2022 investing thread

[Bernardo de la Paz]

This is not a FED issue. A lot of it is a fiscal issue.

I see the Fed as complicit here. We passed $5.7 trillion in unfunded covid stimulus and through QE the Fed essentially printed money to cover $3.6 trillion of it. If they instead let the Treasury yields rise maybe that would provide the voters some feedback that you eventually run out of other people's money.

They also printed money to artificially lower mortgage interest rates which drove the increase in housing prices. I am baffled as to why they thought that was a good idea. That's where we are seeing most of the inflation and there isn't much they can do about it. We learned in the housing crisis that if you let property values drop and people get upside down they will just dump the losses onto the mortgage holders which is disastrous to our financial systems.

 

[FireFoley]

I see the Fed as complicit here. We passed $5.7 trillion in unfunded covid stimulus and through QE the Fed essentially printed money to cover $3.6 trillion of it. If they instead let the Treasury yields rise maybe that would provide the voters some feedback that you eventually run out of other people's money.

They also printed money to artificially lower mortgage interest rates which drove the increase in housing prices. I am baffled as to why they thought that was a good idea. That's where we are seeing most of the inflation and there isn't much they can do about it. We learned in the housing crisis that if you let property values drop and people get upside down they will just dump the losses onto the mortgage holders which is disastrous to our financial systems.

I am not disagreeing, but having factories shut down at its core is not a FED issue. How they dealt with things around the edges was very suspect but b/c the supply issues are there, to kill demand of what little supply there is would cause them to do a Volcker like bazooka. That won;t happen.

I conceded they made many mistakes after the cards were dealt and mentioned them.

 

[Bernardo de la Paz]

I am not disagreeing, but having factories shut down at its core is not a FED issue. How they dealt with things around the edges was very suspect but b/c the supply issues are there, to kill demand of what little supply there is would cause them to do a Volcker like bazooka. That won;t happen.

I conceded they made many mistakes after the cards were dealt and mentioned them.

Yeah. I suppose it's more the Fed's charter to cover congress' mistakes than it is to make them obvious.

 

[Concrete Helmet]

That's where we are seeing most of the inflation and there isn't much they can do about it.

I agree with most of what you're saying except this part....diesel was $2.00 a gallon in 2018 and it's $6.50 now.....Bidens energy policy is half of the problem.....raising interest rates is no more than virtue signaling and WON'T stop the problem. If fuel cost keep going up freight movement will stop altogether because there will be no profit or we will see double digit inflation for years to come. Trump was no magician when it came to the markets and economy.....but he was a master at poker when it came to controlling the worldwide energy market....hence 2% inflation despite generous monetary policy.

 

[bradgator2]

(Bloomberg) -- The days of pricey lumber might finally be over. Lumber futures are toppling to levels not seen since November amid fears of a softening housing market and economic recession. Futures fell as low as $604.50 per 1,000 board feet in Chicago on Wednesday, extending a slump to about 46% this year. The commodity’s collapse is a stark reversal from all-time highs set in 2021 during a pandemic-fueled homebuilding boom. “Lumber markets are probing for a floor,” said Kevin Mason, managing director of ERA Forest Products Research, noting concerns about collapsing home sales and rising interest rates are pushing prices lower.

 

[Concrete Helmet]

Housing inventory is now at a 9 month supply nationally....

 

[Concrete Helmet]

Rumors out that CPI will come in at 8% for May....
WSJ floated a phony story yesterday about supply increase in oil....no sources mentioned. Biden Administration is hard at work...

 

[FireFoley]

Rumors out that CPI will come in at 8% for May....
WSJ floated a phony story yesterday about supply increase in oil....no sources mentioned. Biden Administration is hard at work...

What supply increase in oil? The Ruskies oil being taken off the market will be over 1M barrels a day so OPEC throws Senile Sid a bone and says okay we will up our daily supply by 600K. Still seems like a net loss to me? Only a few Arabs have spare capacity and then there is no where to refine it anyway. And now Senile Sid is going to meet with the Clown Prince? Doesn't then Administration know that the Clown Prince really has no power, other than to order the disappearance of that journalist. Between this and the meeting at the WH with Senile Sid, Jay Powell and that loon Yellen, these are nothing but photo ops that will yield zilch!

 

[Concrete Helmet]

What supply increase in oil?

 

[soflagator]

What supply increase in oil? The Ruskies oil being taken off the market will be over 1M barrels a day so OPEC throws Senile Sid a bone and says okay we will up our daily supply by 600K. Still seems like a net loss to me? Only a few Arabs have spare capacity and then there is no where to refine it anyway. And now Senile Sid is going to meet with the Clown Prince? Doesn't then Administration know that the Clown Prince really has no power, other than to order the disappearance of that journalist. Between this and the meeting at the WH with Senile Sid, Jay Powell and that loon Yellen, these are nothing but photo ops that will yield zilch!

