Buckle up, the crash is sooner rather than later

[PCGatorAlum]

Yesterday, the US government tried to borrow $24 billion by selling a bunch of 30 year debt. It was a huge disaster. In order to get enough people to buy, the rate had to dramatically increase. Even then, then primary dealers had to buy 25% of the debt. The primary dealer are the buyers of last resort who have to buy. China, Japan, Saudi Arabia, Russia ... none of them are buying our debt. In fact, most are selling what they already have. With few buying, the US government is borrowing more than ever. $1.5 trillion in the past 4 months and they announced another $1.5 trillion in the next 6 months. The US government will have to offer higher and higher rates to attracted lenders.

 

[FireFoley]

And Moody's just cut their short term outlook on the US to negative. The AAA rating still was kept, but the outlook was changed. so from the 3 rating agencies the US has 2 AA+ ratings and only 1 AAA rating with a negative outlook attached to it.

 

[BMF]

I saw where Zillow says listings were up in August...as a side note foreclosures were also up in Florida over the last few months. Interesting times for sure. So much conflicting data it just begs an investor to keep a majority share in those risk free 5.5% Tbills for a while.

I bonds just got more attractive in two key ways

The annualized yield for new I bond purchases made through April is 5.27%.

finance.yahoo.com

Seeking advice: I have a $10,000 I-bond that went over 1 year on Nov 1. It says on the treasury direct site that interest rate is 4.88% (I have a second I-bond, with $5,000 that goes over 1 year on Jan 1). The first one is at 4.35%, the second is at 3.79%. Should I redeem the $10k bond?

 

[FireFoley]

I bonds just got more attractive in two key ways

The annualized yield for new I bond purchases made through April is 5.27%.

finance.yahoo.com

Seeking advice: I have a $10,000 I-bond that went over 1 year on Nov 1. It says on the treasury direct site that interest rate is 4.88% (I have a second I-bond, with $5,000 that goes over 1 year on Jan 1). The first one is at 4.35%, the second is at 3.79%. Should I redeem the $10k bond?

LOL. What a coincidence. I just had an I Bond go over one year and I am going to redeem mine. I bought it when the rate was over 9% but now with the fixed rate + the rate of inflation, I can find something that is at least equal to the I Bond rate. Granted by redeeming it prior to 5 years I have to forfeit 3 months interest, but I am okay with that given that the I Bond rate no longer exceeds other instruments that are readily available.

 

[BMF]

LOL. What a coincidence. I just had an I Bond go over one year and I am going to redeem mine. I bought it when the rate was over 9% but now with the fixed rate + the rate of inflation, I can find something that is at least equal to the I Bond rate. Granted by redeeming it prior to 5 years I have to forfeit 3 months interest, but I am okay with that given that the I Bond rate no longer exceeds other instruments that are readily available.

Okay - that's the way I was leaning. I've been laddering at PenFed CU, they have 12, 15, and 18 month CDs at 5.35% so I'm happy with that. I could get a little higher rate at a few other banks, but it's not worth it to me to open up multiple accounts to get an extra .1%, .2% or so.

 

[Concrete Helmet]

LOL. What a coincidence. I just had an I Bond go over one year and I am going to redeem mine. I bought it when the rate was over 9% but now with the fixed rate + the rate of inflation, I can find something that is at least equal to the I Bond rate. Granted by redeeming it prior to 5 years I have to forfeit 3 months interest, but I am okay with that given that the I Bond rate no longer exceeds other instruments that are readily available.

What are your thoughts on AAA Muni's? The 20yr is still around 5.30% and with the tax savings probably better than 6% or so?

 

[Concrete Helmet]

I saw where Zillow says listings were up in August...as a side note foreclosures were also up in Florida over the last few months. Interesting times for sure.

Had to go back to this post as the trend in HELOC's is shifting. We've been getting a steady dose of some ugly files over the last few weeks for sure. 3 that are/were scheduled for the courthouse steps. Also, I've noticed that the average property value on applications is steadily dropping telling me 2 things.....1. The computer based system that these particular lenders are using is trimming back the values of property and 2. The majority of borrowers that are seeking HELOC's at this point are more "average Joe's" if you will and just trying to get out from under 18% CC interest rates(again).

We did get a noticeable uptick in orders starting last week and some pretty decent purchase orders(non investment)so I still believe there is some built up demand in the market that is finally realizing higher for longer may be here for a while.

Oh, and divorce buyouts are still going up telling me there is some nasty financial issues that will be coming out more and more over the next year or so.

 

[FireFoley]

What are your thoughts on AAA Muni's? The 20yr is still around 5.30% and with the tax savings probably better than 6% or so?

I think this just depends on your personal tax situation. So if someone is like you and has boat loads of cash I can understand it, The Muni's will probably be priced at or close to Treasury equivalents. If you want a little more pop you can go down the rating scale or pick up good taxable corporate bonds,

 

[LoyalGatorFan]

Have you guys seen the new tax brackets for this year and next year? Screw job to say the least....if there is one crime I understand people do, it's tax evasion.

Citizens Bank of Iowa 5th bank to close

Credit card debt now over a record trillion dollars

CEO of Citigroup says they could layoff 10% of their workforce....recovering economy my ass....

 

[FireFoley]

No need to worry. Just borrow from your retirement or cash it in early as the taxes and penalty is less than your CC debt.

401(k) balances are down, and 'last resort' hardship withdrawals are up

The average 401(k) balance fell 4% in the third quarter while withdrawals and loans rose, according to a recent report by Fidelity.

www.cnbc.com

 

[Concrete Helmet]

No need to worry. Just borrow from your retirement or cash it in early as the taxes and penalty is less than your CC debt.

401(k) balances are down, and 'last resort' hardship withdrawals are up

The average 401(k) balance fell 4% in the third quarter while withdrawals and loans rose, according to a recent report by Fidelity.

www.cnbc.com

I saw where Fidelity said hardship borrowing from 401K is up 300%....Robust economy my ass...anyone with half a brain has known how bad were being lied to over the last 3-4 years...

 

[Concrete Helmet]

People be aware of your financial transactions....Fidelity is hacked and so are some major loan servicers and lenders. We have not been able to order payoffs from Mr. Cooper, Loancare and another servicer this week and are locked out of Fidelity for underwriting and just received a list from our other underwriter of companies to be on the outlook for .....Crazy sh!t happening out there. Looks like ransom attacks. We've also had several attempts to alter wiring for funds in the last week.

 

[Concrete Helmet]

Fidelity National Financial investigating cyberattack that led to service disruption

AlphV/BlackCat claimed responsibility for the attack on the title insurance giant, which is trying to determine whether the attack will have a material impact.

www.cybersecuritydive.com