patrick.net

I'm already spooked that this bull run in the stock market has continued so long in spite of Wuhan Virus.

Will be interesting to see how things develop. I'm not optimistic.

It's inflation. Money goes into assets. Why hold a continuously debasing greenback? I thought the Euro was trash but the dollar is giving the Europe a serious run for its money, no pun intended. I don't see a crash at all on the horizon, not even a correction.

mell says

It's inflation. Money goes into assets. Why hold a continuously debasing greenback? I thought the Euro was trash but the dollar is giving the Europe a serious run for its money, no pun intended. I don't see a crash at all on the horizon, not even a correction.

That's the only thing I can see. Notice none of the media ever touches on this even though its plane as day. Now can they make many stocks at worthless as money, shouldn't be to hard for dems.

mell says

It's inflation. Money goes into assets. Why hold a continuously debasing greenback? I thought the Euro was trash but the dollar is giving the Europe a serious run for its money, no pun intended. I don't see a crash at all on the horizon, not even a correction.

We'll see. Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion. They have an idea of the shortfalls at this point, but until budgeting starts no one really knows the big picture. Biden will likely bail these financial retards out, but I'm not certain it's enough. Major cities are approaching billions in shortfalls in tax revenue.

There's either more printing to bail them out, they lay off gov. workers (lol, not happening) or they cut services. They'll likely cut services and let roads and infrastructure go to shit and make everything a toll road. Oh and print more. It would be criminal to lay off a voter... errr I mean government worker.

Bubble tops tend to last 12-18months which pretty much coincides with cycle analysis lower low in Apr. We'll see. I'm just worried what a stock market crash would hurt the middle class. We're deflationary now but inflation is starting to show up and that will be more pain. I'm just trading stocks but holding commodities for the long term. They're pretty cheap.

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

Maybe mell is right that it's not that the market is up, it's that the dollar is down. And if they print more to bail out places like SF, the inflation would just be all the greater.

The problem is your only defense in this environment is to buy more stock assets.
At least they will “inflate” faster than inflation over time.
The gigantic debt is going to cause higher taxes, but the worker bees will continue to spend, consume, borrow, because they “deserve a (insert product) today.”
Imagine what may happen to stocks if the pandemic hoax is lifted, people get back to work, and a meteorite hits the White House.
It could happen ☠️

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

In 2010 Meredith Whitney, who was among the first analysts to warn on the ’08 bank heist, called for 50-100 imminent municipal defaults. This was not a notoriety seeking quote on CNN Business, but was based on 2 years of research.
She proved to be wrong, but only on timing I always thought. Another vocal critic of municipal debt at the time was Warren Buffet.
As I have learned the hard way, it is pretty easy to see what is going to happen, and incredibly hard to cipher out when.

Ron Paul has been saying this for 20 years, he's part of this group that sells the doom side, I think he reps a gold distributor. I'm not saying he's neccesarily wrong, the crash guys are correct once a decade. But what these guys miss is the modern MMT that started in 2009 where the central banks are capable of plugging liquidity holes in the system with massive amounts of money, so while you may get a transitory correction, a crash is pretty hard when you have the ability to plug gaps with trillions of dollars. It'll all blow up one day, on the sovereign level, but the US is the cleanest dirty shirt on the block and we have the largest military by far, so no real rival for a while. Dollar stays king and liquidity stays flowing.

Housing is running too hot IMO.
In CA new construction in the middle of nowhere is selling for an insane amount compared to costal towns. I havent seen that before (maybe it was similar in 2005-2007 but I was too young). Inventory is extremely low. I get lenders contacting me for refinancing (lender credit or zero cost with taking a ~2.7% 30y fixed rate). That wont be sustainable over 5 years IMO unless we go to 1% mortgage rates (like in Europe). For years I have heard the housing market is going to crash. When Covid hit in Q1/Q2 EVERYONE said Housing is fucked. I bought another house during that time and its insane how much it appreciated by looking at comps, zestimates etc.

