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Started By
Message
re: 10 yr yield going to 5%
Posted on 9/21/23 at 5:47 pm to GREENHEAD22
Posted on 9/21/23 at 5:47 pm to GREENHEAD22
How so?
1
Posted on 9/21/23 at 10:28 pm to Art Blakey
quote:
Equities probably collapse (who’s gambling on AI with risk free 10% available?).
Baw. Think for a second. Forget gambling on AI. shite, forget fundamentals, forget aapl, msft, brk, whatever. If rates went to 10% overnight, equities would not “collapse.” There would be a whole arse bank run on equities. Every person, pension fund, hedge fund, endowment, venture fund, you name it. Everybody liquidating at that point. The whole game is about taking on risk on the hope and prayer that you might match or possibly beat the historical 7% return of the market. Overnight rate increase to 10% would totally break the system.
Posted on 9/21/23 at 11:19 pm to JimMorrison
Look at money supply and there is your inflation problem.
We increased money supply 40% in less than 2 years.
Inflation is simply an increase in money supply.
Brrrrrrrrrr
We increased money supply 40% in less than 2 years.
Inflation is simply an increase in money supply.
Brrrrrrrrrr
Posted on 9/22/23 at 5:08 am to Art Blakey
quote:
Game out the govt’s net interest expense at 10%. Now they’re paying $2T this year, deficit blows out another trillion, and there’s another trillion being paid which is essentially stimulus for the rich. Equities probably collapse (who’s gambling on AI with risk free 10% available?).
They’re done. The 4 decade bond bull is over as is the era of low inflation most of us grew up with.
it's pretty scary to think we could be heading towards stagflation or worse. the market is just now coming to terms that rates are going to be higher for longer and I think consensus still has a ways to go to figure it out. as we move forward, the market is going to keep losing hope of rate cuts.
check the 10 yr chart. 1950-now in 3M intervals. the increase in the past 3 years is putting us on the same track as leading into the 1970s.
Posted on 9/22/23 at 8:40 am to Sir Saint
quote:
Baw. Think for a second. Forget gambling on AI. shite, forget fundamentals, forget aapl, msft, brk, whatever. If rates went to 10% overnight, equities would not “collapse.” There would be a whole arse bank run on equities. Every person, pension fund, hedge fund, endowment, venture fund, you name it. Everybody liquidating at that point. The whole game is about taking on risk on the hope and prayer that you might match or possibly beat the historical 7% return of the market. Overnight rate increase to 10% would totally break the system.
I think 5% will likely induce a bank run on equities in the near future but it's impossible to say much of anything with any confidence due to the shear novelty of our current situation. We haven't been through a global sovereign debt crisis since the world wars. No one alive has ever seen this before.
Posted on 9/22/23 at 11:44 am to AllDayEveryDay
quote:
How so?
He's claiming that the Shelter component of CPI is far too high, thus he believes inflation is a bit lower than what CPI shows.
The problem is that the Shelter component of CPI essentially double-dips on rents to come up with its value. What I mean by that is instead of using assessed values, area home sales or even mortgage payments to determine home values (1/3 of the Shelter category), they use OER (Owner's Equivalence of Rent). This is looking at home values through a lens of "what would this homeowner be paying in rent to live in this home in region". Rents fluctuate a LOT slower than home prices (especially when you have the low mortgage rates of the last decade+). As home prices are still inflated in many place, even though rent is catching up, the average mortgage is still higher than the average rent (this is just looking at the national average, it can swing wildly once you get more local).
The impact that it's had on Shelter is to skew that number lower while home prices were skyrocketing and rent was not. Now that home prices are starting to come down (slowly) and rents are starting to rise, OER is going to skew Shelter upward.
He's dead on about the yield curve though.
The Fed's "soft landing"...
This post was edited on 9/22/23 at 12:50 pm
Posted on 9/23/23 at 8:17 pm to GREENHEAD22
Ol’ baw must have someone else buying his groceries
Posted on 9/23/23 at 9:05 pm to Art Blakey
Equities are so overvalued right now.
Mid to small regional bank stocks that have CRE portfolios are about to get crushed.
I have scoured the landscape and found a couple decent looking insurance companies to invest in at this time….that is it.
