How Long Do You Think It Will Be?

[Randolph Kinney]

That sounds to be synonymous with a CBO report released yesterday. With that said, I read somewhere that the flattening yield curve may not be as dire of an issue as in the past, due to the central bank flooding the market with bond purchases.

The federal reserve is not purchasing any new debt. They are allowing the debt to run off the balance sheet when any debt matures and therefore redeemed by the US Treasury. The US Treasury issues new debt which is not bought by the federal reserve, at higher interest rates, to replace the maturing debt. This new debt is being bought by the public.

As William Chin of Caldwell Securities, writes:

“A Fed that is determined (for now) to raise the Fed funds rate is driving up the US dollar and inflicting hardship on Emerging Markets…. Historically, Fed Chairs liked to consider the Fed being just the central bank for the US, until things blew up globally. Powell is no exception.”We could be witnessing a slow-moving train wreck."


http://www.talkmarkets.com/content/...t-as-the-world-needs-more-dollars?post=180225

 

[Artemis Fowl]

yep, that's why we only appraise castles and mansions - every house is the best one on the block according to the owner/borrower

Not on my side of the fence...their home is falling apart and should be valued lower. Funny how the story changes based on who is being addressed.

 

[Artemis Fowl]

oops double

 

[Randolph Kinney]

View attachment 35896

https://www.usatoday.com/story/mone...ty-myths-and-reasons-why-overblown/725288002/

You know there is no money in the Social Security tTrust fund. That money was spent long ago and a special Treasury bond (IOU) has replaced it. Therefore, any payment of benefits that are not directly funded by current payroll taxes must come from the general US Treasury, which itself is running huge deficits and must borrow the money to pay benefits and as well, pay interest on the national debt. Therefore the US Treasury redeems the IOU with borrowed money to pay benefits.

 

[Randolph Kinney]

A booming economy solves a lot of problems.

The booming economy is producing deficits, meaning more money is spent than taken in from tax revenue.

 

[TRESinc]

Not on my side of the fence...their home is falling apart and should be valued lower. Funny how the story changes based on who is being addressed.

it was a joke... every home owner thinks their house is the best one, hence they live in castles and mansions... similar to my other favorite line - there are only two types of appraisals - good and low.

 

[Randolph Kinney]

We’re probably at peak housing. Here’s what that means.

A decade after the housing crisis, sales may have reached an unimpressive top

In May, sales of previously-owned homes slumped, the second month in a row of declining sales. The National Association of Realtors, which tracks those sales, pointed to the same culprit it’s blamed for the past few years: not enough supply of homes to buy.

Shortly after the Realtors released their data, Regions Chief Economist Richard Moody wrote this in a research note: “Given that we see little reason to expect meaningful relief on the inventory front over coming quarters, we think it reasonable to conclude that we have passed the cyclical peak for existing home sales.”

Ten years after the financial crisis, the notion of a housing “peak” – which would naturally be followed by a downturn – seems downright spooky. The trauma of the last correction is still with us: more than 1.1 million Americans are still underwater, according to Black Knight, many foreclosures are still wending their way through the system, and ultra-tight lending standards put in place when the pendulum swung hard after the correction continue to lock many Americans out of the market.

https://www.marketwatch.com/story/w...-heres-what-that-means-2018-06-27?siteid=nbkh

That tight inventory runs out of excuses when sales fall leaving unsold listings.

 

[Deleted member 128537]

The booming economy is producing deficits, meaning more money is spent than taken in from tax revenue.

1. We don’t know what the tax receipts will be in the short-term. Fiscal policy takes at least 12 to 18 months to show an impact. That’s economics 101. For example companies won’t move back work to the U.S. immediately due to the corporate tax cut. It takes time to move production.
2. Our economy has only been growing significantly in the last year. Up until then it was 2% or less. The weakest recovery ever.

This is not to say deficits won’t impact the economy. But the only way to increase tax revenue is through economic growth. If tax rate increases worked then it should have worked for the past 8 years. It didn’t.

 

[Deleted member 128537]

https://www.forbes.com/sites/billconerly/2018/04/26/what-will-cause-the-next-recession/#7e4b2d057da4

I agree with this assessment. The most likely cause of a recession is miscalculation by the FED in raising rates too fast. It’s not a housing bubble. It’s not fiscal policy. It’s monetary policy.

 

[Randolph Kinney]

This is not to say deficits won’t impact the economy. But the only way to increase tax revenue is through economic growth. If taxing worked then it should have worked for the past 8 years. It didn’t.

No one is arguing more taxes increases GDP growth. However, Increasing debt since 2000 has not created enough growth to balance the budget either. In fact, deficit spending continued even after the George Bush tax cuts and the federal reserve cutting its FED funds rate down to 0.25%. And then the economy crashed, why? Too many people and too many institutions could not service their debts. Take a look at the debt side of people, companies, and governments since the last crash.