Stock market has legs. I believe this will be a multi year bull market.
With super low interest rates and more money printing on the horizon a stock market crash is not likely. Another sign of why I dont believe there is a stock market correction coming is because we hear daily the stock market is going to crash. A bubble ends with euphoria not with daily news of a Bubble Crash. How do you invest / park your money? Keeping cash has been a losing strategy.

Inflation. Yellen tells us there is no inflation risk. Just look at house prices and stock prices. If you are sitting on cash waiting for a crash.....good luck is all I can say.

I'm amazed at houses going pending after only a couple days on the market. Unless the property is a exceptional deal, no way would I be buying right now.

Inflation is going to be a real problem in the near future. Assets such as real estate and stocks will be the place to have your cash. Gold works too, as rapid inflation is ALWAYS accompanied by a rush on gold and subsequent valuation increase in that metal.

The reason? The federal government has been spending like never before. Creating trillions out of thin air and promising to pay it back to the federal reserve somehow, someday. At some point the fair in our utterly fiat currency will decline sharply around the world and the dollar value will fall precipitously.
You won’t want to be holding a lot of cash at that point.

MAGA says

I'm amazed at houses going pending after only a couple days on the market. Unless the property is a exceptional deal, no way would I be buying right now.

I am not amazed at all. All demographics. Millennials are getting married and having kids. They just started later.
https://www.cnbc.com/2020/02/04/millennials-to-buy-the-most-houses-this-year-how-they-can-prepare.html

high demand, rates go down, prices go up.

Patrick says

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

Maybe mell is right that it's not that the market is up, it's that the dollar is down. And if they print more to bail out places like SF, the inflation would just be all the greater.

I'm a bit confused...if all the money being created is only enough to keep debt afloat and people in the houses, how can inflation go crazy, you're simply filling the cup back up to where it was. As long as you're not overflowing the cup, how can there be inflation?

If a household loses 1 of the household jobs and this created a hole, how does getting another job (as long as it's at the same salary) created excess? It doesn't. So you've only just come back to where you were before.

Inflation is the stimulus checks, each and every dollar. It's money created out of thin air for no work. The debt forgiveness = inflation, moratoriums = inflation. Covid personal and business loans = inflation. It's everywhere.

WineHorror1 says

If a household loses 1 of the household jobs and this created a hole, how does getting another job (as long as it's at the same salary) created excess? It doesn't. So you've only just come back to where you were before.

Others make much more money for every job lost, people at big tech companies, biotechnology, big suppliers such as Costco, gun manufacturers, plenty of sectors booming with money transferred from those poor who lost their jobs from the bullshit lockdowns to their bottom line. Esp. management and funds/billionaires will make even more money and bid up assets.

I don’t know about you guys but my family income climbed significantly this year. Both I and my wife made quite a bit more. We felt a little guilty so dropped some large donations on a youth shelter.

WineHorror1 says

Patrick says

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

Maybe mell is right that it's not that the market is up, it's that the dollar is down. And if they print more to bail out places like SF, the inflation would just be all the greater.

I'm a bit confused...if all the money being created is only enough to keep debt afloat and people in the houses, how can inflation go crazy, you're simply filling the cup back up to where it was. As long as you're not overflowing the cup, how can there be inflation?

If you don't see the pattern here. Bush was mailing out $300. Obama was what? $800? Now we are at bi-quarterly payments where my household is getting $2400. How long before they are mailing us $10k each quarter. It goes overseas through paying for imports, and that money comes back and buys our stock market/real estate. Next thing you know, SF apartments are $2 million dollars. There's been plenty of inflation.

theoakman says

Now we are at bi-quarterly payments where my household is getting $2400.

You lucky baaaastard!

Yes, I added a record number of Hummers to the fleet last year. I'll be sorry to see them go.

theoakman says

WineHorror1 says

Patrick says

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

Maybe mell is right that it's not that the market is up, it's that the dollar is down. And if they print more to bail out places like SF, the inflation would just be all the greater.

I'm a bit confused...if all the money being created is only enough to keep debt afloat and people in the houses, how can inflation go crazy, you're simply filling the cup back up to where it was. As long as you're not overflowing the cup, how can there be inflation?

If you don't see the pattern here. Bush was mailing out $300. Obama was what? $800? Now we are at bi-quarterly payments where my ho...

