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Dems only know politics & they remember how much they weaponized the phrase “Great Recession” for their own gain. Right now they are getting crushed in polling re: inflation & are using the fed to try to curb it. As soon as they deem they are getting beat up more because of something else they will reverse course. Unfortunately for us in the real world, the entire country is between a rock & a hard place.
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Originally Posted By Silverbulletz06: Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. View Quote I know someone who nearly maxed out their dti in order to buy an overpriced home during this nonsense. They have a high 2% loan and if either one of them loses their job, they can’t make payments. I suspect they share that boat with many many families. |
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I think that’s the kicker. If the economy completely tanks and we start to see jobs being shed by the 100,000’s then it won’t matter how low a rate a home was financed at.
As for consumer spending, I think we’re seeing some interesting trends. Purchase of goods seems to be down but purchases of services seems to be up. Every AirBnb where I live (admittedly a lot of them) has been slammed for weeks. Restaurants are packed. People are spending money. |
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Originally Posted By Gatorcountry: As a full time day trader I keep a chart up all day I call the US Economy. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398275.jpg On the left the blue line is the iShares MBS fund (tracks govt MBS holdings). It has dropped lower than it was in 2008 although it has rebounded some. The yellow line on the left is MSACSR at 9.00 (monthly supply of new homes). It's pushing back up to its 2008 high of 12.21. The green line on the left is the US10Y treasury. The red line is the US GDP. On the right, the blue lines are the SP 500 and NASDAQ. The yellow line is crude oil barrel price. The chart on the left clearly shows the Fed in action. When the GDP (red line) spiked down in March of 2020 they went into overdrive buying mortgage paper at the same time tanking interest rates (the green line). Also look at the supply of new homes go down with it (yellow line). Almost like the perfect storm except this one was caused by our economic geniuses. Guess they forgot about the good ole rule of supply and demand on home prices as they went into liquidity overdrive (just look at the divergence between the blue and green lines - well guess what happens when you stretch a rubber band too far). Here's something else - look at how the tops and bottoms of the blue and yellow lines transposed over time. The lowest point of the housing supply was the peak of the Fed buying mortgage paper! Now they are trying to unload mortgage paper (see the blue line rolling over the cliff) while pushing up interest rates (green line). Great plan - try to sell lower interest rate paper while raising interest rates - yeah I'll take some of those because losing money is fun! Nothing like a couple of lines on a chart letting us know we're screwed. View Quote https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? |
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Originally Posted By VooDoo3dfx: https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? View Quote My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. |
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Political speech and writing are largely the defense of the indefensible - George Orwell
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Originally Posted By maleante: I know someone who nearly maxed out their dti in order to buy an overpriced home during this nonsense. They have a high 2% loan and if either one of them loses their job, they can’t make payments. I suspect they share that boat with many many families. View Quote View All Quotes View All Quotes Originally Posted By maleante: Originally Posted By Silverbulletz06: Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. I know someone who nearly maxed out their dti in order to buy an overpriced home during this nonsense. They have a high 2% loan and if either one of them loses their job, they can’t make payments. I suspect they share that boat with many many families. I mean, if I lost my job we couldn’t make the mortgage payment either… ETA: I guess I cash out the 401k and it’s “fine” |
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Originally Posted By Gatorcountry: It's not really a question of foreclosure, it's about the Fed unwinding (selling out of) a $3 trillion dollar position. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? View Quote View All Quotes View All Quotes Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. |
