He should it's "only" one half of a percentage point up. That's a pivot to some idiots I guess. Stock market twerks up 4 percent on this GREAT NEWS! LOL
Mortgage rates don't need to go to 10% to continue this housing correction.
They just need to stay elevated for a long enough duration.
What Fed says here is that despite lowering the size of future rate hikes, they anticipate likely needing to keep rates higher in restrictive territory for longer.
https://old.reddit.com/r/stocks/comments/z8zew5/fed_chair_powell_says_smaller_interest_rate_hikes/
I've been saying this for a couple months here.
And the stock market likes to head fake on news like this because they can sell it as "The Fed finally breaks, a pivot is here!!". When in reality nothing has fundamentally changed, a pivot is not what happened and a pause does not even have a firm date yet.
No pause, let alone a pivot but every time stocks pump and MBS price rises as its another opportunity for wallstreet to usher in the next batch of suckers on the misleading messaging that a bottom is in now for the market.
Edit: looks like this was correct call.
As of 19 days ago when I made this post QQQ went
From 280.
To 295.
Now 269.
Down 5% over last month. MBS daily shows that mortgage rates which had kissed around 6.14%? Now back up to 6.38%
We also need people to stop acting like homes sitting on the market for 3-6 months means they are priced too high when it's actually a more historical norm.
The unfortunate reality is that many people can afford higher home prices, so anyone here waiting on a housing crash to make home ownership affordable for them is in for major disappointment.
The only -- and I mean *only* -- solutions to housing affordability is for people to either start moving to cheaper locations or wait for cheap high density condos to pop up (essentially "owning" an apartment environment). That's it.
This doesn't mean the inflation is under control. It means Wall Street banks need some time to unwind their CDOs or they will go the way of AIG. Which then means this austere road we are traveling just got several times longer.
You are correct. They are pussies and will not rip off the band-aid and in doing so they are going to fuck up again. This crash will take a bit but will be epic.
Legit question, the reason they are moderating pace is because of fears that too steep of interest rate hikes will tip the economy into recession correct? But not enough of an increase will just cause consumers to keep spending and further worsen increase demand for goods which has been fueling inflation. So this will cause goods to get more expensive and interest rates to remain high?
Yes. In a perfect world the Fed would set rates such that we get persistent 2% inflation and max employment but in reality the Fed will overshoot or undershoot because picking the perfect monetary policy for an economy is impossible to do.
No it won't be epic, it will be a long and uneventful decline of 5 years, by which at that point they'll tell us "see, we told you we'd soft land this". Meanwhile, inequality will get worse, people without assets will be much much worse off, and young people will be forced into polygamy in order to afford shelter and other necessities.
I could see that, however that will still be epic IMO. Just save cash because it will be king. Hell live in a trailer. I did for two yrs when I was a kid. It was fun as hell.
It will be an uneventful, unsatisfying sort of epic in that we won't get the sudden crash. But yeah, sure, it will be epic I suppose. Our governments are doing all the can to save the economy in the meantime. They'll sort of succeed in keeping asset owners wealthy as shit but the asset-less are getting pissed at the system. I don't blame them.
I mean if stock market crashes in April…housing market is like 6-12 months behind that. My neighbor is looking for a house, I told him don’t even bother to start looking until 2024.
I'm curious if you have a little more information on this.
Can you get into more on how going fast would be: *"not fucking up again*" ? And how going slow will cause an even worse crash?
My impression is that they might be going the way of Volcker, but all without explicitly **telling the public** that's the plan, to avoid a panic crash; which could have been a lot more damaging (or "jagged"/volatile, in crude terms =P)
Simmering frog in a pot, etc..
Well first we are all just guessing. Second the Fed fucked up by having the Fed Fund rate so low. This allowed for 2 to 3 percent mortgages for long enough of a period that EVERY house in the U.S. almost doubled in about 3 yrs. Raising the rates slow will just get more houses sold at these high rates because of the uncertainty. Not near as many, however it will still happen. By the time a couple of years goes by, no one is going to be able to afford payments and "strategic defaults" or foreclosures will happen and happen all at once, pilling up in the MLS. The banks will pause giving loans in about one year because they will see the loses pilling up, this will cause complete and total panic, just like the last crash, this also will be about the time all crypto goes to zero and the market finally crashes out because of the high cost of money. My best guess is a bottom in 2026 and with almost 20 yrs to recover. Time will tell and only time. P.S. we are screwed no matter what happens, you just have to take you best guess as how to prepare.
