2022 investing thread

[Concrete Helmet]

My fantasy is to see a dip happen in late 2023 or early 2024 when we're ready to move back west. Hope to keep our house in KC as a rental.

And it very well may happen....my point lately is that were not goingto see a 2008 scenario again due to most owners being on sub 3.0% interest rates(fixed) and I will see if I can find the gov stat today that showed rents went up again in July......own a 3/2 for 1800 a month or pay the national average of nearly $1500 for a ONE bedroom apartment? I think I know what most people will opt for.

 

[FireFoley]

Not a single person has ever said we are going back to a housing crash like 2006-2008 and then after. That was due to AIG, et al. I predicted that and it came true. I have never said crash this time. Actually I still see 10-20 years of slow price declines, followed by stability, then a little lower lull, then stability. Refi's are over for 95% of current owners. To me the house price run up this time has been greater and quicker, which is why I predict longer and slower on the back side. The difference is almost all have some sort of equity now due to mandatory down payments, at worst..

As an aside, did you see B of A is going to test a new program in a few areas to only Blacks and Hispanics? It is No Money Down, No closing Costs, and No Minimum Credit Scores. This will go over well.

 

[GatorCatsi]

As an aside, did you see B of A is going to test a new program in a few areas to only Blacks and Hispanics? It is No Money Down, No closing Costs, and No Minimum Credit Scores. This will go over well.

 

[Concrete Helmet]

There are tons of new programs in the works for homebuyers. Everyday we are seeing new rent to own companies popping up, student loan forgiveness will instantly qualify hundreds of thousands of milly's who are paying 2-2.5k a month and more in rent and you can bet your ass the Biden admin will be rolling out all sorts of funding for DPA's....

 

[Concrete Helmet]

Actually I still see 10-20 years of slow price declines, followed by stability, then a little lower lull, then stability.

Do you also see automobiles and refrigerators going down in price? Maybe in blue states that have been at high water levels for 20 years but in Florida we are still WAY behind in property values for comparable sized homes....By 2030 it will be like NY, Cali, Ill. and such where the average house cost 650K.....The supply here still is behind the demand by several years and the cost to build a brand new home ain't going to be going down any time soon.

 

[FireFoley]

Do you also see automobiles and refrigerators going down in price? Maybe in blue states that have been at high water levels for 20 years but in Florida we are still WAY behind in property values for comparable sized homes....By 2030 it will be like NY, Cali, Ill. and such where the average house cost 650K.....The supply here still is behind the demand by several years and the cost to build a brand new home ain't going to be going down any time soon.

Your point is well taken. Cars are already coming down and just like other products b/c the price of the inputs have increased dramatically for cars, etc. companies will adjust and people will adjust their demands, etc. But those products will not decliine in price over a long period of time. I do not buy the argument that home prices have to be equal in all states, or even most states. I would refer you to people like Ivy Zelman who think the country already has more than enough homes. Time will tell, but all I do know is that free money (twice in the past 20 years) due to whatever circumstances causes morons to do moronic things. Again I am seeing 20% price drops on houses where I am (granted from insane asks) but listing for over 30 and 60 days now, where it was 3 to 6 hours or 3 to 6 days 9 months ago,

 

[FireFoley]

On a side note, I was just staring at the entire Treasury curve and the 1 Year T-Bill is the highest yielding interest rate on the entire curve with the exception of the 20-Year T-Bond. And it is only ONE basis point less. Now if that is not telling I don;t know what is. Also I think the only reason the 20 Year is there is that it is the newest duration on the curve and the least traded.

 

[Concrete Helmet]

, I was just staring at the entire Treasury curve and the 1 Year T-Bill is the highest yielding interest rate

Just bought some more 3 month TBills at 3.03, 6 month at 3.27....The 1 year was 3.44. I guess it's better than letting it set idle in the settlement fund.

 

[Concrete Helmet]

Beyond the clickbait headline here is a pretty good summary of the housing market in the near future. Makes sense as I've said many times that by 2024 we'll see the market start kicking into gear again.

The U.S. housing market downturn will be worse in 2023, forecast Goldman Sachs

 

[FireFoley]

Quick change of subject, here is a good article on Klarna, the word's largest Buy Now Pay Never firm.

Fintech firm Klarna's losses triple after aggressive U.S. expansion and mass layoffs

The firm, which allows users to spread the cost of purchases over interest-free installments, saw a jump in operating expenses and defaults.

www.cnbc.com

 

[Egor's Assistant]

 

[Concrete Helmet]

Quick change of subject, here is a good article on Klarna, the word's largest Buy Now Pay Never firm.

Fintech firm Klarna's losses triple after aggressive U.S. expansion and mass layoffs

The firm, which allows users to spread the cost of purchases over interest-free installments, saw a jump in operating expenses and defaults.

www.cnbc.com

I just wonder how much of this we see before the pivot, Bed Bath & Beyond just announced they're closing 150 stores and the private sector jobs report was the worst in over a year. I guess the price of oil will have a lot to do with how much the inflation reading comes down in the next 2 months.

 

[Concrete Helmet]

DXY is crushing everything....above 109 now. I guess we should anticipate even higher short term yields in the next month or 2 at least. Question is when does something break? Credit spreads are widening and will likely cause mortgage rates to hit somewhere around 6.50....A bigger question is when do the rates and spreads create havoc with corporates for both borrowing and earnings. @FireFoley anything to watch for that you've seen in the past to indicate a bottom?

