Housing crash deniers ???

[Greg R.]

Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions. 

However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.

Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct. 

[Michael Wooldridge]

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

So yes people are frustrated and yes they will continue to flop. I happen to believe the dems will hold more power in future years because of the frustration. And frankly given the shifts on the popular vote in recent years that trend should be obvious.

you have to be kidding. in what solar galaxy is that scenario a potential reality? i'm all ears.

 you are looking at just 2-4 year spans. I'm looking at something closer to 8-15 years. The timing has been good for GOP with economy for midterms. I don't believe it will be as red as it should be or that it will last. People are flipping because they are frustrated on economy. They will flip again. Not trying to turn this into a full political discussion but the PA senate race or Georgia Senate race are good examples. 

But sure my reality is wrong :). never mind I don't care who wins because it's all more of the same. 

at the rate those people are going, they might not even have a party in 8-15 years from now. you must not be aware of the "policies" and agendas that are getting peddled to make statements like the one above. good luck out there, Mike.

 Funny I hear the same from the left about the right. I'm guessing you are were surprised by 2020 results then?  Well aware of them all. I just don't care about it from either side.. All more of the same. 

 surprised? what are you talking about? your boy barely pulled ahead in key precincts. some sketchy stuff went down in 2020, that's a fact. thank god we are not ruled by the popular vote electees. 

 My boy? I don't care about him. But you just proved my point. Visit the coasts you'll find entirely different people from Ok / Texas (placed I am a lot and know well). Theres a reason why popular vote keeps trending up. And will continue too for years. one of us does have our head in the sand. I agree. Time will tell who but I don't think it will be me surprised. 

[Victor S.]

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

So yes people are frustrated and yes they will continue to flop. I happen to believe the dems will hold more power in future years because of the frustration. And frankly given the shifts on the popular vote in recent years that trend should be obvious.

you have to be kidding. in what solar galaxy is that scenario a potential reality? i'm all ears.

 you are looking at just 2-4 year spans. I'm looking at something closer to 8-15 years. The timing has been good for GOP with economy for midterms. I don't believe it will be as red as it should be or that it will last. People are flipping because they are frustrated on economy. They will flip again. Not trying to turn this into a full political discussion but the PA senate race or Georgia Senate race are good examples. 

But sure my reality is wrong :). never mind I don't care who wins because it's all more of the same. 

at the rate those people are going, they might not even have a party in 8-15 years from now. you must not be aware of the "policies" and agendas that are getting peddled to make statements like the one above. good luck out there, Mike.

 Funny I hear the same from the left about the right. I'm guessing you are were surprised by 2020 results then?  Well aware of them all. I just don't care about it from either side.. All more of the same. 

 surprised? what are you talking about? your boy barely pulled ahead in key precincts. some sketchy stuff went down in 2020, that's a fact. thank god we are not ruled by the popular vote electees. 

 My boy? I don't care about him. But you just proved my point. Visit the coasts you'll find entirely different people from Ok / Texas (placed I am a lot and know well). Theres a reason why popular vote keeps trending up. And will continue too for years. one of us does have our head in the sand. I agree. Time will tell who but I don't think it will be me surprised. 

 you don't? you should, because he represents everything that is wrong in DC. i visited (and even lived on) the coasts, rest assured. you just made a whole bunch of assumptions because of my listed location, btw. i wasn't even born here, so i'm pretty sure i'm a bit more well-versed than you when it comes to having a well-rounded world view. 

[Michael Wooldridge]

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

So yes people are frustrated and yes they will continue to flop. I happen to believe the dems will hold more power in future years because of the frustration. And frankly given the shifts on the popular vote in recent years that trend should be obvious.

you have to be kidding. in what solar galaxy is that scenario a potential reality? i'm all ears.

 you are looking at just 2-4 year spans. I'm looking at something closer to 8-15 years. The timing has been good for GOP with economy for midterms. I don't believe it will be as red as it should be or that it will last. People are flipping because they are frustrated on economy. They will flip again. Not trying to turn this into a full political discussion but the PA senate race or Georgia Senate race are good examples. 

But sure my reality is wrong :). never mind I don't care who wins because it's all more of the same. 

at the rate those people are going, they might not even have a party in 8-15 years from now. you must not be aware of the "policies" and agendas that are getting peddled to make statements like the one above. good luck out there, Mike.