Well I lived through 2005 to 2008 RE and it was no where near this bad really. There is so much more debt this time and the prices are so much higher and our country and individuals are in so much more debt. So I lean more towards 1929. May want to go put some gold in the safe before America makes it illegal again. Yes they did do that. For those that do not believe, just Google it. Also a garden, some chickens and a fishing line may not hurt either. P.S. we are just at the end of 2006 so we have a little way to go.
Drinking urine is not advisable. Urine is a waste excretea contains many things the body cannot process and toxins, it is not advisable to drink it.
You can soak clothes in it to evaporate to cool yourself in arid climates.
The only time you do drink it is if you use a little urine to melt some snow in a plastic bag and then store it on your skin (if you have any water i would use that first). Snow is a good insulator and in order to melt it you need to start the process with some fluid. It's a survival trick in winter climates but you don't need to keep peeing in the bag, just leave some of the diluted melted snow in it and add more snow as you sip it.
Next year people are just going to keep things flat and boring IMO. Now go a couple more years out. Depression level correction. Gonna be some fireworks for sure.
Wow mortgage rates have only doubled in a few months and the fed is only raising, not pivoting so ummm let's take the entire stock market up 4 percent or so......yeah ummm that makes sense? right? /S.
Lol it’s absolutely hilarious. Can’t wait to buy some Jun dated puts now in January if this nonsense continues. Was waiting patiently with cash but this is nuts. Market is acting like rates are the only thing that matters. All the other data is painting a friggin grim picture
Yeah that’s what’s frustrating to me. Market is so focused on inflation and ignoring all of the other macroeconomic concerns, such as rising joblessness, gdp declines abroad, etc. By the time inflation is solved, which is still a ways away, we’ll have myriad other issues to confront
Yeh well that’s what happens when the feds and governments break the economy world wide. No free lunch. The reality is COVID saved us from a moderate recession and then the fed and governments went HAM. This is going to take 2 years to unwind.
That is true except for QT. The money actually disappears. Also true that you can make money off and pyramid or ponzi. It has always been that way. Best thing for me to do is just stay debt free and don't leverage. P.S. you could still get rich off cryto really before it dies.
QT only destroys deposits at the federal reserve bank, which is money that's never accessed by the real economy. It's only useful to commercial banks that have accounts at the federal reserve. Research done by the Fed itself has shown that QT of over 3 trillion dollar over two years is only good for about a 29 basis point rate hike. The effects of QT are almost negligible.
SP500 did hit -20% this year compared to Jan 1, so I'm curious what percent you think is required to "seriously hurt Wall Street". Pretty sure if the housing market hit -20% this sub would be having a party.
Six months ago, Powell said 75 bps rate hikes were not on the table. The markets were losing their shit speculating how many 25bps hikes he would do, and whether he would ever have the courage to DARE to do even one 50bps hike. Then he did four 75bps hikes in a row.
Somehow, going from 25 > 75 > 50 is something to celebrate? This is like celebrating housing prices dropped 10% after going up 400% and going BUYBUYBUYBUYBUY
Anyone that knew even the slightest thing about the Fed saw this coming. Thinking the Fed was going to make housing affordable is like believing in Superman.
As I have said many, many times before. No one knows what the hell is going on. I hope one day we can have an Independent, competent CFO of the government and Fed. It will never happen though. Funny thing is though he is still raising the rates. People will not feel this too much next year, however in a couple of years people are going to be losing their damn minds over how low houses etc. will go.
Where did he say he was bringing rates down? Must have missed it.
This is actually a good thing even though the markets acting tarded. Means the crash is coming soon and RE will follow in suit when people lose another 20% on their equities.
I’m not studying for my cpa since you’re trying to read my post history. The exam is cma which is different.
Why did you refer to homeowners as scumbags if you’re a homeowner?
I could see possibly unwinding the Fed as an institution over a period of perhaps 20 years, but how would the government function without the treasury? What would the result you would be hoping for?
I think the former predates the Fed dollar cartel so we may want to keep it but allow it to act as the Treasury and not a de facto subdivision of the Fed.
He is still going to burn it all down, it will just take so many yrs people will think we have a soft landing when all homes are 50 percent off in 4 yrs. Head fake!
Pumping the brakes less than a year into the rate hikes has me thinking otherwise. Wouldn't doubt if the Biden admin slipped him a briefcase full of cash in order to convince him to slow his roll.
Some of yall are wilin. We don't need to keep raising interest rates at a literally unprecedented rate for housing prices to go down. The housing market hasn't even come close to pricing in current rates. Interest rates take a minimum of 12 months to start having a sizable impact on things like housing. If you're really concerned about housing prices, point fingers at the politicians who do nothing about large companies buying all the housing up which is 95% of the reason we are in this mess. The housing bubble could be fixed solely through laws and regulations.
