Doing good in the hood. Doing nothing. This market is crazy.
el erian summary. dont bail out airlines. they are not an exception, just just a leading indicator. the longer this goes the more other places blow up. so unfair to bail them out. importance of balance sheet. default deleveraging cycle. ■■■■ going to blow. too many ppl expecting quick rebound.
I have a lot in taxable. I want to have liquidity to invest in private transactions when the opportunity arises. I am going to start using some tax advantaged products since I don’t have a 401k at the current job.
lol i just closed my mortgage bois. so im going to have about 100k in taxable acct. im going to buy spy i think. just so i dont ever sell. i use my tax advvatanged accts for specific stocks. my hope is to use this money to buy a condo closer to work. hopefully ppl stop paying their rents in la. and ■■■■ the landlords here and wathc them panic sell. hahaha i cant wait.
Prices already coming down for sure. I put a lowball offer in on a duplex yesterday that was accepted. Didn’t think for a second they would take it… bidding wars look to be a thing of the past.
I have a few rentals and not too concerned if the market drops further from here given I plan to hold for 10+ years. As long as banks don’t continue to extend the mortgage deferral option you’ll likely be able to find a deal. Condos are getting hit the hardest here, lots of air bnb owners getting punished and being forced to sell.
Listing prices haven’t gone down in Los Angeles yet. Saddddd…
Was reading the other day that US M1 money supply is now at 5 trillion, a 27% increase since Jan this year. Hard not to see inflation picking up in the years to come. Now might be the best time to buy up some real estate as a hedge, ideally at covid related depressed prices. I think you’ll find a few motivated sellers in the near future Nerdy.
Well it really depends on the credit crisis. If credit crisis gets really bad then deflation can happen. Fed expanded balance sheet by 2 trillion since March to 6 trillion. But the total amount of assets in the us is like 250 trillion. 150 trillion of which is debt. So they printed a lot to cover stimulus package and the lost gdp from give shutdown, but it’s not enough if ppl stop spending on credit. Inflation will tick up if we have a v shaped recovery. But I don’t think that will be the case.
Ray Dalio video.
Yeah I suppose it’s in how you view this playing out. I don’t think this will be a prolonged depression. After all, this is a voluntary recession as it is. There may be a structural shift and certain industries will be more or less impacted, but with the printing press on auto pilot and interest rates staying low for the foreseeable future it’s hard to see deflation in the US. The same argument was made in '09 and we know how that went. Either way, if you’re leveraging up to buy real estate for the long term you’ll likely end up in decent shape.
True. This pandemic is a supply side shock. Demand was fine prior the crisis. But The longer this goes the more likely it will turn to a demand side shock.
A lot of people are unemployed. I think there was an article that said 36m unemployment claims. 150m total labor force so roughly 23 percent unemployment. Mostly affecting the poors. Lots of them about to lose credit too. The rich aren’t spending as much and are saving.
The key is spending. If people don’t spend this economy is doing down. You can print a ton of money but if people don’t spend And don’t work then it doesn’t matter cuz profits are going to be down a lot. We are about to reopen so we’ll see if ppl spend again or wait for a vaccine.
If ppl wait it’s going to be bad. A lot of cos has a lot of debt and not a lot of cash. So if ppl don’t spend until a year from now cuz they too ■■■■■. Then lots of cos will be dead!
I’d be careful to call this voluntary. The cell phone data suggests people started to reduce foot traffic substantially before government mandates. The response of citizens is often neglected when trying to make a nice and tidy cause and effect for the current economic situation
Ah nothing like a good counterargument. I think the definition of voluntary is when people make a decision without being told to do so. In effect, that is case in point. That wasn’t the main point of my post, as I’m sure you’re diligently aware. But please, enlighten me on the state of current affairs with explicit data so as to not confuse with a careless assessment. I’ll hang up and listen.
