- Jun 9, 2014
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Investment houses and insurance companies are running at a headwind in a rising rate economy.
2022 investing thread
- Thread starter BMF
- Start date
Investment houses and insurance companies are running at a headwind in a rising rate economy.
- Jul 29, 2014
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I always assumed financials(banks) do better when rates go up since they borrow short term but I guess it also depends on the curve. I just dumped more chips and traded for what else....oil/ng....seems to be the only thing going in the right direction more than one day at a time....
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- Jul 15, 2014
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Can't remember what thread we were talking about real estate in, but this fits here. It goes to what I was saying about "seeing the same thing" as 2007 +/- a few years. I mentioned that two developments were cleared and infrastructure built out, but now sitting empty with no movement on lot sales for 2+ months now. One for I think 200 homes, one for 700. Then in the paper today, there is a story about a 900 house development starting near here as well. I say it ends poorly and takes 10 years to build out just like all the same kind of developments back then.
- Jul 29, 2014
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Admit it, you were cruising the development looking to steal plywood?Can't remember what thread we were talking about real estate in, but this fits here. It goes to what I was saying about "seeing the same thing" as 2007 +/- a few years. I mentioned that two developments were cleared and infrastructure built out, but now sitting empty with no movement on lot sales for 2+ months now. One for I think 200 homes, one for 700. Then in the paper today, there is a story about a 900 house development starting near here as well. I say it ends poorly and takes 10 years to build out just like all the same kind of developments back then.
- Jul 15, 2014
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Copper man, copper!Admit it, you were cruising the development looking to steal plywood?
- Nov 19, 2014
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That was always the conventional thought as banks borrow short (time deposits) at lower rates and lend long at higher rates. Well the banks really are not lending traditional money and have not for a very long time, hence the move down in banks, plus long rates are going lower and short rates going up, not good for banks. But I contend banks will do better b/c now they will have higher NIM (net interest margin). When was the last time your bank offered you a higher savings rate when the funds rate increased? My guess is a very along time Now 2 yr. Treasurys are roughly 1.15-1.20 and the bank is still offering between 0 and 10 basis points on deposits. They can make 100 basis points, risk free now on all those billions of deposits. The risk free NIM has not been this good in a very long time, without sacrificing duration.
- Jul 29, 2014
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In all seriousness I've heard most new builders are pausing on new home builds due to the price of lumber....not a good sign when considering we may be seeing rising rates in the future.....I wonder if that holds true how many buyers will have to back out from not meeting DTI or other downfalls(losing jobs)...This whole thing may hit the sh!tter quicker than most can imagine.
- Jul 15, 2014
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I don't know about all that, I'm a simple man... I just see empty lots. ;)
- Jun 9, 2014
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Founding Member
That’s 25 miles north of Pensacola in what appears to be a sparsely populated area, or have I guessed wrong on the population density? Can an area like that even in the best of times support that kind of speculation?
- Dec 31, 2018
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That looks familiar. Are you sure that's not the new stand alone football facility?Can't remember what thread we were talking about real estate in, but this fits here. It goes to what I was saying about "seeing the same thing" as 2007 +/- a few years. I mentioned that two developments were cleared and infrastructure built out, but now sitting empty with no movement on lot sales for 2+ months now. One for I think 200 homes, one for 700. Then in the paper today, there is a story about a 900 house development starting near here as well. I say it ends poorly and takes 10 years to build out just like all the same kind of developments back then.
- Jul 29, 2014
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Speaking of unfinished real estate I haven't heard any work going on next door on the lot that 2 savage realtors bought a while back to build on nor have I seen them snuggling on their dock which was already built 
for a couple of months now. Quick look on the internet and it looks like they're bailing during construction. It's listed as "under construction" for 1.8 million...These savages are very seasoned RE Broker's in their 50's and I believe they are seeing the writing on the wall and trying to avoid a financial catastrophe....many others refuse to even look.
for a couple of months now. Quick look on the internet and it looks like they're bailing during construction. It's listed as "under construction" for 1.8 million...These savages are very seasoned RE Broker's in their 50's and I believe they are seeing the writing on the wall and trying to avoid a financial catastrophe....many others refuse to even look.Attachments
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- Sep 8, 2014
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Interesting take on RE from Det & CC. Down here in St. Pete area it's out of control - but it's not really new development as it's mostly built out around here. We've been looking for a rental property and haven't had any luck (either too pricey or too sh*tty). I'm in the process of buying my mom & step-dad's house (he's getting dementia or alzheimer's and my mom is worried about their finances if he eventually goes into a facility/assisted living, etc). The rate is 4.2% on an "investment" property - which sucks since we got 2.375% on our primary home in July 2021.