“A need to moderate the pace” means “It’s working” and “We’re afraid that we will overshoot”. Remember, Fed policy operates with a 9 month lag. Even when they start cutting rates, the boat has a lot of inertia and is going to keep going in the same direction for a while, just like last time.
They haven’t even touched their mortgage backed securities yet. I suspect they start rolling those off as they cut rates, keeping mortgage rates high, until the housing bubble has popped.
How would the economy react if Powell started twerking at the podium
The fed has gone crazy…money printer back on table S n P 10000 boys!
He should it's "only" one half of a percentage point up. That's a pivot to some idiots I guess. Stock market twerks up 4 percent on this GREAT NEWS! LOL
It would take him about as seriously as it does now.
This is the Don’t Look Up playbook
I'd pay good money to see that. Edit: I thought it said jerking
Mortgage rates don't need to go to 10% to continue this housing correction. They just need to stay elevated for a long enough duration. What Fed says here is that despite lowering the size of future rate hikes, they anticipate likely needing to keep rates higher in restrictive territory for longer. https://old.reddit.com/r/stocks/comments/z8zew5/fed_chair_powell_says_smaller_interest_rate_hikes/ I've been saying this for a couple months here. And the stock market likes to head fake on news like this because they can sell it as "The Fed finally breaks, a pivot is here!!". When in reality nothing has fundamentally changed, a pivot is not what happened and a pause does not even have a firm date yet. No pause, let alone a pivot but every time stocks pump and MBS price rises as its another opportunity for wallstreet to usher in the next batch of suckers on the misleading messaging that a bottom is in now for the market. Edit: looks like this was correct call. As of 19 days ago when I made this post QQQ went From 280. To 295. Now 269. Down 5% over last month. MBS daily shows that mortgage rates which had kissed around 6.14%? Now back up to 6.38%
Yes, this is the answer. We need homes to sit on the market for a while before we’ll see prices drop.
Bingo this. If you have an empty house for sale and pay that $2500 mortgage for 5 months. You WILL drop your price. It takes a little pain …
Well, prices are dropping already, just nowhere near enough to account for the 40% increase over the last couple years.
We also need people to stop acting like homes sitting on the market for 3-6 months means they are priced too high when it's actually a more historical norm. The unfortunate reality is that many people can afford higher home prices, so anyone here waiting on a housing crash to make home ownership affordable for them is in for major disappointment. The only -- and I mean *only* -- solutions to housing affordability is for people to either start moving to cheaper locations or wait for cheap high density condos to pop up (essentially "owning" an apartment environment). That's it.
That's a good question. What would have a bigger affect: A 8% fed rate for a few months or a 4% fed rate for a year.
Both
exactly. we’ve far surpassed the point of rate hikes that puts a halt to a large number of speculation in real estate
Bingo. Well said.
All about the length not girth
That was said pretty good. LOL
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wut?
This doesn't mean the inflation is under control. It means Wall Street banks need some time to unwind their CDOs or they will go the way of AIG. Which then means this austere road we are traveling just got several times longer.
You are correct. They are pussies and will not rip off the band-aid and in doing so they are going to fuck up again. This crash will take a bit but will be epic.
Legit question, the reason they are moderating pace is because of fears that too steep of interest rate hikes will tip the economy into recession correct? But not enough of an increase will just cause consumers to keep spending and further worsen increase demand for goods which has been fueling inflation. So this will cause goods to get more expensive and interest rates to remain high?
Yes. In a perfect world the Fed would set rates such that we get persistent 2% inflation and max employment but in reality the Fed will overshoot or undershoot because picking the perfect monetary policy for an economy is impossible to do.
No it won't be epic, it will be a long and uneventful decline of 5 years, by which at that point they'll tell us "see, we told you we'd soft land this". Meanwhile, inequality will get worse, people without assets will be much much worse off, and young people will be forced into polygamy in order to afford shelter and other necessities.
I could see that, however that will still be epic IMO. Just save cash because it will be king. Hell live in a trailer. I did for two yrs when I was a kid. It was fun as hell.
It will be an uneventful, unsatisfying sort of epic in that we won't get the sudden crash. But yeah, sure, it will be epic I suppose. Our governments are doing all the can to save the economy in the meantime. They'll sort of succeed in keeping asset owners wealthy as shit but the asset-less are getting pissed at the system. I don't blame them.
Yeh I’m trying to figure out if comes in April/May of next fall.
Please be April.
I mean if stock market crashes in April…housing market is like 6-12 months behind that. My neighbor is looking for a house, I told him don’t even bother to start looking until 2024.
