patrick.net

Logan,

Do you agree that rich people should be buying real estate instead of bonds if rental properties are yielding 5% and 30 year is yielding 2.4%? If, yes then show is buying the bonds?

tr6 says

Logan,

Do you agree that rich people should be buying real estate instead of bonds if rental properties are yielding 5% and 30 year is yielding 2.4%? If, yes then show is buying the bonds?

They have and they're still doing show, cash buyers are still 15% above their historical norms. A lot of that rolls with the distress supply and we had a lot of them in this cycle, so it's not out of line to still have cash buyers this high still

tr6 says

If, yes then show is buying the bonds?

Damn auto correct. Who is buying the bonds?

One of the reasons why we have over 154 million working Americans and the highest job openings today ever recorded by any modern day mature economy is that we have grown our economy to a service sector while maintaining as the 2nd biggest manufacturing.

Some technology new creation jobs create a lot more jobs than other new tech sectors. So no boat is the same.

However, we don't dig with a spoon because a spoon while employing a lot people, would take us forever to do a dig...

We are going to be ok here in the U.S.

And with a little more federal stimulus, it just makes the cake taste even better

#USA

Well we are here!

Logan Mohtashami says

Well we are here!

It helps Microsoft finance their LinkedIn acquisition. LinkedIn CEO is super smart. He got Microsoft to bail them out right before their revenues start declining.

Sharingmyintelligencewiththedumbasses says

Will this time be different? hard to say!

154 million working

5.8 Million Job openings in America today in all sectors

Historical all time high for a mature country

Even manufacturing has hit a cycle high

The best is watching Rich Santelll you I know nothing on CNBC make an ass of himself for the last 7 years.

He doesn't know what he is even arguing anymore!

1.58

:o

errc says

1.58

:o

We actually were under 1.50% earlier in the year but that was intra day action and then it spiked back up.

Watch for the close and follow through, as long as this Bret Exit story is out there, it favors yields going down, but we are over bought short term

We look back what created the down their in yields

2012 = Spain default Fear
2015 = China turmoil
2016 = Bret Exit

2015 and 2016 is the most interesting because this is happening with rising inflation and ECI wage inflation hit a cycle high today at 3.5%

So, the world and negative rates are running the show and I would argue that this 1.60% is more telling on the world that the previous ones as inflation has picked up and oil has moved off the bottom 26

All Fun stuff!!!! :-)

One thing I have noticed live today at 1.61% 10's right now lenders are already changing pricing

Still no break, if it doesn't break down in the next 5 trading days, look for a reversal to happen and keep an eye out on big intraday moves that tends to happen at this level.

So far it's been orderly

def maybeRateHike: Option[RateHike] = { Janet.announce("rate hike soon!"); None }

For my buddy Logan:

NuttBoxer says

For my buddy Logan:

I believe cash balance is at a high not seen for some time or since a real major crisis

Ironman says

Logan told me so....

Economic equilibrium

Each cycle is unique with its many variables

Claims are to low, LEI isn't negative, JOLTS data is strong, and no inflation for the Fed to fight... but most important

No over investment thesis that creates and supply and demand imbalance in the economy yet

To show the cash balance

Are we having fun yet or what?

Rew says

My company, a strong multi-national, is literally crapping itself and tightening its belt already.

May I ask why, in your specific case? The supply of ready money is in obvious surfeit. This is supposed to spawn investment and job creation in order to harvest spending.

Rew says

All I see is massively debt laden companies everywhere. Doesn't even that go badly?

Example. Microsoft borrowing 26B to buy LinkedIn.

neplusultra57 says

This is supposed to spawn investment and job creation in order to harvest spending.

Because consumers cannot buy spendy things, and growth focus has been toward international markets.

Rew says

neplusultra57 says

This is supposed to spawn investment and job creation in order to harvest spending.

Because consumers cannot buy spendy things, and growth focus has been toward international markets

Are international customers more liquid or is your widget simply more marketable in a different currency?

tr6 says

Example. Microsoft borrowing 26B to buy LinkedIn.

They want a social media platform. My question is it pays them what? LinkedIn sure as heck couldn't monetize via their premium account sales, so will MSFT go advertising on it?

Rew says

neplusultra57 says

Are international customers more liquid or is your widget simply more marketable in a different currency?

USA market mature and captured. No more growth here. Other markets (buyers) needed.

Sensible. Thanks. Mature American sectors that are not deeply oversold are dangerous. Energy comforts me. Biotech, RE and some Aerospace are not too fear-inducing.

Rew says

This also is what kind of irks me about Logan's "Ra-ra-ra USA" chanting.