 Funny I hear the same from the left about the right. I'm guessing you are were surprised by 2020 results then?  Well aware of them all. I just don't care about it from either side.. All more of the same. 

 surprised? what are you talking about? your boy barely pulled ahead in key precincts. some sketchy stuff went down in 2020, that's a fact. thank god we are not ruled by the popular vote electees. 

 My boy? I don't care about him. But you just proved my point. Visit the coasts you'll find entirely different people from Ok / Texas (placed I am a lot and know well). Theres a reason why popular vote keeps trending up. And will continue too for years. one of us does have our head in the sand. I agree. Time will tell who but I don't think it will be me surprised. 

 you don't? you should, because he represents everything that is wrong in DC. i visited (and even lived on) the coasts, rest assured. you just made a whole bunch of assumptions because of my listed location, btw. i wasn't even born here, so i'm pretty sure i'm a bit more well-versed than you when it comes to having a well-rounded world view. 

 Location was an assumption sure but nothing to do with that logic jump. It was the comment about dems disappearing. They will only grow over the next 10-15 years. To me it's not about right or wrong but the data behind it. So the logic leap was because of that comment. If you actually believe dems will be pushed out, I have to make assumptions. 

[Victor S.]

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

So yes people are frustrated and yes they will continue to flop. I happen to believe the dems will hold more power in future years because of the frustration. And frankly given the shifts on the popular vote in recent years that trend should be obvious.

you have to be kidding. in what solar galaxy is that scenario a potential reality? i'm all ears.

 you are looking at just 2-4 year spans. I'm looking at something closer to 8-15 years. The timing has been good for GOP with economy for midterms. I don't believe it will be as red as it should be or that it will last. People are flipping because they are frustrated on economy. They will flip again. Not trying to turn this into a full political discussion but the PA senate race or Georgia Senate race are good examples. 

But sure my reality is wrong :). never mind I don't care who wins because it's all more of the same. 

at the rate those people are going, they might not even have a party in 8-15 years from now. you must not be aware of the "policies" and agendas that are getting peddled to make statements like the one above. good luck out there, Mike.

 Funny I hear the same from the left about the right. I'm guessing you are were surprised by 2020 results then?  Well aware of them all. I just don't care about it from either side.. All more of the same. 

 surprised? what are you talking about? your boy barely pulled ahead in key precincts. some sketchy stuff went down in 2020, that's a fact. thank god we are not ruled by the popular vote electees. 

 My boy? I don't care about him. But you just proved my point. Visit the coasts you'll find entirely different people from Ok / Texas (placed I am a lot and know well). Theres a reason why popular vote keeps trending up. And will continue too for years. one of us does have our head in the sand. I agree. Time will tell who but I don't think it will be me surprised. 

 you don't? you should, because he represents everything that is wrong in DC. i visited (and even lived on) the coasts, rest assured. you just made a whole bunch of assumptions because of my listed location, btw. i wasn't even born here, so i'm pretty sure i'm a bit more well-versed than you when it comes to having a well-rounded world view. 

 Location was an assumption sure but nothing to do with that logic jump. It was the comment about dems disappearing. They will only grow over the next 10-15 years. To me it's not about right or wrong but the data behind it. So the logic leap was because of that comment. If you actually believe dems will be pushed out, I have to make assumptions. 

nothing to do with your "Visit the coasts you'll find entirely different people from Ok / Texas"? Just what exactly did you mean by that one then?

"They will only grow over the next 10-15 years."

again, you're making these wild statements without any sort of rational explanation other than "the coast people know better" thing. 

"To me it's not about right or wrong but the data behind it."

where is it, the data? if anything, people with some level of intelligence are trying to leave those hell holes in a jiffy. post-covid migration is very telling, in light of how those "coasts know better" places (mis)handled the pandemic response.

"If you actually believe dems will be pushed out, I have to make assumptions. "

i didn't say they "will" disappear, i simply said they have a good chance of doing so if they keep going down the rabbit hole with their current ideology.

