INFLATION IS OUR FRIEND

[Ready2Downsize]

High inflation and high Fed rates may lead to recessions.
Recessions lead to unemployment.
Unemployment should mean more distress sales/foreclosures/short sales

We live however in a "no-consequence" world where you cannot be foreclosed upon, and "why make a payment when the government will?" morality has run amok. That's an unrealistic and unsustainable economic viewpoint. At some point in time during a recession, more homes at a lower price will come to market.

The never ending buyer cash that lead to high prices in the 2000's were due to "liar loans". The 2008-2010 housing recovery came from hedgies and foreign cash buying bulk. The 2020 foreclosure epidemic was prevented by forbearance measures and taxpayer bailouts of landlords / small businesses. We printed and deferred our way out the 2020 crash. We would be in a much different place if these deferrals weren't in place.

These same measures may be deployed to keep housing prices high, but they cannot be guaranteed to arrive in time or to work. If none of these measures reoccur, housing prices will fall until we see a balance between seller inventory and buyer acceptance of current prices.

even if our economy/markets crash, government like you said will put some forbearance. government for some reason feels owning a property is a "right".

At some point, there is going to be hell to pay over all this free money. I'm on this fence...... one more hurrah in stocks and then a decade or two of misery.

One more, just one more, sound like an addiction to me.

When the QE started, it was temporary. Now it seem like we cant get off of it. Addicted to poison.

IMO, the fed took money from poor people and gave it to rich people. Every time the government does something to reduce the large difference between upper and lower financial/social class it benefits the upper class and the bottom gets farther and farther behind, more and more dependent on government handouts to just survive. Lets give the poor rental assistance and it flows right into the landlords hands. Lets keep rates low so the poor can buy a house and they get beat out by the rich who end up their landlords. Lets raise min. wage and they only fall farther behind with less buying power.

Debt, debt, debt. Rising rates going to make it worse for the feds and eventually something has to give and it's going to hurt.

no shit, Sherlock

Where else you think peons get services/foods from?  8)

The point is, no matter what the government does, the poor get poorer and the debt goes up.

Time is ticking and we're all going to be in a lot of hurt, rich and poor.

 

[nosuchreality]

Skiing has always been an expensive activity but the increases over the past few years are crazy. Yet, there is so much demand because there is just so much money out there. There are some resorts (very few it seems) that limit the number of skiers on the mountain. We are going next week (not to Vail) - fingers crossed

Just substitute Disneyland Annual Passes.  They still haven?t figured out their max price yet.

 

[morekaos]

Isn't this fun? Warned this was coming even before it was supposed to be "transitory".  Nice to know those in charge have such a deep understand of basic economics...or not. ;D ;D >

The Fed Will Ultimately Have To Hike Rates More Than You Think
Markets are underestimating how much the Fed will have to hike rates over the next couple of years and that will spell more trouble for the stock and bond markets before year-end.

The persistence of high inflation and strong demand means that the Fed will need to hike rates enough to slow the economy. While markets now seem priced for the withdrawal of policy stimulus that will take place over the next several months, they do not reflect the extent to which policy rates will have to rise over the next couple of years. Fed funds futures imply an overnight rate of around 1.75 percent by the end of 2023, somewhat below what the vast majority of economists?including those at the Fed?consider neutral (a rate that neither stimulates nor restricts economic activity). It is not clear at this point how high rates will have to go over the next couple of years to stabilize inflation, but it is very likely that the implied policy rate for end-2023 is currently off by at least 150 basis points, suggesting a Fed funds rate of over 3 percent.

If it turns out that the Fed needs to hike rates much more than is currently expected over the next couple of years, the selloff in stocks and bonds will probably have more to run before the year is out.
https://www.dailymail.co.uk/news/ar...ronger-protection-two-doses-study-claims.html

 

[morekaos]

Just like the Peanut Farmer....

Wholesale prices rise 1% in January, up near-record 9.7% over the past year

The producer price index, which measures wholesale prices, rose 1% in January and 9.7% for the 12-month period, the latter just off the record high.
Core PPI rose 0.9%. Both increases were at least double the Wall Street estimates.
Manufacturing in the New York region increased modestly in February but was below expectations. The prices received index soared to a record high.
https://www.cnbc.com/2022/02/15/producer-price-index-january-2022-.html

Are You Better Off Than You Were A Year Ago?...