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Originally Posted By Gatorcountry: I agree with what he is saying. If you look at the psychology of a market cycle, I think we are in the panic stage heading headlong into capitulation. My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg View Quote View All Quotes View All Quotes Originally Posted By Gatorcountry: Originally Posted By VooDoo3dfx: https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg Adding to the above, I fear an exacerbation of the MBS complication from 2006-2012 that didn't exist in the 70s/80s with that level of inflation: When foreclosures start to pop, financial institutions will start sitting on them to show market value on their books. When a bank/mortgage company forecloses, that property gets marked to market value at the time of foreclosure - the foreclosure "resets" the value of the house against the debt owed and those RMBSs go past the dangerzone and into the shitter. There were plenty of instances late 2000s where people stopped paying their mortgages and banks put them into forbearance or just didn't move on them because they were hoping to ride out the dip in the market to avoid marking them to a worse market than could be expected a year later. Back then, banks could afford to "drip" foreclosures into the market to minimize the damage to the market, and subsequently, to themselves. I don't see that as a possibility this time. Similar events THIS time will act as a signal for EVERYONE in the know to to dump/unwind them because of a spiraling fear of loss of market value. The market could possibly REALLY shit the sheets quick - I don't know if they have the stomach this time. No one on Main Street, USA will have liquidity to buy even while higher interest rates drive the property prices lower. Right now, most are selling that property values will not go back down that much. All I know is that if they do a mule dive off the tower while foreclosures start popping AND major holders start dumping RMBS holdings irrespective of ratings or tranches: It's going to be "Katie bar the door." Banks/Mortgagers have theoretically built in firewalls between "investments" and assets, but that's going to be a lot of wealth that will have to be eaten by a LOT of people from all walks. Bail out/Bail in - big unhappiness. Let's not even TALK about CMBS holdings and the pandemic causing moves away from B&M stores along with internet shopping. Add the inability for folks to have discretionary spending and my pea-brain can't comprehend it. |
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Originally Posted By Ajax72: Adding to the above, I fear an exacerbation of the MBS complication from 2006-2012 that didn't exist in the 70s/80s with that level of inflation: When foreclosures start to pop, financial institutions will start sitting on them to show market value on their books. When a bank/mortgage company forecloses, that property gets marked to market value at the time of foreclosure - the foreclosure "resets" the value of the house against the debt owed and those RMBSs go past the dangerzone and into the shitter. There were plenty of instances late 2000s where people stopped paying their mortgages and banks put them into forbearance or just didn't move on them because they were hoping to ride out the dip in the market to avoid marking them to a worse market than could be expected a year later. Back then, banks could afford to "drip" foreclosures into the market to minimize the damage to the market, and subsequently, to themselves. I don't see that as a possibility this time. Similar events THIS time will act as a signal for EVERYONE in the know to to dump/unwind them because of a spiraling fear of loss of market value. The market could possibly REALLY shit the sheets quick - I don't know if they have the stomach this time. No one on Main Street, USA will have liquidity to buy even while higher interest rates drive the property prices lower. Right now, most are selling that property values will not go back down that much. All I know is that if they do a mule dive off the tower while foreclosures start popping AND major holders start dumping RMBS holdings irrespective of ratings or tranches: It's going to be "Katie bar the door." Banks/Mortgagers have theoretically built in firewalls between "investments" and assets, but that's going to be a lot of wealth that will have to be eaten by a LOT of people from all walks. Bail out/Bail in - big unhappiness. Let's not even TALK about CMBS holdings and the pandemic causing moves away from B&M stores along with internet shopping. Add the inability for folks to have discretionary spending and my pea-brain can't comprehend it. View Quote View All Quotes View All Quotes Originally Posted By Ajax72: Originally Posted By Gatorcountry: Originally Posted By VooDoo3dfx: https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg Adding to the above, I fear an exacerbation of the MBS complication from 2006-2012 that didn't exist in the 70s/80s with that level of inflation: When foreclosures start to pop, financial institutions will start sitting on them to show market value on their books. When a bank/mortgage company forecloses, that property gets marked to market value at the time of foreclosure - the foreclosure "resets" the value of the house against the debt owed and those RMBSs go past the dangerzone and into the shitter. There were plenty of instances late 2000s where people stopped paying their mortgages and banks put them into forbearance or just didn't move on them because they were hoping to ride out the dip in the market to avoid marking them to a worse market than could be expected a year later. Back then, banks could afford to "drip" foreclosures into the market to minimize the damage to the market, and subsequently, to themselves. I don't see that as a possibility this time. Similar events THIS time will act as a signal for EVERYONE in the know to to dump/unwind them because of a spiraling fear of loss of market value. The market could possibly REALLY shit the sheets quick - I don't know if they have the stomach this time. No one on Main Street, USA will have liquidity to buy even while higher interest rates