2022 investing thread
- Thread starter BMF
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- Jun 12, 2014
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- Jul 29, 2014
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I added more 1-3 month at 3.22 and 4-6 month at 3.69. I have a CD coming due next week after the fed meeting and I am thinking of going 10-12 month on that since it was at 3.88(?) yesterday and might be over 4.00 after the next meeting.
- Nov 19, 2014
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I do not know if you saw Jeff Gundlach on TV yesterday. He is widely known now as the Bond King, since Bill Gross faded away. I have followed him for a while and though I don;t always agree I appreciate his knowledge. He said 2 things yesterday that stuck with me. One was that he sees long term treasurys as good entry points here. I do not disagree but I prefer a higher rate with shorter duration even tho all durations are liquid. Second, he said he is waiting for the DXY to break down to enter emerging Markets.
- Jul 29, 2014
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Yes on both...I've been waiting to jump into the LT's again but I think the short term stuff still has some legs. I know you're not much on the medals but I hope investors who get margin calls sell off any Gold they have and push it down below $1600 or so because when the dollar lets up on foreign currencies it will jump just like EM's....still I think Powell is going to drag this out until after the elections....
- Nov 19, 2014
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| US 1-YR | 4.015 |
I just copied that after picking myself off the floor. Hope that stays above 4 on Monday and I will put a little extra cake into that duration at the Treasury auction.
OOPS: Correction. The next auction of 1 yr. T Bills is Oct. 4th. Looks like 6 Month again for me Monday.
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- Nov 19, 2014
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These are new homes only, not existing homes.
www.cnbc.com
More homebuilders lower prices as sentiment falls for ninth straight month
Fast-rising mortgage rates caused homebuilder sentiment to drop further into negative territory in September, and builders lowered prices.
- Jul 29, 2014
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Hmmm. What's happening today? Market looks busy. BTW keep your eyes on silver, it's up about 8.0% today and rumor has it off to the races. Yields holding steady but the DXY is down a little. I see a couple of well known pundits calling for the end of tightening in November.
- Nov 19, 2014
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Very poor ISM Manufacturing # today initially sent yields lower and stocks higher. Yields have recovered a bit but inside that #, the future employment component was a very low reading sub 50, and that is where the easing off of tightening rumors started flying. I put some offers out and got filled so that I could take advantage of this Dead Cat and raise cash for future deployment. Also bought more 6 month treasurys. Early today it was the only yield that was higher prior to the auction.
- Jul 29, 2014
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Bought up more 1-3 and 4-6 today myself. Was going to buy another brokered CD at 6 months today but the rate dropped from 4.00 which I bought last week to 3.85 today.....sounds like from the rate curve the market is expecting JP to pull the cord in Jan.....your thoughts?
- Nov 19, 2014
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Parts of the curve have begun to normalize again. Is that a trend or a blip, not sure. I admittedly expected the FED to struggle to get the Fed Funds rate above 3%, but that is clearly wrong. I missed on how stingy Co.'s would be to lay people off. I agree with you that the Grand Master J will pull the cord soon and I also expect them to continue to not run down the balance sheet. what will be the reasoning for the change? Might it be something overseas? maybe. Will they say that autos , housing, durable goods is clearly slowing? Maybe. But my contention on these items is that Grand Master J is not concerned about autos or housing slowing b/c those in particular reached a level that is completely unsustainable and he is just going to accept that many will take losses on one or the other or both. They made that bed, they must sleep in it. I do not think he cares about the stock market, rightfully so, knowing that leads to excess spending when people "feel wealthy". His only concern is that the credit/bond markets do not come unhinged. They sure are volatile relative to history, but have not blown out yet. But the short of it is I agree with you. They stop soon, stocks rally initially, then fade after a while when it is clear the FED will not begin lowering rates (sans a blowup) and instead hold them steady hoping for a longer term slowdown to reach a more sustainable path economically. And I hope whenever this does come to whatever conclusion it reaches that Grand Master J says that the mistakes the FED made was due to not having the experience in cleaning up the over the top BS spending brought on by fiscal policy.
- Jul 29, 2014
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This x1000....we need a healthy balance even if it keeps market expectations in check. If the zombie companies can't adjust then so be it but at a slower pace. Same with individuals who went hog wild over their heads because mortgage rates drove up the equity in their houses. If you can't make it work locked into a 3.0% rate then you need to sell before you get sucked under....btw the "divorce files" are starting to increase which tells me people are getting squeezed out in less than 2 years of having carte blanche with borrowing. Wait till some of the Florida home owners have to increase their HELOC's they just took out because of storm damage....were already getting orders today for people who closed a month or 2 back....