I think the music has stopped and you have people starting to question their equity holdings, bank deposits….and looking for real alternatives.
Mid to small regional bank stocks that have CRE portfolios are about to get crushed.
I have scoured the landscape and found a couple decent looking insurance companies to invest in at this time….that is it.
I think the music has stopped and you have people starting to question their equity holdings, bank deposits….and looking for real alternatives.
This post was edited on 9/23/23 at 9:06 pm
Posted on 9/23/23 at 9:35 pm to SloaneRanger
quote:
That which must eventually be done, is best done immediately.
If you see a red light up ahead, do you instantly slam on the brakes?
Posted on 9/23/23 at 10:23 pm to KillTheGophers
quote:
have scoured the landscape and found a couple decent looking insurance companies to invest in at this time….that is it.
Out of curiosity, who?
Posted on 9/23/23 at 10:52 pm to SloaneRanger
quote:
That which must eventually be done, is best done immediately.
What a dumbass saying lol.
Posted on 9/24/23 at 6:04 am to GenesChin
quote:
have scoured the landscape and found a couple decent looking insurance companies to invest in
I’m in ORI
Posted on 9/24/23 at 8:30 am to makersmark1
quote:
I’m in ORI
So am I. I’ve had ORI for years. The price is up about 45% from my entry. But I mainly bought it for the attractive dividend and it having good fundamentals and a low beta.
Posted on 9/24/23 at 11:55 am to KillTheGophers
quote:
Mid to small regional bank stocks that have CRE portfolios are about to get crushed.
This has me more worried than anything else. There is god knows how much vancant CRE space out there and companies are canceling leases upon expiration. These buildings also can’t be refinanced at todays rates. There has to be billions in CRE coming to an inflection point.
This…rising rates in mid-long term treasuries, growing deficit and existing debt that needs to be rolled over, consumer credit spiking…and the Fed is boxed in because cutting rates will just drive inflation further.
There’s a bunch of bad shite coming coming down the road.
Posted on 9/24/23 at 5:52 pm to Jag_Warrior
quote:
attractive dividend
Will we get a “special” dividend soon?
Posted on 9/25/23 at 5:46 am to SquatchDawg
quote:
There’s a bunch of bad shite coming coming down the road.
the bond market is working to find a breaking point and they will find it.
it's kind of poetic if S&P ends this year around 4050, which is basically flat from Nov. '22. great trading opportunities here with increasing vol.
equity bulls had their fun in the 1H, but bears making the comeback
Posted on 9/25/23 at 9:17 am to makersmark1
quote:
Will we get a “special” dividend soon?
Hard to say. I’d have to look back at how much cash they’re currently sitting on, as well as any special situations that may have happened.
Posted on 1/5/24 at 6:36 am to JimMorrison
so revisiting this thread, 10 yr reached 5% and bonds immediately began a strong rally as expected. 
to all who profited off that move.
now, the new year is gearing up to reverse that rally and today's jobs report looks to be the catalyst. yesterday's ADP report already showed hiring strength and today's report could also be a significant beat.
I've been in the camp that rates are staying higher for longer (contrarian to the market wishcasting rate cuts at every opportunity) and today could set the stage for the 10 yr heading back to 5%.
on the equities side, the VIX has been perking up and could indicate S&P is on the verge of a selloff to around 4400 support. if S&P ends up breaking below that level, I'd look for 2024 to continue with a bearish bias.
to all who profited off that move. now, the new year is gearing up to reverse that rally and today's jobs report looks to be the catalyst. yesterday's ADP report already showed hiring strength and today's report could also be a significant beat.
I've been in the camp that rates are staying higher for longer (contrarian to the market wishcasting rate cuts at every opportunity) and today could set the stage for the 10 yr heading back to 5%.
on the equities side, the VIX has been perking up and could indicate S&P is on the verge of a selloff to around 4400 support. if S&P ends up breaking below that level, I'd look for 2024 to continue with a bearish bias.
Posted on 1/5/24 at 7:39 am to JimMorrison
economy and labor market are strong
yields going higher
yields going higher
Posted on 1/5/24 at 8:05 am to JimMorrison
quote:On what date did the 10-year Note hit 5%?
10 yr reached 5%
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