dollar strengthening there is much chatter about USD/EUR approaching parity for first time since 2016….weakest USD of last ten years had 1.39 USD : 1.00 EUR.
If US ever gets to a point where it actually opens up the presses to repay its debt and that exchange rate moves to 2:1, 3:1 or beyond look out below….
That $15 bottle of Italian olive oil, now $45. That $10k London holiday, now $30k. That $80k imported German auto, now $240k.
And, again, those are prices before normal input or retail price increases at the source.
Worst, if the US goes down that path it will be the single largest threat to the dollar as a reserve currency. Which, if supplanted, you never recover as you won’t be able to issue sovereign domestically denominated debt or if you can it will be at interest rates rivalling some South American banana republic.
3b,
Exonerated. Not reimbursed.
I was exonerated too. But never reimbursed. At 26, he can recover financially. Also, since his was done by the PoPo, he might actually have a case against them, but he will have massive legal bills getting there.
In my case, it was DYFS. And that is sealed tighter than a drum of nuclear waste. You can’t get copies of anything they investigate.
No evidence, no court case, no way to charge for slander or libel. Your money is gone forever. If you are young, you have time to recover. But when older like me-without a doubt you will crash short of the runway.
Pumps – “Stop thinking it’s going to be an utter collapse”
On these shores no, however there is a great big world out there. Perhaps you may one day visit some of these far flung places where people might earn a few hundred dollars a week like even ones in Modern parts of Europe where a good salary might be $800 dollars a month. Ask Grim what the rent cost in Kyiv, he is generously footing the bill for someone there. It’s not even $1000 a month that is for sure.
You may not see in the new here much, but there is now massive inflation in the rest of the world. Turkey is raising wages massively because of 73.5% annual inflation. There are a NATO member too.
The emerging world we should worry about more, they will starve because they cannot afford to import the grains and well there is now a shortage too due to war and lower crop yields.
It’s going to get messier before it gets better. Utter Collapse no..the land, the lakes and the rivers will still be here long after you and I are taking a dirt nap.
“Works until it doesn’t….if one is to go down that road you better darn well assure your supply chains and production are domestic.”
Thanks Boomer. You have put the youth into the world’s crosshairs with your greed.
“Utter Collapse no..the land, the lakes and the rivers will still be here long after you and I are taking a dirt nap.”
They might be radiated and uninhabitable, however.
All it takes is for one guy to just say Eff it.
Juice: There will be pain in this country, not like you so accurately described in other parts of the world, but if the Fed does what really needs to be done, which is cleanse all the excess built up over the last decade, there will be pain.
This silliness that the Fed is going to start lowering again by year end is just that in my view silliness, or perhaps more accurately delusion.
“The fundraising fraud revealed by the Committee on Monday–soliciting $250 M in donations for a non-existent election fund–is very similar to the conduct for which Steve Bannon was indicted (fraud for his “We Build the Wall” scam) and for which Sidney Powell now under DOJ investigation.”
“there will be pain.”
Pain is not distributed equally among the masses.
Expect turmoil.
Someone explain how a pipeline that was 92% incomplete under Trump’s approval is the solution today? It is a fantasy pipeline. Seems like more political bs for sound bites. Get off oil.
leftwing says:
June 15, 2022 at 7:31 am
“…he [Joe] is a cheap, incompetent political hack who lies through his teeth every time he speaks.”
This literally describes every single member of the modern Dem party. Once again, I challenge anyone to name a jurisdiction of any meaningful scale (federal, state, municipal) that is being governed well by a Democrat — hint, there are none. As highlighted by the fact that not a single member of Joe’s disastrous admin has yet been fired/replaced, there is not an ounce of accountability in the Dem party. And even if there were, it is so completely barren of talent and competence that if anyone were fired he/she would simply be replaced by someone equally as incompetent.
3b,
You think they are going to clean up all the growth from the last decade? Why? Your obsession with praying for a housing crash clouds your vision.
10 years ago, I paid 650 for my house. If houses somehow dropped that far (almost impossible in my mind), how long before a feeding frenzy occurs and they drive the prices right back up? The low prices would be like like blood in the amazon river….going to attract a lot of attention and will be eaten till there is nothing left. Those prices are a pipe dream now.
How funny is it that President Puddin’ Head cancelled fossil fuel contracts, signed a slew of executive orders to diminish oil companies, told them that they’re going to be extinct and replaced with alternative energy and is now begging them for more oil. LMAO. Omg, this administration is a shit show. One… term… loser.
I challenge anyone to name a jurisdiction of any meaningful scale (federal, state, municipal) that is being governed well by a Democrat
Well, I think John Fetterman in PA is pretty decent.
Not sure how “meaningful” he is. But he is no Pelosi or AOC.
Very Stable Genius:
https://www.youtube.com/watch?v=q_BU5hR9gXE
Eddie,
I don’t care about “Puddin’ Head.
You think its okay that a corporation has the power to destroy the lives of Americans?
If the govt and the corps can’t get their act together it’s gonna be one hell of a show.
Both have a responsibility to Americans, not one or the other.
Seattle, Austin, Boston, Chicago, NYC..the list goes on for great D cities. Can someone name one city run by R where people want to live?
On the topic of oil. It’s becoming clear as day to me that it’s economic warfare. Using oil to keep the gas on inflation which hurts the leadership in power in our govt. When leadership gets desperate, they start giving in to the leaders practicing economic warfare against us. You already have sleepy joe sucking off Saudi Arabia now. Exactly what they want.
We are at war, just not a physical traditional kind of war. It’s cold war 2.0.
“You think its okay that
a corporationthe democrat party has the power to destroy the lives of Americans?”There, fixed it.
