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SD Realtor
ParticipantPoint well taken CW. However it did kind of suck when you literally saw price increases overnight. Also having double digit mortgage rates pretty much sucked for people who were trying to get loans for starting businesses. Don’t get me wrong, we needed to do it then. However today the complexities are exponentially worse.
Think about this, given our spiraling debt and the non chalant policy of simply raising the debt limit, what do you think the effect will be if we see a very rapid rise in rates? How in the hell do we service our debt if treasuries suddenly jumped to say 8%?
Volker didn’t have to deal with 16 trillion in the hole.
I absolutely agree with your assertions about what people need to do. Lets not forget to put govt in those same assertions.
December 10, 2012 at 7:53 PM in reply to: OT: Note to self: don’t buy a car built by a bunch of drunk/doped people…. #756045ParticipantMy policy is pretty simple. I dont want anyone who works on any assembly line, or driving any equipment, or a school bus, or a teacher, or pretty much any jobs that require safety or care of other people or children drinking a beer or half a beer or 10 beers before or during their time at work.
Trying to compare it to some white collar yoyo having a beer at lunch is idiotic.
December 10, 2012 at 1:12 PM in reply to: OT: Note to self: don’t buy a car built by a bunch of drunk/doped people…. #756023ParticipantOr driving a school bus, or a truck or work in public transportation… or about a million other jobs that regular people have.
Couple of beers and a few bong hits. Why the hell not right?
ParticipantI would be very interest to see how much of our debt is being purchased by other entities, (private parties, other countries, etc…) verses how much we now monetize.
Also regarding inflation, don’t think for a minute we have not experienced inflation over the past few years. Look at prices of food, water, and energy.
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AN I also dream about the days of high rates to buy bonds. However with those days we saw inflation and mortgage rates that would make you cry. Not to mention credit for business loans. Not fun times man.
ParticipantAgreed SK… definitely uncharted and well stated with the strategy employed by the Fed.
ParticipantWell stated Econ… I agree 100%… My problem is I have been predicting just what you said for like 8 years or so… You know the saying in Vegas right? House rules, house wins. Seems like that has been the working model for the last decade.
I know someday it will catch up and it will be a pretty damn hard crash and burn… just don’t know when.
Participant“So it sounds like the worst thing one can do is holding stuff in cash like 1% CD and just waiting 5,10,15+years”
Tough call man. Obviously we are careening down an icy road with no brakes. Monetizing our own debt… it is all a recipe for disaster.
In part the flip problem we have is due to the fact that there are no returns available. When we did our flips we had a 20% target. We got out when our last deal yielded 7 or 8%. Now I see guys happy with 5% as a target! They have groups of people who are happy with that as well.
There is no place for the money to go. Can’t buy bonds… These days to make money on equities you have to be good at that rigged game. Returns on flips are tough now. Rentals are okay but you need to find the right market. Precious metals… maybe but I don’t know.
I don’t have an answer for ya dude. These are uncharted waters for sure.
ParticipantPretty much yes what you said is true. However most bond holders (not traders) don’t purchase them for appreciation, but rather income. The simple intent is to hold them to maturity and collect the income. That is why you hear about retirees purchasing them.
In a free market yes I would agree with you. I am sure you have heard many a pundit talk about that bond bubble we are in. Many consider this to be the final bubble, that is, when (not if) this bubble pops there will be hell to pay. As you know the market is anything but free and as we saw in Japan, rates can be kept low a pretty damn long time.
Like I said, the reverse ETFs offered give you the opportunity to be a bond bear but they don’t operate as much in your favor as you think they would.
ParticipantYes you can short them with the vehicles that SK made note of. However you more then likely get killed because those etfs hammer you. Your movement is only from opening to closing. When gaps happen overnight you do not benefit.
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Look at the tnx from 79 to 84. Just think how life would have been if you bought 30 year bonds at that time?
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FLU you spoke of buying bonds. If you meant trading bonds that is an entirely different matter. Talk to Chris, the email I sent you, he is a bond trader.
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Some day, I don’t know when, I will buy bonds and sit on them for income… At this rate, it looks like that day is far far away. It will come though.
ParticipantWhat is the ideal economic situation do you make money on a buying bonds?
Conditions similar to 1980-1984.
ParticipantHi Nicole
So did you make a purchase of an income property using Sunwest? I presume it has been going well? I would be interested to hear about the experience and approximate maintenance costs.
December 2, 2012 at 8:21 AM in reply to: How do self-directed IRA’s work and how can it be used to invest in RE? #755627ParticipantFLU please post some results if you find a good self directed IRA company with relatively low costs. We are looking at doing the same thing with our IRA money as well.
ParticipantYour entire premise appears to be based on a belief that we will return to the way things were. I don’t think that is true at all. Your argument about a return to 2004 levels to me is not solid. I think it is safe to say that the 2004 economy was robust but for the wrong reasons, (see a housing boom fueled by unrealistic pricing and artificially low rates). This is not about any republican candidate at all. It is about the current level of spending and the lack of economic growth, not about increased revenues.
ParticipantNo I don’t think it is a narrative at all. Given the cost to service our debt if we even see a modest rise in the interest rates we are in big trouble. I agree with you about war spending. We may or may not see an economy to 2004 growth levels but I doubt we will see sub 5% employment levels. Seems to me we are also seeing substantial increases in general welfare spending, food stamps, etc. While reduction in defense spending is needed, the resulting rise in unemployed white collars will not be consumed by the private sector.
So, I guess while your post makes sense about a few drops here and there, physical evidence especially over the past 4 years are absolutely contrary to it. I guess we will see how things go this year.
So yes to me it is a spending issue and that is not just narrative. It was under Bush and it has been perpetuated by Obama.
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