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Thread: Financial Crisis - 2013 - ????

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    Creepy Ass Cracka & Site Owner Ryan Ruck's Avatar
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    Default Re: Financial Crisis - 2013 - ????


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    Default Re: Financial Crisis - 2013 - ????


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    Default Re: Financial Crisis - 2013 - ????

    All I can say about this, is this.

    This money will inflate for a while, then it is going to deflate like a MOFO.

    What this means to you. Do not assume any more debt. Pay down any debt you might have.

    Deflation means that wages go down.

    Borrowing 30k when you make 100k a year? No problem. Next year you make 102k and the year after 105k, it just gets easier!

    Now however, whenever this shit hits, You make 80k, then 60k Then 50k if you still have a job. Each dollar you pay back is worth 2 or 3 or 4 that you borrowed. That's some real pain. It's like a hidden 200%+ interest rate.

    It's not nearly as painful if you have no debt. In fact, it becomes a massive boon! Over night your buying power effectively doubles.


    The markets are going to continue to climb as long as the Fed is pumping money into the system like crazy. I used to think that QE was like a firehose. This is like the 35' diameter pipe that pumps water into NYC.

    Just make sure you're in cash at some point. FOMO is real and I must admit, I'm sticking in there.
    "Far better it is to dare mighty things, to win glorious triumphs even though checkered by failure, than to rank with those poor spirits who neither enjoy nor suffer much because they live in the gray twilight that knows neither victory nor defeat."
    -- Theodore Roosevelt


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    Creepy Ass Cracka & Site Owner Ryan Ruck's Avatar
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    Default Re: Financial Crisis - 2013 - ????

    What's equally insane right now is the real estate market.

    I have been looking into buying a home right now and have been the last 2.5 months, even though I hadn't planned to until I was ready to relocate west but such is life, and real estate is completely dislocated from the current economic conditions with 38 million people unemployed and nearly every other sector pulling back.

    I don't think my expectations are outrageous: ~1500 sqft minimum, ~2 acres minimum, pole barn/shop I can work on my truck in, and reasonably updated kitchen/baths all somewhere 30-45 minutes east outside of the I-275 loop around Cincinnati (not in a super prime area for commuting into the urban areas). I really didn't want to have to be in the place longer than 5 years so that's why I didn't want to get too crazy on expectations and stay with what I thought was reasonable price.

    I originally set my budget at $175k which I thought was pretty reasonable for a first time home given what I was looking for and where I was looking for it. I found a place (1600sqft, 1.75ac, 4 car shop and a stable that needed work, 5 mins from my youngest brother), went under contract, but it failed inspection with a water main leak and water in the crawl. After that the beer bug stuff blew up, wasn't hardly finding anything after a couple weeks.

    Anything around $130k-$150 was largely overpriced garbage only partly meeting my criteria. Nothing below that even met my criteria remotely. Decided to up my budget to $200k. Started finding a little more but still a lot of overpriced shit and stuff that isn't sells in hours, much faster than an individual working a full time job can take time out to see before it sells and often gets bid up. Meanwhile at the $220k-$350k+ range I can find a number of options, that do admittedly sell decently quick, but there's options.

    Just watched an outdated 1999 double wide (had new floors throughout from the owner that owned a flooring company and only half done in proper drywall, no updates to the baths/kitchen since new) on 4.5 acres (where land prices are $5k-$6k/ac) with a shop, 45 minutes from Cincy go for almost $200k and it was on the market less than 2 days. I know how much it went for because I made an offer that I thought was an overpaying offer of $187k + $4k closing from the $197.5 listed and, the seller countered with only $500 off the price and just $3k closing, in fact asking for some concessions on time to move out of the property (a month after closing to move the business out of the shop building).

    This pretty mediocre double wide I just got a notice on, on 1 acre, far outside the prime Cincy metro commute area is somehow a $140k place. Funny, just 6 years ago it was a $103k place. I guess adding a stainless fridge and range added $37k to the value...

    Was supposed to have a showing last week on a $189k 1600sqft (with full basement), 3br/3ba, decently updated, with 30x40 pole barn, on 6ac, an hour outside of Cincinnati (and a half hour from any major retail) yesterday. It went pending within 24 hours before my scheduled showing, during a major rain storm before your typical 9-5 worker could even see it

    So yeah, $200k barely buys what most would consider pretty reasonable rural living, at least where I am in SW Ohio which isn't exactly a hotbed of real estate of activity like other states, and anything that could be considered within the realm of "reasonable" is so scarce it's snatched up before the ink dries on the selling realtor's contract. I don't get it...

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    Default Re: Financial Crisis - 2013 - ????



    So... Personal spending down a record near 14%, 40 million unemployed, 4.1 million people in mortgage forebearance, auto sales down 48%, money printer go brrrr and insane levels of Federal spending, major US city on fire and unrest in others...

    But, tying into my last post, home demand up 5.5% from pre-pandemic levels!

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    Default Re: Financial Crisis - 2013 - ????

    Sounds like the economy is on solid footing...

    Fed Sees Zero Rates Through 2022, Commits To Keep Buying Bonds

    June 10, 2020

    The Federal Reserve pledged to maintain at least the current pace of asset purchases and projected interest rates will remain near zero through 2022, as Chairman Jerome Powell committed the central bank to using all its tools to help the economy recover from the coronavirus.

    “We’re not even thinking about thinking about raising rates,” he told a video press conference Wednesday. “We are strongly committed to using our tools to do whatever we can for as long as it takes.”

    The Federal Open Market Committee earlier said it would increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities “at least at the current pace” to sustain smooth market functioning.

    A related statement from the New York Fed specified that the pace of the increase would be about $80 billion a month for purchases of Treasuries and about $40 billion of mortgage-backed securities.

    “Acting on mortgage-backed securities and Treasuries underscores their belief that more support is needed,” said Diane Swonk, chief economist with Grant Thornton in Chicago. “The Fed does not see a victory in the employment bounce-back. The risk of deflation is still high and the economy needs more support to heal more fully.”

    The dollar rebounded from day-lows and U.S. stocks erased initial gains as Powell spoke. The Treasury curve steepened sharply.

    On Hold

    The Fed’s quarterly projections -- updated for the first time since December, after officials skipped their March release amid the burgeoning pandemic -- showed all policy makers expect the funds rate to remain near zero through the end of 2021. All but two officials saw rates staying there through 2022.

    The economy faces “considerable risks” over the medium term, the Fed said in its statement, reiterating language from the last FOMC meeting in late April.

    Officials forecast the U.S. unemployment rate would fall to 9.3% in the final three months of the year from 13.3% in May, according to median estimates, and to decline to 6.5% in 2021. U.S. GDP was projected to contract by 6.5% this year before rebounding 5% next year.

    Yield-Curve Control

    Powell said the FOMC had received a briefing on yield-curve control -- a strategy to cap Treasury yields out to a specific maturity -- and told reporters that such discussions will continue at upcoming meetings. Economists surveyed by Bloomberg expect them to consider later this year.

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