2022 investing thread

[Concrete Helmet]

It seems a little like what I began saying over a year ago, but clearly this is going to be a regional location thing. There are so few existing homes for sale but the new home inventory is flooded. Just this week I saw listings for rentals of a brand new development that was slated as homes for sale. The project has started but clearly the homes are not selling. I think that 20% down number comes from places like near me that are having price drops and then sales down from 10-40%, because the previous sales price was just obscene, way way way way above the 2006 peaks. Then you have other areas nationally that had big increases, but nothing like FL or TN or TX etc. So you will have huge price declines there, but still high prices and small decreases in the remainder of the country and that is how you get to 15-20%. I think I said it would be a slow slow slow drip of 1% here 2% there over a very long period of time. Keep us posted Crete on the lending arena. I am sure December will be a quiet month but interested in first of year when people's bloated credit card bills start coming due from their holiday spending and the 20+% interest rates start compounding.

That makes sense to me, but I think we had a 40% increase in median home sales price over a 2-year period from 2020 to 2022. To me it only makes sense that like with most other value driven asset bubbles(not tech or crypto) a 50% retracement over the next 2 years would be likely and like you mentioned some areas could see most or all of those gains wiped out completely. I think at this point there would likely be stabilization in the housing market brought on by monetary policy(think 2012-2016)due to a fallout in corporate/junk bond debt piling up and the US not being able to service it's debt at higher interest rates over a long period of time. In fact, I think this happens sooner(April-June 2023) but the FED being behind the curve takes several more months to enact the policy and it takes several more months beyond that to take effect.

From there I believe boomers dying off and millies moving out starting families will keep a more balanced inventory level and along with reasonable mortgage interest rates somewhere in the 5% area will in turn lead to a mostly flat long term outlook of say 5-8 years say like a mid 80's to mid 90's scenario.

 

[Bernardo de la Paz]

and the US not being able to service it's debt at higher interest rates over a long period of time.

Keep in mind that our debt is issued at fixed rates and we don't pay any more interest on the 30 trillion we already owe when the Fed raises rates.

We'll pay the higher interest on the trillion dollar current deficit and you'll start to see that reflected in the cbo forecasts during the budgeting process which will put a lot of pressure on fiscal policy.

 

[Concrete Helmet]

Keep in mind that our debt is issued at fixed rates and we don't pay any more interest on the 30 trillion we already owe when the Fed raises rates.

We'll pay the higher interest on the trillion dollar current deficit and you'll start to see that reflected in the cbo forecasts during the budgeting process which will put a lot of pressure on fiscal policy.

Interesting point. I wonder what the "average rate" spread out over the total 31T would be? Any idea?

 

[FireFoley]

Keep in mind that our debt is issued at fixed rates and we don't pay any more interest on the 30 trillion we already owe when the Fed raises rates.

We'll pay the higher interest on the trillion dollar current deficit and you'll start to see that reflected in the cbo forecasts during the budgeting process which will put a lot of pressure on fiscal policy.

This is true, but please don;t forget that the Treasury issues debt every single week. Now this is shorter dated maturities, but still it is significant increase in cost of capital relative to the past weekly auctions. Then they conduct quarterly refundings involving longer durations, 2-30 years, so it is not like all the debt service is constantly stable. It is evolving every week.

 

[Bernardo de la Paz]

This is true, but please don;t forget that the Treasury issues debt every single week. Now this is shorter dated maturities, but still it is significant increase in cost of capital relative to the past weekly auctions. Then they conduct quarterly refundings involving longer durations, 2-30 years, so it is not like all the debt service is constantly stable. It is evolving every week.

Yep. Is there anywhere you can look up the average duration of the total debt? That's what would help answer the question as to how quickly the interest payments will go up as part of the budget.

 

[FireFoley]

Yep. Is there anywhere you can look up the average duration of the total debt? That's what would help answer the question as to how quickly the interest payments will go up as part of the budget.

Not that I am aware, but I am guess if you searched something like "how much is the annual interest costs on US debt", you might find some answers or site links.

 

[FlyingGator]

Thought this was funny. A little dated but still somewhat accurate! Apologies if posted before,,

 

[Detroitgator]

Yep. Is there anywhere you can look up the average duration of the total debt? That's what would help answer the question as to how quickly the interest payments will go up as part of the budget.

I'm not going to try and find it, but when I was REALLY trying to follow this stuff, I remember reading that a LOT of the debt was being rolled into shorter and shorter terms.

 

[Egor's Assistant]

If you had $75K you needed to park somewhere for 6-9 months, what would you buy? Bond fund? T-Bills? CD? Funds are parked at TDA so not buying coins. Which bond funds do y'all like? Is it time to rebuy TLT?

 

[FireFoley]

If you had $75K you needed to park somewhere for 6-9 months, what would you buy? Bond fund? T-Bills? CD? Funds are parked at TDA so not buying coins. Which bond funds do y'all like? Is it time to rebuy TLT?

Not knowing your personal situation, this is what I would do for MYSELF. 6 month TBill. 4.70%. Zero risk, no state tax.

 

[Egor's Assistant]

Not knowing your personal situation, this is what I would do for MYSELF. 6 month TBill. 4.70%. Zero risk, no state tax.

