Fed cuts rates by .5%

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Fed cuts rates by .5%

Michael BaumPro Member

Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes

Just announced. More than many thought including me. I figured 1/4 point then another in a couple of months.

Should be interesting to see how things shake out.

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Chris SeveneyBusiness Member

Moderator

Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

2y

@Michael Baum

I believe they noted to be another 1/2 point and down to 4.5 by end of year, 3.5 by end of 2025 and 3 by end of 2026.

Again mortgage rates are closerly correlated to 10 year not short term rates - so we can see how that reacts and how investors price the 10 year to gauge mortgage rates

I think people think rates will drop tomorrow but the last month rates have been dropping knowing the fed was reducing rates

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Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
2y
Quote from @James Hamling:

Wow, have fun in your eco-chamber.
Last I checked, Hong Kong wants nothing to do with mainland China. Beyond that this isn’t about East vs West, it’s specifically China and Russia where the management of the BRICS currency will be based, which are 2 of the most untrustworthy countries in the world when it comes to human and property rights.

Which is why there are more Chinese people parking their capital here than the other way around, and same goes for Russians with Western Europe.
2 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Jon Martin:

Quote from @James Hamling:

Wow, have fun in your eco-chamber.
Last I checked, Hong Kong wants nothing to do with mainland China. Beyond that this isn’t about East vs West, it’s specifically China and Russia where the management of the BRICS currency will be based, which are 2 of the most untrustworthy countries in the world when it comes to human and property rights.

Which is why there are more Chinese people parking their capital here than the other way around, and same goes for Russians with Western Europe.

BRICS..... How about INDIA.....
Look, fact is the #1 reason why BRICS hasn't kicked the USD's butt all over the planet yet is because the BRICS can't get there sh_t together on a unified reserve currency that is up to the task. RU ruble, no, even RU knows that. Yuan, many arguments for that but they know it's not adoptable internationally due to CCCP ability and actions to readily manipulate it at will. That's really it, that's the last piece to the puzzle.
They sort that circus out, USD is in very serious trouble. Especially if they do it in a decentralized manner, which they seem to be leaning towards doing given the 40+ new countries entering BRICS sphere of recent.
You need to do more then regurgitate what your media is feeding you Jon, get out in the world, read market news as in reports of the actual things happening not opinion pieces telling you what to think. The US is on a SIGNIFICANT decline, that's just reality. As is the "west" in large part.
The BRICS, reality is they control such a massive vast majority of world population, land and resources it's ridiculous. India, China, Russia, Brazil and South Africa...... Think about the positioning of these places, these are also strategically placed. Oil, minerals, you name it they have it in VAST supply.
Tell me Jon, when is last time you were in a BRICS nation? When is last time you saw with your own 2 eyes?
0 Reply
Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
2y
Quote from @James Hamling:
BRICS..... How about INDIA.....
Look, fact is the #1 reason why BRICS hasn't kicked the USD's butt all over the planet yet is because the BRICS can't get there sh_t together on a unified reserve currency that is up to the task. RU ruble, no, even RU knows that. Yuan, many arguments for that but they know it's not adoptable internationally due to CCCP ability and actions to readily manipulate it at will. That's really it, that's the last piece to the puzzle.
They sort that circus out, USD is in very serious trouble. Especially if they do it in a decentralized manner, which they seem to be leaning towards doing given the 40+ new countries entering BRICS sphere of recent.
You need to do more then regurgitate what your media is feeding you Jon, get out in the world, read market news as in reports of the actual things happening not opinion pieces telling you what to think. The US is on a SIGNIFICANT decline, that's just reality. As is the "west" in large part.

I would agree with you that India is the bright spot among the 5. Democracy, solid demographics, well educated, diversified economy. I would also agree that Brazil has the foundational pillars if they can solve their corruption and trust issues.

As for Russia, most of the smart kids left and the rest of the men are at risk of not making it out alive. Plus they are largely a commodity based economy. China is natural resource poor and dependent on the rest of the world to fill that void, and with cheap labor drying up they will lose some ground on the manufacturing side.

“The BRICS, reality is they control such a massive vast majority of world population, land and resources it's ridiculous. India, China, Russia, Brazil and South Africa...... Think about the positioning of these places, these are also strategically placed. Oil, minerals, you name it they have it in VAST supply.”