A youth baseball coach in Branchburg NJ broke the jaw of a 72 year old umpire for a perceived bad call. The umpire will have to undergo extensive dental surgery.
What a POS, absolute shameful.
Any coincidence that inflation comes out of control at the moment we become publicly hostile to china and russia? Follow the money…
Any coincidence that Russia invades Ukraine at this time of high inflation? I think not.
I mean, the leadership of oil producing countries must love Biden begging on his knees for more oil…
3b,
Expect turmoil.
https://bit.ly/3QqHRtu
Refined product shortages. You can’t tank global demand by 22% and lock everyone in their homes and keep a refinery operating 24/7 with billions of dollars of losses. Refiners borrowed insane amounts of money in 2020; then you tell the public, “oops, you can drive now”….too late
I found it..Miami, great R city..oh wait
In 2018, Suarez voted against Republican nominee and later Governor of Florida Ron DeSantis in the 2018 Florida gubernatorial election and instead voted for his Democratic opponent Andrew Gillum for which he was criticized by fellow Republicans. Suarez did not vote for the Incumbent Republican Donald Trump in the 2020 presidential election.
Suarez was re-elected in the 2021 election, receiving over 78% of the vote in the first ballot.
Here it comes.
https://bit.ly/39oyRo6
Bystander,
Let them yap it up. They will be in full control in 2024. The populists lack of decency, hatred of everyone except white males and their dumb wives and girlfriends, plus their placating love of Jesus is going to make this country look like Afghanistan. You think our Democratic cities are bad now. Just wait until they cut off funding to them. The establishment Dems are idiots and human rights in this country are going to be dictated by Genesis. Let them have their cake. Believe me, this country will look like a junkyard by the time their done shooting it up and enriching the rich further.
When I was a dumb 12 year old, I remember this really cool black light banner that they had for sale in the back of Spencer’s. It had a skull with a knife through it and it said “Kill ’em all! Let God sort them out.”
It might as well be the motto of today’s Republican Party.
For shits and giggles, I just Googled it. They have it (without the black light paint) for sale on Amazon. I shit you not, in the suggested “buy it with” section, there is a “Don’t tread on me,” and Thin Blue Line flag. Apparently, I am not alone in my feelings. The algorithm that makes that suggestion is based on what items tend to be purchased together.
Hell of a guiding light. And DeSantis is trying to make it illegal for children to watch a Drag Queen read mother goose to children in an effort to teach tolerance.
You see. Democrats suck just as bad as Republicans. To me their political leadership is all the same. The goal for both parties is to trick the easily fooled (the masses of asses) into believing they care about them. But the ONLY thing they care about is enriching themselves. But if I had to choose between two liars, I would take the tolerant over the intentional asshole every time.
“People are bitching about energy costs now, but the screaming has not started yet, if we head to $185 oil there will be screaming that is for sure. We shall see there are predictions now the war and the sanctions will be with us for a long long time.”
When/if there comes the event driven time that oil ramps up and vol explodes shorting it will be your easiest trade ever when the shooting stops.
No politician takes blame for anything, look at the Moron-in-Chief this morning over something as simple as $6.00 gas. Blaming everyone and anything, like an 11 year old caught plucking a twenty from his mom’s purse…
The entire boat is leaning on the side that unless Putin is gone even after the firing stops sanctions will continue. Some even say sanctions hold unless Russia cedes captured territory. They are smoking dope.
No way in hell a US president keeps 6-8 dollar gas and a near doubling of utility bills if Ukranians stop dying. Especially since in that scenario Western Europe is literally freezing. No German chancellor or French PM is going to face populations burning brown coal with cars permanently garaged when Ukranians stop dying.
There will be every (bad) political excuse and deflection, but rest assured when the shooting stops oil and LNG will flow…and if oil is anywhere near 185 a barrel then, opportunities like that are few and far between.
Bystander,
Miami is a pretty popular city.
“I voted for Mayra Flores – first time I ever voted Republican.
Massive red wave in 2022.” ~ Elon Musk
Also: “Republican @MayraFlores2022 has won the special election for Texas’s 34th Congressional District, flipping a seat that has been under nearly unbroken Democratic control for four decades.”
https://www.politifact.com/factchecks/2022/mar/09/facebook-posts/oil-production-bidens-first-year-par-trump/
Read that article and understand we are at economic war. We didn’t cut off supply, but the producers working with russia and china did. Economic warfare…
“DeSantis is trying to make it illegal for children to watch a Drag Queen read mother goose to children in an effort to teach tolerance.”
I guess you would just have to switch to non-stop RuPaul show marathons at home to make up for the terrible loss of tolerance training.
Have you thought about bringing your kids to S&M clubs for nursery rhymes instead?
Maybe you could set up a Museum of Tolerance like this in Costa Rica?
https://southpark.cc.com/video-clips/kugf43/south-park-museum-of-tolerance
“Works until it doesn’t….if one is to go down that road you better darn well assure your supply chains and production are domestic….Thanks Boomer. You have put the youth into the world’s crosshairs with your greed.”
Thank the unholy alliance among moderates and centrists of both parties for shipping your economy offshore, led by ‘globalists’ in the Democratic crime family (Clinton, Kennedy, Kerry, Bradley, Lieberman, et. al) and ‘free traders’ in the Republican crime family (McCain, Dole, Grassley, Nunn, Simpson, etc).
Who opposed it? Well, the ‘crazies’ like Helms, D’Amato, Thurmond, Moynihan.
Everyone wishing for moderates and centrists to be elected from both parties so they can ‘get things done’? Well, that is the type of bipartisan ‘solution’ you get.
