Actually, the credit default cycle needs to ramp up appreciably (more bankruptcies & down grades) before the targeted corporate bonds become suitably sour to acquire.
Bill makes a good point about Americans not selling their home and moving to another home. (I think his three colleagues have made this point as well.) I went out to one of those mortgage calculators on the internet, and used 2.75% and 7.50% interest rates over 30- and 15-year periods. For a $350,000 house, with $70,000 down (20%), and taxes and insurance included, over 30 years: the difference in a monthly mortgage is $2,050 (2.75%) compared to $2,850 (7.50%), a whopping $800/month increase or a 39% increase. Over 15 years, it's $2,800 to $3,500 or a $700/month increase or a 25% increase.
Caveats: Now, this is just a broad look to make a point. I'm averaging (and rounding off) here. Some folks can provide more of a down payment if they have lots of equity in the home they're selling/moving from; but lots of folks probably have less than $70,000. And taxes vary; and, many folks do get a tax break on the interest. And $350,000 is flyover country; the coasts and many suburbs throughout the U.S. are considerably higher on average where home prices are concerned.
But no surprise Americans are holding onto their homes. And would they have trouble selling their homes in this environment?
Thank you for the Yeoman's work Mr. Westmoreland. Convert it over to BB's oft-used "hours of labor required" and I would guess it gets even uglier/fuglier.
As to your last point - I share an inherited house in the town where I plan to retire, but still live fulltime in a small place in West Palm Beach, FLA. I'm just across the river from "The Lago" as we call it, but that's why it's WEST Palm Beach. Anyway, I locked in 30 years of remaining mortgage balance at the aforementioned 2.65% a few years back. I have a ridiculously low P/I payment and was planning on heading to the other residence and renting this one out - there is a severe scarcity of rental homes in WPB.
Surprise, surprise - Citizens jacked my 2024 Homeowner's Insurance by 36% (NOT A TYPO) and the Taxes on my 76-year old, Post-WWII palace are up 28% for the FY started a couple of days ago. I had just about changed my mind and decided to wash my hands of the whole thing by selling, but at this particular time the market for that sucks too. Thanks dimocrats, repugnicants, deep state, globalists and central "banks." So I reckon I'll hang here for a while longer, then rent the place out with an eye to look toward selling it when conditions improve. Again unfortunately, I'm starting to think that the poor pooch has been screwed so very hard this time that there won't BE an improved market for selling...
SE: You are not alone in your current situation. My homeowner's insurance went up 20% ( not as bad as yours did). Now my car insurance is coming due and when talking to my agent..it's going up also but he didn't know the exact amount. That's w/o any claims ever.
Yes Dorothy, it really doesn't matter which party we belong to, when we are all getting fleeced together.
Our goal will soon be survival, and that is why it's so important to live in an area with good, God fearing people, who will do the right thing to protect their family, friends and way of life, over those who will take everything you own, including your life...
Yes brother Starboard, I believe life is immitating art, or Ayn Rand was 100% correct with her insight and imagination.
You may want to come up north a bit and check out the little dream cabin we are building in the beautiful Blue Ridge Mountains. You would fit right in with men, and real women who love America and know the time is coming to be with those who think alike.
We were blessed to be given the insight to sell our dream home last year. Made a killing, and it's now worth much less, unfortunately for the new owners. But they have pleanty to weather the comming storm.
If it wasn't for our monthly("Obama-nation, Affordable Care Act/theft)of $2400, life would be a little easier, but we were smart enough to stash much away when it was comming in strong. Much of it in metals, bitcoin and lead:)
So whenever you are ready to escape the trap, you are welcome to spend as much time as you want in the mountains, and we can show you and yours a much better way...
Greatly appreciate the offer Brother Steve. I have the type of community you describe waiting for me a bit to the north, and that's the plan for now. We have begun organizing by neighborhood as the area is full of God-fearing. like-minded, TOTALLY AWAKE individuals.
So true Bill and Joel. It's been a long time coming!
Wouldn't it be great if we could get Greenspan, Bernanke, Yellen up on stage and ask them to defend their positions for "building the US economy"? Maybe put Stephanie Kelton up there too. She could pose as their academic expert.
Then we could have Murray Rothbard asking them questions. What fun!
Thanks so much governors for saving the country and globe.
FUGLY! Hilarious Joel. We need as many laughs as possible in these dire times.
DW: You read what you want and I will do the same. Your 80% is too high. I have not heard of any covid crisis in over a year or what the final costs were; although the biggest costs were the human lives.