[Michael Wooldridge]

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

So yes people are frustrated and yes they will continue to flop. I happen to believe the dems will hold more power in future years because of the frustration. And frankly given the shifts on the popular vote in recent years that trend should be obvious.

you have to be kidding. in what solar galaxy is that scenario a potential reality? i'm all ears.

 you are looking at just 2-4 year spans. I'm looking at something closer to 8-15 years. The timing has been good for GOP with economy for midterms. I don't believe it will be as red as it should be or that it will last. People are flipping because they are frustrated on economy. They will flip again. Not trying to turn this into a full political discussion but the PA senate race or Georgia Senate race are good examples. 

But sure my reality is wrong :). never mind I don't care who wins because it's all more of the same. 

at the rate those people are going, they might not even have a party in 8-15 years from now. you must not be aware of the "policies" and agendas that are getting peddled to make statements like the one above. good luck out there, Mike.

 Funny I hear the same from the left about the right. I'm guessing you are were surprised by 2020 results then?  Well aware of them all. I just don't care about it from either side.. All more of the same. 

 surprised? what are you talking about? your boy barely pulled ahead in key precincts. some sketchy stuff went down in 2020, that's a fact. thank god we are not ruled by the popular vote electees. 

 My boy? I don't care about him. But you just proved my point. Visit the coasts you'll find entirely different people from Ok / Texas (placed I am a lot and know well). Theres a reason why popular vote keeps trending up. And will continue too for years. one of us does have our head in the sand. I agree. Time will tell who but I don't think it will be me surprised. 

 you don't? you should, because he represents everything that is wrong in DC. i visited (and even lived on) the coasts, rest assured. you just made a whole bunch of assumptions because of my listed location, btw. i wasn't even born here, so i'm pretty sure i'm a bit more well-versed than you when it comes to having a well-rounded world view. 

 Location was an assumption sure but nothing to do with that logic jump. It was the comment about dems disappearing. They will only grow over the next 10-15 years. To me it's not about right or wrong but the data behind it. So the logic leap was because of that comment. If you actually believe dems will be pushed out, I have to make assumptions. 

nothing to do with your "Visit the coasts you'll find entirely different people from Ok / Texas"? Just what exactly did you mean by that one then?

"They will only grow over the next 10-15 years."

again, you're making these wild statements without any sort of rational explanation other than "the coast people know better" thing. 

"To me it's not about right or wrong but the data behind it."

where is it, the data? if anything, people with some level of intelligence are trying to leave those hell holes in a jiffy. post-covid migration is very telling, in light of how those "coasts know better" places (mis)handled the pandemic response.

"If you actually believe dems will be pushed out, I have to make assumptions. "

i didn't say they "will" disappear, i simply said they have a good chance of doing so if they keep going down the rabbit hole with their current ideology.

 At the rate they are going they won’t have a party is pretty well “disappear”. As to the ideology part both parties are ridiculous at this point on that front but I could argue one pivots faster there was one “policy” that was very popular around 2016-2019 but hasn’t been spoken of much lately. 

Data? Look at the popular vote trends this century. If it continues the electoral college won’t matter. Even funnier especially with people moving (and 99% of people move for jobs or COLA) you can see that popular vote spread.

Anyway this disagreement will be solved like the discussion around home prices with time. The latter half of 2020’s and early 2030s should be enlightening. 

[Victor S.]

Data?

[Nicholas L.]

@Greg R.

https://www.cnbc.com/2022/10/3...

genuine question - if builders pull back, won't that hurt supply such that prices will be propped up?  or will it be more than outweighed by the increase in rates?

as I have said before I'm in the "I'm at a total loss to predict what is going to happen next year" camp... still just trying to find deals way below ARV and keep moving forward

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Anyway this disagreement will be solved like the discussion around home prices with time. The latter half of 2020’s and early 2030s should be enlightening. 

Dude people in the 1960 or 1950s also said the same thing " they will disappear (for something they don't like)" ,etc,etc,etc

The fact is idea actually never disappears. 

Folks in 1990 are saying communism is dead when the berlin wall is falling, in 2022 it's a communist country that's more advanced than a developed country. 

Ideas and ideology never disappear.

[Carlos Ptriawan]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Quote from @Victor S.:

Quote from @Michael Wooldridge:

Anyway this disagreement will be solved like the discussion around home prices with time. The latter half of 2020’s and early 2030s should be enlightening. 