The crazy populists on the sidelines? Maybe we should start calling them ‘grass roots’ so you people will listen to the dangers of entrenched government and actually do something about it rather than just get screwed every so often and then bitch about it like some overly made-up NJ housewife complaining about the humidity as drives her Escalade….
Centrists and Moderates shipped your jobs offshore in a bipartisan effort signed by a President, as one of his first acts in the Oval Office, who held no job in life other than as a politician but who assured you he ‘felt your pain’.
Wake the fuck up, people. The more your each members of your respective parties calls out ‘populists’ the more suspicious, not compliant, you should become.
Politicians and parties exist for a sole reason….to propagate themselves and their positions of power. There is literally no other purpose for the permanent political class.
“It feels a lot like my old trading days in the floor. Basic bitches are going to see what a real market is going forward.”
Oh yes. For anyone who has been a mature investing professional for a rising rate, bear market before we recognize the lights have dimmed, the trailers are finished, the opening credits have rolled, and the show has started.
Markets have gone from full on bull and access to declining (not a BTFD), closing of the window for new issuances of the most speculative assets (shit-tech, SPACs, crypto), decline and withdrawal of liquidity down the line into higher and higher quality assets, blowing out of fixed income spreads and seizing up the most vulnerable of those markets….next scene, coming soon, will be the breakout scene with explosions and bright lights as some (until then) unknown overlevered player blows up, leading to the chase scene as we all speculate which poorly run international bank will get caught with its pants down with derivative/off BS exposure there….
Sad thing is even most ‘professional’ investors haven’t lived through one of these during their adult investing career…should make for a good sequel. We are closer to the beginning than the end.
Bill Gates says crypto and NFTs are ’100% based on greater fool theory’
“Expensive digital images of monkeys” will “improve the world immensely,” Gates joked, referring to Bored Ape NFTs.
I love coming home to a complete and total meltdown. (Sarcasm) but hey it was gonna happen. Geeeezus Lib, You should be running a fund. Inanely cool man.
Have fun guys. Made some timely sales this year myself in a very tough to time market.
It’s going to be a veryyy interesting 2022. Perhaps the year of the meltdown and up and down. Hang on to whatcha’ got. This ones for Gu-ru stu
https://www.youtube.com/watch?v=I4pvFDeYsrU
Juice,
I don’t know, I just find it hard to believe that crypto dissolves into nothing. How many years has it gone through this boom and bust cycle? Every time the bust cycle comes, the same bashing occurs. I used to be the one bashing it. Not no more. For once, when it hits a bottom, I will finally be buying some. Why should I ignore the past boom/bust cycles? Why is this time different?
Primaries march on and a big congrats to Mayra Flores. . .
Last night, Mayra Flores (R) became the first Mexican-born person elected to the US Congress. She took a seat that was last held by a D (the D retired a few months ago, so this was a special election). This was TX-34. Fuego! Fuego!
I really wish that there was a way to gamble, at scale, regarding the upcoming 2022 congressional elections. The line on predictit moved from about $0.85 right after the SCOTUS Roe leak to $0.90 today to win $1 if the R’s take the house. Flores’ win made that more likely (but, it was already mis-priced at $0.90, I would probably take the bet at $0.97 with 2% of my net worth).
Other big one . . . Tom Rice (R-SC) got primaried hard because he voted FOR Trump’s impeachment. He is the first “Yes to impeachment” Republican congressperson that faced a primary.
Someone explain to me what uses they’ve put bitcoin and NFTs in their lives.
Explain the economic utility to me.
Something other than a token for speculation.
I think paying ransom is the best use case I’ve heard yet. Or getting around Venezuelan currency controls. I wonder if Russians with their frozen bank accounts have been recently liquidating their bitcoin-denominated cybercriminal ransoms.
On the other hand, I hear it’s not so easy to anonymously convert bitcoin into large sums of legal money.
No one,
Bitcoin…I think it’s biggest use is peer to peer exchange of value. Also, as a safety hedge for a small percentage of your money from govt confiscation.
ETH, on the other hand, is really good tech. The use is limitless. It’s main use prob hasn’t even been invented yet. Block chain is not going away, imho.
I’m a simpleton when it comes to this tech….but too much work has gone into its development for it to die. Too much work has gone into it to be used as some speculative bs.
Someone explain to me what uses they’ve put bitcoin and NFTs in their own lives. Their actual own uses.
Not some theory someone has pitched to them.
“In the past I voted Democrat, because they were (mostly) the kindness party.
But they have become the party of division & hate, so I can no longer support them and will vote Republican.
Now, watch their dirty tricks campaign against me unfold …”
~ Elon Musk
Eddie,
Musk is all yours. He is no different then Trump. I have hated him since the first day he started lying about Tesla. He is going to be the Le’Veon Bell of the American autocrats. Go buy some Dogecoin from the Dogefather.
Left: We go to far to the right, there is a huge backlash on the left, and vice versa. So if it’s not moderates/ centrists, what’s the answer?
I thought Elon Musk was a mens cologne!!
Ex,
I could never sleep at night managing other people’s money. I have a hard enough time explaining to my BIL (whose money I do manage because he has special needs and his family got robbed blind by a horror of a stock broker) who I have been an absolute investing god too, that he needs to be patient at a time like this. Heck, when he moved in with us, I started doing his taxes. He used to pay someone like $500 annually to do them. His taxes were so simple they take me twenty minutes in Turbo Tax. But I cringe every year I see his carryover stock losses. Let’s just say, he had more carryover losses than money in the brokers account. Oh the crap she had him in. She was a true Pumpy special.
But really, I’ve had hundreds of people ask me to manage their money. I know I would have been handsomely wealthy if I managed others money. I’m extremely good at it and an excellent salesperson. I can sell patience. That’s the key. But I don’t know if I would be able to sleep at night and that’s simply not worth any amount of money.
