well fine but if a house falls in value, its owner equivalent rent will likely also fall, right? Why would it not? Just because house prices and rents don't always move together, I suppose. But they do, really.
Yes, but OER isn't what's causing so much inflation.
the Council of Econ Advisors agrees with you - just 19 bps.
Council of Economic Advisers @WhiteHouseCEA Rent of primary residence rose by 0.6 percent while owners’ equivalent rent rose by 0.4 percent. Together they contributed about 19 basis points to monthly core CPI inflation, versus 11 basis points on average pre-pandemic, reflecting challenges in the housing market. 9/
bond yields blowing out to the upside today. 10 year up to 2.5%. what a screaming rise.
2 questions now I suppose:
1/ Are bonds now an alternative to stocks? Will that bring down stock prices? I think the consensus is that it will hurt tech stocks...but won't it hurt dividend payers too? Since people can now get the same yield from safer bonds?
2/ at what point do trillions of dollars flood into the US bond market to take advantage of those yields? That would steady the bond market. Has to be pretty soon, I think.
Ascribing all of the problems in the world to a single monolithic superstructure is about as Marxist as you can get (see also - systems thinking). In the case of Marx and Engels it was capitalism, but Igy's manifesto starts out with "the whole of post-war history is one of globalist struggles." I mean did you see his list? Even gay people are apparently a product of globalism.
Replace "globalism" with race and you sort of essentially get critical race theory.
Even if that was true, that does not make the phenomenon inherently “Marxist”. Marxism would be but one example of a more general construct. It is IMO incorrect and misleading to label the broader construct “Marxist”.
Such constructs are used as investigative starting-points: a thesis, a point of departure, that has its own associated critical paradigm. That does mot mean that they generate nothing of value, and it does not mean that their products are useless outside that particular paradigm.
It never ceases to amaze me how dogmatic people can be, in both directions: in origination, and in criticism.
Regarding OER, it’s rubbish. One need only go to industry groups, Zillow, etc to get actual rent numbers, not to mention purchase prices and financing and maintenance costs, etc. The great thing for the gov is that oer can be fudged, which is the essential characteristic in the policy tool known as CPI. Think about why they don’t use PPI, or export prices, or a combination of many different measures.
Smooth sailing again today, except of course for BASF😡😡😡. Glad I don’t have much of it.
bond yields blowing out to the upside today. 10 year up to 2.5%. what a screaming rise.
2 questions now I suppose:
1/ Are bonds now an alternative to stocks? Will that bring down stock prices? I think the consensus is that it will hurt tech stocks...but won't it hurt dividend payers too? Since people can now get the same yield from safer bonds?
2/ at what point do trillions of dollars flood into the US bond market to take advantage of those yields? That would steady the bond market. Has to be pretty soon, I think.
1. Dividend Discount Model (Fed Model) is not an accurate predictor over longer time horizon (pre-1980s). TINA therefore was more of a narrative, than a reality.
2. Flows more of a directional bet correlated to risk. Index funds and mutual funds have an investment mandate that keeps them fully or nearly fully invested. Insurance companies and pensions will rebalance to models. As in the past, they will reduced allocation to stocks as market declines.
Ascribing all of the problems in the world to a single monolithic superstructure is about as Marxist as you can get (see also - systems thinking). In the case of Marx and Engels it was capitalism, but Igy's manifesto starts out with "the whole of post-war history is one of globalist struggles." I mean did you see his list? Even gay people are apparently a product of globalism.
Replace "globalism" with race and you sort of essentially get critical race theory.
Even if that was true, that does not make the phenomenon inherently “Marxist”. Marxism would be but one example of a more general construct. It is IMO incorrect and misleading to label the broader construct “Marxist”.
Such constructs are used as investigative starting-points: a thesis, a point of departure, that has its own associated critical paradigm. That does mot mean that they generate nothing of value, and it does not mean that their products are useless outside that particular paradigm.