The Misery Index is up. When Biden took office, the Misery Index ? which simply adds the unemployment and inflation rates together ? stood at 7.7 and it was falling fast. It peaked at 15.03 in April 2020 after the COVID lockdowns threw millions out of work. But instead of continuing to head back down to the 5.8 level it was before COVID, the Misery Index has steadily climbed under Biden. It is now at 10.94, with increases in inflation swamping the decline in unemployment.
https://issuesinsights.com/2022/02/15/are-you-better-off-than-you-were-a-year-ago/

 

[morekaos]

Ahhh..the good old days...

We control the horizontal...we control the vertical...Take that Paris Climate Agreement!!

Feds Discover Largest Oil, Natural-Gas Reserve in History

In all, the new reserve is said to contain 281 trillion cubic feet of natural gas, 46.3 billion barrels of oil, and 20 billion barrels of natural-gas liquids, the Interior Department?s U.S. Geological Survey said.

COMMENTS
Almost a third of the U.S.?s total crude-oil production comes from the Permian Basin where the reserve was found, making it the biggest shale-oil-producing region in the U.S.

?American strength flows from American energy, and as it turns out, we have a lot of American energy,? said Zinke. ?Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.?

https://www.nationalreview.com/news/feds-discover-largest-oil-natural-gas-reserve-in-history/

U.S. Becomes a Net Oil Exporter for First Time in 75 Years

America turned into a net oil exporter last week, breaking 75 years of continued dependence on foreign oil and marking a pivotal ? even if likely brief ? moment toward what U.S. President Donald Trump has branded as ?energy independence.?

http://fortune.com/2018/12/06/oil-exports-us/
https://youtu.be/FCcdr4O-3gE

https://youtu.be/FCcdr4O-3gE

Oil prices surge to almost $100 a barrel ? the highest in more than seven years - after Putin ordered troops into eastern Ukraine's breakaway regions
Oil surged to its highest since 2014 Tuesday, pushing prices near $100 a barrel
It comes after Putin recognized the independence of two regions in Ukraine
Russia dispatched troops and armored vehicles to Eastern Ukraine late last night
US, UK and European allies are poised to announce new sanctions
But Russia is a major exporter of oil to the US, while roughly a third of Europe's supply of gas comes from Russian pipelines
https://www.dailymail.co.uk/news/ar...-100-barrel-Putin-ordered-troops-Ukraine.html

 

[morekaos]

You havin fun yet? And NO it's not Russias fault...give ya threee guesses on whos it is though...

Brace for more pain at the pump: Gas tops $6 at one Los Angeles station as prices hit an eight-year high and experts warn oil will soar further if Russia's invasion of Ukraine intensifies
National average price of gas hit $3.53 on Tuesday, the highest in eight years
Gas prices are up 21 cents from last month and 90 cents from a year ago
California leads the nation with a gallon of regular gas averaging $4.74
Experts warn that a full-scale Russian invasion of Ukraine could push prices up
Crude oil is already approaching $100 a barrel amid fears of a supply shock
Russia is a major exporter of oil and could benefit from the rising prices
https://www.dailymail.co.uk/news/ar...-pump-Gas-tops-6-one-Los-Angeles-station.html

 

[morekaos]

"Inflation is your friend" and "we all need to suffer equally" will be the theme of the State of the Union....can't wait... ;D ;D >

Inflation will be worse than feared this year, Goldman Sachs predicts

New York (CNN Business)Red-hot inflation in the United States may not cool off this year as much as many hoped, Goldman Sachs cautioned in a new report.

"The inflation picture has worsened this winter as we expected, and how much it will improve later this year is now in question," Goldman Sachs economists wrote in a client report Sunday night.
Given that uncertainty, Goldman Sachs is raising its inflation outlook. It expects that core PCE inflation, the Federal Reserve's preferred price metric, will decelerate to 3.7% at the end of this year.
That's a jump from Goldman's previous forecast of 3.1% ? and almost double the Fed's goal of 2%.