That’s interesting because last I checked, USA had the most agricultural and oil exports? We arguably have the best geography because we can’t be walked to by a 100+ nations. Given our diverse economy of both commodities and tech, I think we will do fine if the world decides to go multi polar or even isolatonist.

“Tell me Jon, when is last time you were in a BRICS nation? When is last time you saw with your own 2 eyes? “

I was in South Africa, Hong Kong and Turkey in 2018/19. I’ve spent 6 months in Brazil over several trips. Sold products for my day job in South America. So yeah- I’ve been around. It’s easy to prop up countries from afar, but once you are on the ground you realize that they struggle with a lot of the same issues as we do. Plus, democracy has a way of showing its warts, whereas dictators jail and kill the people who try to expose them, which makes them fester more.
Which relates to this gem you just posted:

“Problem is the lying is so rampant, hell it's "main-stream" now for cooked-books and out-right lying in reports. 0 accountability anymore, 0.”

. . . Because China and Russia are so well respected on the world stage for their transparency and honesty right? Lolz. This is why the BRICS won’t live up to the hype- there is no trust, which is one of the foundational pillars of a successful currency.

2 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Jon Martin:

Quote from @James Hamling:
BRICS..... How about INDIA.....
Look, fact is the #1 reason why BRICS hasn't kicked the USD's butt all over the planet yet is because the BRICS can't get there sh_t together on a unified reserve currency that is up to the task. RU ruble, no, even RU knows that. Yuan, many arguments for that but they know it's not adoptable internationally due to CCCP ability and actions to readily manipulate it at will. That's really it, that's the last piece to the puzzle.
They sort that circus out, USD is in very serious trouble. Especially if they do it in a decentralized manner, which they seem to be leaning towards doing given the 40+ new countries entering BRICS sphere of recent.
You need to do more then regurgitate what your media is feeding you Jon, get out in the world, read market news as in reports of the actual things happening not opinion pieces telling you what to think. The US is on a SIGNIFICANT decline, that's just reality. As is the "west" in large part.

I would agree with you that India is the bright spot among the 5. Democracy, solid demographics, well educated, diversified economy. I would also agree that Brazil has the foundational pillars if they can solve their corruption and trust issues.

As for Russia, most of the smart kids left and the rest of the men are at risk of not making it out alive. Plus they are largely a commodity based economy. China is natural resource poor and dependent on the rest of the world to fill that void, and with cheap labor drying up they will lose some ground on the manufacturing side.

“The BRICS, reality is they control such a massive vast majority of world population, land and resources it's ridiculous. India, China, Russia, Brazil and South Africa...... Think about the positioning of these places, these are also strategically placed. Oil, minerals, you name it they have it in VAST supply.”

That’s interesting because last I checked, USA had the most agricultural and oil exports? We arguably have the best geography because we can’t be walked to by a 100+ nations. Given our diverse economy of both commodities and tech, I think we will do fine if the world decides to go multi polar or even isolatonist.

“Tell me Jon, when is last time you were in a BRICS nation? When is last time you saw with your own 2 eyes? “

I was in South Africa, Hong Kong and Turkey in 2018/19. I’ve spent 6 months in Brazil over several trips. Sold products for my day job in South America. So yeah- I’ve been around. It’s easy to prop up countries from afar, but once you are on the ground you realize that they struggle with a lot of the same issues as we do. Plus, democracy has a way of showing its warts, whereas dictators jail and kill the people who try to expose them, which makes them fester more.
Which relates to this gem you just posted:

“Problem is the lying is so rampant, hell it's "main-stream" now for cooked-books and out-right lying in reports. 0 accountability anymore, 0.”

. . . Because China and Russia are so well respected on the world stage for their transparency and honesty right? Lolz. This is why the BRICS won’t live up to the hype- there is no trust, which is one of the foundational pillars of a successful currency.

You are so drunk on the slogan you miss it all don't you Jon.

