When Powell was asked about housing market affordability which they completed disregarded when cutting rates, he stuttered so badly, and passed it off to the government. Buyers aren’t getting back in because prices are ridiculous. People would prefer price decrease and to keep rates the same. I thought Powell was doing good staying the course despite pressure, but ultimately he shows himself to be weak, caving to pressure!!! Totally lost respect for Powell on this decision! How about letting a recession naturally happen and stop interfering. By interfering they kick the can down the road and our kids are being stolen from. How about our generation suck it up a bit. They operate in the short-term, never the long term. The trend for rates was never low, only the last 12 years. Any more consequential inflation and there will rioting on the streets. They need to look at inflation over 5-10 years. That’s the real truth.
Adam, In my area, your thesis regarding more real estate inventory coming on the market because of lower interest rates is correct. I live in a NYC suburb in NJ, 10 miles from Manhattan and I am seeing 2-4x more inventory available in just the past few weeks and this is in the off-season for real estate sales. Houses are priced higher ($600,000 bought a nice house a couple of years ago, now junk is priced at that amount) than they were a few months ago (likely because of the recent lower interest rates); however they are not moving! This certainly portends that real estate prices will be dropping soon. And, this is with the job market and stock market still mostly intact. If the job and stock market tanks, the price reductions will be sizeable. During the real estate correction due to the GFC, prices in the NYC suburbs corrected 30%, despite that it is typically a very competitive market for buyers.
"All Lance and I do is analyze risk/reward," ...Lance "We love Costco at a pe of 40-50 and are buying. We love Nvda 5x off its recent lows and are buying." Me: k do you really analyze risk/reward of companies or are you more driven by career risk/reward?
I understand bonds intellectually. When you search for them in Fidelity the data points are confusing in regards to par, yield, coupon, etc. I mean why the 1st on the list instead of the 5th?
You can pay the same mortgage you are paying for a smaller property but, it may be offset by home insurance, property taxes etc. Home owners insurance and property taxes in my state keep going up. Owning a house is expensive. There is no way out really.
Dudes we are sitting in T Bills for the current yield but even more so for return of capital not return on capital. If the economy is tanking as it appears there ain't no way I am going into low rated longer rated bonds!
Rates cuts and increase are secondary effects, it’s M2 money supply expansion/contraction that primarily affects everything; the FED is not in control because data is lagging by nature , and this recession is baked in the cake regardless what the FED does, it’s too late
anyone who thinks the Fed move actually helps the economy needs to explain who takes the loss on the other side of that transaction. isn't this a zero-sum game? Simple logic - if there is a beneficiary of their move, then there is also a loser. Once that is properly accounted for, it seems like a net wash. (although I remember something about R* from finance school, where maybe there is an optimum rate for growth - but is that all just a charade invented by the banking system to justify all this? and wouldn't the markets figure out R* on their own rather than the committee to save the world?)
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rates are about to explode higher, their bond position gna implode.
We love Michael on a Saturday morning. How about at least once a month having Michael on instead of Lance?
When Powell was asked about housing market affordability which they completed disregarded when cutting rates, he stuttered so badly, and passed it off to the government. Buyers aren’t getting back in because prices are ridiculous. People would prefer price decrease and to keep rates the same. I thought Powell was doing good staying the course despite pressure, but ultimately he shows himself to be weak, caving to pressure!!! Totally lost respect for Powell on this decision! How about letting a recession naturally happen and stop interfering. By interfering they kick the can down the road and our kids are being stolen from. How about our generation suck it up a bit. They operate in the short-term, never the long term. The trend for rates was never low, only the last 12 years. Any more consequential inflation and there will rioting on the streets. They need to look at inflation over 5-10 years. That’s the real truth.
Bingo!! Totally agree with you!
I have always enjoyed hearing what Michael has to say.
Yeah, if we strip out shelter, energy, food and transportation, we're golden.
Get the Wall Street hedge founds out of the housing market! Houses are for families, not Wall Street speculation.
This guy really knows how to talk in a circle.
When house prices continue down and jobs continue to get shaved, inventory will rise and prices will drop faster and faster
Adam,
In my area, your thesis regarding more real estate inventory coming on the market because of lower interest rates is correct. I live in a NYC suburb in NJ, 10 miles from Manhattan and I am seeing 2-4x more inventory available in just the past few weeks and this is in the off-season for real estate sales. Houses are priced higher ($600,000 bought a nice house a couple of years ago, now junk is priced at that amount) than they were a few months ago (likely because of the recent lower interest rates); however they are not moving! This certainly portends that real estate prices will be dropping soon. And, this is with the job market and stock market still mostly intact. If the job and stock market tanks, the price reductions will be sizeable. During the real estate correction due to the GFC, prices in the NYC suburbs corrected 30%, despite that it is typically a very competitive market for buyers.
Thanks for the boots-on-the-ground intelligence!
"All Lance and I do is analyze risk/reward," ...Lance "We love Costco at a pe of 40-50 and are buying. We love Nvda 5x off its recent lows and are buying." Me: k do you really analyze risk/reward of companies or are you more driven by career risk/reward?
Is this going to have a more profound effect on cd rates for retired people
always great shows Adam,,,hoping youll consider having some analysts and forecasters in the trucking industry,,,,thanks
We shall see. Thinking temporary here.
NickiLeaks, the Fed Whisperer!
I understand bonds intellectually. When you search for them in Fidelity the data points are confusing in regards to par, yield, coupon, etc. I mean why the 1st on the list instead of the 5th?
You can pay the same mortgage you are paying for a smaller property but, it may be offset by home insurance, property taxes etc. Home owners insurance and property taxes in my state keep going up. Owning a house is expensive. There is no way out really.
Dudes we are sitting in T Bills for the current yield but even more so for return of capital not return on capital. If the economy is tanking as it appears there ain't no way I am going into low rated longer rated bonds!
that's longer term bonds
Rates cuts and increase are secondary effects, it’s M2 money supply expansion/contraction that primarily affects everything; the FED is not in control because data is lagging by nature , and this recession is baked in the cake regardless what the FED does, it’s too late
If yields move back up to 3.9/4.1, add TLT, IEF
3rd, 21 September 2024
anyone who thinks the Fed move actually helps the economy needs to explain who takes the loss on the other side of that transaction. isn't this a zero-sum game? Simple logic - if there is a beneficiary of their move, then there is also a loser. Once that is properly accounted for, it seems like a net wash. (although I remember something about R* from finance school, where maybe there is an optimum rate for growth - but is that all just a charade invented by the banking system to justify all this? and wouldn't the markets figure out R* on their own rather than the committee to save the world?)
Savers lose.
I kno several people who bought new houses recently and all around 4.8% rate. So I'm not sure why you guys think 7% is what it is
Auto stocks in the tank
Toyota , Ford, bmw and Mercedes
bonds are fkd
It’s funny how quickly everyone flipped bullish!
That won't last
Lots of options expiration Friday pushing markets around. Will be interesting next week.
Detective of Money Politics is following this very informative content cheers from VK3GFS and 73s from Frank
LOL!! PermaBear Adam! 😂
What would war in the middle east do?
Another one? They have not finished the one that started in 1947.
Wow 😢👎🏻👎🏻👎🏻👎🏻