drive the property prices lower. Right now, most are selling that property values will not go back down that much. All I know is that if they do a mule dive off the tower while foreclosures start popping AND major holders start dumping RMBS holdings irrespective of ratings or tranches: It's going to be "Katie bar the door." Banks/Mortgagers have theoretically built in firewalls between "investments" and assets, but that's going to be a lot of wealth that will have to be eaten by a LOT of people from all walks. Bail out/Bail in - big unhappiness. Let's not even TALK about CMBS holdings and the pandemic causing moves away from B&M stores along with internet shopping. Add the inability for folks to have discretionary spending and my pea-brain can't comprehend it. In 2006 everyone thought that residential housing values only went up. Yes, there were occasional minor corrections or regional aberrations; but there had not been a wholesale destruction in value across the board in living memory. Today it's in everyone's recent memory; and your point about there being a lot of institutions with itchy trigger fingers to avoid the pain of 2008 is spot on. |
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Originally Posted By HDGator: In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote I don't place all the blame on the Fed. Yes they are a key player but we've had scumbags running treasury (Rubin, Paulson, geithner, etc), an SEC thats been asleep for DECADES, banks like wells, jp Morgan and BofA run by criminal vampires, politicians selling out our workers and industries for DECADES and all of the pillars of our economy turned into predators (housing, education and health care are the biggest). The fktards that want to chant everything is awesome in their little corner of legoland and "buy the dip bro" are apparently quite happy with their role as a hamster on a wheel but for sentient beings the ultimate solution involves a whole lotta CoC. |
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Originally Posted By Cataly5t: I don't place all the blame on the Fed. Yes they are a key player but we've had scumbags running treasury (Rubin, Paulson, geithner, etc), an SEC thats been asleep for DECADES, banks like wells, jp Morgan and BofA run by criminal vampires, politicians selling out our workers and industries for DECADES and all of the pillars of our economy turned into predators (housing, education and health care are the biggest). The fktards that want to chant everything is awesome in their little corner of legoland and "buy the dip bro" are apparently quite happy with their role as a hamster on a wheel but for sentient beings the ultimate solution involves a whole lotta CoC. View Quote View All Quotes View All Quotes Originally Posted By Cataly5t: Originally Posted By HDGator: In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. I don't place all the blame on the Fed. Yes they are a key player but we've had scumbags running treasury (Rubin, Paulson, geithner, etc), an SEC thats been asleep for DECADES, banks like wells, jp Morgan and BofA run by criminal vampires, politicians selling out our workers and industries for DECADES and all of the pillars of our economy turned into predators (housing, education and health care are the biggest). The fktards that want to chant everything is awesome in their little corner of legoland and "buy the dip bro" are apparently quite happy with their role as a hamster on a wheel but for sentient beings the ultimate solution involves a whole lotta CoC. Well stated, I agree the Fed shouldn't be directly blamed; they are but pawns. I wish we could do something; but then we cope with what we're given or gained. |
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Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote View All Quotes View All Quotes Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” |
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"Investors will focus on a heavy load of economic data on Friday, with the Fed’s preferred inflation gauge, the core personal consumption expenditure index deflator, in the spotlight. The core PCE is expected to have gained 4.9% in April annually, a drop from 5.2% in March, according to economists polled by Dow Jones Newswires and The Wall Street Journal."
https://www.marketwatch.com/story/u-s-stock-futures-inch-higher-ahead-of-feds-favorite-inflation-gauge-11653642699?siteid=yhoof2 Investors believe the worst of the inflation is behind us and we can resume our bullish market gains. |
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Originally Posted By VooDoo3dfx: "Investors will focus on a heavy load of economic data on Friday, with the Fed’s preferred inflation gauge, the core personal consumption expenditure index deflator, in the spotlight. The core PCE is expected to have gained 4.9% in April annually, a drop from 5.2% in March, according to economists polled by Dow Jones Newswires and The Wall Street Journal." https://www.marketwatch.com/story/u-s-stock-futures-inch-higher-ahead-of-feds-favorite-inflation-gauge-11653642699?siteid=yhoof2 Investors believe the worst of the inflation is behind us and we can resume our bullish market gains. View Quote Translation, They need to sell off some shit to suckers. |
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Liberals are a curious mix of communism and fascism, they want to destroy you but want to use your own money to do it.
I'd rather be CALLED a fascist then BE a liberal. |
$400+ mo prop taxes.... gah!!!