That’s Elon’s Musk. It now comes free with Egyptian Dreams sheets.
I kid you not, I was watching one of those terrible wonky political debate shows on Sunday morning in the background as I was filling out stupid college stuff on Naviance that my kid’s guidance counselor (who just quit) asked Gator and I to fill out. I think it was on NBC. On comes a commercial for Egyptian sheets and pillows, only this time the hawker didn’t wear a cross, flag pin and have pictures of Trump behind him. Even the brand name was similar. I think it was like Max Pillow. Exact copycat of My Pillow. Man wonks are morons.
Finally,
I warned you all about SPACS, NFTs, Crypto and even Tesla. You all chose not to listen. You heard me, but you didn’t listen to me. I’ve been addicted to the stock market since I was 9 years old. Always trying to figure out how to crack the code. It’s really one big sham. There is no code. Well besides making money off of other peoples money. Cramer knows no more than you and me. He is a terrible fund manager. He is wrong more than he is right. Just follow the teachings of the Munger’s and the Buffet’s. This shit NEVER changes. It works the same as it did in the 1800s. It always comes back to earnings lead share price. But the masses, and many of them are so called experts, can’t keep their eyes off share price first. And the faster share price moves, the less they pay attention to earnings. If someone bought my freshly pinched morning loaf for $100,000, Cramer would do a ‘segment’ on it and would call it a flaming buy. I honestly have not watched that network in over ten years. Maybe longer. It is the antidote to investing success.
There are lots of brilliant minds on this site. And one who will argue with himself all day to try to join the ranks. Many of you hear us, but few tend to listen. Listen.
Oh yeah. One month ago, that Old Coot Buffet said he wouldn’t pay $25 for all of the Bitcoin in the world. At the same time, Musk was Tweeting about a virtual coin based on a picture of a dog.
Lib: 100 percent Egyptian cotton!
The study also found that people who knew these long-term cannabis users well observed that they had developed memory and attention problems. The above findings persisted even when the study authors controlled for factors such as dependence on other drugs, childhood socioeconomic status, or baseline childhood intelligence.
The impact of cannabis on cognitive impairment was greater than that of alcohol or tobacco use. Long-term cannabis users also had smaller hippocampi (the region of the brain responsible for learning and memory). Interestingly, individuals who used cannabis less than once a week with no history of developing dependence did not have cannabis-related cognitive deficits. This suggests there is a range of recreational use that may not lead to long-term cognitive issues.
Source: https://www.health.harvard.edu/blog/cognitive-effects-of-long-term-cannabis-use-in-midlife-202206142760
Lib,
Great post. We have no principled people on either side. They are simply power & money mongrels. The libertarians are the only ones who have it mostly correct. Do what you want but I am not paying for it. I have never met a true libertarian though. The problem is that most libertarians lean one way or another. Defund military – no, defund welfare – yes. Or defund military – yes, defund welfare – no. They will support Rs strictly because most are irrational gun nuts. They refuse to see that neither party speaks to libertarian values, otherwise gay rights would be important as gun rights. Either way, we live in state controlled capitalism which has heavy interest in never having spigots shut off. We can fiddle around with who created a ‘great economy’, who created debt, who is dividing country, who is to blame for gas prices etc, and who will fix immigration. The answer: None of them bc the corps don’t want it. Low income middle America Rs think Muslims / immigrants are to blame but farm and military job handouts should go on forever. Low income Ds think racists to blame but welfare handouts should go on forever. At end day, corps don’t care as taxpayers on hook. They pay politicians to ensure corps never pay for it via slanted tax system
.75 with perhaps another .75 next month!
8% Mortgages here we come!
If everyone thought and invested like you and buffet, there would be no innovation. Why? Your type only invests in the status quo. Business that has been around forever and makes money. Instead of bashing others, appreciate their investments and how they make your life better and easier.
Libturd says:
June 15, 2022 at 1:37 pm
Finally,
I warned you all about SPACS, NFTs, Crypto and even Tesla. You all chose not to listen.
Fed says 3.80 by end of 2023. Silly Fed, we will be at 3.80 well before the end of 2023.
Juice: Agreed, 8 handle mortgages are a given.
And watch how fast it turns when inflation is brought down. 8% is not sustainable and you know it. Its only purpose is to stop people from buying. Aka hurt the economy.
Juice Box says:
June 15, 2022 at 2:46 pm
.75 with perhaps another .75 next month!
8% Mortgages here we come!
Silly, 3b. We will already be lowering rates by that point. It’s amazing how you think low rates are gone for good.
3b says:
June 15, 2022 at 2:48 pm
Fed says 3.80 by end of 2023. Silly Fed, we will be at 3.80 well before the end of 2023.
There is nothing perfect about capitalism. That’s why the FED exists. If the system was perfect, it wouldn’t need FED intervention. You guys expect perfection when it does not exist.
“Either way, we live in state controlled capitalism which has heavy interest in never having spigots shut off. We can fiddle around with who created a ‘great economy’, who created debt, who is dividing country, who is to blame for gas prices etc, and who will fix immigration. The answer: None of them”
Like someone said “Musk is the dumb guy’s idea of a smart man”. No, it doesn’t mean Musk is smart.
Going back to a market of real interest rates, not sham market rates. The days of low rates are over for a long time. Some people out there are going to find out the Fed does not exist for their personal benefit.
Honestly, who in their right mind is going to take out an 8% mortgage? No one will.
Who on this blog would actually sign up for a 30 year mortgage at 8%? You know how much interest you are giving to the bank? This isn’t 1970 or 1980 where wages kept up and housing was 50k.
