Foreclosure ban end.

[svelte]

[quote=scaredyclassic][quote=Coronita]

TBD reliability….

Mini-cooper. Scotty Kilmer has a few things to say about it.

https://www.youtube.com/watch?v=Lp0LdnreYmE%5B/quote%5D

Yeah. I hate that car. But my wife loves it and won’t get rid of it. Not even for a Porsche.[/quote]

Don’t listen to Scotty Kilmer. Not even about where to buy lunch. Can’t stand that man.

If you want to watch a guy with valuable car opinions, watch the Car Wizard.

He’ll walk you through about the good and bad about any car make and model, pretty fairly in my opinion.

[svelte]

[quote=scaredyclassic]

I hate cars and I want that. are all these e cars going to be reasonably reliable? My wife’s mini cooper is a piece of garbage; seals constantly failing and leaking; will the electric version be ok? maybe we can trade it in.

maybe I should just be nuts and buy a 70k electric suv. she won’t expect that kinda weird behavior from me. im too predictable. or the porsche. yeah, maybe I need a porsche in my life. Why am I bicycling everywhere?[/quote]

lol – it is easy to get caught up in all of this. I certainly am! My opinion, never buy first year anything. Even the best manufacturers find a few glitches they hadn’t noticed during design. Second year, better. Third year and on, best.

[Rich Toscano]

[quote=sdrealtor]Inflation reported this morning is highest in 13 years. Who would’ve guessed? Get ready for more. Holders of hard assets gonna be the winners[/quote]

Depends on your timeframe, I would think (assuming you are talking about real estate here). In the very long term, higher inflation helps by increasing (nominal) rental income and eroding your mortgage. In the meantime, though, home prices are very vulnerable to rising interest rates. It’s hard to see an inflation shock as much of a benefit to the housing market given that ~3% mortgages are basically the last rational reason to buy…

[scaredyclassic]

[quote=svelte][quote=scaredyclassic]

I hate cars and I want that. are all these e cars going to be reasonably reliable? My wife’s mini cooper is a piece of garbage; seals constantly failing and leaking; will the electric version be ok? maybe we can trade it in.

maybe I should just be nuts and buy a 70k electric suv. she won’t expect that kinda weird behavior from me. im too predictable. or the porsche. yeah, maybe I need a porsche in my life. Why am I bicycling everywhere?[/quote]

lol – it is easy to get caught up in all of this. I certainly am! My opinion, never buy first year anything. Even the best manufacturers find a few glitches they hadn’t noticed during design. Second year, better. Third year and on, best.[/quote]

There’s a 30 percent ebike tax credit bill that justmight pass. If so, I’m getting a new dual suspension e mountain bike. Would look awesome on top of the Audi etron.

[sdrealtor]

I was referring to inflation everywhere but I remember you documenting years ago home prices don’t always follow rates. Have you changed your mind on that? Inflation also means wage inflation. We have and will continue seeing that. Rates look to be low for a long time to come. Maybe not this low but still very low historically.

[an]

[quote=sdrealtor]I was referring to inflation everywhere but I remember you documenting years ago home prices don’t always follow rates. Have you changed your mind on that? Inflation also means wage inflation. We have and will continue seeing that. Rates look to be low for a long time to come. Maybe not this low but still very low historically.[/quote]
I’m definitely seeing huge salary inflation for software engineers.

[Rich Toscano]

[quote=sdrealtor]I was referring to inflation everywhere but I remember you documenting years ago home prices don’t always follow rates. Have you changed your mind on that? Inflation also means wage inflation. We have and will continue seeing that. Rates look to be low for a long time to come. Maybe not this low but still very low historically.[/quote]

You are right, they haven’t had much relationship with rates in the past, but valuations are so high at this point that I think it’s unsustainable in the absence of low rates. I’ve written about this frequently in the monthly(ish) updates. See late-2018 for a preview of what might happen if rates were to rise… and homes were a lot cheaper then.

[Rich Toscano]

PS which is it, “get ready for more inflation” or “rates look to be low for a long time to come”? I was basing my reply on your more-inflation-to-come prediction, which would imply higher rates.

[sdrealtor]

Gotcha but I think they stay low for a while. I think the Fed is gonna let inflation run and not let rates go to the equilibrium point they should. I think there is still a debt hangover from the 04-06 bubble and they know behind the scenes there’s work still to be done to clean that up. So I say inflationary economy left running with continuing low rates from a historical perspective. Not 2% mortgages but I don’t see rates getting to the 5’s in my lifetime

[The-Shoveler]

LA in the 80’s was on a defense spending sugar high, we had rates in the 11’s and housing was going nuts. well until the sugar was removed about 1989.

I am super busy and company is doing very well as well even with covid and everyone working at home (just a data point).

One more data point I think people forget, back in the 80’s California was a red state (it goes back and forth believe it or not).

[sdrealtor]

I’ve learned when people try to predict things based upon things they see as black and white, more often than not they end up on the wrong side of things. The world operates in shades of grey

[gzz]

I don’t think an uptick in inflation means higher nominal interest rates. Sure if we have 10% inflation (but we won’t), but not a spell of 3 or 3.5% inflation.

There’s no economic rule that savers are entitled to risk-free positive real returns, but I often think people feel that way anyway.

3% inflation, 0.75% 10-year treasuries, and sub-3% 30 year mortgages I think is very possible for 2022-2024.

Semi-related: after loving taxable munis for many years, I am gradually transitioning to NCA, a tax free California muni bond fund. The giant surplus probably means less bond supply, and Biden’s high-income tax increase will be more demand.

[svelte]

[quote=sdrealtor]
I’ve learned when people try to predict things based upon things they see as black and white, more often than not they end up on the wrong side of things. The world operates in shades of grey.
[/quote]

+1

[quote=gzz]I don’t think an uptick in inflation means higher nominal interest rates. Sure if we have 10% inflation (but we won’t), but not a spell of 3 or 3.5% inflation.
[/quote]

+1

[quote=gzz]
3% inflation, 0.75% 10-year treasuries, and sub-3% 30 year mortgages I think is very possible for 2022-2024.
[/quote]

+1

[Rich Toscano]

Just to get this on record, I think you guys are very overconfident in your ability to predict interest rates.

[svelte]

[quote=Rich Toscano]Just to get this on record, I think you guys are very overconfident in your ability to predict interest rates.[/quote]

Not to speak for the crowd, but I’m pretty sure we all know we’re taking a semi-educated guess and we could very well be wrong. But as with anything else in life, we gotta lay our money down somewhere so we need to give it a little thought.

Year after year now I’ve been betting on rising rates. Year after year that’s bit me in the arse.

In 1992, we bought our first single family residence (we’d owned condos before). In 1992, my wife’s sister bought their second single family residence. We went fixed rate. They went variable. With every refi, we’ve both selected the same path…us fixed, them variable.

Want me to tell you who won on those bets? Hint: it wasn’t me.

[Author]

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