Down goes the Dow

agip wrote:

ARKK up around 9% from its Friday lows.

that thing rising would catch a lot of shorts back on their heels.

which is something the AI knows, and the meme stonk traders know.

could have some kindling under it.

I should have pointed out that it has a catalyst now, and isn't up on simple noisy trading

PTON is up 25% on takeout talk...traders can get drunk on takeover talk...can make multiples rise and stay high even on bad earnings. Which could support ARKKish stonks for a while.

Prof. Racket wrote:

VS-SJW-IR-TS idiot wrote:

Au contraire:

https://ibb.co/f2RCBbd

What?

I said home ownership, not prices.

It did drop a bit in the 80s but was largely flat. Didn't really pickup until the mid-90s (likely due to Clinton administration policies that kicked off a housing boom).

https://fred.stlouisfed.org/series/RHORUSQ156N

also the decline of the crime numbers in the cities made wealthy people more comfy with buying homes in cities, and NYC and SF went on a tear, home value wise.

I moved to a big blue city in the mid 90s and all everyone said then was that 'no one ever made money in NYC real estate.' because they hadn't for a long time - the white flight of 1970s-1990 was devastating.

So the question obvi is if today's higher crime numbers stick and scare people away, combined with many rich people being able to retire or work remotely from anywhere.

Could be rough sledding for housing in the cities.

Prof. Racket wrote:I said home ownership, not prices.

The discussion was about home prices, supply and demand. The specific point was about interest rates affecting demand and prices. I guess we were talking past each other.

small caps up almost 7% from their lows Jan 28.

weakness in small caps is astonishing - one of the biggest lags vs big caps in 20+ years.

the conventional wisdom is that small caps are being creamed by inflation and are reflecting the near-zero growth economy of the 1Q.

If they rebound that would restore much confidence to the market as a whole.

agip wrote:

small caps up almost 7% from their lows Jan 28.

weakness in small caps is astonishing - one of the biggest lags vs big caps in 20+ years.

the conventional wisdom is that small caps are being creamed by inflation and are reflecting the near-zero growth economy of the 1Q.

If they rebound that would restore much confidence to the market as a whole.

Probably getting hammered the most from supply chain issues I'd imagine

VS-SJW-IR-TS idiot wrote:

It didn't take me much time to find and plot those data. Median housing prices across the US slid for more than 3 years after the US Fed rate passed upward through 10% in the late 70s, and didn't start rising again until interest rates had dropped back to about 10%.

If you're going to use inflation adj house price, shouldn't you use inflation adj interest rates? There is a stronger relationship with the unemployment rate and the correlation between price and interest rate is actually slightly +.

Anyway here is a chart with inflation adj median house price with index starting at 100 Q1 1963 ( Ebony line; left side ) and private residential fixed investment/ GDP ( Smokey line; right side ). 1500x900 graph works best.

I'll post more later.

I’ll be like Iggy does!

BTC 43.3k || ETH 3.1k

So question. How to know when to sell something like XLE that’s gone up 72% since I bought? Seems like oil will be in demand. But 72% is pretty solid. That was actually an Iggy bet from Nov 2020 when I started reading this thread I think…. I think.

I legit have no big expenses, not gonna buy a home, etc. So no risk to let it ride, only other investments as opportunity cost.

Prof. Racket wrote:

agip wrote:

small caps up almost 7% from their lows Jan 28.

weakness in small caps is astonishing - one of the biggest lags vs big caps in 20+ years.

the conventional wisdom is that small caps are being creamed by inflation and are reflecting the near-zero growth economy of the 1Q.

If they rebound that would restore much confidence to the market as a whole.

Probably getting hammered the most from supply chain issues I'd imagine

sure, and fear of econ slowdown and a lack of pricing power compared to big companies.

small caps are viewed as quite cyclical so any hint of slowdown and they suffer.

So it's a double whammy - lower margins, lower sales.

I like Igy but I gotta disagree about his opinion of a housing bubble. If my house dropped 50% in value then I'm not going to walk away. It's not like I would panic sell like with a stock. What am I gonna do, take a 50% loss then buy a house in a different neighborhood for the same price? That would be pointless to walk away. I need a place to live and I can afford my mortgage because we have steady jobs. This is our forever home. We are established in the neighborhood. My kid goes to school and has friends here. We like our community.

Also, BTC ETH 🚀

If you post when they go down then you gotta post when they go up too. I'm only down 3k with crypto now. From -25kish to -3k in about a week, nice. Will be green soon at this rate.

Swaglord_the_realest369 wrote:

I’ll be like Iggy does!

BTC 43.3k || ETH 3.1k

So question. How to know when to sell something like XLE that’s gone up 72% since I bought? Seems like oil will be in demand. But 72% is pretty solid. That was actually an Iggy bet from Nov 2020 when I started reading this thread I think…. I think.

I legit have no big expenses, not gonna buy a home, etc. So no risk to let it ride, only other investments as opportunity cost.

Comparatively energy is a bargain to Apple, that said I would stay away from both. A market call more than anything.

la gente esta muy loca wrote:

VS-SJW-IR-TS idiot wrote:

It didn't take me much time to find and plot those data. Median housing prices across the US slid for more than 3 years after the US Fed rate passed upward through 10% in the late 70s, and didn't start rising again until interest rates had dropped back to about 10%.