Dude people in the 1960 or 1950s also said the same thing " they will disappear (for something they don't like)" ,etc,etc,etc


Folks in 1990 are saying communism is dead when the berlin wall is falling, in 2022 it's a communist country that's more advanced than a developed country. 

Ideas and ideology never disappear.

[Carlos Ptriawan]

Quote from @Nicholas L.:

@Greg R.

as I have said before I'm in the "I'm at a total loss to predict what is going to happen next year" camp... still just trying to find deals way below ARV and keep moving forward

 I guess everyone is on "total loss" camp either but they guy that has to predict has range of prediction from -1.5$ (Fanny Mae) to 3.0% (Realtor association). Funny they follow Zillow.

[Chris Clothier]

 @Greg R.

I already posted a couple of times way back near the first couple of pages.  My thoughts were that no, we are not going to have a crash and I'm not sure of the definition of a correction.  I stand by the notion that there is no "national housing market" so arguing that the US housing market is going to go up or down is silly in my opinion.  I invest in the south and southeast, I continue to love the current market and continue to add to my portfolio.  If I have cash, it is not sitting on the sidelines.  I look to use smart leverage which may mean higher downpayment right now, but I am looking for assets that historically go up in value and right now are in high demand.  Median priced, single-family housing. I continue to purchase right through this market as long as the deal itself hits my criteria.  

That being said, I wanted to share these two articles as I think they illustrate why most cities will not see any significant drops, certainly nothing to cause concern for any buyers from he past 12-24 months and why I do believe that we will continue to see significant purchases by institutional buyers and investors.

https://markets.businessinside...

Biggest quote from this one pertains to why housing is not in a free fall with rates at their highest rates since early 2000's.

"There's still this gap between demand and supply because we were underbuilding for many years," Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, told Insider. "So now we see demand is slowing, but it still outpaces supply."

As long as demand continues to outpace supply in any individual market or segment of a market, you will not see a significant drop in prices.

https://www.yahoo.com/finance/...

Biggest quote comes from Redfin CEO, Glenn Kelman.

"The investor pullback makes sense. While most housing economists don’t foresee a correction on scale with the Great Financial Crisis bust—during which U.S. home prices fell 27% between 2006 and 2012—they do acknowledge that this home price correction is sharper than it was in 2006. The lagged Case-Shiller Index already shows that home prices are down 8.2% in San Francisco.

To Redfin CEO Glenn Kelman, the Pandemic Housing Boom’s investor frenzy helps explain why home prices are correcting faster this time around. Historically speaking, home prices are sticky. Sellers simply don’t want to relent on price unless economics, like a supply glut, force their hand. That’s not as much the case for institutional investors and builders. If they think prices are about to drop, they want to get out first. The fact that the Pandemic Housing Boom saw investors become a higher share of buyers, Kelman says, ultimately makes the U.S. housing market more vulnerable to a faster swing down.

“My take is that because builders and iBuyers account for more inventory, that leads to a faster correction. We’re one of them, we’re an iBuyer,” Kelman says. “We notice immediately when fewer people are on our website and fewer are signing up for tours…We’re sitting on $350 million worth of homes for sale that we bought with our own money, or worse bought with borrowed money. And what we always told investors is that we would protect our balance sheet by acting quickly. We don’t have hope as a strategy. We immediately started marking down things.”

As always, it is market by market, but I think prevailing data will show that this time was a very good time to continue turning cash into assets that historically go up in value over-time, especially if it is a revenue producing asset.  

Again, just my thoughts on your post Greg 79 pages later, lol!

[Carlos Ptriawan]

Quote from @Chris Clothier:

 @Greg R.

I already posted a couple of times way back near the first couple of pages.  My thoughts were that no, we are not going to have a crash and I'm not sure of the definition of a correction.  I stand by the notion that there is no "national housing market" so arguing that the US housing market is going to go up or down is silly in my opinion.  I invest in the south and southeast, I continue to love the current market and continue to add to my portfolio.  If I have cash, it is not sitting on the sidelines.  I look to use smart leverage which may mean higher downpayment right now, but I am looking for assets that historically go up in value and right now are in high demand.  Median priced, single-family housing. I continue to purchase right through this market as long as the deal itself hits my criteria.  