Was looking for safety for eroding cash. Can't handle another OxCoin or FTX situation.

 

[Concrete Helmet]

Not knowing your personal situation, this is what I would do for MYSELF. 6 month TBill. 4.70%. Zero risk, no state tax.

Concur....the flexibility and a rate higher than the 10yr seem to make it a good choice until at least the Santa rally sh!ts the bed come January....then maybe bargain time in the SM.

 

[Egor's Assistant]

Thanks for the advice guys. I'm thinking about letting it all ride on Oregon State +7.5 in the Las Vegas Bowl instead. Easy money.

To clarify, I mean thanks for telling me what you might do if the funds were yours. No personal investment advice was actually given ()

Anyone have a favorite bond fund? The direct bonds confuse me. Just need some fixed income here.

 

[Concrete Helmet]

Thanks for the advice guys. I'm thinking about letting it all ride on Oregon State +7.5 in the Las Vegas Bowl instead. Easy money.

To clarify, I mean thanks for telling me what you might do if the funds were yours. No personal investment advice was actually given ()

Anyone have a favorite bond fund? The direct bonds confuse me. Just need some fixed income here.

Not sure I understand your position completely but you can buy individual bonds anything from tax free Muni's which would give you a 4.7ish yield for longer term 10-20 years. If you factor in the tax savings that's probably like getting 5.25-5.50% or so. If you want a little more risk go to some quality corporate bonds which may be over 5.0% on a medium term.

Like I and FF said short term 6 month TBIlls are at 4.68 as of yesterday and they are as liquid as cash minus the time it takes to move from and to your settlement account. You can buy bonds through the Treasury although you have to set up an account, your bank, or like me through my online brokerage account.

With TBills you don't actually get a coupon you actually trade a disounted amount of cash for the denominated amount you buy which matures to the denominated amount over the term(6 months)kinda like a strip bond.

 

[oxrageous]

Investing in Gatorchatter is the best thing I can think of. I would accept the $75,000 donation.

 

[Concrete Helmet]

Investing in Gatorchatter is the best thing I can think of. I would accept the $75,000 donation.

I'm pretty sure you could qualify for a nice tax write off with all of the elderly care this site provides.....it's like a giant Bingo hall in here most of the time.

 

[Egor's Assistant]

Not sure I understand your position completely but you can buy individual bonds anything from tax free Muni's which would give you a 4.7ish yield for longer term 10-20 years. If you factor in the tax savings that's probably like getting 5.25-5.50% or so. If you want a little more risk go to some quality corporate bonds which may be over 5.0% on a medium term.

Like I and FF said short term 6 month TBIlls are at 4.68 as of yesterday and they are as liquid as cash minus the time it takes to move from and to your settlement account. You can buy bonds through the Treasury although you have to set up an account, your bank, or like me through my online brokerage account.

With TBills you don't actually get a coupon you actually trade a disounted amount of cash for the denominated amount you buy which matures to the denominated amount over the term(6 months)kinda like a strip bond.

The zero coupon was causing the confusion. Thanks for clarifying. I had these funds parked in a Muni Fund --- EVM. Bought it 2-3 weeks ago and it shot up 6% so I sold it and banked the profits.

 

[Egor's Assistant]

Investing in Gatorchatter is the best thing I can think of. I would accept the $75,000 donation.

I was all set for a massive end-of-year donation to Gatorchatter, but then you were such a jerk yesterday that Santa lowered your credit worthiness. Fortunately, we're saving a bunch on our taxes this year by writing off the loss of our Oxbucks. Stolen in some sort of FTX-like ponzi scheme. Maybe next year though.

 

[BMF]

Not sure I understand your position completely but you can buy individual bonds anything from tax free Muni's which would give you a 4.7ish yield for longer term 10-20 years. If you factor in the tax savings that's probably like getting 5.25-5.50% or so. If you want a little more risk go to some quality corporate bonds which may be over 5.0% on a medium term.

Like I and FF said short term 6 month TBIlls are at 4.68 as of yesterday and they are as liquid as cash minus the time it takes to move from and to your settlement account. You can buy bonds through the Treasury although you have to set up an account, your bank, or like me through my online brokerage account.

With TBills you don't actually get a coupon you actually trade a disounted amount of cash for the denominated amount you buy which matures to the denominated amount over the term(6 months)kinda like a strip bond.

I recently put $10k for me & my wife ($20k total) into the I bond - not as good of a rate as last year, but this market is killing me! I've also started to ladder CD's at my credit union since they're over 4% for 12-18 month (4.25% right now).

 

[Concrete Helmet]

I recently put $10k for me & my wife ($20k total) into the I bond - not as good of a rate as last year, but this market is killing me! I've also started to ladder CD's at my credit union since they're over 4% for 12-18 month (4.25% right now).

Yup the one thing I like about the TBills is the liquidity....I actually offed a couple of then today to buy some miners and a little more of my favorite Lithium and Uranium stocks while they were dropping. Not sure if you're buying brokered CD 's but the nice thing about them is you can sell them like a bond with no penalty if the rates drop but they are also callable beyond 6 months. Gonna be a very interesting next 6 months IMO.