Ex, I had a friend in high school, total pothead, smoked 3x a day every day. He took the SAT’s in 8th grade before becoming a pothead and scored over 1300, when he took them in high school he scored 900. The dude smoked over 400 points his SAT’s. Yes smoking weed definitely causes cognitive impairment when done habitually.
Smart enough to get us off oil. The big dogs trying to keep us relying on oil got taken out by his genius. Could you imagine the cost of oil right now if elon didn’t get so many people to buy electric and solar? But mock the dude…
RentL0rd says:
June 15, 2022 at 2:58 pm
Like someone said “Musk is the dumb guy’s idea of a smart man”. No, it doesn’t mean Musk is smart.
Bystander: There are very few capitalists out there as when they get in trouble they expect to be bailed out.
During the financial crisis when the government had to step in, and then more of the same. The apologists say well they paid it back, which they did, but that’s besides the point. The big banks should have been broken up, and the executives should have been forced to resign. A few perp walks would have been helpful too.
3b,
Jesus, life is short. Why are you so obsessed with pushing pain on the population? Like wtf? What is the benefit of totally letting the system crash? All ears, dude!
Bystander,
I think you’re looking for the Llewellyn Rockwell libertarians. They exist. I’m a small l libertarian because I think the party at its base is full of pervs and stoners, and there’s an element of anti-Americanism. So I’m a limited state libertarian not a no-state libertarian. The “anarcho-capitalists” are oblivious to the fact that without an army, the US would be brutalized by much worse governments that don’t have constitutions that are intended to protect individual rights.
I know you’ve gotten the shaft from the system, but as imperfect as they are, without police and courts and defensive armies, you’re basically going to live in fear of the latest warlord or gangster. The anarcho-capitalists like to dream of competing defense agencies, but the reality would be more like LA gang wars I fear. Their efforts would be better spent on limiting state power and reforming and making more professional the remaining arms of the police and courts.
Pumps, what year did you buy your 1st house? We were are 7.5% when we bought ours. Difference this time is the inflated home prices
Trick,
Like I said, this isn’t 1980. You can’t have rates that high anymore.
The price is not 50k anymore. It’s much higher.
You can’t have that much of the payment going to the lender in the form of interest unless you want to make rich people even richer. They are the ones loaning the money. They are buying with cash. So high interest rates are a tax on the middle class by the rich. F that.
I paid 6.25% I think for my multis original 30-year in 2004. Might have been 6.5% and that was with 20% down and perfect credit!!!
500k loan at 10% ….50k a year. Who the f’k can afford that? That’s a lot of interest being paid to the lender. Wealthy class will be on cloud 9. People like buffet/lib that want zero risk on their investments will be on cloud 9. Getting paid huge guaranteed interest on said capital with almost zero risk.
Lib: My wife does real estate closings occasionally, and she was still seeing lots of 5 percent down buyers during the now ended boom. She was curious about that and confirmed from others in her office that 5 percent down was still common. Credit scores can change on a dime.
8% a year! The economy chugs along.
“Left: We go to far to the right, there is a huge backlash on the left, and vice versa. So if it’s not moderates/ centrists, what’s the answer?”
The Left and Right (specifically not the Far Left nor the Far Right) have more in common than they think. Because they have the same day-to-day concerns.
Lib (Left) and I (Right) agree on quite a bit that if passed would be very good for America. And those items where we don’t agree likely shouldn’t be passed. I suspect we both like Mikie Sherrill, and we both swallow vomit listening to Giuliani’s kid as he campaigns for NY Governor.
Problem is the items where the centrists and moderates reach across the aisle are the items that sell you out. For their own benefit and preservation.
FFS, Nancy Pelosi’s father was a congressman from Maryland…she attended JFK’s Inaugural ball as a college student. Were your parents congressmen and did you attend Inaugural Balls? Me either. Four decades in politics. She doesn’t represent me.
Mitt Romney’s father was an auto CEO and Governor of Michigan. He ran for Senate thirty years ago and lost. Since then he obviously was Governor of MA and the Republican candidate for President. He was CEO of Bain. He is at least nine figures wealthy. Yet, he wants to come back and remain in Congress? Move on already, right? Were your parents corporate CEOs or Governors? Are you knocking on the door of three commas of wealth? Me either. He doesn’t represent me.
Can do the same analysis for most centrists as most of them are children of privilege (and often politicians themselves) or have levered politics for privilege. Over the course of my business career and life a single best indicator of the success of an organization is the extent to which its current leaders prepare and then make way for the younger generation where there are new, wide ranging ideas and vibrant real debate. Those entities that fail often have ‘leaders’ who are there decades, are stagnant, and focus on their ‘relationships’ in the organization. Doesn’t matter what entity we are speaking about…your local hockey league, your parish, a large corporate, or your government. Ultimately, the agenda is about preserving their position comfortably and not what is best for those they supposedly serve.
I want people that will stir things up. And make everyone a bit uncomfortable. Me included, which is why I listen to the Left. And voted for Mikie.
Clean the established centrists out. Before they clean you out. Further than they already have.
Separately, nice day in the markets, eh? 75bps wins the day. Manage your positions…..
$1,741 a month for a 30 year mortgage at 3.25%
$2,463 a month for a 30 year mortgage at 6.25%
$3,005 a month for a 30 year mortgage at 8.25%
What gives first mortgage rates or the price of a double wide on a main road?
Same $400,000 loan gets very very expensive and unaffordable quickly.
Lol…thought some of you might enjoy this.
“Wokeness is quite literally a luxury born of good times.
Doesn’t work when there’s hard times. Companies operate on thin margins. The resources to placate imagined slights literally aren’t feasible.
