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Prepare for landing....the US economy

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    #31
    Lower interest rates is a stimulus.

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      #32
      No recession this time. Too many people working, saving money, paying bills. If unemployment were higher - then yes a recession is happening. People have forgotten that a 2% interest rate is very stimulative to the economy. I think we should have stayed at 2% and let the world know that is what it is going to be for a while. That would create certainty. Now?? Why take a loan when you know the rate will be lower in the future?

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        #33
        Originally posted by Razrbk89 View Post
        Things aren’t really great up here economically right now, so I sure hope it doesn’t get too much worse.

        It’s bound to crash out eventually, and I guess my neck of the woods is fairly insulated from major economic swings anyway. I think a lot of real estate/land investors stand to get burned on the next down turn. I see people paying quite a bit more than they should on ground that can’t make them a dollar and I’m sure there’s a ton more of that going on down there & in areas with larger population bases.


        I moved form North Carolina(Charlotte) in 2011 to Baton Rouge and it was like going back in time.

        Carolina Banking 2008 crash to Baton Rouge and the influx of Catrina so there never was a slow down.


        Sent from my iPhone using Tapatalk

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          #34
          Originally posted by Shane View Post
          Lower interest rates is a stimulus.
          Agreed it should stimulate some industries that depend on working credit, also forces everyone except the accredited and in some cases sophisticated investors into the stock market. It is near that point already. Then we will get to enjoy the magic show as the small investors money turns into the financial institutions money as they short them all the way down.

          (Go FOX, Go CNN) Ouch that doesn't tickle anymore

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            #35
            Article is a carp but the charts are great. Spend some time on the 3 charts and create your own story.

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              #36
              Originally posted by Shane View Post
              Economists I follow are saying that the current yield curve shows a bubble in the bond market rather than impending economic collapse. It's hard to have a recession with historically low unemployment, increased wages, low interest rates, reduced government regulation, growing corporate profits, etc... The trade war and cost of the tariffs are definitely a drag, but (so far) not a big enough drag to offset all the rest of the positive fundamentals that currently exist in the economy. As low as interest rates are in the US, they're even lower in several other countries - even negative in a few. Lots of folks around the world that want to hold some safe bonds are buying US bonds since they pay more than other governments' bonds right now. Couple that with the Fed still holding huge amounts of Treasuries, and you have a really high demand for US bonds. That leads to higher prices, which leads to lower yields. It has nothing to do with some magical ability for the yield curve to predict or cause a recession.


              There's definitely another recession coming eventually. There's always another one. Everything is cyclical. But the fundamentals will need to shift in a negative direction before that can happen. Right now the fundamentals are largely positive for continued growth.

              None of that means that the stock market can't experience some wild volatility. It can and will, regardless of what reality is sometimes.
              I think I fear a bubble in the bond market much more than you imply here. Importance/Ability to borrow in our market can't be understated. We are addicted to debt. In my real estate industry it can have severe impacts on municipalities ability to fund infrastructure for development (sewers roads etc). Land developers and home builders will be passing that cost on to the homeowner. I hope they can continue to streamline banking regs to allow them to lend the cash they are sitting on now.

              Sent from my SM-G973U using Tapatalk

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                #37
                The law of gravity says that what goes up must come down. Best thing is to place oneself in a position to catch some of what's falling.

                That's it, I'm outta here.

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                  #38
                  Originally posted by Dusty Britches View Post
                  I think it is kinda' ironic that a top ranking Democrat on the Finance committee said last week that the only thing that can stop Trump is a recession and for no apparent reason the Fed lowers interest rates.
                  The fed decides whether to lower or raise rates based upon 8 regularly scheduled meetings per year. The timing would seem coincidental.

                  As for why they lowered it, they lay their reasoning out in this statement:

                  https://www.federalreserve.gov/monet...20190731a1.pdf

                  More detail from the meeting minutes will be available at the end of the month here:

                  https://www.federalreserve.gov/monet...ccalendars.htm

                  Note: this isn't my endorsement of their decision being the correct one. Just posting links.
                  Last edited by sir shovelhands; 08-17-2019, 02:27 PM.

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                    #39
                    Originally posted by TeamAmerica View Post
                    I think I fear a bubble in the bond market much more than you imply here. Importance/Ability to borrow in our market can't be understated. We are addicted to debt. In my real estate industry it can have severe impacts on municipalities ability to fund infrastructure for development (sewers roads etc). Land developers and home builders will be passing that cost on to the homeowner. I hope they can continue to streamline banking regs to allow them to lend the cash they are sitting on now.

                    Sent from my SM-G973U using Tapatalk
                    I fear bonds also. May never happen but every city is bonded out for growth. A lot of them are banking on a lot of growth. Small cities have billions in bonds.

                    So what happens when something happens that stops population growth? IMO if our population went down across the country the stock market would be screwed WAY more than people think.

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                      #40
                      After the Russia hoax, nothing else has worked for them. And of course, they have their friends in the MSM ready to parrot their doom and gloom.
                      Originally posted by Johnny Dangerr View Post
                      The Dems are banging the rescission drum ahead of this up coming election. Throwing stuff at the wall and seeing what sticks...........

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                        #41
                        Saw another interesting note on the market (not necessarily the broad economy). Berkshire Hathaway (Buffet) has the highest level of cash reserves since shortly before the 2008 recession.

                        Still may not mean a recession but it is a signal that a correction may be here soon.

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                          #42
                          Originally posted by captainsling View Post
                          I'll wait and see what happens. Been watching a few stocks for a while. OPD and HOME are two I have been watching drop like a rock. Retail is not necessarily where I would want to be in a recession though. It is already a struggling area thanks to Amazon ruining retail.

                          Would be nice if rates go a little lower and I can refi the house for a lower note.
                          How low are you waiting for? I've been locking 3.625% over and over with several 3.5%. We're within 1/8 of the lowest that interest rates have been in the history of home loans. I'm refinancing a dozen TBHers right now. I'd love to take a look at your scenario. Shout at me. Trey@treypowers.com

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                            #43
                            I just locked my new home purchase 30yr fixed at 4.0%

                            I bought my house in 2008 and got 3.125%

                            Sent from my SM-G955U using Tapatalk

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                              #44
                              Originally posted by TeamAmerica View Post
                              Saw another interesting note on the market (not necessarily the broad economy). Berkshire Hathaway (Buffet) has the highest level of cash reserves since shortly before the 2008 recession.

                              Still may not mean a recession but it is a signal that a correction may be here soon.
                              That is interesting.

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                                #45
                                Originally posted by TeamAmerica View Post
                                Saw another interesting note on the market (not necessarily the broad economy). Berkshire Hathaway (Buffet) has the highest level of cash reserves since shortly before the 2008 recession.

                                Still may not mean a recession but it is a signal that a correction may be here soon.
                                Originally posted by PlanoDano View Post
                                That is interesting.
                                It could also mean that the cash that he normally might keep in bonds is just being held in cash right now, due to the low yields in the bond market and the possibility of a corresponding bubble in bond prices. Rather than parking it in bonds that could pay a little interest while waiting on the next acquisition, maybe he's just holding it in cash since the yield isn't much different than bonds but cash doesn't have the downside risk that bond values do.

                                ?? Just another possibility. I don't know Mr. Buffet, so I couldn't say what his thinking is for sure.

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