Well I don't know about SF, prices have been dropping like a rock as people are fleeing the literal shithole, many now below their previous purchase prices. The housing market is not a pure sellers market anymore but inflation will guarantee that it won't crash. For a crash you need to see mass layoffs at big companies, esp tech. And those are still printing money as we type.

Fucking globalists want to enslave us. If they win there won’t be correction without revolution. Only revolutions overthrow fucked up ruling classes.

@mell

They may be fleeing the city, but their just moving out to the suburbs. My buddy who lives in Mill Valley has seen his house almost double in the last 3 years.

Dholliday126 says

@mell

They may be fleeing the city, but their just moving out to the suburbs. My buddy who lives in Mill Valley has seen his house almost double in the last 3 years.

True to some extent, but there is an overall exodus out of CA as the problems will sprawl into the burbs. The fat years are over, you may see inflation adjusted gains in house prices at best. Even the most optimistic (due to self interest bias) engines such as zillow forecast not more than 10% appreciation for the "hottest" areas in SFH (not condos/apts/townhouses) at best. Which is still great as an inflation hedge but you won't see anything double anymore within the next decade IMO. Also more houses are hitting the market everywhere, with cities leading of course. If CA hangs onto prop13 prices should hold or appreciate better. Once govt taps into dismantling prop13 look out below.

mell says

Inflation is the stimulus checks, each and every dollar. It's money created out of thin air for no work. The debt forgiveness = inflation, moratoriums = inflation. Covid personal and business loans = inflation. It's everywhere.

The covid tests, consumables and everything else on Covid orders or Covid related business is a 80% margin business.

80% margin = INFLATION

Also keep in mind that the cost of living in CA, esp. bay area has been inflating an an even higher pace IMO so you "need" those gains. Energy, trash, traffic/tolls, school tuition, childcare, healthcare and of course rising taxes are all out of control. It doesn't matter if you move to another area where your house value stagnated or even depreciates as long as you pay next to nothing in taxes and cost of living compared to CA.

Dholliday126 says

@mell

They may be fleeing the city, but their just moving out to the suburbs. My buddy who lives in Mill Valley has seen his house almost double in the last 3 years.

Also I'm skeptical of the house values presented, I have been working with a realtor and while it's true that the nice houses which are also good deals in the burbs usually sell relatively fast I have not seen any bidding wars or multiple offers. Usually an offer comes in around the ask and gets accepted. Many sellers try to overprice and you can find plenty of properties sitting on the market for months. If you take zillow for reference I assume the real home value to roughly 10-15% below what they list.

Here's somebody who predicts a crash:

https://www.zerohedge.com/markets/investing-legend-sees-spectacular-crash-next-few-months

Robert Sproul says

As I have learned the hard way, it is pretty easy to see what is going to happen, and incredibly hard to cipher out when.

Exactly. "The market can remain irrational longer than you can remain solvent."

Shaman says

I don’t know about you guys but my family income climbed significantly this year. Both I and my wife made quite a bit more. We felt a little guilty so dropped some large donations on a youth shelter.

2020 was my best year ever if you count unrealized stock market gains.

mell says

I have been working with a realtor and while it's true that the nice houses which are also good deals in the burbs usually sell relatively fast I have not seen any bidding wars or multiple offers. Usually an offer comes in around the ask and gets accepted. Many sellers try to overprice and you can find plenty of properties sitting on the market for months. If you take zillow for reference I assume the real home value to roughly 10-15% below what they list.

Where?

mell says

theoakman says

WineHorror1 says

Patrick says

WookieMan says

Beating a dead horse here, but municipal debt and shortfalls are the biggest concern in my opinion.

Maybe mell is right that it's not that the market is up, it's that the dollar is down. And if they print more to bail out places like SF, the inflation would just be all the greater.

I'm a bit confused...if all the money being created is only enough to keep debt afloat and people in the houses, how can inflation go crazy, you're simply filling the cup back up to where it was. As long as you're not overflowing the cup, how can there be inflation?

If you don't see the pattern here. Bush was mail...