Time spent being offended or divisive over cultural differences is too costly.”
“I’ve said it’s a result of the 15 years of execessively easy monetary policy. It’s created an entirely unproductive society both economically and socially”
“As Bitcoin tumbles it makes me sad to think about all the fab capacity and raw materials that were wasted on ASICs over the past decade. They can’t be repurposed, there’s no other use for them, just permanently lost productivity destined for a landfill.”
3:06 ahhhhh just take the part i’m not using.
This year if you received 8% interest, you’d actually be paid nothing, after inflation adjustment.
People are collecting large negative interest rates on safe assets, as has long been the plan by the Federal Reserve central planners.
They imagined this would force people to spend and borrow more and “stimulate” the economy. It also pumped up asset prices, especially the most speculative assets. So much so that the dumbest people started buying modern tulip bulbs, because they couldn’t earn anything from safe assets. Banks used to redirect those savings into useful investments in companies.
Again, who is going to pay for this? People are used to paying lower rates.
So what happens. This..
People totally abandon buying homes. What does this force the FED to do? That’s right, lower rates to get the economy moving. No one will accept high rates anymore. 5-6 are the max. No one will pay for an 8% 30 year mortgage. Pretty much paid more in interest than you did for the house…f that.
Juice Box says:
June 15, 2022 at 3:35 pm
$1,741 a month for a 30 year mortgage at 3.25%
$2,463 a month for a 30 year mortgage at 6.25%
$3,005 a month for a 30 year mortgage at 8.25%
Things gonna get ugly around these parts soon.
And Left, I think a lot of our differences are semantics. Most likely, me using the wrong words and expecting everyone else to understand what I am trying to say. It’s a terrible habit of mine and probably the reason I like to speak with people in person way more than through the written or typed word. Time is such a limiting factor. I can’t wait until I have more of it to shoot the shit. You know, you remind me a lot of ExPat. You two share a lot of traits and think about things in very logical ways. You both were also not afraid to say exactly how you feel. You know on J6, I knew exactly what you meant when you said you wanted to frame a picture of the insurrection and hang it on your wall. Deep down inside, I felt that way too. Though I was adamantly against the crowds attempt to delay the certification of the election. I was impressed by my fellow American’s willingness to act. There is a reason all of these anti gun protests and pro abortion protests (and pussy hat and white pants and etc.) are a complete waste of time. No one is listening. Certainly not our political leaders. They could care less. But bust some windows in the Capitol Building and it’s a whole different story. I applaud that group of crazies for having the chutzpah to do what they did, but their cause, not so much.
I always respected Trump’s desire to fight the establishment, by the way. But he ended becoming too much like the establishment once he got there. And I agree that Mikie Sherrill is the real shiznit. I only wish she didn’t take Bloomberg’s blood money.
Left: You bring up some thought provoking points which I had not considered them before. I too supported Bernie, which the idea that his election might shake up both sides from actually getting things done. But, I viewed it from the perspective of moderates from both parties getting together and accomplishing something worthwhile. I had viewed it from left right, like you have. It’s something I am going to have to consider further.
There are some really intelligent and insightful people on this blog regardless of where they fall on the political spectrum. That’s the reason I come here. Great discussions and thought provoking comments.
As for the .75 Fed had no other course, and looks like same for July. It has to be done. A year late, but at least Powell appears to be serious now.
Yea, sure. Savings and Loan crisis anyone?
“Banks used to redirect those savings into useful investments in companies”
“Same $400,000 loan gets very very expensive and unaffordable quickly.”
Or you could save money reducing the amount of interest you will pay over the life of the loan? Like in the old days when people invested in companies that manufactured things, like computers and technology which created tons of jobs.
Nah, better we invest in virtual apes and shiny coins which do absolutely nothing but waste electricity and make powerful processors too expensive for those who could use them to, like, manufacture real things.
Juice: Prices will come down to reflect the new reality. When rates come down again in the future ( no time soon) people can refinance. Young people should not have to over pay for an inflated asset so Mary Muppet can get her 500k
The markets will be doing a cleanse!
3b,
Powell is at least showing signs that he gets it. He should have done the full point. But who are we kidding? He still represents Wall Street, not Main Street.
Doesn’t matter though, the next leg down is when fear begins to take hold.
You crack me up. You make no sense. Who the f’k do you think bought all the higher priced homes? Boomers? Now you want to artificially shoot the price of the houses they paid for over the last 15 years and let the boomers walk with their money? Are you trying to destroy the younger generations for buying a home? Like wtf?!
You want to lower the price on their backs, and then at the same time, make them pay way more interest to borrow money. Wow.
3b says:
June 15, 2022 at 3:56 pm
Juice: Prices will come down to reflect the new reality. When rates come down again in the future ( no time soon) people can refinance. Young people should not have to over pay for an inflated asset so Mary Muppet can get her 500k
Lib: I agree, he should have done the full point and stated clearly he would do another full point in July, and keep going as need be. But yeah, he finally gets it. Transitory my ass!!
Mortgage rates can stay at 8%+. It will just depend on what the Fed sees with inflation and whether or not they buckle to political forces (including when Powell spinelessly did not stand up to Trump).
To take it charitably, the Fed policy response had some semblance of sense to it since 2008 in that we did not see crazy inflation. Loose monetary policy can be prudent if you do not see inflation. Still, even before inflation, there was plenty of sense on the other side of that discussion – that the Fed was running crazy risks keeping monetary policy so loose for so long.
Historical rates:
Jan. 1, 2001 – 6.89%
July 1, 2008 – 6.52%
The rate got down to the 5’s for part of that time period between 2001 and 2008, but it mostly stayed in the 6’s for those seven years. I don’t think it’d be sensible to say that rates were too high at that time.
