Who thinks this next Covid Relief bill is being handled well?

[Guest]

@"JimmyinSD" said:

@"BigAl99" said:

@"JimmyinSD" said:

@"AGRforever" said:

@"BigAl99" said:

@"AGRforever" said:
we arent going to raise rates. The fed picked this path long ago during the obama administration. Come hell or high water, print and print big. 

Why do you assign it to the Obama admin and not the aftermath of the Bush admin?  Just curios, have heard, somewhere, the economy may have had something to do with fiscal policy at the time.  How did that work out, I mean we did get tax cuts in the aftermath, or is that not work in your narrative. 

Ummmmmm......because we didnt raise rates off zero for Obamas entire term....that is until the moment Trump was elected....and he became a lame duck.

We should have been raising rates in early 2011. We should have had intrest rates availible to cut for the next recesion in 2012 but those cuts would have slowed Obamas economy down and we certainly couldnt have that. 

Even if we didnt raise rates the Fed could have stopped its quantitative easing earlier or even ***gasp*** started quantitative shrinking as early as mid 2012 or so instead of waiting till Trump was president to contract the economy by $50Billion per month at its peak. 

Think what you want, but the Fed was in the bag for Obama and did everything in their power to make Trumps economy look bad. 


https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

people can say what they want,  but inflation is real and its happening hard core.   building costs are double and triple what they were just a year ago,  some of this is covid related due to mfg shutdowns,  but much of this is simply demand,  all I keep hearing when I see people spending stupidly on materials is how money is so cheap they have to use it.   My question is once interest rates are raised,  and all this buying slows down and material prices come back down to earth... what happens to all these homes and buildings that are being built with these hugely  inflated prices?  right now a $300k home is costing upwards of $500k to build in many areas,   when the market goes back to $300k to build a home,  how do those people in these newer homes handle losing that $200k?  Its leaking over into the used home market as well and into about every other aspect of our economy,  except for food,  so far those prices are  still low somehow.

Time to start laddering CD's(certificates of deposit), my father made a killing doing that with his Fireman pension, late 70's.  He had one coming due every month, when he passed really took care of Mom, then she got into class c mutual funds from her banker, that sucked, deregulation of fiduciary role for banking institutions.

Yep My FIL had CDs in the 70s and early 80s that were paying returns that the stock market  wasn't touching in the 90s.  I've heard about it but never witnessed it myself,   would be nice as I get closer to retirement to find those safe investments that still paid double digit returns.  I doubt we ever see that again though.  I can't imagine its profitable enough for the bankers when the rates go that high,  since it encourages saving and all.

You can make some coin on investing in short term interest rates in an inflationary cycle, it's when the Fed is slow to react that things get bad.  My first home loan I locked in at a ~12% mortgage rate by signing a contract for preconstruction in a post freeze grapefruit orchard.  It was another percentage point if you waited till they cleared the land and it was more than surveyor stick lot's, the good old days of Florida real estate.  That's when ARMs and balloon payment evictions caused a lot of social mobility.  

Best bit of advice I ever pursued was learning " exactly" what is meant by a Monte Carlo distribution and ranking asset classes.  Was never a day trader, but there was always a few in the office and watching them learned a lot of things not to do.  Engineers with MBAs and the evolution of spreadsheet economics, what could go wrong.

[Guest]

@"AGRforever" said:

@"BigAl99" said:

@"JimmyinSD" said:

@"AGRforever" said:

@"BigAl99" said:

@"AGRforever" said:
we arent going to raise rates. The fed picked this path long ago during the obama administration. Come hell or high water, print and print big. 

Why do you assign it to the Obama admin and not the aftermath of the Bush admin?  Just curios, have heard, somewhere, the economy may have had something to do with fiscal policy at the time.  How did that work out, I mean we did get tax cuts in the aftermath, or is that not work in your narrative. 

Ummmmmm......because we didnt raise rates off zero for Obamas entire term....that is until the moment Trump was elected....and he became a lame duck.

We should have been raising rates in early 2011. We should have had intrest rates availible to cut for the next recesion in 2012 but those cuts would have slowed Obamas economy down and we certainly couldnt have that. 

Even if we didnt raise rates the Fed could have stopped its quantitative easing earlier or even ***gasp*** started quantitative shrinking as early as mid 2012 or so instead of waiting till Trump was president to contract the economy by $50Billion per month at its peak. 

Think what you want, but the Fed was in the bag for Obama and did everything in their power to make Trumps economy look bad. 


https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

people can say what they want,  but inflation is real and its happening hard core.   building costs are double and triple what they were just a year ago,  some of this is covid related due to mfg shutdowns,  but much of this is simply demand,  all I keep hearing when I see people spending stupidly on materials is how money is so cheap they have to use it.   My question is once interest rates are raised,  and all this buying slows down and material prices come back down to earth... what happens to all these homes and buildings that are being built with these hugely  inflated prices?  right now a $300k home is costing upwards of $500k to build in many areas,   when the market goes back to $300k to build a home,  how do those people in these newer homes handle losing that $200k?  Its leaking over into the used home market as well and into about every other aspect of our economy,  except for food,  so far those prices are  still low somehow.

Time to start laddering CD's(certificates of deposit), my father made a killing doing that with his Fireman pension, late 70's.  He had one coming due every month, when he passed really took care of Mom, then she got into class c mutual funds from her banker, that sucked, deregulation of fiduciary role for banking institutions.

you cant compare a CD to a mutual fund. Theyre two completley different types of assets. 

And as far as the CD rates over the years. Up until Obama when we unattached inflation and intrest rates from reality. 

If you take intrest rates and take out inflation plus taxes, CD rates have returned 2-2.5% year in year out. 

Yep that is exactly true, what I was getting at was my widowed mother was sold the mutual funds by the same place my father had set up the CD purchase schedule.  In the 80's there was a real move for deregulation to enable "creativity" in the market.  Savings and Loan, banks were allowed expand into market investing and also lower cash reserve holding's along with pension plan administrators.