The #1 thing the "west" had over BRICS was a moral superiority. Stability via clarity and integrity. And now, all the BS of the west, we have now destroyed our competitive advantage, and now the 'west" is a lot more like RU and China than not in that regard. Thus, it's not such an issue anymore the fkery those 2 do in those regards.

not to mention the US going hard HARD Left with ultra lgbtqxrz15qqfsdb whatever it is this hour, reality is most of the world is rather conservative in such and does not regard drag-queen book hour with kids as anything good, so in that RU is looking more the moral high ground to most in the world now.

And when you say China is dependent on west for resources, is resource poor..... Sorry, done right there because you obviously are clueless and just talking out your arse.
China is the resource power-house.
Tech is reliant on China. Do your research, real actual research, learn a thing or two on this.

I don't know what you mean when say it's easy to prop up countries from afar. Are you meaning me? Oh, sorry, last time I was in a BRICS nation was January, 2024.... Yuuup, so, you assumed wrong, yet again.

Look, your clearly not open to any facts so this is pointless. I have lent facts, you reply with opinions, this is just go on forever long as your locked into opinion bias.

Me, personally, I am NOT a fan of BRICS, not in the least. But I am a realist, I accept things for what they are and move forward. I am results based. And those facts are the US is loosing, and we have idiots in charge because we select idiots, who's focus is there personal power, personal enrichment, not the job, the country, the long term ramifications.
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Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
2y
"The #1 thing the "west" had over BRICS was a moral superiority."

LOL, no, not even close (but maybe also that). The west has far more democracies, better ability to depose of leaders, less dictators, more equal rights, greater transparency, more accessible property rights that are enforced in courts, more trustworthy banking systems. . . The list goes on. The countries in the East where this is also true tend to be more cozy with the US than they are with China.

Try wearing a Ukraine flad in Russia or a Free Tibet or Uiygur shirt in China and let us know how that goes for you.

"not to mention the US going hard HARD Left with ultra lgbtqxrz15qqfsdb"

I agree that this is crap is absurd, but that has little to do with global currency trading and trust is foreign banks and currency markets.

"And when you say China is dependent on west for resources, is resource poor..... Sorry, done right there because you obviously are clueless and just talking out your arse."

I said they were dependent on the world for resources, not the west. That's why they invest so heavily in Africa and other nations. If every country were cut off from each other, China would have a tougher go at going alone than many.

"Tech is reliant on China. Do your research, real actual research, learn a thing or two on this"

More of your condescending garbage. Do I need to post photos of my passport stamps? Happy to do so. The US and Taiwan lead the world in semiconductor technology.

"I don't know what you mean when say it's easy to prop up countries from afar. Are you meaning me? Oh, sorry, last time I was in a BRICS nation was January, 2024.... Yuuup, so, you assumed wrong, yet again."

No, another one of your reading comprehension fails and false assumptions. I'm saying the grass is always greener. Autocratic governments tend to have even more issues because the issues are hidden from the public and nobody within those institutions wants to risk pushing them up the chain to get solved.

"Look, your clearly not open to any facts so this is pointless. I have lent facts, you reply with opinions, this is just go on forever long as your locked into opinion bias. "

More projection. My point is that you are pointing out everything that is wrong with the US while saying that everything else in the rest of the world is rainbows and unicorns. My point is that we all have our problems, it's simply easier to notice our own because we live here and we have a free media that can talk about them openly.

"Me, personally, I am NOT a fan of BRICS, not in the least. But I am a realist, I accept things for what they are and move forward. I am results based. And those facts are the US is loosing, and we have idiots in charge because we select idiots, who's focus is there personal power, personal enrichment, not the job, the country, the long term ramifications."

And again- these countries are run by geniuses who do everything right? Many Latino immigrants in the US lived through bank appropriations in the 70-00s. China and Russia don't even pretend to have an honest banking system. Do you really think that the rest of the world is going to trust countries with that track record?
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y

Oh, that's your evidence for how "superior" the US to everywhere else........ Ok, try wearing a pro-Trump shirt or a carry a Trump 2024 flag in, oh, name your left "pillar of greatness"......

I'd have better chances of survival skipping down central ave Tehran with a Yamika singing fiddler on the roof tunes, in Yiddish, than I would just walking through parts of CA carrying a Trump 2024 flag...... Or Portland, or or or....