^sorry, meant to type “Historical 30-Year Fixed Mortgage Rates:”
Lib 30 percent increase in house prices in a year was unprecedented madness!! Any one could have seen that. Demand we were told, nah, a massive bubble. Correction in stock market, correction in bit coin, now the correction in housing.
Crushed: The Fed should be forward looking, not looking at right now. As part of the that forward looking process they should have been anticipating what their actions would do.
As for not seeing inflation at that time, debatable in my view, as their measurements are suspect, cheap clothes and TV s for example are not an accurate measure, but that’s for another discussion.
Less lib, I don’t know what pumps is thinking. When my dad died we went through his files and came across the long paid off mortgage from their home and yes the interest rate was like 10% and it was a 50% of purchase price loan. I noticed that the 225k mortgage from 1988 had a similar payment to my 625k loan from 2017. So yeah I think prices may need to adjust a little. This is also why people paid off their mortgages, at 10%, paying 50k saves your 5k per year, I’m pretty sure my folks entirely paid off the loan in something like 8 years and this was in a recession where my dad’s income was way off so, yeah responsibility needs to come back, no more free credit.
Running Juice’s calculatiions from above the other way around . . .
To afford a $3,000 monthly mortgage payment, a home buyer would need to pay the following home purchase prices (let’s just assume the person is borrowing 100% of the purchase price at a 30-year fixed, for the sake of applies-to-apples):
2.25% = $785,000 home purchase price
4.25% = $610,000 home purchase price
6.25% = $490,000 home purchase price
8.25% = $400,000.00 home purchase price
Yes they will stat buying 100 Billion a month of Fannie, Freddie, Ginne bonds again, sure they will.
There is no replacement for the Feds bond buying, it’s what kept rates low for so long, if they are not cornering the market in agency bonds then the rates will only go higher and higher. Anyone else want to pony up 2 trillion to keep the housing markets rate low and do it for over a decade? I don’t think so.
Lib, thanks for the market analysis over the last few months. I went out a little late but only down 8%ish ytd.
BTW I still hold a couple of shares of VNT to remind me “listen but ultimately make your on decisions”
Juice: You are right, those days are over.
No problem Walking. Appreciate the credit. Now don’t get greedy. Everyone should be thinking about scaling in starting around here. Don’t fight the Fed.
I am going full on divestiture. Mostly of sporting goods! Any takers?
Hahahha
Poor 3b is always wrong. Now his latest dead ends are high rates are here for good and home prices are going to drop 100s of thousand dollars. This is even worse than his belief that the suburbs were dead. God, post after post yelling at me that suburbs were dead. The city this, the city that. Now cities are dead…wfh will kill them. Guy never ceases to amaze me.
It’s different times. The economy is much larger and evolved from when your dad was buying.
Real estate is not going to go down much. Once the panic sellers sell, there will be no others. Put it this way; are you going to sell your house for 30% less or just rent it out? If the price of houses dropped by that much, I will never sell, I will then rent it out. Are rents going to magically drop? Why in the world would someone give up a low rate and sell? They too will rent it out if they have to move.
You guys are all looking at this housing market through the past. Look at it through the present.
JCer says:
June 15, 2022 at 4:23 pm
Less lib, I don’t know what pumps is thinking. When my dad died we went through his files and came across the long paid off mortgage from their home and yes the interest rate was like 10% and it was a 50% of purchase price loan. I noticed that the 225k mortgage from 1988 had a similar payment to my 625k loan from 2017. So yeah I think prices may need to adjust a little. This is also why people paid off their mortgages, at 10%, paying 50k saves your 5k per year, I’m pretty sure my folks entirely paid off the loan in something like 8 years and this was in a recession where my dad’s income was way off so, yeah responsibility needs to come back, no more free credit.
Exactly what I said yesterday. WFH was a giant signal of an overheated labor market. Pure anomaly. I would not want to own real estate in tech driven markets. They are going to get killed…
“That said, these adjustments are meeting with shock & surprise when it comes to the employee base, particularly those employees in the Bay Area. During this rate induced boom, competition for employees created a Disney-esque set of experiences/expectations in high tech companies.
For employees that have only known this world, the idea of layoffs or cost reduction (or being asked to come into the office) is straight up heresy. In many ways this is not their fault. Excess capital led to excessive showering of employee benefits and heightened expectations.”
Exactly what I was afraid of. How long before they off-shore it? Tried to tell people not to show your boss that your job can be done remotely, but they couldn’t help themselves. Better not cry when you lose your job or are asked to take a huge pay-cut. Remote is the devil.
“During the Pandemic, many companies experimented with remote workers, most from outside of the Bay Area. Based on anecdotal conversations, this trend is likely to continue post-pandemic. Which means the Bay Area employee is now competing with a broader set of alternatives.
In today’s world, positive cash-flow matters & surviving requires out maneuvering your competitors. You need teammates that are ready to roll up their sleeves & get to work. Sadly, we may have conditioned a contingent of employees in a way that is incongruent with this mindset.”
This does not apply to million plus market. Rent can’t support the cost. Also, like Phoenix pointed out the other day, the regular joes didn’t get huge stimulus. The million plus market did. You own a 4 million dollar florida property that was 1 million 10 years ago…good luck!
“Real estate is not going to go down much. Once the panic sellers sell, there will be no others. Put it this way; are you going to sell your house for 30% less or just rent it out? If the price of houses dropped by that much, I will never sell, I will then rent it out. Are rents going to magically drop? Why in the world would someone give up a low rate and sell? They too will rent it out if they have to move.”
