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  • Interest rates, inflation, stock market, oil, etc etc

    Not even sure what I want to say, but there's probably at least 4 inter-linked conversations in the tag line. Kind surprised nobody has started one here yet. I can't deal with Pelican on these as they go from OT into PARF in half a dozen posts.

    I've been privy to quite a number of conference calls in the mornings that my wife has had in the last 2 weeks, she's in capital market debt financing for commercial and multi-family residential. She managed to time our refinancing of 2 properties a couple of months ago (low 3's). Right now the crunch she's seeing (and there's quite a few) is in 10-31 exchanges, a loan maturity that forces a refinance, and of course any deals that anybody is trying to put together shows cap rates going to rise, debt ratio's changing by lenders (and they are looking far closer at any deals), etc. etc. The big deal is that buying power has shrunk... a former 65% ltv is now a 55% ltv, and sellers are not going to be able to get what they want to get. Sellers are going to pause, unless they need to sell.

    Interest rates have pushed buyers out of the home purchasing market (for sfr buyers) which means that rental rates will remain flat and possibly rise as we have limited housing in our country. At the same time inflation has pushed gas and food prices up dramatically, so how much of an increase can rentals sustain and we see continued rental rate increases here in the Seattle area for housing. Will housing prices go down?

    I read a report today that said that 36% of those making $100K or more are living paycheck to paycheck, that's up 50% from a couple of years ago. The number is 50% for those making $50K to $100K.

    Can the Fed give us a soft landing? Or do they have any control at all.... Powell's speech wasn't clear at all, he seemed to say two things at once, and since when is the fed involved in oil?

    Just a casual observer ;-) Does this affect our hobby?

    E


    soterik
    HTH....!
    Last edited by soterik; 06-18-2022, 11:01 AM.
    Smoother than a fresh jar of Skippy....

    www.autoforeignservices.com
    autoforeign@gmail.com
    67S's......

  • #2
    Some random facts....

    -----

    Bend, Oregon Housing Market
    Numbers from Zillow

    4/5/22 - 178 active listings / 26 price reductions
    6/15/22 - 532 active listings / 144 price reductions

    As of last month 2.9% of home owners in Oregon were underwater on their mortgages.


    -----

    Michael Burrows:
    People always ask me what is going on in the markets. It is simple.
    Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.

    -----


    Over 40% of the "Money" the U.S. has EVER printed in its history was printed in 2020.

    -----

    I fear for my grandchildren with this one. Thread I started a while back on the economy.

    -----


    JohnA
    www.911bestinclass.com
    jaudette3
    I've had enough.
    Last edited by jaudette3; 06-17-2022, 07:44 PM.
    John Audette
    www.911bestinclass.com

    Comment


    • #3
      Saw this today...

      Click image for larger version

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      John Audette
      www.911bestinclass.com

      Comment


      • #4
        I forgot about your old thread. Seems like ages ago (and it kinda is in todays news cycles, no offense intended).

        When mortgage rates exceed cap rates sales of commercial properties they really SLOWWW DOWNNN (pretty much) and triple nets come literally to a standstill. And why buy a triple net Walgreens when you can get a treasury at 3.22 (and the Walgreens as about 4%). Unfortunately (for me) the downward pressure on property pricing won't be enough imho to allow me to buy a warehouse, which means I'm going to have to build. The dirt around here is simply too expensive. My grandfather told my dad to "buy when there's blood in the streets", and my dad said the same to me. My grandfather did do that in 1933 to 35, dad did in 1972, and I did a few times (moving up each time).... but there's just so much $$ floating around that I doubt there's enough pressure to allow me to buy another.... but my wife is looking but says "we just have to wait"....

        I wonder if NickP will weigh in.
        Smoother than a fresh jar of Skippy....

        www.autoforeignservices.com
        autoforeign@gmail.com
        67S's......

        Comment


        • #5
          No offense taken whatsoever. And you're right, every week seems like a month. Years and years of kicking the can down the road are ending.
          John Audette
          www.911bestinclass.com

          Comment


          • #6
            Originally posted by jaudette3 View Post
            Some random facts....

