How Long Do You Think It Will Be?

[George Hatch]

For the most part pricing cannot get too far away from incomes. Obviously there will be a few exceptions to this but at that point we're talking about imported money.

 

[Randolph Kinney]

Since 1988, the Joint Center for Housing Studies at Harvard University has provided an overview of housing market conditions in the United States. As the report marks its 30th anniversary, this year’s report suggests the housing market is overbought, immobile, and unequal.

The influential Harvard think tank even believes the American housing sector is broken.

 

[Riick]

I am fully cognizant of the possibility of a future market correction, but unlike you I am not gleefully cheering for one to happen.

The consensus of the people I read is that the longer & higher the expansion, the longer and the lower the bust. Perhaps the the doom & gloom people have everyone's best interests at heart.
People disliked the Sybils (oracles), because their forecasts came true, whether good or bad.

 

[timd354]

The consensus of the people I read is that the longer & higher the expansion, the longer and the lower the bust. Perhaps the the doom & gloom people have everyone's best interests at heart.
People disliked the Sybils (oracles), because their forecasts came true, whether good or bad.

A slight pullback or correction would likely be a good thing and I would be fine with that, however I am most certainly not cheering for a meltdown of the market like a few people on here seem to are just so they can say "see I told you so"

 

[Deleted member 128537]

1. The “recovery” really only started in earnest in the past year. Notice that although unemployment has gone down wages have not gone up significantly. That is going to put downward pressure on inflation.
2. Note inflation is only at about 2%. That means supply and demand are still pretty much in balance.
3. Interest rates must creep up some. They are still historically low and yet we still only have about 2% inflation. That tells me we are still in the recovery phase.
4. The housing sector inflation has hit certain segments of the market in urban areas. That is because new housing is not being built to take up the slack. Eventually that will be rectified, and I have heard it is already occurring in some areas; except California where government regulation squelches affordable housing.

Will we have another recession? Of course. How deep? No one really knows.

I have been around long enough to know the prognosticators are seldom right. If I would have listened to the doomsayers out there I would have never invested a dime of my money only to bury it in the back of my yard.

 

[Deleted member 128537]

http://business.financialpost.com/i...ive-reasons-to-ignore-stock-market-doomsayers

And by extension most doomsayers.

 

[Randolph Kinney]

What raising short term interest rates will do, eventually ...

Yield Curve: flattest US Treasury yield curve since Sept’07, just 36bps from 1st inversion since 2007; curve inversions have preceded 7/7 prior recessions since 1970 by 4 to 5 quarters (Chart 7).

 

[Randolph Kinney]

The yield curve is basically the difference between interest rates on short-term United States government bonds, say, two-year Treasury notes, and long-term government bonds, like 10-year Treasury notes.

Typically, when an economy seems in good health, the rate on the longer-term bonds will be higher than short-term ones.

The gap between two-year and 10-year United States Treasury notes is roughly 0.34 percentage points. It was last at these levels in 2007 when the United States economy was heading into what was arguably the worst recession in almost 80 years.

Every recession of the past 60 years has been preceded by an inverted yield curve, according to research from the San Francisco Fed. Curve inversions have “correctly signaled all nine recessions since 1955 and had only one false positive, in the mid-1960s, when an inversion was followed by an economic slowdown but not an official recession,” the bank’s researchers wrote in March.

https://www.nytimes.com/2018/06/25/...h_180627&nl=todaysheadlines&nlid=503291100627

 

[Randolph Kinney]

The U.S. government is on a glide path to pay as much in interest as it spends on Social Security. The Congressional Budget Office's latest projections show interest payments equaling Social Security over the next two decades, overall debt payments reaching the highest level ever and overall spending accounting for the largest share of gross domestic product since World War II, David Harrison reports.

The good: The U.S. is paying more in part because interest rates are rising. Rates are rising because the economy is strong.

The bad: Rising government-debt levels and interest rates would reinforce each other. High debt levels would push interest rates up further, and higher debt payments would boost debt.

The ugly: With the budget already stretched and record levels of debt, Congress and future administrations will have less flexibility to respond to economic emergencies.

 

[Riick]

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