I don’t think a single OPEC country has EVER actually stuck to their committed quotas. They’re all pumping more than they agreed to already and always have. So yes, that’s not the answer here. CNBC analysts seem to be a complete loss as to how this increase isn’t helping. Everything is about optics with the administration. No substance whatsoever as to finding a way forward.

 

[Concrete Helmet]

Everything is about optics with the administration. No substance whatsoever as to finding a way forward.

Agreed and I also think Powell is more politically driven than people realize...If he can keep this inflation high for about 2 or 3 more months then he pretty much seals the fate of 50-60 Dems in the House, probably 2-3 in the Senate, a few Governors, and any chance for a 2nd term for Brandon....thank god. Bad part is we will all have to suffer and people like me more than the rest until then.

 

[soflagator]

Agreed and I also think Powell is more politically driven than people realize...If he can keep this inflation high for about 2 or 3 more months then he pretty much seals the fate of 50-60 Dems in the House, probably 2-3 in the Senate, a few Governors, and any chance for a 2nd term for Brandon....thank god. Bad part is we will all have to suffer and people like me more than the rest until then.

I don’t necessarily agree on Powell, but regardless, I’ld be ok with that result. I don’t think he has much choice here.

 

[bradgator2]

Janet Yellen Seen Reading 'Economics For Dummies'

 

[FireFoley]

Janet Yellen Seen Reading 'Economics For Dummies'

I said that Yellen should have declined or never been considered for any post in the cabinet. It just is not right to have been the Head of the FED, considered totally independent and A-political, to a completely political post where you are pushing for shyt that you would probably would have panned as the Fed Head. Not too mention she is a just one more incompetent Economist.

 

[Concrete Helmet]

Welp good news is bad news....stronger than expected jobs report means no pause on tightening for a few more months. We may not see any growth in the stock market or lower rates until next Feb....

 

[FireFoley]

I would not be so certain on your timetable Crete, but these are only opinions. all I can tell you is I am seeing bonds with a 7% yield when only months ago those same type and rated bonds were in the 3's. Looks to me like credit is tightening pretty fast and the purse strings are being reined in. but we shall see.

 

[Concrete Helmet]

I would not be so certain on your timetable Crete, but these are only opinions. all I can tell you is I am seeing bonds with a 7% yield when only months ago those same type and rated bonds were in the 3's. Looks to me like credit is tightening pretty fast and the purse strings are being reined in. but we shall see.

See here's the way I think it goes down.
If Biden doesn't change his energy policy Powell can raise rates for the next 6 months and we'll still have lingering inflation, plus a BUNCH of pissed off Wall Streeter's. If Biden does change energy policy he loses all of the 30% of voters who still support him and the Dems.

Powell on the other hand would like to create a Fed Chairs wet dream by creating gridlock....Dem in the White House and Repub controlled Congress which would be what we most likely have when the next Congress in sworn in next Jan/Feb....no new tax changes or burdensome federal regulations or big spending plans....

At that point we would have all the pieces in place for the easy money put....housing market is already starting to show signs of the upcoming struggle and when that starts making mainstream media news lookout....stock market is down around 15-20%(maybe 30-35% by then)rising unemployment....

By the way this scenario was not mine alone as several ex fed employees have been talking about it for a few weeks now. I guess we'll see.

 

[FireFoley]

Energy policy is not changing under the current regime. In fact Chevron CEO said today that there may never be another refinery built in the US.

Not sure what is going on in central, but here in south I am seeing 10-20% price drops on homes for sale. Now don't me wrong they were WAY overpriced but just months ago they were getting those prices or close to them immediately. A friend of mine tells me today that there is 8 homes in his little neighborhood for sale and there had been none and when there was one it went that day. Also told me the asking rent on those homes is no longer 5K but 4K, and most of these are starter single family homes.

 

[Concrete Helmet]

Energy policy is not changing under the current regime. In fact Chevron CEO said today that there may never be another refinery built in the US.

Not sure what is going on in central, but here in south I am seeing 10-20% price drops on homes for sale. Now don't me wrong they were WAY overpriced but just months ago they were getting those prices or close to them immediately. A friend of mine tells me today that there is 8 homes in his little neighborhood for sale and there had been none and when there was one it went that day. Also told me the asking rent on those homes is no longer 5K but 4K, and most of these are starter single familydollar homes.

Without a shadow of a doubt housing is rolling over. I think South Florida gets more over heated than we do here but eventually it spreads out all over. Were getting a good share of purchase orders for some reason especially stuff in the 300-375K range along with a couple here and there in the 1 plus million range....but for some reason were getting a ****ton on 2nd position HELOCS where people in 500k-1m dollar homes are pulling out 100k-300k....

 

[Concrete Helmet]

Look out below.....
I guess China caught the sniffles again. Everything dumping in pre market. Gold is holding up better than anything else for now so I pulled more out the little I still have in stocks and bought a few more ounces. I keep stalling on the decision to take the rest out and pay off at least one of the rentals. I'm open to anyone here to try and talk me out of that? I just don't see a reversal happening for the next couple of years myself?