Yes, that's a definitely true. People are fleeing SF, NYC, and other places. Consider this, how does a SF apartment go from $250k to $2 million while you have drug addicts shitting outside your home when a nice property allows you to live much better? Why did the same exact thing happen to my sister's shitty apartment in NYC go from $200k to $600k while a communist mayor destroys the entire city bringing it back to the 70s? Now, people finally see the writing on the wall....or don't. People are fleeing NYC en masse. You know what they are doing? They are buying up properties in my neighborhood bidding them through the roof in New Jersey. We are no better off, with our idiot governor shutting down the entire state and waging war on every business destroying his tax base. Yet, our home prices grow by $200k in the midst of 15% unemployment?

All of that inflation always flies into the real estate market because when those dollars we send overseas come back, they buy up our prime real estate. The system is going to continue to bleed in all facets and inflation is inevitable.

TARP was the biggest bailout and when it happened, we couldn't conceive it. We've had what, the equivalent of 3 TARPs last year and Biden's talking about stimulus of 1.9 trillion, another 2 TARPs. That's literally teh equivalent of 5 TARPs in a one year span. Even if we keep it going another 10 years, they've only gotten worse and now state governments are finally realizing they literally are broke. The federal government is fast realizing they are broke as well. The amount of money that we spend to pay off interest on the national debt as a percentage of GDP is quickly getting out of control. They are too big and they've destroyed their tax bases. They are going to need bailouts as well. How long before we are up to bailouts equal to 10 TARPs?

B.A.C.A.H. says

mell says

I have been working with a realtor and while it's true that the nice houses which are also good deals in the burbs usually sell relatively fast I have not seen any bidding wars or multiple offers. Usually an offer comes in around the ask and gets accepted. Many sellers try to overprice and you can find plenty of properties sitting on the market for months. If you take zillow for reference I assume the real home value to roughly 10-15% below what they list.

Where?

Anywhere but SF is on the table, likely north of. Eventually out of state.

MAGA says

I'm amazed at houses going pending after only a couple days on the market. Unless the property is a exceptional deal, no way would I be buying right now.

If you are already on the property ladder and just swapping properties you can’t lose. We bought in 2011 and our home doubled in price. We are now deciding in the next year whether to buy a slightly bigger and fully done home a little further out in the burbs or to just stay put and upgrade our current home that’s closer to city and work. My work has floated permanent work from home for me... so it will depend on that coming to fruition or not.

Buying a first home without home equity to cash in on at the same time is riskier.

Compare the price to the annual rent divided by the current interest rate.

If the price is higher than that rent / interest rate, then the house is overpriced.

Example: rent of $12,000 per year, interest rate of 0.04 => value of house is 12000 / 0.04 = $300,000

I just sold the last of my investment properties. I bought my properties during the housing crash. The purchase prices were below the insurance replacement price by quite a bit. Therefore, the value of the land was a negative value. This occurred across broad swaths of America. Yes, even in the Inland Empire the banks were paying people to take the land. Wall Street hedge funds swooped in and scooped up about 7% of America's housing stock at better than giveaway prices.. This was done mostly with money loaned by the banks that the government bailed out. They were bought from the banks through short sales and foreclosure auctions, sometimes in bulk. This was a huge transfer of real wealth from the middle class to Wall Street. There were about 8 million foreclosures. Anyone with cash and/or intact credit could participate because the market was so vast.

Nowadays, the value of an acre of land is not a negative figure, but instead is quite valuable. I never met the person who bought from me. He trusted his Realtor, placed a purchase order sight unseen to buy the house at $5k over asking, and bought using an FHA loan with 3,5% down.

While it is possible that real estate prices will continue their trajectory to the moon, I have decided to watch how things play out with a big bag of popcorn.

I've tried to convince my wife that we should sell and pocket the profits, and rent for a few years in the same location. Our little community has a history of price swings.

But she doesn't want to move again. /sigh

rocketjoe79 says

I've tried to convince my wife that we should sell and pocket the profits, and rent for a few years in the same location. Our little community has a history of price swings.

But she doesn't want to move again. /sigh

She's smart and knows that trying to time the RE market is a bad strategy.