If you're going to use inflation adj house price, shouldn't you use inflation adj interest rates? There is a stronger relationship with the unemployment rate and the correlation between price and interest rate is actually slightly +.

Anyway here is a chart with inflation adj median house price with index starting at 100 Q1 1963 ( Ebony line; left side ) and private residential fixed investment/ GDP ( Smokey line; right side ). 1500x900 graph works best.

https://fred.stlouisfed.org/graph/?g=LKDR

I'll post more later.

Here's a chart Median house price YoY % change and YoY bps change in US 10 YR Treasury. Using 10 Yr T for more data as Mortgage rate info begins in 71, if you use Mortgage rate data you'll get similar results.

I linked to the page so you can download data.

agip wrote:

Ghost of Igloi wrote:

Of course the debt can never be paid back. A piece I posted recently proposed inflation as purposeful plan to deal with the debt. I doubt whether the Fed or Treasury really have a handle on the problem. Winging it as they go, praying it does not blow up in their face. Congress seems equally adrift.

The debt never needs to be paid back - that would be silly to do.

Interest payments as a percent of gdp are low historically. The debt put much more of a stress on the economy in the past than today.

As long as the regime of low interest rates continues, we’re fine.

That debt becomes a huge impediment to everything. No different from ATT or the individual that leverages their personal balance sheet to the extreme. Sure you can rationalize how it will all be OK.

Ghost of Igloi wrote:

agip wrote:

The debt never needs to be paid back - that would be silly to do.

Interest payments as a percent of gdp are low historically. The debt put much more of a stress on the economy in the past than today.

As long as the regime of low interest rates continues, we’re fine.

That debt becomes a huge impediment to everything. No different from ATT or the individual that leverages their personal balance sheet to the extreme. Sure you can rationalize how it will all be OK.

Doesn't matter as long as GDP keeps increasing

la gente esta muy loca wrote:

la gente esta muy loca wrote:

If you're going to use inflation adj house price, shouldn't you use inflation adj interest rates? There is a stronger relationship with the unemployment rate and the correlation between price and interest rate is actually slightly +.

Anyway here is a chart with inflation adj median house price with index starting at 100 Q1 1963 ( Ebony line; left side ) and private residential fixed investment/ GDP ( Smokey line; right side ). 1500x900 graph works best.

https://fred.stlouisfed.org/graph/?g=LKDR

I'll post more later.

Here's a chart Median house price YoY % change and YoY bps change in US 10 YR Treasury. Using 10 Yr T for more data as Mortgage rate info begins in 71, if you use Mortgage rate data you'll get similar results.

https://fred.stlouisfed.org/graph/?g=LKKe

I linked to the page so you can download data.

Now a chart with YoY bps change in UNRATE.

Prof. Racket wrote:

Ghost of Igloi wrote:

That debt becomes a huge impediment to everything. No different from ATT or the individual that leverages their personal balance sheet to the extreme. Sure you can rationalize how it will all be OK.

Doesn't matter as long as GDP keeps increasing

Igy come on

T can't print money.

T doesn't have a Federal Reserve to buy its debt.

T isn't the center of the planetary economy.

That said, we are playing loose and fast with the nation's future. If rates went up to 5% then we'll be in trouble and all these goodies we get courtesy of deficit spending will start to go away.

My point is housing is an over valued asset distorted by Fed policy. I purchased a different home in 2013 and the value is up a bout 150% since, though down about 5-15% from the high (May 2021). Like you I will not sell it if the house price drops, and hopefully I will croak here. That said, this will not be the experience of many. Like the last housing bubble, many will simply walk away.

In regards to crypto, investors are back to a speculative mood. My view is the market is acting very similar to past bubbles, and this enthusiasm will fade with the next leg down.

agip wrote:

Prof. Racket wrote:

Doesn't matter as long as GDP keeps increasing

Igy come on

T can't print money.

T doesn't have a Federal Reserve to buy its debt.

T isn't the center of the planetary economy.

That said, we are playing loose and fast with the nation's future. If rates went up to 5% then we'll be in trouble and all these goodies we get courtesy of deficit spending will start to go away.

The level of stimulus required to lift a unit of GDP has been rising alarmingly. Unfortunately the wealth of a nation is productivity and savings not spending and borrowing. We have somehow lost our way as a society. Not with a good future outcome.

would be a hoot if Hobbes was right in the end and more and higher populations have outstripped the ability of the planet to support them. Well not a hoot but ironic in some way.

“I’ve been doing this 30 years and I’ve never seen markets like this,” (GS commodity trader) Currie said in a Bloomberg TV interview. “This is a molecule crisis. We’re out of everything, I don’t care if it’s oil, gas, coal, copper, aluminum, you name it we’re out of it.”

Futures curves in several markets are trading in super-backwardation -- a structure that indicates traders are paying bumper premiums for immediate supply. The downward sloping shape in prices is generally taken to mean commodities are severely undersupplied.

Sure things:

Death

Taxes

Iggy is a permabear