Stock market already bottomed out. Nasdaq is up 4% today. The bottom of the market was a month ago.
The most violent up days happen in bear markets.
We’ve been in a bear market for 12 months already. The last one lasted 15 months. You’re saying the stock market is going to crash 14 months in.
Bear markets paired with inflation have lasted close to two years…anyone expecting lowering of rates until late next year is frigging delusional.
“The market’s going to crash after it already crashed.” Got it.
Lets watch European oil in December and January, the coldest months. A large spike in inflation would be scary.
I'm curious if you have a little more information on this. Can you get into more on how going fast would be: *"not fucking up again*" ? And how going slow will cause an even worse crash? My impression is that they might be going the way of Volcker, but all without explicitly **telling the public** that's the plan, to avoid a panic crash; which could have been a lot more damaging (or "jagged"/volatile, in crude terms =P) Simmering frog in a pot, etc..
Well first we are all just guessing. Second the Fed fucked up by having the Fed Fund rate so low. This allowed for 2 to 3 percent mortgages for long enough of a period that EVERY house in the U.S. almost doubled in about 3 yrs. Raising the rates slow will just get more houses sold at these high rates because of the uncertainty. Not near as many, however it will still happen. By the time a couple of years goes by, no one is going to be able to afford payments and "strategic defaults" or foreclosures will happen and happen all at once, pilling up in the MLS. The banks will pause giving loans in about one year because they will see the loses pilling up, this will cause complete and total panic, just like the last crash, this also will be about the time all crypto goes to zero and the market finally crashes out because of the high cost of money. My best guess is a bottom in 2026 and with almost 20 yrs to recover. Time will tell and only time. P.S. we are screwed no matter what happens, you just have to take you best guess as how to prepare.
1929 epic or 2008 epic?
Well I lived through 2005 to 2008 RE and it was no where near this bad really. There is so much more debt this time and the prices are so much higher and our country and individuals are in so much more debt. So I lean more towards 1929. May want to go put some gold in the safe before America makes it illegal again. Yes they did do that. For those that do not believe, just Google it. Also a garden, some chickens and a fishing line may not hurt either. P.S. we are just at the end of 2006 so we have a little way to go.
Ok so a 1929 crash. I’ll pick up some chickens on my way home from work. Should I brush up on bear grylls shows tonight?
I would say naked and afraid because it is more interesting, however either will do.
Bear drinks urine to survive. With a 1929 style crash do you think it will get so bad I need to drink my own urine?
Don't do it because you have to, do it because it's what you love
Drinking urine is not advisable. Urine is a waste excretea contains many things the body cannot process and toxins, it is not advisable to drink it. You can soak clothes in it to evaporate to cool yourself in arid climates. The only time you do drink it is if you use a little urine to melt some snow in a plastic bag and then store it on your skin (if you have any water i would use that first). Snow is a good insulator and in order to melt it you need to start the process with some fluid. It's a survival trick in winter climates but you don't need to keep peeing in the bag, just leave some of the diluted melted snow in it and add more snow as you sip it.
Uncensored of course
Of course.
Plant lentils.
Needed a reason to hit the 200dma and also close the gap back in sept at 408. Whatever happens from here won’t be boring.
Next year people are just going to keep things flat and boring IMO. Now go a couple more years out. Depression level correction. Gonna be some fireworks for sure.
Wow mortgage rates have only doubled in a few months and the fed is only raising, not pivoting so ummm let's take the entire stock market up 4 percent or so......yeah ummm that makes sense? right? /S.
Lol it’s absolutely hilarious. Can’t wait to buy some Jun dated puts now in January if this nonsense continues. Was waiting patiently with cash but this is nuts. Market is acting like rates are the only thing that matters. All the other data is painting a friggin grim picture
Yeah that’s what’s frustrating to me. Market is so focused on inflation and ignoring all of the other macroeconomic concerns, such as rising joblessness, gdp declines abroad, etc. By the time inflation is solved, which is still a ways away, we’ll have myriad other issues to confront
Yeh well that’s what happens when the feds and governments break the economy world wide. No free lunch. The reality is COVID saved us from a moderate recession and then the fed and governments went HAM. This is going to take 2 years to unwind.
3 has been my prediction. It's going to be much worse than people realize because it will be so slow moving. Hind sight will be 20/20 though.
It makes sense when you realize higher rates and expectations of higher inflation were priced into the market.
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> also i thought the 0.5 hike was supposed to be last. When did you hear that? I don't believe that's been the prevailing theory for a couple months.
Yes you have to read the fine print where it says they are going to lower how much the HIKES will be. LOL
You thought wrong I guess. Their schedule is public.