That being said, I wanted to share these two articles as I think they illustrate why most cities will not see any significant drops, certainly nothing to cause concern for any buyers from he past 12-24 months and why I do believe that we will continue to see significant purchases by institutional buyers and investors.

https://markets.businessinside...

Biggest quote from this one pertains to why housing is not in a free fall with rates at their highest rates since early 2000's.

"There's still this gap between demand and supply because we were underbuilding for many years," Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, told Insider. "So now we see demand is slowing, but it still outpaces supply."

I think there are a few more dimension why home prices didn't really fall outside the above reason, albeit it's actually in the neutral zone right now :

1. we have a recorded history of high equity ownership; and also a large cash especially owned by the upper middle class. This means folks with equity can still purchase a home with cash or large downpayment. The mortgage rate seems to affect mostly FTHB according to mortgagenews dotcom.
Many companies also still record highest earning history.

2. Some markets started to go against gravity as well where the price is spiking up in Sep after price was reduced in May. This is the first time in history I've seen San Jose property is higher than San Francisco. This economy is very strange, it's just so resilient and "too strong".  

It seems, depending on which sector you're working on, if you work on real estate you feel depression ; but if you work for oil and gas company or even some tech company, this feels like 2019. Very strange. 

Take a look at San Jose chart here, price is spiking up in September.

[Chris Clothier]

Quote from @Carlos Ptriawan:

Quote from @Chris Clothier:

 @Greg R.

I already posted a couple of times way back near the first couple of pages.  My thoughts were that no, we are not going to have a crash and I'm not sure of the definition of a correction.  I stand by the notion that there is no "national housing market" so arguing that the US housing market is going to go up or down is silly in my opinion.  I invest in the south and southeast, I continue to love the current market and continue to add to my portfolio.  If I have cash, it is not sitting on the sidelines.  I look to use smart leverage which may mean higher downpayment right now, but I am looking for assets that historically go up in value and right now are in high demand.  Median priced, single-family housing. I continue to purchase right through this market as long as the deal itself hits my criteria.  

That being said, I wanted to share these two articles as I think they illustrate why most cities will not see any significant drops, certainly nothing to cause concern for any buyers from he past 12-24 months and why I do believe that we will continue to see significant purchases by institutional buyers and investors.

https://markets.businessinside...

Biggest quote from this one pertains to why housing is not in a free fall with rates at their highest rates since early 2000's.

"There's still this gap between demand and supply because we were underbuilding for many years," Nadia Evangelou, senior economist and director of forecasting for the National Association of Realtors, told Insider. "So now we see demand is slowing, but it still outpaces supply."

I think there are a few more dimension why home prices didn't really fall outside the above reason, albeit it's actually in the neutral zone right now :

1. we have a recorded history of high equity ownership; and also a large cash especially owned by the upper middle class. This means folks with equity can still purchase a home with cash or large downpayment. The mortgage rate seems to affect mostly FTHB according to mortgagenews dotcom.
Many companies also still record highest earning history.

2. Some markets started to go against gravity as well where the price is spiking up in Sep after price was reduced in May. This is the first time in history I've seen San Jose property is higher than San Francisco. This economy is very strange, it's just so resilient and "too strong".  

It seems, depending on which sector you're working on, if you work on real estate you feel depression ; but if you work for oil and gas company or even some tech company, this feels like 2019. Very strange. 

Take a look at San Jose chart here, price is spiking up in September.

 I read a stat earlier today in an article where the headline is about the housing crash, but the data was very deceiving.  Both good and bad. The author noted that that Austin, TX. saw a "...whopping 10.3% decline in housing value from June to September, although September pricing is 2.2% ahead year over year".

I definitely think much of how you feel is where you are viewing from and the market can be good and bad at the same time depending on your point of view.  

[Bruce Woodruff]

A recession is now more likely - https://www.msn.com/en-us/mone...

[Nicholas L.]

@Bruce Woodruff

what do you think the impact will be on prices?