When I was looking this last winter, anything over $350 was an instant "nope".... |
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Seriously, a tractor dealer from Possum Trot, KY has to explain this to you, a lawyer? - JPL
WTB: Glock 17 gen 2. SN CAF 895 |
Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote View All Quotes View All Quotes Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. |
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Political speech and writing are largely the defense of the indefensible - George Orwell
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Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote I wish to subscribe to your newsletter. Best summary I've ever seen on arfcom about our current state of monetary affairs. |
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Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote View All Quotes View All Quotes Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. Excellent post. |
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Originally Posted By HDGator: In 2006 everyone thought that residential housing values only went up. Yes, there were occasional minor corrections or regional aberrations; but there had not been a wholesale destruction in value across the board in living memory. Today it's in everyone's recent memory; and your point about there being a lot of institutions with itchy trigger fingers to avoid the pain of 2008 is spot on. View Quote Not sure it's in everyone's recent memory- that's how we got right back to the same mess barely 10 years later. |
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Originally Posted By BillofRights: Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” View Quote View All Quotes View All Quotes Originally Posted By BillofRights: Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” Even if the dip bros did understand what he’s saying, there is no financial rebuttal because he’s stating a solid case of fundamentals. But fundamentals aren’t everything, or even the biggest thing in the direction of markets and economies. Politics overpowers finance often, and is why we are here now. So, the best rebuttal is: the Fed is likely to reverse course again and do QE infinity because that is most politically expedient. Whether markets/economies keep faith in the fed (and therefore dollar) at that time will remain to be seen. Click To View Spoiler |
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Babnana split.
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Originally Posted By Gatorcountry: Before I retired this year, I worked a full time job and flipped houses for close to 30 years. My way of flipping houses was to buy a larger distressed home and live in it for a few years while I remodeled it. Sell for a nice tax free profit and move on to the next one. To show I've put my money where my mouth is take a look at this chart of the value of my last house (and yes I bought the dip)- https://www.ar15.com/media/mediaFiles/88037/ValueChart_PNG-2398521.png I put it on the market earlier this year at a ridiculous price right when the Fed announced they were going to start raising rates. I had multiple sight unseen offers the first day it hit the market. I accepted a 7 figure offer that was $55k over ask the second day on the market. Now my point is - does anyone really believe this is sustainable? The amount of FOMO going on with this sale was something like I've never seen before. I planned the sale for over a year - watching and waiting for my trigger to sell. As part of my plan I had a new house lined up to rent before I sold, in fact I paid a month's rent before I signed the rental agreement just to have it held for me (cost of doing business). Now here is the interesting thing. The person I'm renting from only wanted a 12 month lease because this is intended to be one of his Airbnb homes. He is now carrying well over $1m in debt building homes for his Airbnb empire. He started building them right as material and labor prices skyrocketed. So we have two completely different interpretations of where the market is heading. Time will tell which one of us made the right decision. View Quote Similar but different . I sold 6 rental properties last year and they all brought over asking My tax bill was terrible but the balance of the money paid off the majority of my other rentals debt so my free flow cash is fantastic. I now have a surplus of funds to re buy cheap(er) real estate in 2024 or so when things get really ugly. |
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"Problem in Venezuela is not that socialism has been poorly implemented, but that socialism has been faithfully implemented."
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Originally Posted By GETBACKINTHEKITCHEN: Even if the dip bros did understand what he’s saying, there is no financial rebuttal because he’s stating a solid case of fundamentals. But fundamentals aren’t everything, or even the biggest thing in the direction of markets and economies. Politics overpowers finance often, and is why we are here now. So, the best rebuttal is: the Fed is likely to reverse course again and do QE infinity because that is most politically expedient. Whether markets/economies keep faith in the fed (and therefore dollar) at that time will remain to be seen. Click To View Spoiler View Quote View All Quotes View All Quotes Originally Posted By GETBACKINTHEKITCHEN: Originally Posted By BillofRights: Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” Even if the dip bros did understand what he’s saying, there is no financial rebuttal because he’s stating a solid case of fundamentals. But fundamentals aren’t everything, or even the biggest thing in the direction of markets and economies. Politics overpowers finance often, and is why we are here now. So, the best rebuttal is: the Fed is likely to reverse course again and do QE infinity because that is most politically expedient. Whether markets/economies keep faith in the fed (and therefore dollar) at that time will remain to be seen. Click To View Spoiler We are all going to be millionaires. |
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Originally Posted By exponentialpi: We are all going to be millionaires. View Quote View All Quotes View All Quotes Originally Posted By exponentialpi: Originally Posted By GETBACKINTHEKITCHEN: Originally Posted By BillofRights: Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” Even if the dip bros did understand what he’s saying, there is no financial rebuttal because he’s stating a solid case of fundamentals. But fundamentals aren’t everything, or even the biggest thing in the direction of markets and economies. Politics overpowers finance often, and is why we are here now. So, the best rebuttal is: the Fed is likely to reverse course again and do QE infinity because that is most politically expedient. Whether markets/economies keep faith in the fed (and therefore dollar) at that time will remain to be seen. Click To View Spoiler We are all going to be millionaires. |
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Shit like this is why you don't give typewriters to monkeys. - L_JE
Colonialism, bringing ethnic diversity to a continent near you. - My Father Me being brief, this is like seeing a comet - Geralt55 |
Originally Posted By teamr2: I wish to subscribe to your newsletter. Best summary I've ever seen on arfcom about our current state of monetary affairs. View Quote View All Quotes View All Quotes Originally Posted By teamr2: Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. I wish to subscribe to your newsletter. Best summary I've ever seen on arfcom about our current state of monetary affairs. Same here |
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Originally Posted By Gatorcountry: I agree with what he is saying. If you look at the psychology of a market cycle, I think we are in the panic stage heading headlong into capitulation. My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg View Quote View All Quotes View All Quotes Originally Posted By Gatorcountry: Originally Posted By VooDoo3dfx: https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg It's currently at 25, looking at the chart when it spikes to 50+ it does so quickly. Is there any signs to look out for when it will spike? |
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote."