 

[FireFoley]

DXY is crushing everything....above 109 now. I guess we should anticipate even higher short term yields in the next month or 2 at least. Question is when does something break? Credit spreads are widening and will likely cause mortgage rates to hit somewhere around 6.50....A bigger question is when do the rates and spreads create havoc with corporates for both borrowing and earnings. @FireFoley anything to watch for that you've seen in the past to indicate a bottom?

Was just seeing the 10yr breach 3.25 which mean conventional 30yr. mortgage will be above 6% today, double what it was 6 or so months ago. But we are beyond housing now, and I am a total macro person. Yes gas prices are way down, but food prices are not. $3/lb for a red onion, are you kidding me? My electric bill just went up 25%, and I have FPL. Not complaining, but Nat Gas is a problem. So I ask how does the average guy make it? They don't. Now they are talking about ECB and B of E rasing 75 bps? And those places are already in a depression. More over those raises are doing nothing for the Euro or the Pound. And the Yen, forget it. Every company is laying people off, yet there are plenty of job openings on the lower end b/c productivity is horrendous. I have no idea about Stock Market bottoms, etc., but I am layering short term treasurys in the auction every week, and if there is a stock or two that gets to a level I like, I will buy it. Overall market, not my balliwick. I like individuals. but I believe this. It will not end until credit spreads blow out and perhaps a day when Apple is down $10 in a day that will tell you that people are raising money, and when they need money they sell what they can, not what they want to. And you know the stock market is 4 or 5 stocks.

Crete, I told you last week. The best thing to do is go on a vacation to Europe and Asia and reap the benefits of that DXY!!!!

 

[Concrete Helmet]

Was just seeing the 10yr breach 3.25 which mean conventional 30yr. mortgage will be above 6% today, double what it was 6 or so months ago. But we are beyond housing now, and I am a total macro person. Yes gas prices are way down, but food prices are not. $3/lb for a red onion, are you kidding me? My electric bill just went up 25%, and I have FPL. Not complaining, but Nat Gas is a problem. So I ask how does the average guy make it? They don't. Now they are talking about ECB and B of E rasing 75 bps? And those places are already in a depression. More over those raises are doing nothing for the Euro or the Pound. And the Yen, forget it. Every company is laying people off, yet there are plenty of job openings on the lower end b/c productivity is horrendous. I have no idea about Stock Market bottoms, etc., but I am layering short term treasurys in the auction every week, and if there is a stock or two that gets to a level I like, I will buy it. Overall market, not my balliwick. I like individuals. but I believe this. It will not end until credit spreads blow out and perhaps a day when Apple is down $10 in a day that will tell you that people are raising money, and when they need money they sell what they can, not what they want to. And you know the stock market is 4 or 5 stocks.

Crete, I told you last week. The best thing to do is go on a vacation to Europe and Asia and reap the benefits of that DXY!!!!

I agree. I ducked a small amount back into value thinking banking and energy would at least tread water while spinning a dividend but I'm thinking of taking a small loss there and just turning over the short term tbills in the meantime.....I think Tech in general is going to have a difficult road over the next 4-6 months(possibly longer)
I think you're spot on with the labor market too but this administration seems to think the overall job market is good because every Wawa store has help wanted stickers on their doors....productivity is truly in the sh!tter and manufacturing outlook is feeble at best.

Again I would take your advice on the vacation but I don't travel well and someone has got to get these homeowners the last of the their equity lines so they can go further in debt.

 

[FireFoley]

DXY is crushing everything....above 109 now. I guess we should anticipate even higher short term yields in the next month or 2 at least. Question is when does something break? Credit spreads are widening and will likely cause mortgage rates to hit somewhere around 6.50....A bigger question is when do the rates and spreads create havoc with corporates for both borrowing and earnings. @FireFoley anything to watch for that you've seen in the past to indicate a bottom?

So I am watching Bloomberg and they have a guest on and he is predicting DXY to 115, as I see the Yen has broken 140. I might have to venture to Japan myself and partake in a Geisha girl or two at a discounted price.

 

[Concrete Helmet]

Well in our upside down modern world we got some good news today that was actually bad news....lol..employment slowed in both private and BLS.....I think Powell hits it with one more .75 for good measure then takes a wait and see approach. Also the Fed has been shrinking their balance sheet and there is supposed to be a major wad of LTT's coming to maturity on the 1st and 15th of this month.....I'll ask our resident Bond guru @FireFoley his take on this(btw I'm not thinking they start easing for another 3-6 months but rather watch their handiwork from a distance)

 

[FireFoley]

I have no view on whether they raise 50 or 75 bps in Sept. and do not think it really matters. The real balance sheet reduction starts this month and that will be interesting to see how that affects longer rates. The argument I hear is that it will not have a huge effect b/c the Treasury is issing a lot less new debt due to the shrinking deficit, therefore there will be natural buyers for what the FED sells. Time will tell. But here is what I found interesting today (sans the Gazprom news), was that the yield curve actually steepened today. The 2-10 spread closed at -20 and the 2-30 spread is almost zero. Still inverted but not as badly. Is it b/c the market expects long rates to rise due to QT or that all of the rate hikes are completely built in on the short end???? I think the big question now is. When the rate increases stop, will Grand Master J and his cronies lower rates in 2023? A few weeks ago it was almost 100% said they would. Now it is more like 50-50

 

[bradgator2]

 

[Concrete Helmet]

Anyone know when the next CPLie reading is?

Holy sh!t!!! DXY is over 110......not sure how many times that has happened before but my guess is most of Europe is about insolvent.....