[Carlos Ptriawan]

I got more data from my market as it's the market that has the biggest price reduction; it gives a lot of additional insight :

- There's more volatility in SF than in Townhome/condo. Townhome doesn't have much volatility
- Most sold homes are adjusted to Q3 to Q4 2021 price.
- The MOST significant price reduction is primarily on 5 BR and above, with the price of $2 mil and above.
In this area, the drops are extremely significant like 30% compare to Q3 2021.
- But for most 2BR/3BR homes, the price has 1-2% YoY increase compared to Q3 2021. Basically a flat market.  

What is most interesting is, I found this algorithm :
- If within a quarter new listing is higher than sold homes, you will see more price reduction BUT
- If the sold home is equal to the new listing, the price will just be flat or going up. 

It's very interesting how this market finds new price discovery.

[Carlos Ptriawan]

Quote from @Bruce Woodruff:

A recession is now more likely - https://www.msn.com/en-us/mone...

 If we see the bond / stock volatility like the one displayed in the article eventually it's 100% a signal for a recession.
But if we follow standard US fundamental economic indicators like ISM, job market, it's still an okay market.

There're divergences in the economy between the fundamental real economy and wall street economy. 
Wall street is saying recession , real economy saying we're still okay. Very strange indeed. 

My company has the biggest record backlog order means need for tech equipment industry is so large. My friend at Exxon has the largest bonus ever, how could there be just too many disagreements right lol.

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

A recession is now more likely - https://www.msn.com/en-us/mone...

 If we see the bond / stock volatility like the one displayed in the article eventually it's 100% a signal for a recession.
But if we follow standard US fundamental economic indicators like ISM, job market, it's still an okay market.

There're divergences in the economy between the fundamental real economy and wall street economy. 
Wall street is saying recession , real economy saying we're still okay. Very strange indeed. 

My company has the biggest record backlog order means need for tech equipment industry is so large. My friend at Exxon has the largest bonus ever, how could there be just too many disagreements right lol.

 The cheap money to expensive money aspect is hitting those stocks / bonds hard. Job market is still fairly strong and earnings aren't even bad.

Also there is still so much cash out there in both wall street, including big companies, and the consumer. VC is sitting on more cash than ever and still investing or planning to. The fundamentals are changing (more cash flow less about market share) but there is still a lot going on. 

[Bruce Woodruff]

Quote from @Nicholas L.:

@Bruce Woodruff

what do you think the impact will be on prices?

 I still see housing prices continuing to drop in every area. Sooner or later....

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

A recession is now more likely - https://www.msn.com/en-us/mone...

 If we see the bond / stock volatility like the one displayed in the article eventually it's 100% a signal for a recession.
But if we follow standard US fundamental economic indicators like ISM, job market, it's still an okay market.

There're divergences in the economy between the fundamental real economy and wall street economy. 
Wall street is saying recession , real economy saying we're still okay. Very strange indeed. 

My company has the biggest record backlog order means need for tech equipment industry is so large. My friend at Exxon has the largest bonus ever, how could there be just too many disagreements right lol.

 The cheap money to expensive money aspect is hitting those stocks / bonds hard. Job market is still fairly strong and earnings aren't even bad.

Also there is still so much cash out there in both wall street, including big companies, and the consumer. VC is sitting on more cash than ever and still investing or planning to. The fundamentals are changing (more cash flow less about market share) but there is still a lot going on. 

The stock valuation is moving down because for valuation they use the DCF factor, as interest rate hike, of course automatically stock going down (vice versa). But there're still a lot of tech stock companies that's going up against gravity such as my employer has made so much record revenue. Now with tech stock, so far the EPS earning until the next 6 months in the future is still not impacted by the higher interest rate. For a company that generates cash flow like us, an interest rate hike has no or little effect.

For the bond, obviously it's the worst as the interest rate and yield is rising, bond has no bid and is cratered to 4th standard deviation now. It's the first time since 1786 that USA bond is reaching 4th standard deviation. This bond would have a strong impact to a country/company that doesn't generate cash-flow including the startup that you mentioned above. Obviously, VC doesn't want to lend their money right now if your product/company sucks and doesn't produce money.

In high-interest-rate economy, countries and companies that generate money will survive.

[John Williams]

Something that many people are overlooking is the very real possibility that we may just have a normal cycle (i.e. not a crash like many expect because of what happened in 2008). What if is just a very moderate slowdown that rebounds back into very moderate/steady growth?