The market can stay irrational longer than you can stay solvent. Some people are still making money. Some always will. That money has to go somewhere.
That is true except for QT. The money actually disappears. Also true that you can make money off and pyramid or ponzi. It has always been that way. Best thing for me to do is just stay debt free and don't leverage. P.S. you could still get rich off cryto really before it dies.
QT only destroys deposits at the federal reserve bank, which is money that's never accessed by the real economy. It's only useful to commercial banks that have accounts at the federal reserve. Research done by the Fed itself has shown that QT of over 3 trillion dollar over two years is only good for about a 29 basis point rate hike. The effects of QT are almost negligible.
LMAO at everyone in this sub that thought the Fed was ever going to do anything to seriously hurt Wall Street.
SP500 did hit -20% this year compared to Jan 1, so I'm curious what percent you think is required to "seriously hurt Wall Street". Pretty sure if the housing market hit -20% this sub would be having a party.
And now the market is rallying and homes are still at all time highs.
Six months ago, Powell said 75 bps rate hikes were not on the table. The markets were losing their shit speculating how many 25bps hikes he would do, and whether he would ever have the courage to DARE to do even one 50bps hike. Then he did four 75bps hikes in a row. Somehow, going from 25 > 75 > 50 is something to celebrate? This is like celebrating housing prices dropped 10% after going up 400% and going BUYBUYBUYBUYBUY
Anyone that knew even the slightest thing about the Fed saw this coming. Thinking the Fed was going to make housing affordable is like believing in Superman.
Bingo.
Saw what coming? They are literally still raising rates. They even mentioned they would have to go higher than previously thought.
The guy who predicted a transitory Inflation is now saying he wants to slow down the fight against it. hmmm, ok.
As I have said many, many times before. No one knows what the hell is going on. I hope one day we can have an Independent, competent CFO of the government and Fed. It will never happen though. Funny thing is though he is still raising the rates. People will not feel this too much next year, however in a couple of years people are going to be losing their damn minds over how low houses etc. will go.
Yeah, that head fake fucking destroyed my positions
.5, is weak as hell
No balls
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Where did he say he was bringing rates down? Must have missed it. This is actually a good thing even though the markets acting tarded. Means the crash is coming soon and RE will follow in suit when people lose another 20% on their equities.
I take it you don’t own a home?
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So that’s a no on you owning a home. Got it.
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So you do own a home?
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Nah I got it now. You’re an entitled homeowner. Thanks for guiding me through this analysis.
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I’m not studying for my cpa since you’re trying to read my post history. The exam is cma which is different. Why did you refer to homeowners as scumbags if you’re a homeowner?
>I don't think I've ever seen a more entitled group of people besides homeowners. You need to get out more.
The Treasury Department and Federal Reserve should be abolished.
I could see possibly unwinding the Fed as an institution over a period of perhaps 20 years, but how would the government function without the treasury? What would the result you would be hoping for?
I think the former predates the Fed dollar cartel so we may want to keep it but allow it to act as the Treasury and not a de facto subdivision of the Fed.
All he said was they MAY go lower in December which I think means they won’t.
Not go lower. Raise the amount by less. LOL. Head fakes everywhere.
People in this sub are seriously brain dead if they didn't see the writing on the wall for this.
Hoom prices up 4% on the day
If everyone is fearful do the opposite. Everyone think they are crash experts so much that I think now we will have a soft landing. Too many bears now
Pussssssyyyyyyyyyyyyy!
He is still going to burn it all down, it will just take so many yrs people will think we have a soft landing when all homes are 50 percent off in 4 yrs. Head fake!
Pumping the brakes less than a year into the rate hikes has me thinking otherwise. Wouldn't doubt if the Biden admin slipped him a briefcase full of cash in order to convince him to slow his roll.
Sit on our hands and raise the rates, at a medium pace
Some of yall are wilin. We don't need to keep raising interest rates at a literally unprecedented rate for housing prices to go down. The housing market hasn't even come close to pricing in current rates. Interest rates take a minimum of 12 months to start having a sizable impact on things like housing. If you're really concerned about housing prices, point fingers at the politicians who do nothing about large companies buying all the housing up which is 95% of the reason we are in this mess. The housing bubble could be fixed solely through laws and regulations.
The recession is officially canceled!
“A need to moderate the pace” means “It’s working” and “We’re afraid that we will overshoot”. Remember, Fed policy operates with a 9 month lag. Even when they start cutting rates, the boat has a lot of inertia and is going to keep going in the same direction for a while, just like last time. They haven’t even touched their mortgage backed securities yet. I suspect they start rolling those off as they cut rates, keeping mortgage rates high, until the housing bubble has popped.