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No Matter What Wallstreet Says, Rates Will Keep Going Down. /sarc

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Big ole Boy

Elite Member
Joined
Dec 6, 2003
Professional Status
General Public
State
Tennessee
All rates gonna have to go to 0 to keep the stock market up, real estate up and keep the government cheese flowing.

Its that simple.

----------------------------------------------------------------------

In this scenario, PE ratios can go to the moon and mars ..... it won't matter. All peoples will load up on equities. All police/municipal pension plans will be salvaged by skyrocketing stock prices. Real estae prices will keep rising.

Or,

bankruptcy

s/
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
quit spoiling so many people's fantasies.

hug a thug and the world will be a better place.

:)

.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
It's the car theory of economics. Rising prices can be sustained without rising incomes.

Just two weeks ago we noted that a record 25% of vehicles being traded in for used car purchases had negative equity of $3,635. Now, according to the latest report from Edmunds, the new car market isn't any better off with 32% of trade-ins having an average negative equity balance of $4,832. Of course, that's no problem when you can simply roll that negative equity into a brand new 7-year loan at a 2% interest rate. Sure, with the average car priced at $33,000, that means your starting principal balance is 115% of your new car's value but that's no big deal, right? That just means you'll have to roll over even more negative equity in 4 years when you buy your next brand new vehicle.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Groups representing municipal governments in California warn that some cities could be forced to make layoffs and major cuts in city services as well as face the risk of bankruptcy if they have to absorb the decline through higher contributions to CalPERS.

In just a couple of months, the largest pension fund in the United States, the California Public Employees' Retirement System (CalPERS), will have to decide whether they'll rely on sound financial judgement and math to set their rate of return expectations going forward or whether they'll cave to political pressure to maintain artificially high return hurdles that they'll never meet but help to maintain their ponzi scheme a little longer. The decision faced by CALPERS is whether their long-term assumed rate of return on assets should be lowered from the current 7.5% down to a more reasonable 6%.

As pointed out by Pensions & Investments, the decision has far-reaching consequences. First, a lower rate of return will equate to higher contribution levels for municipalities throughout California, many of which are on the verge of bankruptcy already. Second, given that CALPERS is the largest pension fund in the United States, a move to lower return hurdles could set a precedent that would have to be followed by other funds around the country in even worse shape (yes, we're looking at you Illinois).
 

Big ole Boy

Elite Member
Joined
Dec 6, 2003
Professional Status
General Public
State
Tennessee
Groups representing municipal governments in California warn that some cities could be forced to make layoffs and major cuts in city services as well as face the risk of bankruptcy if they have to absorb the decline through higher contributions to CalPERS.

In just a couple of months, the largest pension fund in the United States, the California Public Employees' Retirement System (CalPERS), will have to decide whether they'll rely on sound financial judgement and math to set their rate of return expectations going forward or whether they'll cave to political pressure to maintain artificially high return hurdles that they'll never meet but help to maintain their ponzi scheme a little longer. The decision faced by CALPERS is whether their long-term assumed rate of return on assets should be lowered from the current 7.5% down to a more reasonable 6%.

As pointed out by Pensions & Investments, the decision has far-reaching consequences. First, a lower rate of return will equate to higher contribution levels for municipalities throughout California, many of which are on the verge of bankruptcy already. Second, given that CALPERS is the largest pension fund in the United States, a move to lower return hurdles could set a precedent that would have to be followed by other funds around the country in even worse shape (yes, we're looking at you Illinois).

Trumps new Treasury Secretary is talking about 100 year bonds.

Here we go .........
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Get your Unabomber style cabin in BFE before the sky falls and the rates go up! :ROFLMAO:
 

Big ole Boy

Elite Member
Joined
Dec 6, 2003
Professional Status
General Public
State
Tennessee
The implications of a 100 year US Treasury bond ...... maybe that buys us a few years ....... 30 yr rates could go higher I guess ..... that can can be kicked a long way down the road ........ I know enough math that once you get past 30 yr maturities the law of diminishing returns sets in ......

but with 100 year maturities it should allow for all kinds of fun and games with PE ratios .... stocks could go super-sonic .....

Keynesianism on steroids ...

.
 
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