- 154 million working

Highest Job openings ever recorded in human history

5.8 Million

110K combined wages men and women

full time workers mostly 82% of the working population

- retail sales cycle highs

- home sales cycle highs

- net worth cycle highs

- Car sales over 17 million

You guys are an investment club, which is fine, but your economic theories need a lot work, everything that the Anti American Bears have talked about from the left and right...

None of it happened

You don't take the discipline to learn, which is fine, because you're an investment club

You won't win this battle, picked the wrong country to bet against

#USA

No Black Swan

No deflationary spiral

No Great Recession 2

When the next recession hits and the recovery happens all the doom and gloom on this site will be exposed as just internet demagoguery

That's kind of the point why I am here....

By all means, continue... it's fun to read

Nothing in the data that shows America is in a deflationary spiral or has a deflationary problem of such a epic magnitude that it would create some type of 2nd Great Recession

Logan Mohtashami says

Nothing in the data that shows America is in a deflationary spiral or has a deflationary problem of such a epic magnitude that it would create some type of 2nd Great Recession

So why is the Fed keeping rates at 0.25 helping inflate other asset classes?

tr6 says

So why is the Fed keeping rates at 0.25 helping inflate other asset classes?

This statement right here... this is what I point out to young Americans who want to know about real economics.

Why is the Fed Funds rate at a 0.25% With rising inflation for years now, not deflation ...

A. Deflationary spirals are something that is very difficult to find in American economics, Great Recession was a massive household debt bubble, but once broken adjusting to demographics the cycle is running at par to what expectation should have been

B. However, demographic deflationary factors are a real issue, more global that here, older people don't spend like younger people do. Japan and German are a lot older than us.

This will in time hit our shores but not yet....

We still have a massive young work force coming on line

You can make a case that the Fed is behind the curve but .... the real question is can the world actually handle a stronger dollar?

All these one trick pony economies tied to exports got smashed with the dollar rise ... These countries aren't balanced enough and don't have a service sector economy to off set the exporting factor.

China, got the memo... they're desperately trying to copy the U.S. Model but China's prime age labor force growth peaked in 2015..

Massive young workforce coming online, who are debt laden by expensive school loans, and find no huge tech sector stock run up to save them, and most jobs are service industry paying minimum wage. Fabulous!

Meanwhile stocks, big money makes more money, FIRE still booming. The net gain to society for money growing is what? Money from money produces nothing.

The engine is revving high, but the car ain't in gear. We aren't going anyplace.

Rew says

Massive young workforce coming online, who are debt laden by expensive school loans

70% of college debt is 14K and under
13% of college debt is over 50K
3% of college debt is over 100K

40% of total college debt is held buy Grad

students

Don't worry about educated Americans who are buying homes and cars ... having kids

They're going to be fine

Now

30% of all student loan debt is held by college drop outs and the average balance is 9K

They make up the majority of the loans delinquent

Rew says

The net gain to society for money growing is what? Money from money produces nothing

You have deep dark view of this country, your bad America will never happen, if it did you would have left this country a long time ago and taken your family from such a horrible economy

Now I can add the charts of each one above going back to 1939 if you like, but your thesis of an economy going no where has no single data point to reflect such a dark view of America

Logan Mohtashami says

70% of college debt is 14K and under

13% of college debt is over 50K

3% of college debt is over 100K

40% of total college debt is held buy Grad

Your numbers have been disputed before yet you keep posting the same BS.

tr6 says

Your numbers have been disputed before yet you keep posting the same BS.

The numbers are the exact numbers reported for many years by every single Agencies that reports the data.

I have tried to explain this, you guys aren't reading the data properly and I explained exactly why...

If you don't want to learn then I am not going to force it on you guys.

Logan Mohtashami says

70% of college debt is 14K and under

13% of college debt is over 50K

3% of college debt is over 100K

Let's look at it another way assuming total debt is 1T

14000 0.7 $700,000,000,000.00 50,000,000 with under 14k in debt
50000 0.13 $130,000,000,000.00 2,600,000 with over 50K in debt
100000 0.03 $30,000,000,000.00 300,000 people with over 100K in debt

Does not that look a little scarier?

tr6 says

Does not that look a little scarier?

Not at all...

What you're afraid of is that highly educated Americans who make a lot money are all about to fall into to deflationary spiral because they can't spend things which they have already bought?

Fallacy of logic is great, hence why I keep on hearing about this student loan debt bubble crushing America and it hasn't done anything to the magnitude to what the extreme views

A better thesis is that those who went to college, drop outed, have the debt but no degree, now that group has issues for sure.

I am not worried about educated Americans who have been buying homes in this cycle, that fear is misplaced