DW: Why do you make stupid statements that are not true? It doesn't bode well for you. Maybe you are confused and it's only the Republicans not the Democrats.
The cheerleaders on the business channels are ridiculous with their constant refrain: “when will the Fed pivot”. They need to realize that interest rates aren’t high now, they have just returned to normal and won’t be heading back down anytime soon.
Q: Are Gold and Silver going to tank along with everything else? Some of us were assuming, perhaps erroneously, that precious metals prices would do better than stocks, bonds and real estate? Were we wrong?
I believe that gold and silver will go lower , the ratio Dow/gold is at 18 and has been there for more than 18 months .
Eventually this ratio will go to 5 and lower , that s do not mean that gold will be up but that Dow will be much lower ... my guess gold 1350-1400 in the next 24 months silver 14-15 usd an ounce . And then up to new highs
The manipulated numbers will tank but physical gold and silver are getting harder and harder to get. Eventually they will stop selling physical gold for the paper price... but for now yes we’re gonna see a little dip in precious metals.
Maybe start an Important Addendum to Doom 2.0 and file this as Exhibit #1.
I'm not smart enough to figure all the implications that stem from your facts - but that delay sounds like it would be pretty darn important to somebody, and pretty darn inconvenient to somebody else...
When they locked in their 30 year loan @ 2.65% most overpaid for their houses big time ... in effect capitalising future interest rate rises in the purchase price. With mortgage rates at 8% and going higher along with cost of living... houses prices will fall accordingly... to a point in which the sweet deal will evaporate.
What I would like someone to explain to me is: How is gold an avenue for risk-averse investors? Wha's been happening for years now is that movements in the gold price are closely correlated with movements in the overall stock market - and so, now, as stocks have plunged, so has gold. This is exactly what a risk-averse investor does not want. How, then, is gold a hedge against anything?
Repeat after me: Gold is not an investment! It's a hedge against inflation, and if stocks are down, with, supposedly, consumer prices to follow, then gold will be down too. The BPR theory is that after the crash, the fed will lower rates, thus causing massive inflation, and raising the price of gold. (In federal reserve notes, of course. You can argue that it's all relative, and that a house, or gold, or whatever, costs the same as it did years ago; the difference is inflation. But it's not an exact correlation, as commodities can also go higher than the inflation rate.)
Bill well done best to stick to your knitting and leave the politics alone .. it only causes stress and God knows we have enough of that in our financial life already .. and Joel yep them Ozzies love an acronym or two like a Thooies or 2 .. but all will be well when we give the "Voice" a voice ..? figure that out mate and you know we're goner's !
Bond, dead Bond it is. This stock market trend ain’t your friend, as you BPR boys have appropriately preached for a defensive posture. A serious credit default cycle is already in motion and the opportunity for Los Buitres Extraordinaire to feed on the detritus of the distressed corporate bond market is on the horizon. Also, Got Gold & Tequila Anejo.
To put Joel's new word to use, I am persuaded that fugly times are a-coming.
Lots of salesmen want to sell their solutions. Corporate bonds seems to be the latest hidy-hole
Look forward to the Bonner Boys forthcoming thoughts where to hide the nest egg.
Actually, the credit default cycle needs to ramp up appreciably (more bankruptcies & down grades) before the targeted corporate bonds become suitably sour to acquire.
P. S. Joel might say, mas fugly.
Bill makes a good point about Americans not selling their home and moving to another home. (I think his three colleagues have made this point as well.) I went out to one of those mortgage calculators on the internet, and used 2.75% and 7.50% interest rates over 30- and 15-year periods. For a $350,000 house, with $70,000 down (20%), and taxes and insurance included, over 30 years: the difference in a monthly mortgage is $2,050 (2.75%) compared to $2,850 (7.50%), a whopping $800/month increase or a 39% increase. Over 15 years, it's $2,800 to $3,500 or a $700/month increase or a 25% increase.
Caveats: Now, this is just a broad look to make a point. I'm averaging (and rounding off) here. Some folks can provide more of a down payment if they have lots of equity in the home they're selling/moving from; but lots of folks probably have less than $70,000. And taxes vary; and, many folks do get a tax break on the interest. And $350,000 is flyover country; the coasts and many suburbs throughout the U.S. are considerably higher on average where home prices are concerned.
But no surprise Americans are holding onto their homes. And would they have trouble selling their homes in this environment?
Thank you for the Yeoman's work Mr. Westmoreland. Convert it over to BB's oft-used "hours of labor required" and I would guess it gets even uglier/fuglier.