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Wife's told me her companies going rate is now 5.0%, possibly down to 4.875%
ETA: 800+ credit and 20% down conventional |
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"Life is Hard, its Harder if You're Stupid" - John Wayne
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Originally Posted By fxntime: Translation, They need to sell off some shit to suckers. View Quote View All Quotes View All Quotes Originally Posted By fxntime: Originally Posted By VooDoo3dfx: "Investors will focus on a heavy load of economic data on Friday, with the Fed’s preferred inflation gauge, the core personal consumption expenditure index deflator, in the spotlight. The core PCE is expected to have gained 4.9% in April annually, a drop from 5.2% in March, according to economists polled by Dow Jones Newswires and The Wall Street Journal." https://www.marketwatch.com/story/u-s-stock-futures-inch-higher-ahead-of-feds-favorite-inflation-gauge-11653642699?siteid=yhoof2 Investors believe the worst of the inflation is behind us and we can resume our bullish market gains. Translation, They need to sell off some shit to suckers. Glad I wasn't the only one thinking that. |
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote."
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I wouldn't stand in front of a piss-filled supersoaker. Does that make it a good pistol? - Caboose314
I thought I was covered for 22 cans, but the NFAids is a bitch when it mutates - themagikbullet |
Originally Posted By 2tired2run: It's currently at 25, looking at the chart when it spikes to 50+ it does so quickly. Is there any signs to look out for when it will spike? View Quote View All Quotes View All Quotes Originally Posted By 2tired2run: Originally Posted By Gatorcountry: Originally Posted By VooDoo3dfx: https://threadreaderapp.com/thread/1529570587961606144.html What are your thoughts on that? My definition of capitulation - the VIX heads towards 50 and everybody says fuck it I can't take it anymore and I'm out of the market. I keep waiting and watching for this every day. We'll know when it happens and just like every other cycle I fully expect it to happen. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398414.jpg It's currently at 25, looking at the chart when it spikes to 50+ it does so quickly. Is there any signs to look out for when it will spike? One thing I watch is when it puts in a series of lower lows following a spike as the market sentiment calms down. Then it heads back up as panic starts up and bounces around for a bit then takes off into capitulation. And since the VIX is a 30-day forward looking projection based on index options I always watch the call/put ratios (below is SPY). |
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Political speech and writing are largely the defense of the indefensible - George Orwell
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https://fortune.com/2022/05/27/housing-market-correction-peak-mark-zandi-moodys-home-prices-outlook/?utm_source=facebook.com&utm_campaign=fortunemagazine&utm_medium=social&xid=soc_socialflow_facebook_FORTUNE&fbclid=IwAR0zCMI-o5cfAt2CddTLegXMRjmEYptQJnOL0bk1CWXyI3twg9O8ExLDU68
The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling. View Quote |
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Originally Posted By BustinCaps: So 2% of buyers, lol View Quote View All Quotes View All Quotes Originally Posted By BustinCaps: Originally Posted By laxman09: Wife's told me her companies going rate is now 5.0%, possibly down to 4.875% ETA: 800+ credit and 20% down conventional So 2% of buyers, lol I’d that sarcasm or actual data? I’d love to see a breakdown of buyer qualifications actually |
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I wouldn't stand in front of a piss-filled supersoaker. Does that make it a good pistol? - Caboose314
I thought I was covered for 22 cans, but the NFAids is a bitch when it mutates - themagikbullet |
Originally Posted By bradpierson26: We dropped auto loan rates on Monday too View Quote View All Quotes View All Quotes Originally Posted By bradpierson26: Originally Posted By laxman09: Wife's told me her companies going rate is now 5.0%, possibly down to 4.875% ETA: 800+ credit and 20% down conventional We dropped auto loan rates on Monday too Figured the next rate increase would already start being built into the current rates. Guess not. |
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Once it drops biggly, dems will swoop in to “ help “, and do another rent payment cock block and fuck landlords hard again. At least if things crater, it’s happening with dems in full control, should be really bad by 2024, with dems taking the blame. Unless idiot liberals still think trumps responsible after being out of power for 4 years.