It never ceases to amaze me how dogmatic people can be, in both directions: in origination, and in criticism.
Regarding OER, it’s rubbish. One need only go to industry groups, Zillow, etc to get actual rent numbers, not to mention purchase prices and financing and maintenance costs, etc. The great thing for the gov is that oer can be fudged, which is the essential characteristic in the policy tool known as CPI. Think about why they don’t use PPI, or export prices, or a combination of many different measures.
Smooth sailing again today, except of course for BASF😡😡😡. Glad I don’t have much of it.
“Igy manifesto” certainly sounds Marxist.
On Zillow and inflation, just got my Zillow report minutes ago, it says my house value went up 3.8% the past month.😂
My car insurance (perfect record, platinum customer) just increased 20% for the next period. Electric utility here has received approval for large increases over the next 3 years.
Bonds...there are bonds, and there are bonds. With 5/10 inversion and the miniscule 5 or 10/30 spread, the only ones buying 30’s are sovereigns—or, rather, those in charge of governments. They agree to a ridiculous rate on behalf of their citizenry, because in return they get direct payments from the US gov for businesses/offices that they own/control in their own country. They privatize the gains, and socialize the losses.
The losses aren’t socialized to only their citizenry, but also to the US citizenry in the form of higher debt and consequent devaluation of the currency. Yes some of the citizenry benefit in each country, but only that portion whose votes are being bought via the trade.
This is a known, time-honored mechanism, a form of kickback. The point is that US bonds are not for the average Joe, who hopefully only has exposure to them via pensions. There is a demonstrated negative real rate of return, and it’s large. They aren’t purchased for their published public return, but rather for their unpublished private return. WHAT bond bubble?😂.
Ascribing all of the problems in the world to a single monolithic superstructure is about as Marxist as you can get (see also - systems thinking). In the case of Marx and Engels it was capitalism, but Igy's manifesto starts out with "the whole of post-war history is one of globalist struggles." I mean did you see his list? Even gay people are apparently a product of globalism.
Replace "globalism" with race and you sort of essentially get critical race theory.
Even if that was true, that does not make the phenomenon inherently “Marxist”. Marxism would be but one example of a more general construct. It is IMO incorrect and misleading to label the broader construct “Marxist”.
Regarding OER, it’s rubbish. One need only go to industry groups, Zillow, etc to get actual rent numbers, not to mention purchase prices and financing and maintenance costs, etc.
Yeah this sounds like a really rigorously defined method here.
The entire corpus of mainstream economic theory - "Here's the deal about OER..."
bond yields blowing out to the upside today. 10 year up to 2.5%. what a screaming rise.
2 questions now I suppose:
1/ Are bonds now an alternative to stocks? Will that bring down stock prices? I think the consensus is that it will hurt tech stocks...but won't it hurt dividend payers too? Since people can now get the same yield from safer bonds?
2/ at what point do trillions of dollars flood into the US bond market to take advantage of those yields? That would steady the bond market. Has to be pretty soon, I think.
Banks and big institutions really never stop buying T-notes. The collateral is just too good to pass up.
For your first point, that seems to be asking quite a bit from bonds and investors aren't that bearish on stocks I think (yet at least)
Earnings Scorecard: For Q1 2022 (with 13 S&P 500 companies reporting actual results), 8 S&P 500 companies have reported a positive EPS surprise and 10 S&P 500 companies have reported a positive revenue surprise.
bond yields blowing out to the upside today. 10 year up to 2.5%. what a screaming rise.
2 questions now I suppose:
1/ Are bonds now an alternative to stocks? Will that bring down stock prices? I think the consensus is that it will hurt tech stocks...but won't it hurt dividend payers too? Since people can now get the same yield from safer bonds?
2/ at what point do trillions of dollars flood into the US bond market to take advantage of those yields? That would steady the bond market. Has to be pretty soon, I think.
Banks and big institutions really never stop buying T-notes. The collateral is just too good to pass up.