- Sep 8, 2014
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I noticed Silver yesterday too. It's up 2+% today.
- Sep 8, 2014
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How long does it "usually" take for the Fed to lower rates? I recall the late 90's/early 2000's and rates were around 7% in the mid/late 90's (I bought my first home in 1997 at 7.25%) and it GRADUALLY (I bolded that because it took years to lower) dropped in the 5's (5% range) by the 99/2000/2001. It bounced around quite a bit throughout the 2000's (4% to 5.5% ish), from what I recall. Then in the early 2010's is when it got under 4% and has hung on in that range until this year. This inflation is going to linger at least another year, in my guess. Curious when rates will get into the low 5's (which I think is very fair - and will help stabilize the housing market).
- Jul 29, 2014
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I think the fed holds rates after this month and then slightly lowers them by next spring but I don't think it will be a huge drop...hopefully more of a leveling effect to give the housing and stock market some relief but not so much to re ignite inflation....or at least that's what I would do.
- Nov 19, 2014
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Not sure there is a historical answer to your question as every time is different, LOL. I know I know we have heard that in regards to yield curve inversion, etc., but in that case it is never different. I agree with you that certain parts of the inflation will linger for a very long time and feel confident in saying mortgage rates will not return to 3% or below in my lifetime, for various reasons. As to when the Fed will lower rates is the great debate now, but remember in "normal" times, the FED directly controls ONLY the overnight Fed Funds rate. All other rates are determined by the market. But given the past 15 or so years, the FED has had quite an influence on all duration Treasury rates and mortgage rates. The FED typically does not sway long term treasury rates other than their everyday market actions just for housekeeping purposes, but over the past 15 years the FED has been the largest single buyer of long term paper. That is going to change. And at one point recently, the FED owned between 40-50% of all MBS paper. And remember it is really MBS paper that sets mortgage rates, so if the Fed was the largest owner then mortgage rates would be artificially low, which they have been..
So if I were you and looked to buy an investment property, I would hope rates do not come in and stabilize the market. That way you could get a better price, but your rate would be higher and as you know investment property rates are higher than primary home rates, but you can get around that if you need to. I also suspect that the FED will be slower than normal to lower rates this time around simply to show the markets that things have changed and are not going to treat the symptom every time the market sneezes. They will be aware of the credit markets as that is what really matters (see the UK last week). I think the FED will be hands off regarding the stock market. They worshipped at the feet of the stock market for a long time now and realize that it has been a big mistake when they let the tail wag the dog.
- Jul 29, 2014
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@FireFoley have you been looking at the 1-3/4-6 month TBills? 3.68% and 4.10% today. Question if the CPLie comes out a little lower tomorrow say 7.5-8.0 will the rates start of flatten out? I sold some of the shorter bills I bought in Aug./Sept and bought in at the newer higher rate over the last week, just wondering if I should grab more(10/12/2022 issues) before the reading? Your thoughts?
- Nov 19, 2014
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I have been buying either 6 month or 1 year bills about every other week. I bought a good chunk of 6 month TBills in the auction today. I don;t mind keeping for an extra 3 months given the difference between the 3 and 6 month. But now the 6 month is closing in on the 1 year so I prefer shorter in that instance, We both know that current CPI is already coming down, but the backward looking # that will be released might still be elevated. I am getting the feeling that the rates market has sniffed this out, but maybe not the stock market. If the CPI release is a little soft, I think the curve will steepen, but not sure if that will be from short rates dropping or long rates rising. Given the turmoil in the UK, one has to think that something lurks in our shadow banking system. Given that belief, I still maintain the FED will not get to 4.5% on the O/N rate. However if they do, then I predict they will lower rates soon after. My opinion only, is they will stop soon, but let that rate rest there for a good bit. The problem with our FED is they are always looking backwards and have no one with an ability to think in real terms. They have to see actual numbers, hence why they are all PHD economists, sans Grand Master J. I guess what I am trying to say is that I think short rates are very near a top, just my 2 cents, and am comfy buying up to 1 year out. I think there will be plenty of time to rethink stocks down the road. Look at last week. 5% barrage up and poof it is gone. As to grabbing more, my opinion is if the CPI is softer, then the talking heads will keep up the hawkish talk thus keeping rates a little elevated, so I think you will get a chance to buy. If the CPI is hot, then you can pick up more at an even higher rate. Given such short durations to me it is not worth risking a couple of basis points trying to play the potential reaction to one number.