As to your last point - I share an inherited house in the town where I plan to retire, but still live fulltime in a small place in West Palm Beach, FLA. I'm just across the river from "The Lago" as we call it, but that's why it's WEST Palm Beach. Anyway, I locked in 30 years of remaining mortgage balance at the aforementioned 2.65% a few years back. I have a ridiculously low P/I payment and was planning on heading to the other residence and renting this one out - there is a severe scarcity of rental homes in WPB.
Surprise, surprise - Citizens jacked my 2024 Homeowner's Insurance by 36% (NOT A TYPO) and the Taxes on my 76-year old, Post-WWII palace are up 28% for the FY started a couple of days ago. I had just about changed my mind and decided to wash my hands of the whole thing by selling, but at this particular time the market for that sucks too. Thanks dimocrats, repugnicants, deep state, globalists and central "banks." So I reckon I'll hang here for a while longer, then rent the place out with an eye to look toward selling it when conditions improve. Again unfortunately, I'm starting to think that the poor pooch has been screwed so very hard this time that there won't BE an improved market for selling...
SE: You are not alone in your current situation. My homeowner's insurance went up 20% ( not as bad as yours did). Now my car insurance is coming due and when talking to my agent..it's going up also but he didn't know the exact amount. That's w/o any claims ever.
Our homeowner's insurance went up by 40% in Minneapolis-St. Paul.
Cat: Wow! Guess I can't complain. Sorry to hear that! Hope all's well!
Yes Dorothy, it really doesn't matter which party we belong to, when we are all getting fleeced together.
Our goal will soon be survival, and that is why it's so important to live in an area with good, God fearing people, who will do the right thing to protect their family, friends and way of life, over those who will take everything you own, including your life...
SL: Totally agree.
Yikes!!
Where ya been Ms. Cat?
Miss me?
Yes brother Starboard, I believe life is immitating art, or Ayn Rand was 100% correct with her insight and imagination.
You may want to come up north a bit and check out the little dream cabin we are building in the beautiful Blue Ridge Mountains. You would fit right in with men, and real women who love America and know the time is coming to be with those who think alike.
We were blessed to be given the insight to sell our dream home last year. Made a killing, and it's now worth much less, unfortunately for the new owners. But they have pleanty to weather the comming storm.
If it wasn't for our monthly("Obama-nation, Affordable Care Act/theft)of $2400, life would be a little easier, but we were smart enough to stash much away when it was comming in strong. Much of it in metals, bitcoin and lead:)
So whenever you are ready to escape the trap, you are welcome to spend as much time as you want in the mountains, and we can show you and yours a much better way...
Greatly appreciate the offer Brother Steve. I have the type of community you describe waiting for me a bit to the north, and that's the plan for now. We have begun organizing by neighborhood as the area is full of God-fearing. like-minded, TOTALLY AWAKE individuals.
But I'd never say Never...
Thanks Mark - that short article should be required reading for every high school Senior in America...
So true Bill and Joel. It's been a long time coming!
Wouldn't it be great if we could get Greenspan, Bernanke, Yellen up on stage and ask them to defend their positions for "building the US economy"? Maybe put Stephanie Kelton up there too. She could pose as their academic expert.
Then we could have Murray Rothbard asking them questions. What fun!
Thanks so much governors for saving the country and globe.
FUGLY! Hilarious Joel. We need as many laughs as possible in these dire times.
Yes Sir! Folks are starting to realize that interest rates are likely to remain higher for longer.
And why NOT.
They were Lower for Longer just recently.
So it stands to reason that the opposite will get us out of this mess.
Remember The Fed has more “time” than any person alive.
And unfortunately that all they have this time.
Everyone must shift gears and make money in a higher for longer environment.
CD’s and TBILLS.
Democrats and The Fed still think that the economy is recovering from the Covid Crisis.
80% of America is delusional!
Democrats are in power, not Republicans. I do do not defend either one. And blame both for OUT OF CONTROL spending.
Trump was an outsider. Attacked from both sides because he threatened their lame establishment.
Both Democrat and Republican are totally inept. Stop voting for them. And stop giving them money.
No one can deny with Democrats in power that America is spiraling out of control.
BOTH SUCK!
My Dear Dorothy, Are you blind?
https://www.news4jax.com/news/local/2022/05/11/trust-index-president-biden-blames-inflation-on-the-pandemic-and-the-war-in-ukraine/
DW: You read what you want and I will do the same. Your 80% is too high. I have not heard of any covid crisis in over a year or what the final costs were; although the biggest costs were the human lives.