For your first point, that seems to be asking quite a bit from bonds and investors aren't that bearish on stocks I think (yet at least)
as I read today....higher yields are great for patient bond investors. Terrible for impatient bond investors. Meaning we'll be getting bigger coupons down the road that will make up for these losses. But 5-7 years is a long time.
Earnings Scorecard: For Q1 2022 (with 13 S&P 500 companies reporting actual results), 8 S&P 500 companies have reported a positive EPS surprise and 10 S&P 500 companies have reported a positive revenue surprise.
Valuations do not provide an environment for “intelligent investment” here, nor do market internals provide an environment for “intelligent speculation.” Aside from very minor tactical shifts, the main opportunity that invest...
bond yields blowing out to the upside today. 10 year up to 2.5%. what a screaming rise.
2 questions now I suppose:
1/ Are bonds now an alternative to stocks? Will that bring down stock prices? I think the consensus is that it will hurt tech stocks...but won't it hurt dividend payers too? Since people can now get the same yield from safer bonds?
2/ at what point do trillions of dollars flood into the US bond market to take advantage of those yields? That would steady the bond market. Has to be pretty soon, I think.
Banks and big institutions really never stop buying T-notes. The collateral is just too good to pass up.
For your first point, that seems to be asking quite a bit from bonds and investors aren't that bearish on stocks I think (yet at least)
Same old. Where do they get the money? And what do they get in return for “buying” them?
I’m with Racket in believing that not everybody has soured on stocks. We have heard this all before. IMO there will be future QE. Stocks will maintain, at least through the next round. Heck, even if the sp500 ends the year 5% down, that’s a 2-year average of +11%—and that’s ex-div’s.
By some measures there has been an equities rotation to value, and I am within that movement. I think value is an intermediate step between growth and bonds. Will value investors rotate more into bonds? Not among those few I know, and it’s because of the negative real rates. Even the bonds that I’m easing into have rates at least neutral wrt the official deflator, and I am only into them in a limited way, mostly because of the durations.
Meantime, divs roll in from my value stocks, BP just today, I think. I don’t think there will be an overall flight to US bonds.
Banks and big institutions really never stop buying T-notes. The collateral is just too good to pass up.
For your first point, that seems to be asking quite a bit from bonds and investors aren't that bearish on stocks I think (yet at least)
Same old. Where do they get the money? And what do they get in return for “buying” them?
I’m with Racket in believing that not everybody has soured on stocks. We have heard this all before. IMO there will be future QE. Stocks will maintain, at least through the next round. Heck, even if the sp500 ends the year 5% down, that’s a 2-year average of +11%—and that’s ex-div’s.
By some measures there has been an equities rotation to value, and I am within that movement. I think value is an intermediate step between growth and bonds. Will value investors rotate more into bonds? Not among those few I know, and it’s because of the negative real rates. Even the bonds that I’m easing into have rates at least neutral wrt the official deflator, and I am only into them in a limited way, mostly because of the durations.
Meantime, divs roll in from my value stocks, BP just today, I think. I don’t think there will be an overall flight to US bonds.
The Fed inflated assets to make people feel wealthy and spend more money. At first it was just paper asset inflation, followed by real estate inflation, then even used cars, to now almost anything. You cannot control inflation without popping this huge asset bubble. Sorry, there is no way to avoid the pain. The Fed realizes this, but many investors are not listening.
“In my view, the challenge for investors is that until and unless we observe an improvement in the uniformity of market internals, or a retreat in market valuations, the only “opportunities” are likely to be purely tactical – involving minor changes in market exposure in response to short-term oversold conditions...” -Hussman
In other words, BTFD, and I assume then STFR.
Or more simply, “Buy low, sell high.”
Pages of Hussman verbosity, condensed by our forefathers.
Am up in the middle of the night. Hopped in the tub, thinking about possible RE purchase. Nice, but expensive. Still want to travel, don’t want to be house-poor, even in a great situation. Did a fast (for me😂) half mary, and still didn’t run out all the nervous energy.