Things You Know Will Happen

[Smitty-48]

I'm doing a fixed, and refinance when everything calms down, if I can build my credit up 120 points during the time when everything is going to hell, I see nothing but good news for me in the future.

Here is the thing, if I plan accordingly, I can pay off my house in 15 years instead of 30... at the rate I have been saving, I technically could pay it off in 10.

you have a son, so your appetite for risk is lower than mine

it's like I am multimillionaire now, parleyed my inheritance 1000%, you gotta have money to make money

but the main thing was, I was playing with house money, so I was more willing to let it ride

I have a son, and my risk level is not as low as you think it is. If you don't take risks, you can't reap the rewards.

I'm rooting for you, there is money to be made out there, get that papuh

I think the home in the Carolinas is the way to go, transfer the Massachusetts money to the undervalued market

just don't settle, get a place you are perfectly happy to live in for the rest of your days if you have to

if you gotta pay a bit more, don't worry about it, fully detached at a prime location is worth the stretch

[DBTrek]

I wouldn't take bonds if you paid me to take them, personally.
And the Fed may soon be doing that.

/shrug

the only way interest rates rise is by bond rates rising

so when your mortgage rate is rising, so are bond rates, so suddenly bonds make sense again

you will see the money shift from stocks to fixed income, as the interest rates rise

the stock market is inflated because there is no yield in bonds

but interest rates is the yield, when those come back, so do bonds

it's all about hedging, what you lose in one venue, you make back in another

it's like a default swap, the bonds are your insurance policy against rising interest rates

That's the classic wisdom.
Perhaps it still holds true.

However ... with the Fed printing 25% of all US dollars last year ... and then keeping most of it out of circulation by buying Bonds and MBLs ... I'm not really convinced of the value of the US treasuries. Russia, China, and Japan are dumping our bonds as well, signaling that they aren't really into them either.

So we have a situation where for the government to raise money they gotta sell US bonds.
But they're selling them directly to the people who print money.
So ... I'm content to stay out of all that.
Too weird for me, man.
Conventional wisdom be damned.

[Smitty-48]

I wouldn't take bonds if you paid me to take them, personally.
And the Fed may soon be doing that.

/shrug

the only way interest rates rise is by bond rates rising

so when your mortgage rate is rising, so are bond rates, so suddenly bonds make sense again

you will see the money shift from stocks to fixed income, as the interest rates rise

the stock market is inflated because there is no yield in bonds

but interest rates is the yield, when those come back, so do bonds

it's all about hedging, what you lose in one venue, you make back in another

it's like a default swap, the bonds are your insurance policy against rising interest rates

That's the classic wisdom.
Perhaps it still holds true.

However ... with the Fed printing 25% of all US dollars last year ... and then keeping most of it out of circulation by buying Bonds and MBLs ... I'm not really convinced of the value of the US treasuries. Russia, China, and Japan are dumping our bonds as well, signaling that they aren't really into them either.

So we have a situation where for the government to raise money they gotta sell US bonds.
But they're selling them directly to the people who print money.
So ... I'm content to stay out of all that.
Too weird for me, man.
Conventional wisdom be damned.

well fixed income comes in different forms, you don't have to buy treasuries

but I mean, Japan has no problem selling their debt a 234% debt to gdp ratio

so I don't forsee a collapse in the value of American treasuries, the higher the interest, the hotter they will be

[Smitty-48]

remember, this is fixed income

you make a contract and at the end you get paid a fixed amount

at the threshold of that amount being competitive against the likely return from the stock market ?

that is where the money will flood out of stocks and into bonds

investors prefer a sure thing, so they will take fixed income over longer bets on equity

[DBTrek]

remember, this is fixed income

you make a contract and at the end you get paid a fixed amount

at the threshold of that amount being competitive against the likely return from the stock market ?

that is where the money will flood out of stocks and into bonds

investors prefer a sure thing, so they will take fixed income over longer bets on equity

Sure, but bond rates are shit.
And raising the yield on bond rates is fine - but if the people printing the money are simply printing *more* money to pay the rising yield, then you're in an inflationary trap.
If bond rates go up without more money being printed, then people gotta ask "Where is the US government getting all this extra cash to pay us down the road? Is their productivity up? Have they discovered new resources? Where is that interest they're paying coming from?"


Now ... foreigners get the benefit here because that interest *might* be paid by Americans paying higher taxes ... but as an American, being taxed more to pay for my own bond yields is pointless.

So ... I'm out, man. Fuck a US Treasury Bond.
But if you hold them and like them, I hope they work out for ya.

[Smitty-48]

remember, this is fixed income

you make a contract and at the end you get paid a fixed amount

at the threshold of that amount being competitive against the likely return from the stock market ?

that is where the money will flood out of stocks and into bonds

investors prefer a sure thing, so they will take fixed income over longer bets on equity

Sure, but bond rates are shit.

because the Fed is buying them as part of quantitative easing in various forms

the bonds don't pay because of there is this Fed customer who keeps buying them for zero interest

the interest rates cannot rise so long as the Fed is doing that

when the Fed stops doing that, the interest rates rise and the treasuries start to become ever more valuable

not that you shouldn't buy stocks too, this will be the blood in streets buying opportunity there as well

[Smitty-48]

see, the Fed is the only reason I made so much money in the stock market

I just happened to have cash on hand and went buying when there was blood in the streets

then the Fed started buying treasuries, driving the interest rates down to net zero

then the money flooded into the stock market looking for returns

so this is how the Fed paid me in a free money party

1000% return across the board, I didn't make any moves, the money was just dropped on me from Washington

[Fife]

Good luck and Godspeed to anyone holding assets denominated in USD.

[Smitty-48]

Good luck and Godspeed to anyone holding assets denominated in USD.

assets are not held in any particular currency, there is no such thing as a USD asset

even US treasuries can be converted into any other type of currency, assets are assets in any denomination

[Fife]

Peace be with ye