It’s been slowing for a minute IMO. Lots of sales around me, malls were pretty empty in the lead up to Christmas here, and a lot of people in my circle have been talking about not having any money.
I almost bought a house once. Not sure if it’s a good thing or a bad thing that my offer got rejected. But I am nowhere near being able to afford one now.
Yep, and some of that was known at the time. The FDIC should have figured out the range of how big the over $250K haircut was going to be, and then guaranteed a percentage of deposits and made it immediately liquid on that Monday… but still made them take the haircut. So if they were going to lose somewhere between 5% and 20% of their deposits, guarantee 80% and get it liquid, and then let the dust settle on the rest.
buyin a house ain’t all it’s cranked up to be
my entire net worth wrapped up in an asset that’s assumed to always magically appreciate but just can as easily burn down or the market can just be like aayyyyy nevermind. no thanks
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Nearly everyone has homeowner’s insurance which would pay to rebuild the house.
I expect rent inflation to be horrendous for basically the rest of our lives. I also want to be able to upgrade/customize my home, not share a wall with neighbors so I don’t have to worry if the TV is too loud at midnight or the music when I’m lifting weights is too loud. On that note, I’d like to have a more permanent home gym setup, which wouldn’t be too expensive but would require work I can’t do in a rental.
Mainly I want to get to a point where my home is paid off and there’s no rent, nobody can tell me shit, and the only outlay for the home is insurance and maintenance.
that’s why I like to live in a pseudo rent control state like CA. only can legally raise by a certain percentage per year. not that rent inflation doesn’t happen in such a system, of course, but you can’t get evicted super duper easily or frivolously here either, so a technique they used to do was just jack up your rent til you leave. if you find a place you like you can sorta just stay in it.
just saying I have pretty much all those things you mentioned and I rent.
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I think the % is 10% though right? But yeah they tried to jack mine 38% in 2020.
with some caveats, the effective rate is usually lower.
I’ve had my rent raised one time in 3 years and it was about 4%. But I’m not sure this guy isn’t dead, I’ve literally seen him only the day I moved in.
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And taxes of course.
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Right, that too.
Millennial home ownership rate is still like 48%. It’s not a 1% thing or even a 10% thing. And even ignoring home ownership, inflation should also help those who have fixed rate student loans which is a lot of millennials. So your perspective is way off here.
Yeah what’s happening here is a lot of millennials bought homes with very little money down at very low interest rates. Those of us who didn’t are getting fucked pretty good. I wanted to put 20% down, which in hindsight was astronomically stupid.
So the 52% who don’t own homes are in a way tougher spot in terms of getting into home ownership than anyone our age has been in a while in America.
And I have no student loans, so I have no fixed rate debt. Being debt averse has really screwed me. On the flip side I don’t know too many people who just have a mortgage and a student loan. Most people I know either have ~no debt and some savings thus inflation hurts them, or they have way too much debt both fixed rate and variable, so they’re in trouble either way pretty much. Rising rates punish them for the variable rate debt, but rising inflation makes them run up more debt because they’re paycheck to paycheck already and have been for a while.
Looks like he’s the real genius here. GME up 56.5% pre-market. Of course he has to actually sell at some point to get the win.
This is very clearly what the Fed is doing, not just bad on the merits but extremely dumb:
It’s what the Fed says openly says their goal is, we are going to raise interest rates to lower inflation.
Huh, how does that work?
Well, it’ll lead to a lot of businesses laying people off and maybe even going out of business. The laid off workers won’t be able to afford stuff and that’ll bring down prices for everyone else. And also the people who keep their jobs will feel fortunate and stop asking for raises.
Pretty gross plan, you are at least going to turn the dial up gradually and responsibly to make sure you keep the pain and suffering to a minimum, right? Right?
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Love that scene. That’s basically my financial philosophy/goal.
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Not necessarily. We have high inflation and a labor shortage. Hiking interest rates to target inflation shouldn’t automatically cause layoffs, it should decrease demand which usually leads to layoffs due to decreased demand. In this case, we have a labor shortage and thus supply can’t keep up with demand. So quenching demand should bring us back towards a balance without layoffs.
Now, that’s economy-wide. There will (and should) be layoffs in some sectors, particularly ones that have been fueled by speculation on the back of low-interest loans. AKA tech, mostly. Some of those people will have two options: try to start something yourself or be a freelancer, or switch sectors for a while. Many of them also have enough money to make this choice a lot less painful. I don’t think we should worry a ton about them, especially given that the industry was propped up by the low interest rates for a long time.
Obviously they should be attacking this twice as hard on the corporate profits side, but this is America and that isn’t going to happen. I think here we can all agree that they should do that and that they won’t. So that’s kind of a moot point.
Unemployment has been fluctuating between 3.4% and 3.7% since March 2022. So far the rate hikes haven’t caused a net-loss in jobs.
So what we should be doing is hiking rates, perhaps a tad more slowly than we have, attacking corporate profits legislatively, and increasing immigration to increase the labor supply. Attacking corporate profits and increasing immigration are complete political non-starters in USA#1, but so far I haven’t heard a compelling reason why that means we should leave the third tool in the toolbox.
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CME has the odds at…
Pause 14%
25 bips 86%
50 bips 0%
I don’t think 50 bips should be 0%. I think it should be like 5%.
They also have a 0% chance of more than 50 bips of hikes from now til the end of 2023. That seems insane to me.