Point being, hopefully we get a rep controlled gov and someone like desantis as president, might not get anything fixed but it will keep dems away from the controls for awhile at least. Sucks all around though, and Repubs suck too. |
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Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote View All Quotes View All Quotes Originally Posted By HDGator: Originally Posted By Gatorcountry: Originally Posted By Silverbulletz06: Originally Posted By 2tired2run: Wouldn't the fed have to dump those at ridiculous discounts to get anyone to buy them thus increasing US debt? Maybe not. Chance of foreclosure on a low interest loan is probably low. Many of them were bought before the last 2 years of spiking sales so people have some leeway for realty to lose some value. 2.8% with low risk may be better the today's 5.xx loans at top market value which people will be much more apt to default on. https://www.ar15.com/media/mediaFiles/88037/Capture_JPG-2398395.jpg They can't hold until expiration since these mostly 15/30 year notes and they need to unwind (sell) now. And as you said, most of these were purchased within the last 2 years at low interest rates, presenting a conflict with rising interest rates. Here's a quote from a former senior trader at the Fed's open market desk - And finally, when the central bank sells MBS, it's likely to do so at a significant loss. Who will eat it? You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. |
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Originally Posted By Porkchop_Sandwiches: Capped at 3% a year. Florida wins yet again View Quote View All Quotes View All Quotes Originally Posted By Porkchop_Sandwiches: Originally Posted By FZJ80: Originally Posted By fxntime: People really do tend to forget about the tax increases when they start bragging about how much the value of their house has gone up over the past couple of years. Add in a couple of millage increases for stupid stuff and some people start realizing that eating may become a treat and not a necessity. Yep, those 6000 square foot homes aren't looking so good now. Add to the taxes ever increasing maintenance, insurance and energy costs. Good luck. |
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And I looked, and behold a pale horse: and his name that sat on him was Death, and Hell followed with him.
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Originally Posted By HDGator: You're directly on the crux of the issue. The FED has maintained a position that their asset purchases wouldn't be inflationary by either holding to term or selling at cost. If they have to dump low interest MBS's back on the market at higher interest rates then their only choice is to sell at a loss. The result of that sale at a loss means the FED bought at a higher price and sold at a lower price. This is the important part - that means the dollars the FED spent (which they printed out of thin air) stay in the economy and become inflationary. Which makes them lose more on subsequent sales and even more inflation - a literal doom loop. All of the FED's machinations over the past 14 years to fend off collapse in 2008 has put them behind an eight ball that's bigger than anyone can conceive how to avoid. They've put us into an inflationary environment that is now pretty well entrenched. They can't unwind their balance sheet without impacting market liquidity and goosing inflation. They can't begin to fight inflation when their only tool is interest rate raises without pushing us into a real depression like we haven't seen since the '30s. Any rise in interest rates pushes the economy over a cliff. And now they face the worst kind of inflation which is supply driven. The completely fucked up global supply chains are one of the largest drivers in the current inflation. The FED can't print goods or services out of thin air. In short, the economy is completely fucked in coming years thanks to the FED. Pick any combination of raging inflation, higher interest rates, shortages on the shelves, lost jobs, housing market down the toilet and all with the background of famine in third world countries and uncertainty about WW3. In my opinion we're far past the point where anyone can do anything; I believe the die has been cast. View Quote https://www.reuters.com/markets/us/fed-carrying-330b-unrealized-losses-its-asset-according-q1-financial-statement-2022-05-27/ $330B in unrealized losses so far... |
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Not that you guys care, but I fought my PVA this year. Tons of comps, pictures, etc. professional appraisal that I paid for, etc. No property valuation increase.