- Nov 19, 2014
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Sorry to here about your family. I am in the same situation unfortunately, though different ailment. As for the RE, it is the same still in SE FL. Listing goes up, unless the price is WAY out of bounds, it is sold by the next day. Not going to end the same way 2006 did, but it will end in a SSSSLLLLOOOOOOWWWWW, drawn out manner The 2 differences are that we are starting at an exceptionally low MTGE rates unlike 2006ish and you truly have people seeking to move permanently out of the poorly run states, instead of everyone looking to flip.
- Jul 29, 2014
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I've got a perfect solution for you.....
Take out about 30-35% of your stock holdings since that's about how far the market is going to fall, hold in cash for about 8-12 months while the entire economy gets all f vcked up, swoop in and buy a couple of foreclosures with cash which will be starting right after the lay offs. Since you bought them in cash let the rent pay back your returns for a while and by then the rates will be ready to go back down sending prices higher.... then sell them. You will have saved the downturn losses in the stock market, bought at the bottom of the RE market, paid yourself back some yield(rent) on the money you would have lost AND made probably 40-60% gain on the RE you bought. Granted it may be a 3-5 year time frame....rinse and repeat.....
- Sep 8, 2014
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I think the city-centers/higher population areas are going to hold strong - if the prices are right. But I'm curious to see what happens when rates rise (which they already have). I think the lesser populated areas/rural areas may slow down, and slow down quicker.
- Nov 19, 2014
- 9,331
- 15,051
I've got a perfect solution for you.....
Take out about 30-35% of your stock holdings since that's about how far the market is going to fall, hold in cash for about 8-12 months while the entire economy gets all f vcked up, swoop in and buy a couple of foreclosures with cash which will be starting right after the lay offs. Since you bought them in cash let the rent pay back your returns for a while and by then the rates will be ready to go back down sending prices higher.... then sell them. You will have saved the downturn losses in the stock market, bought at the bottom of the RE market, paid yourself back some yield(rent) on the money you would have lost AND made probably 40-60% gain on the RE you bought. Granted it may be a 3-5 year time frame....rinse and repeat.....
Does this advice come with the obvious disclaimer of: "Past results are no guarantee of future returns."
- Nov 7, 2015
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FWIW, I do a fair share of real estate litigation. I’ve heard some rumors, that the banks are dealing with a bunch of defaulted mortgages, just like 2008.
However, the banks learned that if they start foreclosing on loans at once like they did back in ‘08, the bottom falls out and they don’t get repaid on the foreclosure sale.
So, the banks are rolling out the foreclosures gradually to keep prices high. Of course, only the execs at the banks know this for sure, but there are a lot of lawyers, and investors, who have heard this rumor.
If it’s true, prices will fall, but it won’t be nearly as rapid as before
However, the banks learned that if they start foreclosing on loans at once like they did back in ‘08, the bottom falls out and they don’t get repaid on the foreclosure sale.
So, the banks are rolling out the foreclosures gradually to keep prices high. Of course, only the execs at the banks know this for sure, but there are a lot of lawyers, and investors, who have heard this rumor.
If it’s true, prices will fall, but it won’t be nearly as rapid as before
- Jun 12, 2014
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This is one of those game theory things that requires collusion between the banks for it to work.
I'm not buying it.
- Jul 29, 2014
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Yup...ain't heard a thing....yet.
- Jul 29, 2014
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Not investing advise but for those interested I bought into Vale and BHP several weeks back to add to my natural resources line up and haven't been disappointed....up 20-25% and a 8 and 9% dividend respectively.
It kinda humors me that piles of dirt and rocks are the new big tech and are also slaughtering the bull bond yields...
It kinda humors me that piles of dirt and rocks are the new big tech and are also slaughtering the bull bond yields...