At least in Iran, they'd just assume I'm nuts and bring me to the hospital, lol.

0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Jon Martin:

"The #1 thing the "west" had over BRICS was a moral superiority."

LOL, no, not even close (but maybe also that). The west has far more democracies, better ability to depose of leaders, less dictators, more equal rights, greater transparency, more accessible property rights that are enforced in courts, more trustworthy banking systems. . . The list goes on. The countries in the East where this is also true tend to be more cozy with the US than they are with China.

Try wearing a Ukraine flad in Russia or a Free Tibet or Uiygur shirt in China and let us know how that goes for you.

"not to mention the US going hard HARD Left with ultra lgbtqxrz15qqfsdb"

I agree that this is crap is absurd, but that has little to do with global currency trading and trust is foreign banks and currency markets.

"And when you say China is dependent on west for resources, is resource poor..... Sorry, done right there because you obviously are clueless and just talking out your arse."

I said they were dependent on the world for resources, not the west. That's why they invest so heavily in Africa and other nations. If every country were cut off from each other, China would have a tougher go at going alone than many.

"Tech is reliant on China. Do your research, real actual research, learn a thing or two on this"

More of your condescending garbage. Do I need to post photos of my passport stamps? Happy to do so. The US and Taiwan lead the world in semiconductor technology.

"I don't know what you mean when say it's easy to prop up countries from afar. Are you meaning me? Oh, sorry, last time I was in a BRICS nation was January, 2024.... Yuuup, so, you assumed wrong, yet again."

No, another one of your reading comprehension fails and false assumptions. I'm saying the grass is always greener. Autocratic governments tend to have even more issues because the issues are hidden from the public and nobody within those institutions wants to risk pushing them up the chain to get solved.

"Look, your clearly not open to any facts so this is pointless. I have lent facts, you reply with opinions, this is just go on forever long as your locked into opinion bias. "

More projection. My point is that you are pointing out everything that is wrong with the US while saying that everything else in the rest of the world is rainbows and unicorns. My point is that we all have our problems, it's simply easier to notice our own because we live here and we have a free media that can talk about them openly.

"Me, personally, I am NOT a fan of BRICS, not in the least. But I am a realist, I accept things for what they are and move forward. I am results based. And those facts are the US is loosing, and we have idiots in charge because we select idiots, who's focus is there personal power, personal enrichment, not the job, the country, the long term ramifications."

And again- these countries are run by geniuses who do everything right? Many Latino immigrants in the US lived through bank appropriations in the 70-00s. China and Russia don't even pretend to have an honest banking system. Do you really think that the rest of the world is going to trust countries with that track record?