Goldman also now expects consumer prices, which rose by a near-40-year high of 7.5% on an annualized basis in January, to cool off to 4.6% by the end of this year and 2.9% by the end of next year.
https://www.cnn.com/2022/02/28/economy/inflation-economy-goldman-sachs/index.html

 

[Liar Loan]

Inflation will be worse than feared this year, Goldman Sachs predicts

Goldman also raised their prediction to 11 rate hikes by the end of 2023 (which implies a Fed Funds rate of 2.75-3.00%.)  I wonder what that does to Jumbo loan rates?

 

[daedalus]

Gonna be some mixed feelings when I get a raise that's double what I got last year, and half the inflation rate.  At least my mortgage is fixed.  The renters out there are going to get creamed on housing costs.

 

[usctrojancpa]

Inflation will be worse than feared this year, Goldman Sachs predicts

Goldman also raised their prediction to 11 rate hikes by the end of 2023 (which implies a Fed Funds rate of 2.75-3.00%.)  I wonder what that does to Jumbo loan rates?

If that happens, the yield curve will invert and the 10-year & 30-year may go lower than they are today because bond traders will start pricing in a coming recession since Fed funds rates don't drive long term bond rates and mortgage rates.  And what happens when we get a recession?  That's right, lower mortgage rates.  Ain't that a trip? 

 

[The Motor Court Company]

Maybe the household formation will shrink; roommates and movie in with family etc.

Gonna be some mixed feelings when I get a raise that's double what I got last year, and half the inflation rate.  At least my mortgage is fixed.  The renters out there are going to get creamed on housing costs.

 

[irvinebullhousing]

Maybe the household formation will shrink; roommates and movie in with family etc.

Gonna be some mixed feelings when I get a raise that's double what I got last year, and half the inflation rate.  At least my mortgage is fixed.  The renters out there are going to get creamed on housing costs.

When I get qoutes for repairs, materials and labors the costs has run up dramatically. Many items hardwares and construction material have doubled. I am schock and have to do a double take. I then look for it online, and without better pricing and delivery fees is rediculous. It's squeeze my pocket more and more.

 

[OCtoSV]

Just prior to the pandemic start we bought 2 new cars and the Tesla Solar + PW. That lucky timing saved us perhaps close to $100K.

 

[morekaos]

Tonight's SOTU..
https://twitter.com/i/status/1460070685615792129

https://twitter.com/kerpen/status/1460070685615792129?s=20&t=QkW-21A9L5pn7qrsDt5jrA

 

[zubs]

The Tesla Y I ordered back in AUG arrived in JAN 2022
Out the door price $61,500

Looked on the internet today and it can sell for $71,000 or so.

Should I order another Y and sell it once I get it since inflation is not transitory.
Perhaps order 10 Ys!!
It says delivery in AUG 2022.


Instead of holding cash or stocks I'm holding cars.

 

[irvinebullhousing]

Recession will fix it.

 

[Liar Loan]

Inflation will be worse than feared this year, Goldman Sachs predicts

Goldman also raised their prediction to 11 rate hikes by the end of 2023 (which implies a Fed Funds rate of 2.75-3.00%.)  I wonder what that does to Jumbo loan rates?

If that happens, the yield curve will invert and the 10-year & 30-year may go lower than they are today because bond traders will start pricing in a coming recession since Fed funds rates don't drive long term bond rates and mortgage rates.  And what happens when we get a recession?  That's right, lower mortgage rates.  Ain't that a trip?

Yep, and a recession means job losses and lower home values, especially when starting from a point of historic low affordability.

 

[eyephone]

Inflation will be worse than feared this year, Goldman Sachs predicts

Goldman also raised their prediction to 11 rate hikes by the end of 2023 (which implies a Fed Funds rate of 2.75-3.00%.)  I wonder what that does to Jumbo loan rates?

If that happens, the yield curve will invert and the 10-year & 30-year may go lower than they are today because bond traders will start pricing in a coming recession since Fed funds rates don't drive long term bond rates and mortgage rates.  And what happens when we get a recession?  That's right, lower mortgage rates.  Ain't that a trip?

Yep, and a recession means job losses and lower home values, especially when starting from a point of historic low affordability.

Forget recession if Putin actually follows through with nuclear threat.

 

[morekaos]

How do you model for that?.. ;D ;D >

 

[eyephone]

Its called world war of Putin uses the nuke