            -----

            Bend, Oregon Housing Market
            Numbers from Zillow

            4/5/22 - 178 active listings / 26 price reductions
            6/15/22 - 532 active listings / 144 price reductions

            As of last month 2.9% of home owners in Oregon were underwater on their mortgages.


            -----

            Michael Burrows:
            People always ask me what is going on in the markets. It is simple.
            Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.

            -----


            Over 40% of the "Money" the U.S. has EVER printed in its history was printed in 2020.

            -----

            I fear for my grandchildren with this one. Thread I started a while back on the economy.

            -----


            JohnA
            www.911bestinclass.com
            Well, when a 2,000 sq ft house in Bend is around a million dollars, it doesn't really seem that surprising... I think we will see a lot more foreclosures due to the mess our economy is currently in. Everything this administration does seems to only make the problems worse. You would almost start to think they're doing it on purpose



            Comment


            • #7
              Interesting thread, and a topic that's been on mind recently. Concerned where we are heading.

              Scott

              Comment


              • #8
                The FED is between a rock and a hard place. Raise rates too much and the economy takes a hit. We are already seeing this. Go too slow and the flood of money out there will keep inflation running hot and heavy. The Presidents solution is to throw more money out there. Personally I think we are going to have to take our lumps to cool things down or maybe this will be the beginning of hyper inflation if the Gov throws out a few more trillion. The poor and middle classes are just getting killed.
                We have been living on cheap money for too long. This is going to be like an addick going through withdraws. As I have zero debt I would love to see 10 to 15 percent interest rates for me personally. But the other side of me doesn't want to see it as it would create way too much pain for way too many folks.

                My brother in law owned a commercial lending company with 2 other guys in Orange County. He did VERY well. He saw this coming and sold out over a year ago. He is now stress free.
                Chris Pomares
                2.4L
                Last edited by Chris Pomares; 06-18-2022, 09:10 AM.

                Comment


                • #9
                  the issue is not only US related…www same issue, same problems, same no-solutions…
                  erwin_loves_polo

                  Comment


                  • #10
                    stagnic growth and higher prices = stagflation
                    my guess is that top tier cars will do well
                    lesser cars soften
                    Last edited by bob joyce; 06-18-2022, 10:28 AM.

                    Comment


                    • #11
                      Originally posted by bob joyce View Post
                      static growth and higher prices = stagflation
                      my guess is that top tier cars will do well
                      lesser cars soften
                      My best guess:

                      Inflation => Deflation => Stagflation

                      Of course deflation and stagflation would cause asset prices to erode.
                      John Audette
                      www.911bestinclass.com

                      Comment


                      • #12
                        Originally posted by Chris Pomares View Post

                        My brother in law owned a commercial lending company with 2 other guys in Orange County. He did VERY well. He saw this coming and sold out over a year ago. He is now stress free.
                        “Stress free” my butt. Regarding debt perhaps but it’s the human condition to be anxious. Now it’s probably more about whether the yacht is prepped and ready to go, who’s going to pump the full septic tank at the cabin, or whining because he and his wife can’t find a contractor to do a simple remodel on their 10M primary residence.

                        Humans simply trade one set of headaches for another.
                        Old, white cisgender male oppressor.
                        Influencer/Life Coach.
                        Nominated Supreme Judge of all things but supremely under-qualified.

                        www.beckseuropean.com

                        Comment


                        • #13
                          amen brother frank...

                          Comment


                          • #14
                            Frank,
                            He has no boat, no debt, lives way under his income level, rides bikes and skis. No vintage Porsches either.
                            He is a very self confident guy and has prepared for this a long time ago.

                            Chris Pomares
                            2.4L
                            Last edited by Chris Pomares; 06-18-2022, 03:36 PM.

                            Comment


                            • #15
                              God bless him. I spell that P-E-A-C-E.

                              Cheers,
                              John
                              John Audette
                              www.911bestinclass.com

                              Comment

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