Posted on 06/14/2022 5:12:07 AM PDT by Browns Ultra Fan
We’ve goin’ down!
The US Treasury 10Y-5Y yield curve has gone into negative territory (which usually occurs before a recession). At the same time, US mortgage rates are climbing like Tom Cruise in “Top Gun: Maverick” to 5.87% as The Fed tightens its choke hold on markets.
(Excerpt) Read more at confoundedinterest.net ...
Wonder where we are on the Bad to Worse sphincter scale?
“sphincter scale”
~~~
LOL close.
It’s Biden’s Rekt-em scale
Next stop,17% mortgage rates, like 1980, depressing real estate prices accordingly. The only real estate activity that was going on was by contract-for-deed, in which the seller retained title, and the buyer was offered a 6% rate on the balance of the contract. Later, when the mortgage rates fell to below 6%, the buyer could refinance out and pay off the seller, gaining title to the property.
This situation managed to cause a very long-term depression in home prices. Some places, it took up to ten years to recover.
I know, I watched it happen in the early Reagan years.
There are a lot of “doom and gloom” youtube channels I follow. But I know they are “doom and gloom”.
What really caused me to get REALLY concerned was when channels that are not into that stuff started discussing the same stuff. The hardest thing for doom and gloomers is to get the timing right. Well, since it’s happening NOW, the timing part is suddenly easy.
If you’ve not prepped, the next couple/five years could be really bad. The left knows they only have until November and they are pulling out all the stops. It’s fascinating to watch all this stuff unfold. And yeah, I’m talking civil unrest too.
Rekt-em? Damn' near Killed-em!
Wait until the rate hits 15%. That’s where we are heading, Jimmy Carter II.
“Why are my Savings interest rates not going up?”
Silly..... because Potato-Head says you don’t have enough or some such.
Let’s consider what it means when a rate curve goes negative: it means that investors believe that the short-term cost of borrowing exceeds the long-term cost of borrowing. In other words, the market is saying: “You’ve gone too far (or, you’ve made it very clear that you’re going to go too far), and now we’re less worried about long-term inflation than short-term inflation, and the long-term harm to markets.” Given the drastic financial harm of a recession, there is no way that a recession is a good thing to tame inflation; the goal is a soft landing that maybe even results in prolonged weak growth and drastically reduced government spending.
Frankly, on my own, THIS TIME I’d side with the other armchair prognasticators and the Federal Reserve over the investors. But seeing how the Federal Reserve has a perfect record of doing unnecessarily severe harm to the economy (i.e., ZERO successful “soft landings,” but rather crash-and-burn EVERY SINGLE TIME), I think the federal reserve should go through with their 100-basis-point hike, because it’s already been factored into the markets, but then be very clear that they do not YET see any reason for further hikes.
And for God’s sake, they need to quit pumping trillions of dollars into the pockets of billionaires through the federal reserve’s asset purchasing.
What’s the interest payment on a $35T national debt with those interest rates? When Volker did it the debt was less than $1T.
I’d also like to add that “drastically reduced government spending” does NOT need Congress to act responsibly! The federal reserve is spending faster than Congress on asset purchases. They can sell those assets and have the same effect as reducing spending.
Climbing mortgage rates are the least of my concerns. If the stock market is tanking this badly over some rate hikes what is it going to do with more and a recession?
Some people living in the moment are acting like it is trying to find bottom already. It looks like eents will trigger more cliff jumping. A 20% drop requires a 25% increase to recover we aren’t seeing that anytime soon.
Recession would seem to be a foregone conclusion instead of an if. Who is so stupid to deny that?
I watched futures most of the night thinking someone got an inside on the fed meeting. Looks more like wishful thinking as it ebbs and flows.
The lefties either:
1. Know they already have November in the bag and don’t care
2. Figure they don’t and are doing all they can while they can
3. Are tone deaf
Quick.
LOL, watching the doom and gloom channels.
I was just starting out and remember the bad economy in the late 70s and 80s. This has a similar feeling in that whatever recovery there is will be a gradual long and slow climb.
I am fully convinced that Eric Holder, ValJar, Obama, and team Obama, have been doing absolutely everything possible to transform America in their perceived window of absolute Democrat control.
From the ongoing efforts to corrupt and transform the entire US justice system and turn it into a partisan killing machine, to destroy oil production and the economy by ushering in the green energy boondoggle and climate change. What we are witnessing has all the hallmarks and direct finger prints of Holder and Obama and their disciples.
Until that nest of vipers is defanged this country and economy will suffer under their Communist fundamental transformation.
I foresee something like this too, excepting that the rather aggressive response by Volker requires a Volker, and there isn't one.
As to the Obama-centered "nest of vipers," I agree again, and conclude that this is the third four-years of the "extended" Obama administration. Color revolutions and all.
“Wait until the rate hits 15%”
Don’t know if I’m calculating this correctly but just paying interest on the federal deficit (and no other debts) would cost about tens of trillions of dollars over say, 10 years.
And this is assuming no more debt is added.
This doesn’t look like Jimmy Carter II, it looks a bit more like the end of the Spanish Empire and the destruction of the Spanish economy (which has never recovered). See if this sounds familiar:
“...pervasive corruption meant that small landowners often lost everything with a single stroke of misfortune. Estates in Spain, and especially in Castile, grew progressively larger and the economy became increasingly uncompetitive...”
https://en.wikipedia.org/wiki/Habsburg_Spain#Philip_IV
I think it’s number 2. I also think that if it is number one, it will be via massive cheating and we may see civil unrest the likes of which would put 1968 to shame.
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