Your a waste of my energies. You run wild with assumption, infer things I never inferred or stated, disregard facts, disregard the points I am making, regurgitate talking points, invent wildly false "facts? for example "the us and Taiwan lead in....." no, it would just be Taiwan, the US produces diddly squat in contrast to Taiwan or, really anywhere for that matter, measuring domestic production vs domestic production. And no, assembly is not manufacturing, it's assembly.
I never stated anywhere else is great, to any degree, not a once, look back at my actual words not the voices in your head.
What i point out, is the rest of the world is not some weak frail helpless thing in dire need of the US as it was post WWII. And BRICS is resource rich, more so than the US.
BRICS is rising, growing, being pro-active and the US is doing what..... coasting on yester-generations.
Africa is a GREAT example, BRICS is "on it", they are securing there future, Africa is "the" resource jewel in the world and US is just doing nothing as BRICS secures it all and runs there tentacles deep.
You speak of some rediculous BS that Russia is without anything, China, India, on and on how if not west it's shiit and if it's good it's west, even if it's say indo-pacific, lol.
Look, Saudi, are they "good"? There "west" by many measures and they have one of the most oppressive everything or anywhere on earth.
Fact is, US is slipping big time. Were running on achievements and advantages long gone, that is the point. And yeah, the melt-down of our society does matter when were trying to convince the planet to use our USD as world reserve, it does matter that the society backing it is a dumpster fire, that = volatility.
The US "democracy" is a faint, it's a perception of choice and that curtain has been recently drawn back and literally out-right stated, in relation to why Trump is such a threat as he threatens those prevailing powers who control things, without elections, since '47'.
Ever wonder why it's called right wing or left wing? Because there each just 1 side of the same vulture.
0 Reply
Maxwell Hines
Member since 2024 · 3 posts · 1 vote
2y
Economy is fine. The uncertainty and worry is more so with the labor market than inflation (fed dual mandate) hence the 50bp cut. Bond markets had 50bp cut at 60% odds before the announcement. It's not a big surprise by any means even if 40% of people assumed 25. JPowell might land this thing...he may not.. will continue to look at the data as he's said forever but looks like they've got eyes on labor
1 Reply
Paul Azad
Member since 2024 · 162 posts · 232 votes
2y
China has the best economic growth of any major nation in the world over the last 30 yrs from 1994, but Shanghai Comp is actually negative in real terms over that time, while SP500 up 1136%, why?
Well, do you trust anything in a Chinese company's 10-K?, no one else does either. They have millions of slaves and indentured servants who make our I-phone 16's, and almost everything Americans buy at Wal-Mart and Costco, but still their stocks can't catch a sustained BID.
Is America the Greatest Country on Earth? Did the Trojan Horse have a wooden dick?
of course it is, no one's swimming across oceans to get into China, nor India, nor Russia, nor Saudi Arabia, and why not?
America has the 3 enlightenment Pillars that are true Civilization. 1) Rule of Law, 2) Freedom of speech/conscience, and 3) One life One vote
These 3 ideas are the air we breathe and water in which we swim, and give rise to actual and enforceable property rights, which allows for people to safely save, safely invest, safely create, and safely live a full and expressed life. Are we perfect? Heck no, but we are better than all the alternatives. And each generation has a chance and duty to get us all closer to perfecting that Perfect Union.
Freedom!!! (imagine Mel Gibson's voice at end of BraveHeart) :)
1 Reply
Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
2y
Quote from @James Hamling:

Nowhere did I say "superior" and nowhere did I limit what I said to the US. These are western society values.
The difference is that you won't get arrested in San Francisco and potentially do years in prison for wearing a MAGA hat.
1 Reply
Jon Martin
Member since 2022 · 1k+ posts · 1k+ votes
2y
@James Hamling "Your a waste of my energies. You run wild with assumption, infer things I never inferred or stated, disregard facts,"

Um, really? How many times now have I pointed out in this very thread where you changed a few key words and then formulated an argument against it? That is the definition of a Strawman argument.

""the us and Taiwan lead in....." no, it would just be Taiwan, the US produces diddly squat in contrast to Taiwan"

The USA and Netherlands make the machinery that is required to make the make advanced semiconductors.

"And BRICS is resource rich, more so than the US."

If you combine them all together, sure, but the US still has a vast natural and intellectual resource base. China is more dependent on natural resources from elsewhere than the US.

"And yeah, the melt-down of our society does matter when were trying to convince the planet to use our USD as world reserve, it does matter that the society backing it is a dumpster fire, that = volatility"

Like I said, the culture wars stuff in the US is insane, but why don't you also take an honest look at the social and demographic issues that these countries are dealing with? I'd rather live in a country where there is confusion about what a woman is, than a country where women have minimal rights or where they are in short supply because of failed social engineering policies.

"The US "democracy" is a faint, it's a perception of choice"

Again- is there a more democratic and less corrupt BRICS country that we can look to?

You still haven't touched the trust issue in regards to how confident the rest of the world will be in this new currency. If the people of those countries don't even trust their own banks, and instead put USD under the mattress and buy real estate in Europe and the US to store their wealth, what makes you think there will be any trust in this new currency?
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Jon Martin:

what makes you think there will be any trust in this new currency?
Because of the weakness's each individual BRICS presents.
There weakness is there strength, if they use it for strength.
No 1 of the individual could replace USD, no, only China and that's a GIANT "if" requiring nothing less than radical change of their entire system of governance and social framework of such that's rooted many many generations long so, all but no chance there alone.
And they know this. Putin is one of if not the greatest strategist alive. Anyone who infers he is any form of an idiot is themself a fool, just because he is an enemy do not ever disregard the enemies genius. He is "the" KGB master strategist, what he was able to achieve through strategy and guise is only paralleled by Adolf Hitlers rise from private in a jail cell to Fueler.
So it would need be decentralized of a singular nations control. This would enhance the need for a founding basis to make such a strength. BRICS has resources, and that is the only thing that could tie. If BRICS was joined by OPEC, that's it, game over for USD and "west".
Think Euro, but instead of common trade and societal alignment, instead common trade of resource, international resource, and alignment in such. Oil is literally the life blood of modern civilization. Oil, gas, energy.
But, there would be sacrifices for this alignment. Each "bending the knee" as it were to this unified currency and I bet ya that's the sticking point, thankfully. Each has tried pressing trade in other currencies, to some significant success. No, not significant volume, the success is just in fact of any placating to it at all, that shows USD vulnerability. Think of it like an Alpha, to see if it's even potential.
The only shot they got, it would have to be decentralized of any 1 of there governments, decentralized of any one of there currencies, decentralized of any one of there controls, and thus backed, back by something of unifying power, weight and importance that transcends religion, region, culture.
The USD's current greatest strength is not in the USD, it's int he BRICS bickering and self-serving nature for power leverage. If they came aligned, a union, done.
Because as mentioned, most are not US fans, many of our allies are allies of situation not desire. Turkey is a great example. But even half of Europe is loveless allies. Given a real alternative, yes, I have upmost faith all too many would love to join the group in taking a hatchet to Uncle Sam's knees.
These facts are not to bad talk the US, hell I am a citizen. But to fix a problem you must first acknowledge it exists. To live in denial is to empower the enemy and the downfall. At a certain point complacency becomes complicit.
We have a MAJOR economic issue at hand, massive. We are in the last cycles of society, and if we don't wake up to it and take actions it will complete that cycle, and in 20 years it will all be vastly different. Yes, we are that close. Because so many do as you've done and just want to remain blind to fact US is not half as dominant as we were just 10 years ago.
China is not resource poor, I have no idea where you keep getting this notion, it's not based in any fact at all. They were poor in development, the ability to utilize there resources, to tap such. And we just spent a decade fixing that for them, developing there nation because we wanted cheap exports. They let us f ourselves. Smart.
Now China is leagues beyond where they were before, and capable to continue forward.
The US is not self sustaining when it comes to tech, in an isolationist world. We would be f'd. Because we are reliant on China for some of the key natural resources for tech manufacture, as China has majority of known supply for some of it. Hence why location of most of manufacturing in Taiwan, it's about proximity to the inputs.
So sure, US would be fine from an agrarian standpoint in isolation. But, tech would come to a screeching halt for US. China would dominate.
Not to mention in an isolationist world, China would take Taiwan and Hong Kong back in full, as well as who knows what else, hell maybe the whole Pacific.
I already said do some actual research to get informed vs pretending to know what your talking about, you decided more opinion pretending as fact is what was asked for. So ok, here ya go, I started the journey for ya with the simple google search below, how about ya take me up on the advice and digging deeper to find out the reality and how wrong whatever BS source of opinion you were using was (it was MSNBC wasn't it....)
0 Reply
James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Quote from @Jon Martin:

Quote from @James Hamling:

The difference is that you won't get arrested in San Francisco and potentially do years in prison for wearing a MAGA hat.

Aaaaaa, not to sure on that one.
You'd loose your job, get refused service, spit on, threatened, assaulted, told you should die, threatened of reprisals. Just because ya don't go all the way to public execution, yet, does not make it ok or different. It's the same, just as deranged, just not yet to the same extremes.
Yet.....
0 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
A lot of people seem to confuse inflation with prices. If inflation is "over" prices are not coming down, they just go up slower.
Prices will never come down again, we have devalued the dollar. You have to bring now more paper to buy the same house.
There is also some confusion on the FED step to lower rates a little. In race car terms, what the FED is doing is they are easing off the breaks, as they are coming out of the corner. Foot is still on the break, just not as hard. No throttle yet.
In terms of rate cuts, the US is actually late, the European Central Bank has been dealing with inflation even higher than we did and they are already on their second cut and now at 3.5%. Canada and UK and also already cut rates.
1 Reply
Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
2y
BRICS sounds great in theory, but they lack uniform cultural values, which makes collaboration really hard. The West has similar values, culture, religion - we all watch the same Hollywood movies that shape to some degree how we view the world.
Imagine Brazil and Iran: one of them is used to bikini ladies in Rio, the other one is more for keeping them wrapped up. Or India and China: the Chinese will never understand the Indian cast system and the gap in language, culture, religion etc is enormous. Every meeting these countries have has to follow international diplomatic protocols because as soon as they go off script they are lost. They can't just go an play a round of golf together - anyone who has ever worked in a global organization understands those things are a necessary lubricant to make things work. Without them, it is still possible, but much harder and takes longer.
1 Reply
V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Marcus Auerbach:

A lot of people seem to confuse inflation with prices. If inflation is "over" prices are not coming down, they just go up slower.
Prices will never come down again, we have devalued the dollar. You have to bring now more paper to buy the same house.
There is also some confusion on the FED step to lower rates a little. In race car terms, what the FED is doing is they are easing off the breaks, as they are coming out of the corner. Foot is still on the break, just not as hard. No throttle yet.
In terms of rate cuts, the US is actually late, the European Central Bank has been dealing with inflation even higher than we did and they are already on their second cut and now at 3.5%. Canada and UK and also already cut rates.

US usually always trails and the other countries do it quicker due to desperation. They don't have the ability to remain afloat due to a mix of mockery of the system(saying its all good) and being significantly more resilient(a good thing) than those other countries.

It's now practically 50/50 we get another .5bps cut, just prior to Wednesday meeting it was 25% chance of getting that 50bps cut(from an original 50bps cut).

Long way to go to Nov 7 though, and it's post election so we shall see.

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Collin HaysBusiness Member
Property Manager · Gatlinburg, TN · Member since 2020 · 3k+ posts · 4k+ votes
2y
Quote from @Paul Azad:

For the last 20 years the Federal Reserve's dual mandate has been to prop up both the SP 500 and the Nasdaq, not its purported goal to maintain price stability and maximize employment. 5 days ago a collection of Democratic senators wrote a letter haranguing Jerome Powell and asking him to cut by 75 basis points. And four years ago, we all remember Donald Trump threatening to fire Jerome Powell if he didn't cut interest rates further at a completely unnecessary time, other than to help him try to win re-election. Both parties as long as I can remember want interest rates at 0. in order to inflate the assets of their donor pool which holds stocks, bonds and real estate. If you listen to the end of Powell's speech yesterday the most important part was rarely commented on by the media which is when he said, We will continue reducing the balance sheet. translation, They are continuing to let Mortage backed securities and US Treasuries roll off without renewed purchases. They have been doing this for two years now, and it is what's called quantitative tightening, The opposite of the quantitative easing over the past 15 years. This quantitative tightening fights inflation, and Most economists estimate that it adds another 100-150 basis points implicitly to the Fed funds rate so we have really been at 6.375 to 6.675% the last year. But now inflation has been tamed, core PCE run rate at 1.9% now, and headline CPI at 2.5%. So why would the FED fight itself by doing Q.T. and cutting FedFunds Rate at the same time, as they have the opposite effect?
I don't know, but I suspect, it's just to inflate the Markets which were up 2% today. One of the 800 economists who work there may have told them that since they decreased the M2 money supply by 4% over the last 2 years and currently now growing at only 1.26% not the pre-covid 6%, that they have stalled the plane, so forget the soft landing, get ready for some CHOP. So, they should have cut yesterday by 100, and they should have cut in July, but they don't want to crash the Markets (their true masters-as they are appointed by politicians beholden to asset owning donors). I think they will stop the quantitative tightening soon as well, but it won't help. Inflation will continue to fall/unemployment to rise/the insider c-suite/director Sell/Buy ratio now over 25, (so the dudes running America think a Recession or hard landing is coming). So put your trays and seat backs in the upright position because we are probably in for a Hard Landing or at least a lot of turbulence.