No need to get upset when your assumptions are questioned. Under your definition, any recession is voluntary. No one forced people to stop paying their mortgages last crisis. No one forced anyone to stop buying tech stocks in the bubble. So please explain how this is a voluntary recession Mr. Sassy. And how this logically leads to the conclusion this isn’t a depression. I’ll get my hater blockers on, so I can get the substance from out of the sass.
Ok kiddo, if your M.O is always to point out the faults in other’s viewpoints and offer no alternative than “that’s a lazy assessment”, you’re going to struggle in life. I don’t intend to offer up a thesis for every point I make just to satisfy your thirst to prove you’re an analyst and we’re all peasants.
The conversation is around real estate investment. I suggested that investing in real estate might offer a hedge against inflation given the sharp increase in the money supply. It’s a logical conclusion. I made a passing comment that I don’t believe this will be a lasting depression and that the recession is voluntary. This view is also shared by the President of the St. Louis Federal Reserve (https://www.stlouisfed.org/on-the-economy/2020/march/bullard-expected-us-macroeconomic-performance-pandemic-adjustment-period) if you care to read. It’s mirrored by bloomberg and host of other agencies.
I think that the housing market is being supported by mortgage deferrals and government assistance. Most people are waiting for this to end and think the market will collapse once it does. I don’t share this opinion as the banks have already said they’re willing to extend deferral for another 6 months, by which time a vaccine should be in place and a full recovery under way. And for the record I put my money where my mouth is.
If you disagree with me that’s fine, but as you so eloquently put it, show me some substance in your reply instead of nitpicking on one sentence in a thread of comments.
powell was just on 60min. just said he prolly doesnt expect a depression. but said in the same interview that gdp will fall 20% to 30%. which means that he is using the definition that requires over 1 year of economic decline. and not just the typical 10% decline in gdp. whats interesting is, he is even saying he doesnt know when a vaccine will come. and that we’ll prolly need a vaccine to see economic levels recover. so with that said. imo it can reeally go either way and everyone economic forecast is prolly moot. kinda funny that the best economic forecasters now are virologists. but in any case the longer this goes, the more pain there will be. interesting how markets pop on a good phase 1 trial. literally a 15% chance it gets approved all the way.
Modern’as is in phase 2, those were phase 1 results, once in phase 2, there is a 30% historic progression rate. It joins Oxford and Pfizer in phase 2 among others.
There are 8 vaccines in human trials including about 4 in phase 2. Phase 2 has a 30% historic progression rate, but that is dragged down by cancer meds and meds in crowded fields that get shut down when efficacy doesn’t beat existing peers. Realistically, the odds of a vaccine are high and high chance of delivered vaccines this fall. I worked for JNJ’s pharma sales group for a stint before grad school. Oxford’s ran in monkey trials before human with 93% DNA overlap and not only produced strong antibodies but those antibodies were effective in eliminating any lung infection. People are confusing the health science industry’s lack of conjecture with lack of confidence.
Powell did not say we need a vaccine for levels to recovery, he said “For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,”
Regardless he sees “Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,"
Anyhow, people are missing what is in plain sight in front of them on this one, recovery is already under way.
still in dal then? i think u’ll see things opening up pretty soon. and be surprised how ■■■■■ people are nowadays.
lol well respect.but lots of people are catching on about the us weakness now. the amt of printing we did has caused the world to lose a lot of respect. china might even beat us gdp wise during covid. we’re still 2x richer though. but they are the rising star that is about to eclipse us.
chian really catching up in terms of networth though for real. they were literally at 2.5x a good minute ago.
im going t ohave to learn chinese pretty soon!
Interesting BS about the vaccine. I did see that Trump guaranteed a vaccine by the end of the year, so I guess that’s that.
Nerdy, the US is still top dog by a country mile. The world’s reserve currency has always been that of the country with the strongest military and we’re decades away from anybody coming remotely close to topping them. (Will supply sufficient resources and links for rawraw to verify after I have my dinner).