Assessment stays the same as 2020. Fuck taxes. I say this because you don’t have to just take what they value your property. You can dispute. But it’s like fighting the DMV, it ain’t gonna be easy. They want you to give up. |
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Originally Posted By spidey07: Not that you guys care, but I fought my PVA this year. Tons of comps, pictures, etc. professional appraisal that I paid for, etc. No property valuation increase. Assessment stays the same as 2020. Fuck taxes. I say this because you don’t have to just take what they value your property. You can dispute. But it’s like fighting the DMV, it ain’t gonna be easy. They want you to give up. View Quote Congrats on extrapolating a single data point into the entire RE market? |
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Originally Posted By spidey07: Not that you guys care, but I fought my PVA this year. Tons of comps, pictures, etc. professional appraisal that I paid for, etc. No property valuation increase. Assessment stays the same as 2020. Fuck taxes. I say this because you don’t have to just take what they value your property. You can dispute. But it’s like fighting the DMV, it ain’t gonna be easy. They want you to give up. View Quote So in the end how much net did you save? I ain't jumping through a ton of gov hoops to save a few hundred bucks. My time has a certain value attached to it |
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Originally Posted By CaliContractor: So in the end how much net did you save? I ain't jumping through a ton of gov hoops to save a few hundred bucks. My time has a certain value attached to it View Quote View All Quotes View All Quotes Originally Posted By CaliContractor: Originally Posted By spidey07: Not that you guys care, but I fought my PVA this year. Tons of comps, pictures, etc. professional appraisal that I paid for, etc. No property valuation increase. Assessment stays the same as 2020. Fuck taxes. I say this because you don’t have to just take what they value your property. You can dispute. But it’s like fighting the DMV, it ain’t gonna be easy. They want you to give up. So in the end how much net did you save? I ain't jumping through a ton of gov hoops to save a few hundred bucks. My time has a certain value attached to it About 2k per year. This year and every year until next valuation. About 6 hours of work/correspondence. 333 bucks an hour. For this year alone. Next year 2k/0 At 4 years till next valuation 1333 bucks an hour. |
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Originally Posted By OregonShooter: https://fortune.com/2022/05/27/housing-market-correction-peak-mark-zandi-moodys-home-prices-outlook/?utm_source=facebook.com&utm_campaign=fortunemagazine&utm_medium=social&xid=soc_socialflow_facebook_FORTUNE&fbclid=IwAR0zCMI-o5cfAt2CddTLegXMRjmEYptQJnOL0bk1CWXyI3twg9O8ExLDU68 The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling. View Quote View Quote
Interesting comment at the bottom which makes sense given many Central banks are negative interest rates right now.
The long and short of it is, at least from what I can tell, we have no historical perspective for any of the data we're seeing now. Sure certain data points taken in isolation look like trends from past economic cycles but taken in totality. It's really uncharted, no pun intended, territory. Could it be possible we run high inflation and low unemployment? The fact we're running out of places to support wage arbitrage says it's possible. Strange times indeed. |
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote."
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Originally Posted By BustinCaps: So 2% of buyers, lol View Quote View All Quotes View All Quotes Originally Posted By BustinCaps: Originally Posted By laxman09: Wife's told me her companies going rate is now 5.0%, possibly down to 4.875% ETA: 800+ credit and 20% down conventional So 2% of buyers, lol Might not be the min, but it's what I'm bringing. |
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"Life is Hard, its Harder if You're Stupid" - John Wayne
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Market has calmed a bit here, but the neighbor two doors down just went under contract. List was $1.2M with two weeks on market. We moved in at the same time 15 years ago and their purchase price was $600k.