In fact, that's what my crystal ball says will happen!

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

A recession is now more likely - https://www.msn.com/en-us/mone...

 If we see the bond / stock volatility like the one displayed in the article eventually it's 100% a signal for a recession.
But if we follow standard US fundamental economic indicators like ISM, job market, it's still an okay market.

There're divergences in the economy between the fundamental real economy and wall street economy. 
Wall street is saying recession , real economy saying we're still okay. Very strange indeed. 

My company has the biggest record backlog order means need for tech equipment industry is so large. My friend at Exxon has the largest bonus ever, how could there be just too many disagreements right lol.

 The cheap money to expensive money aspect is hitting those stocks / bonds hard. Job market is still fairly strong and earnings aren't even bad.

Also there is still so much cash out there in both wall street, including big companies, and the consumer. VC is sitting on more cash than ever and still investing or planning to. The fundamentals are changing (more cash flow less about market share) but there is still a lot going on. 

 I also like to see the job number. Do you see the latest job report issued a few minutes ago? 261K jobs added beyond the estimated 195k job. Hourly wage is also increasing more than expected.

This is more like an economy that's during the expansion phase, but the money authority doest like it and would like to crush it (which I found weird lol). There's no recession when job market is expanding lol 

Fed vs market literally .....

[Michael Wooldridge]

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Bruce Woodruff:

A recession is now more likely - https://www.msn.com/en-us/mone...

 If we see the bond / stock volatility like the one displayed in the article eventually it's 100% a signal for a recession.
But if we follow standard US fundamental economic indicators like ISM, job market, it's still an okay market.

There're divergences in the economy between the fundamental real economy and wall street economy. 
Wall street is saying recession , real economy saying we're still okay. Very strange indeed. 

My company has the biggest record backlog order means need for tech equipment industry is so large. My friend at Exxon has the largest bonus ever, how could there be just too many disagreements right lol.

 The cheap money to expensive money aspect is hitting those stocks / bonds hard. Job market is still fairly strong and earnings aren't even bad.

Also there is still so much cash out there in both wall street, including big companies, and the consumer. VC is sitting on more cash than ever and still investing or planning to. The fundamentals are changing (more cash flow less about market share) but there is still a lot going on. 

 I also like to see the job number. Do you see the latest job report issued a few minutes ago? 261K jobs added beyond the estimated 195k job. Hourly wage is also increasing more than expected.

This is more like an economy that's during the expansion phase, but the money authority doest like it and would like to crush it (which I found weird lol). There's no recession when job market is expanding lol 

Fed vs market literally .....

 Yep. The fed will win eventually but they are trying to slow it is all. So the moment it slows they will back off. Because it's so strong I feel like they won't overshoot for a change on it. 

Jobs are strong and will continue to be. Even in tech some companies are being hit but not all. And most are just freezing. They might not be adding but they aren't reducing near as much as people expected. 

Anyway I've been calling for stagnation and it's feeling and looking more and more like that is what will happen. Still remained more concerned about activity outside the US such as Credit Suisse and other foreign markets. 

[Carlos Ptriawan]

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Quote from @Michael Wooldridge:

Quote from @Carlos Ptriawan:

Anyway I've been calling for stagnation and it's feeling and looking more and more like that is what will happen. Still remained more concerned about activity outside the US such as Credit Suisse and other foreign markets. 

 US market is def. in stagnant mode. You will have -1 to 1% growth I think until the dust settles. 

For Credit Suisse uproar etc you can take a look at Swiss Bank FX Liquidity Swap, the Fed has money channeled via SNB and has been used quite a lot. The purpose is rather than for European banks to sell their treasury holding (which ultimately will create a crisis) ; that banks could access the swaps "to borrow" the dollar. This is one way the Fed makes money without doing anything while still injecting liquidity to avoid any crash.

[Bruce Woodruff]

Quote from @John Williams:

Something that many people are overlooking is the very real possibility that we may just have a normal cycle (i.e. not a crash like many expect because of what happened in 2008). What if is just a very moderate slowdown that rebounds back into very moderate/steady growth?

In fact, that's what my crystal ball says will happen!

I agree. I think maybe more than moderate, maybe 20%? But then a rebound back to something relatively normal, not the craziness of 2018 - 2021...