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I dunno about total collapse, but just how high the dead cat is bouncing, sure makes it seem like traders are now grasping at straws of irrational exuberance. Haha, who thought we'd see a market where you put all that together in one phrase?
“It’s a stretch at this point for the market, particularly in the US to expect a change in Fed policy,” said Greg Peters, co-chief investment officer at the asset manager PGIM Fixed Income. Central banks see stopping inflation as their main job and “they think it means hitting it hard” with higher rates, said Peters. “People are forcing the narrative of the pivot.” https://www.bloomberg.com/news/artic...dollar-weakens
Hilarious that we can see a 1400 DJIA rally based on mildly bad economic data and the actions of Australia as traders wishcycle their stocks.
Well my Uncle works for Fannie Mae and Freddie Mac as a broker. Here in IL, we are about to get decimated with inventory. I've only started hearing about this shadow inventory within the past year once the moratorium was lifted. There was no inventory leading up to COVID, hence the crazy buyers rush we saw.
As for the prices, who knows where it will end up. That was just a guess but if we have high inventory AND high interest rates it's going to become a fire sale.
I read the other day that some builders are offering investors a discount to buy not just one house, but the entire development. So get ready for more Wall Street involvement in local real estate...what could go wrong?
Well my Uncle works for Fannie Mae and Freddie Mac as a broker. Here in IL, we are about to get decimated with inventory. I've only started hearing about this shadow inventory within the past year once the moratorium was lifted. There was no inventory leading up to COVID, hence the crazy buyers rush we saw.
As for the prices, who knows where it will end up. That was just a guess but if we have high inventory AND high interest rates it's going to become a fire sale.
Decimated? Going from almost nothing to something is a large percentage increase but let's see the proof that the market is going to actually see many homes listed that are in foreclosure. Until I see it I'm calling BS.
Actually the markets want nothing more than higher unemployment now.
Federal Reserve job is to bring down inflation, they don't care about the stock market or if unemployment goes higher. An increase in interest rates looks highly likely for as far out as possible.
I know I criticize the central banks quite a bit but if I was actually running the fed I'd stop the rate hikes at 3% and take a wait and see attitude. Seems like they plan to overshoot.
I know I criticize the central banks quite a bit but if I was actually running the fed I'd stop the rate hikes at 3% and take a wait and see attitude. Seems like they plan to overshoot.
All they really need to do is stop QE.
I think the Fed wants to increase labor force participation rates, and increase interest rates continually until inflation comes down to the targeted level.
I know I criticize the central banks quite a bit but if I was actually running the fed I'd stop the rate hikes at 3% and take a wait and see attitude. Seems like they plan to overshoot.
All they really need to do is stop QE.
QE has been stopped and its effects have been seen. Central banks always overshoot if they want to reduce something. They have been quite transparent on everything they plan to do this year. I think they end up just as they say, somewhere between 4.25% and 4.50% and its probably not more than 4-6 months away. A couple more 50 point hikes and one or two 25 point hikes are likely coming and then its probably done. If the market wants to fluctuate like crazy over if its 50 or 75 next time and then less later then that indicates opportunity coming soon.
I think the strength of the economy even as we should be starting to feel the rate hike impacts now gives confidence the market will bottom soon. I don't see a collapse coming short of a black swan event. Some things may break but they need not cause a financial panic. If it all plays out this is just a rolling soft recession and then we put the impacts of the pandemic and the stimulus response behind us.
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