Good commentary.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @Paul Azad:

China has the best economic growth of any major nation in the world over the last 30 yrs from 1994, but Shanghai Comp is actually negative in real terms over that time, while SP500 up 1136%, why?
Well, do you trust anything in a Chinese company's 10-K?, no one else does either. They have millions of slaves and indentured servants who make our I-phone 16's, and almost everything Americans buy at Wal-Mart and Costco, but still their stocks can't catch a sustained BID.
Is America the Greatest Country on Earth? Did the Trojan Horse have a wooden dick?
of course it is, no one's swimming across oceans to get into China, nor India, nor Russia, nor Saudi Arabia, and why not?
America has the 3 enlightenment Pillars that are true Civilization. 1) Rule of Law, 2) Freedom of speech/conscience, and 3) One life One vote
These 3 ideas are the air we breathe and water in which we swim, and give rise to actual and enforceable property rights, which allows for people to safely save, safely invest, safely create, and safely live a full and expressed life. Are we perfect? Heck no, but we are better than all the alternatives. And each generation has a chance and duty to get us all closer to perfecting that Perfect Union.
Freedom!!! (imagine Mel Gibson's voice at end of BraveHeart) :)

Agreed with the great @Collin Hays @Collin Hays @Collin Hays
Well put, watch what they are doing not what they are saying.

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Paul Singh
Member since 2024 · 3 posts · 1 vote
2y
Nobody has a magic 8 ball, but here’s my guess: after a decade-long bull run and skyrocketing home prices, things are feeling shaky. Job numbers? May not be the whole truth. That 0.5% rate cut? Just the opening act.
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Andrew Strauss
Accountant · Pasadena, CA · Member since 2014 · 102 posts · 36 votes
2y
Exactly, it will be interesting. 50bps cut already done and remaining 50bps cut expected in this year itself. I think mortgage notes will go for significant re-pricing.
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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
2y
Ok, so here is some data on mortgage rates today. Curious if anyone can say what this math is telling us? No, I am not asking, I know, I am curious how many others know, and thoughts on it.
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Ivan Terrero
Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes
2y
@Paul Azad This.....
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
2y
Quote from @James Hamling:

Ok, so here is some data on mortgage rates today. Curious if anyone can say what this math is telling us? No, I am not asking, I know, I am curious how many others know, and thoughts on it.

Notice when the announcement was and the 10 year since.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2y
Quote from @Mike H.:

I think when you can start seeing rates in the low 5's, people will start to jump back in again. But I still believe we have a huge supply and demand issue and the government needs to do something to spur new construction. As it is, there are more households forming than there are new construction starts coming online. Way more.

And there are also more people locked in with rates in the 3's or low 4's, that may never sell their house because they can't part with that financing.

I saw a mention of providing first time homebuyers more down payment assistance. That doesn't do anything but help people buy homes that probably can't afford to do so.

What I'd like to see is the government pay down a mortgage rate for X number of years if a buyer buys a new construction home. We have to create real demand for growth in new construction if we're going to fix the problem - and its a big problem.

If rates were to come down to 5.5%, then the govt could offer to buy down the rate to 4% for say 7 years. I think that would cost 225/mo? or 2700 a year? Do that for 5 years of the 30? It would cost the govt 15k but think of all the jobs it would generate in new construction and taxes it would add to the states. Maybe the states could kick in some of that 15k too.

Plus they'd get money back from the taxes on the builder's profits. If the builder makes 30k on a house, the govt is getting 4k to 6k in income taxes. Not to mention the taxes they get on salaries of the construction workers.

where I have seen this work and can be done at state county and city level is property tax abatements. Portland did this in their pearl district it was a defunct area with a bunch of old buildings that were functionally and economically obsolete ( probably like many city cores) but prime locations and all the infrastructure is already there.. They gave developers tax breaks and then the buyers of these new units got a 10 year tax abatement no prop taxs for 10 years. That changed the whole area its now all condo's of course not starter housing but it worked to transform an area. Starter housing on the west coast is pretty tough unless the govmit buys the land and donates it.. land cost are huge part of it.. but in cities were you have lots that are basically worthless as existing homes cost less than it cost to build.. those could be targets.
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Dustin TuckerBusiness Member
Lender · Savoy, TX · Member since 2020 · 195 posts · 80 votes
2y
@Michael Baum Crash imminent, you cant have an 800,000 negative job revision and have a strong economy.
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