Identical floor plan to mine, but I have more space in the basement and a bigger lot. |
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Originally Posted By smartliketractor: https://www.reuters.com/markets/us/fed-carrying-330b-unrealized-losses-its-asset-according-q1-financial-statement-2022-05-27/ $330B in unrealized losses so far... View Quote So by March they took a $165B hit to their $3T MBS nut. Guess they aren't mind readers either although simple math would have worked in this case. The real fun starts when the unrealized losses start turning into actual losses. Unwinding this mess is going to be very interesting. Anyone up for a group buy on some discounted tranches? By the time this is over it will be spun to make them look like financial geniuses with the MSM declaring them our saviors. |
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Political speech and writing are largely the defense of the indefensible - George Orwell
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Originally Posted By VooDoo3dfx: Figured the next rate increase would already start being built into the current rates. Guess not. View Quote View All Quotes View All Quotes Originally Posted By VooDoo3dfx: Originally Posted By bradpierson26: Originally Posted By laxman09: Wife's told me her companies going rate is now 5.0%, possibly down to 4.875% ETA: 800+ credit and 20% down conventional We dropped auto loan rates on Monday too Figured the next rate increase would already start being built into the current rates. Guess not. We didn’t raise rates with the fed 3 weeks ago We dropped this week Clown world |
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I wouldn't stand in front of a piss-filled supersoaker. Does that make it a good pistol? - Caboose314
I thought I was covered for 22 cans, but the NFAids is a bitch when it mutates - themagikbullet |
Originally Posted By bradpierson26: We didn’t raise rates with the fed 3 weeks ago We dropped this week Clown world View Quote View All Quotes View All Quotes Originally Posted By bradpierson26: Originally Posted By VooDoo3dfx: Originally Posted By bradpierson26: Originally Posted By laxman09: Wife's told me her companies going rate is now 5.0%, possibly down to 4.875% ETA: 800+ credit and 20% down conventional We dropped auto loan rates on Monday too Figured the next rate increase would already start being built into the current rates. Guess not. We didn’t raise rates with the fed 3 weeks ago We dropped this week Clown world Unless the loan product is directly tied to prime, the fed rate doesn’t control mortgage rates, car loan rates, etc. the lender does. My SBLOC is not tied to prime rate My car lease is not tied to prime rate My mortgage is not tied to prime rate My CRedit cards may be, but don’t care My HELOC is however tied to prime, but that doesn’t happen for another 18 months. |
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Originally Posted By BillofRights: Good Post. I wish more people would take the time to understand it. More than anything, I wish the people who Do understand what you’re saying, and are dismissive of it, would chime in with a logical and believable rebuttal. Something more than just “LoL”, or “Buy the dip, keep Buying!” Any counterpoint, really. Something to hang your hat on besides; “History shows that recessions only last for 18-24 months at most, so just keep buying!” View Quote i agree with the gators and say there's a better than even chance of their doom scenario. however... there are a few other things to take in for context. 1. people have been predicting economic doom for a long time and through manipulation, fraud, etc TPTB managed to "kick the can down the road" for a couple decades. like many doomer boomer scenarios, from the population bomb and famine stuff in the 60s, to the predictions of a new ice age, to prediction of an ice free north pole by 2015, peak oil, etc...something always seems to save us. and betting against the US economy long term has always been a bad bet. 2. our current mess is 100% political. I think a lot of us understood intuitively that we could fix obama's disaster of a "jobless recovery" economy with the policies trump implemented, but were shocked at just how quickly everything turned around. i mean, if you look at consumer sentiment, manufacturing sentiment, the stock market, etc, it all went up like a rocket starting the day after the election and we hit month after month after month of record low unemployment and labor participation at the same time despite super negative press. if americans start voting with their pocket books again, (a big if), we could experience a tremendous recovery pretty dang quick. in other words, just because biden has f'd it up, doesn't mean we have to be in a depression for 10 years or turn into mad max. we can fix it pretty fast. of course, some things, like refineries and nuclear plants take longer to bring online than others. 3. the damage the fed and congress are doing to cause inflation has to be taken into context. yes, $3T is a lot to unwind. but in the context of being already $20+ T in debt, if we stop the bleeding now, it's really just another 20% to absorb. I mean, if inflation goes up another 20% it's painful but it's not the end of the world. it's not 1000% and 1000000% venezuela/zimbabwe stuff. what will well and truly be the end of our republic is if congress' reaction is to keep passing $T spending bills giving away money and causing us to hyper inflate. 4. inflation has some negative feedback mechanisms internationally that will help us. theoretically, if the dollar dropped a lot, that would cause foreign goods to be more expensive, and thus manufacturing and service jobs to move back to the US, which long term would be good for us. now, the current reality is other economies are even more f'd up than we are, so despite record inflation, the dollar is shockingly strong right now. to summarize, Jacob at Rifles Only has an appropriate saying... "believe the bullet". meaning, if you calculate the wind and elevation etc and take a shot and the bullet goes somewhere completely unexpected, your theories, calculations, observations were wrong and the bullet is right. and some retard named Keynes, who got it 80% wrong, at least got this right: "the market can remain irrational longer than you can stay solvent". so.... despite the based explanation and prediction from the gators above, if they turn out to be wrong, don't let it bankrupt you. manage your risk. one last quote from a retard, "don't fight the Fed" |
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