800k and less….that market is going to be tight for a long time in north jersey.
If you can keep your head when all about you are losing theirs.
If you can wait and not be tired by waiting.
If you can think and not make thoughts your aim.
If you can trust yourself when all men doubt you.
Yours is the Earth and everything that’s in it.
Courtesy Warren Buffett
Pumps you were not old enough or don’t otherwise remember but housing lost nearly half it’s value during the S&L explosion and we are talking Bergen county not the middle of nowhere. My folks were looking for a bigger house in a nicer town in 1986-87, literally having a hard time, it was a period of high prices. I’m sure realtors were saying “this time is different”, “buy now or be priced out forever”, yada yada yada…. Low and behold black Monday happens, the economy starts having issues and they bought a home they looked at but was out of their budget at the time(around 800k, low 700’s) for a final price of 465k, 320k less than the asking price or an almost 40% reduction.
Mind you housing crashed in 1980 before this, then we had 2008 and now we will have this. This time is not different, if there is recession forcing people to sell the prices will be lower as the buyer pool will be smaller and have less money to spend because of rates. The party is over, without inflated stocks to fund cash purchases or easy cheap credit there are no buyers, very few who are not independently wealthy can just write a check for a 500-1m.
Jcer,
The party is not over. It will never be. The FED will not let the economy crash to the levels you speak about. Hasn’t 2008 taught you this? This is a new FED. They will never ever let it get that bad again. I learned my lesson with doom and gloomers getting in my head 2009 with sirus stock. Never again. This is not the FED of the 80s.
Pumps stop being a dolt, you know nothing about the history of the time, you were too busy shitting your pants to know.
The Fed caused not one but two recessions in the early 1980s. They were calling for Volker’s head down in Washington. Fact is housing was dead, to sell your home back then it was common for sellers to help buyers pay for their homes by letting them assume their existing mortgages and move in. FHA mortage origination was about 200,000 in 1981 and only 100,000 in 1982 meaning only crazy people were taking out mortgages then, lending was at a near standstill.
You get it right? Assume my mortgage and pay me later, mortgage assumptions required no financial approval and when rates get even higher you can bet rent to own and other ways to “sell” homes will be back via private contracts and schemes, and that could again last for a long time. A high school friend of mine well his dad in the 198os was “renting to own” dozens of properties down the shore. Once they missed payments they lost any equity, and they got evicted it was in the private contract!
The U.S. financial crisis spread around the globe in 2008, we helped wreck economies around the world as Wall St products from Lehman etc products like CDO and CDS were sold everywhere, and guaranteed too!! See you in bankruptcy court with that guarantee it’s as good as UST Hahahaha!! My company got nailed for over $200 million in that debacle when the markets froze in these financial products disappeared along with the people who sold them.
No worries the Fed has it all set this time. They will lower rates and spend 100 Billion a month again to buy housing bonds because they give a shit about you!! Hahaha get fucked…They will all be gone in a few years….
Pumps I bought my house with around a 38% haircut for it’s purchase price in 2004 in 2016. The thing that happens is you only get these prices when someone needs to sell. Even with unprecedented fed intervention, the crashes still happen. The party is done until the fed shifts to zirp again, when is that? Maybe 2023, 24 or later? The fed is shifting away from ZIRP because they are losing control, they needed to do ZIRP and QE to achieve their goals. At the moment the balance sheet has ballooned, the fed needed to take this action so they have the ability to cut in the future, they are going to tank the economy and flush out speculators etc before turning the spigot back on. I expect them to try to end the recession in about 2 years.
The Fed hiked its bench mark interest rate by 0.75 today the first 0.75 hike in 28 years. It’s all there in one sentence for those that understand . The party is finally over. The hangover will be painful.
People with good rates that sell their primary residence . . .
The bad reasons:
-death
-divorce
-job loss or other financial distress
The good reasons:
-upgrade to a more expensive home
-relocate to a new city for a job opportunity
-retirement
Having a low rate on the house might encourage people to stay put so they won’t be selling for the good reasons, but the bad reasons kinda force sales when they do.
A million reasons not to sell except wanderlust!
I love moving.
I’m still convinced Jay Pow will toss another 75%, then stop and promptly reverse course. Liquidity driven markets are all this blog knows!!! Fourteen years.
Thanks for nice comments, I will try to read and listen to Lib more from now on. He had a lot of wisdom I didn’t listen, I admit.
Back in 2000, my first mortgage was 7%, the price gone up 10x since then, but it was normal to have 7% 30 yr fixed. Didn’t know much about refi back then, but I’d say I prefer the country experience a bit of high-inflation to educate in the future. Every generation needs some education. I think we will see $250 WTI in winter, seeing some large demand in summer, but some destruction over winter. My best estimate is $9/gal tops in the region.
The housing will be mildly down this time in our neck of the woods. Will go back to 2019 market. We didn’t double/triple home values, and yet in recessionary times, closer to the city more job opportunities rise . Compared to remote, or less populated destinations. Recession will be milder for the metro area. Will be devastating in south and in the country.
The wild card will be the millennials, but looks like they will evolve to their elder genX generation soon, esp. once they get married. Hence, I don’t think housing will go ever down like it did decades ago.
Your comment that you don’t expect housing to go down here was the same comment I heard 30 years ago, and guess what it did, and hard.
Every single person who got theirs so to speak is now in firm agreement with every other person who got theirs, that prices simply can’t and won’t go down. Markets, clearing prices and price discovery don’t stop working for subsequent generations. The reasons being provided are so weak that they wouldn’t look out of place in a Yahoo! finance article.
Forecasting $250 WTI, $9 gas and your home price to stay just about same is some high level cognitive dissonance.