Altshule, they (Biden & other democrats) are referring to Covid 2019.
They are delusional as are all democrats 60% and half republicans 20%.
60+20=80%
DW: Why do you make stupid statements that are not true? It doesn't bode well for you. Maybe you are confused and it's only the Republicans not the Democrats.
The cheerleaders on the business channels are ridiculous with their constant refrain: “when will the Fed pivot”. They need to realize that interest rates aren’t high now, they have just returned to normal and won’t be heading back down anytime soon.
Q: Are Gold and Silver going to tank along with everything else? Some of us were assuming, perhaps erroneously, that precious metals prices would do better than stocks, bonds and real estate? Were we wrong?
I believe that gold and silver will go lower , the ratio Dow/gold is at 18 and has been there for more than 18 months .
Eventually this ratio will go to 5 and lower , that s do not mean that gold will be up but that Dow will be much lower ... my guess gold 1350-1400 in the next 24 months silver 14-15 usd an ounce . And then up to new highs
That is what the market is saying. Are we listening?
What's that?
I can't hear you over the BEEPBEEPBEEP coming from my truck backing-up to the Physical PM loading dock...
"some analysts note that the selloff hasn’t changed the broader landscape."
Only the honest ones that also have eyes, ears and two functioning brain cells that are willing to talk to each other.
I know - few and far between are those kinds of "analysts" nowadays.
MUST maintain the narrative - "Ain't Bribemnomics Grand!!"...
The manipulated numbers will tank but physical gold and silver are getting harder and harder to get. Eventually they will stop selling physical gold for the paper price... but for now yes we’re gonna see a little dip in precious metals.
Hi Mark -
Very interesting information sir.
Maybe start an Important Addendum to Doom 2.0 and file this as Exhibit #1.
I'm not smart enough to figure all the implications that stem from your facts - but that delay sounds like it would be pretty darn important to somebody, and pretty darn inconvenient to somebody else...
I doubt anyone will end up with a ‘sweet deal.’
When they locked in their 30 year loan @ 2.65% most overpaid for their houses big time ... in effect capitalising future interest rate rises in the purchase price. With mortgage rates at 8% and going higher along with cost of living... houses prices will fall accordingly... to a point in which the sweet deal will evaporate.
I'm ridin' that lightning now Mr. Nick...
What I would like someone to explain to me is: How is gold an avenue for risk-averse investors? Wha's been happening for years now is that movements in the gold price are closely correlated with movements in the overall stock market - and so, now, as stocks have plunged, so has gold. This is exactly what a risk-averse investor does not want. How, then, is gold a hedge against anything?
Repeat after me: Gold is not an investment! It's a hedge against inflation, and if stocks are down, with, supposedly, consumer prices to follow, then gold will be down too. The BPR theory is that after the crash, the fed will lower rates, thus causing massive inflation, and raising the price of gold. (In federal reserve notes, of course. You can argue that it's all relative, and that a house, or gold, or whatever, costs the same as it did years ago; the difference is inflation. But it's not an exact correlation, as commodities can also go higher than the inflation rate.)
Bill well done best to stick to your knitting and leave the politics alone .. it only causes stress and God knows we have enough of that in our financial life already .. and Joel yep them Ozzies love an acronym or two like a Thooies or 2 .. but all will be well when we give the "Voice" a voice ..? figure that out mate and you know we're goner's !
Bond, dead Bond it is. This stock market trend ain’t your friend, as you BPR boys have appropriately preached for a defensive posture. A serious credit default cycle is already in motion and the opportunity for Los Buitres Extraordinaire to feed on the detritus of the distressed corporate bond market is on the horizon. Also, Got Gold & Tequila Anejo.
“Consumer prices are down 20%”??????? How about some proofreading before sending please!
Bill, did you mean to wite that consumer prices are up 20%?
Something like that, taking in context of that paragraph and the rest of the letter.
Bill will own up in his next offering.
I have a great respect for Bill. And I wasn't trying to put him down but I was wondering if this was right or a typing error.
Hi Mr. Solow -
A visit to the grocery store will clear up any confusion...
;)
No need to get smarty pants, I wasn’t sure if it was a typing error.
Wasn't trying to smarty-pants you -- see the ;)
Was just trying to contribute in my often superfluous, near-worthless way.
*It's a slow day...
;)
Wish our portfolio manager would submit great info. like you. Many thanks