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2021 - Is inflation finally back in the conversation?

Reagan1k

By Reagan1k
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52-80
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Bateshorn
Bateshorn

The only thing more predictable than the GOP running up huge deficits on tax cuts and military spending, is each one suddenly becoming horrified by deficit spending 5 mins after a Democrat is sworn in

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Incredulity

Incredulity 11566

Posted
Posted
Just now, Rex Kramer said:

 

Not sure yall are getting my crack at them. 

Oh, I am.  They(ZH) have been up their own ass forever.

My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  

 

Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

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BabaYaga

BabaYaga 15215

Posted
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12 minutes ago, Incredulity said:

Oh, I am.  They(ZH) have been up their own ass forever.

My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  

 

Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

Can.  Road.  Kicked

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tbone_

tbone_ 14032

Posted
Posted
Oh, I am.  They(ZH) have been up their own ass forever.
My point is pretty much everyone said '23 would be a recession.  It wasn't...  some said it would happen in '24... it hasn't.  
 
Frankly I am absolutely stunned that 7plus % mortgages and 10 plus % auto loans haven't turbo fucked enough people to cause a recession.  IMPO profligate deficit government spending is what has kept economic numbers positive.   Is that good, or bad...we'll see.

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Storm the Field

Storm the Field 5274

Posted
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Let's all not forget that ZH is owned by a former member of the Soviet-aligned Bulgarian Communist Party. He also runs a similar website in Bulgaria that frequently pushes conspiracy theories, anti-semitism, anti-LGBT, pro-Russia/anti-Ukrainian crap. Sound familiar? 

"Tyler Durden" is essentially his son, who is the primary editor of the site, which is pretty much his full time job, because he got barred by FINRA for insider trading and lost his career in investment banking.

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Incredulity

Incredulity 11566

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13 minutes ago, G650 said:

Why?

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

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Rex Kramer

Rex Kramer 1303

Posted
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48 minutes ago, jimmyjazz said:

Were you expecting (or even desiring) a deflationary environment?

Yeah no kidding. This would be disastrous. 

3 minutes ago, Incredulity said:

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

Rates reset slowly for existing ARMs. Most smart people had fixed anyway from low ‘21 rates. I have a jumbo at 2.875%. I told my wife a few years ago we weren’t gonna move, probably ever. 

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Incredulity

Incredulity 11566

Posted
Posted
Just now, Rex Kramer said:

Yeah no kidding. This would be disastrous. 

Rates reset slowly for existing ARMs. Most smart people had fixed anyway from low ‘21 rates. I have a jumbo at 2.875%. I told my wife a few years ago we weren’t gonna move, probably ever. 

I'm referencing the buying and selling.  Brokers, realtors, contractors of all types...

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Rex Kramer

Rex Kramer 1303

Posted
Posted
1 minute ago, Incredulity said:

I'm referencing the buying and selling.  Brokers, realtors, contractors of all types...

Knowing rates will be coming down a lot further, I imagine transactions will be slim through the next 9-15 months, and then kinda explode. 

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G650

G650 14117

Posted
Posted
19 minutes ago, Incredulity said:

Because the monthly payment on a $500 K 30 year mortgage at 3% is $2108

The monthly payment on a $500k 30 year mortgage at 7% is $3,326.51

 

What do you want to throw on there for taxes, maintenance and insurance/month?  $1500 sound reasonable?

 

That takes the 28% of gross housing cost "rule" from 90K income to 200K income.  

I would have speculated a change of that magnitude would have literally stopped home sales, at least in the lower and middle.  I know the song and dance has been buy now, eat the financing cost short term and refinance later.  Looks like that MAY work out given the Sept cut. 

 

 

 

 

 

 

That's all great, but how does that equate to anyone being turbo fucked? It's a nonsensical statement on myriad levels.

 

I build neighborhoods btw, people have asked me for years, well before Covid, what rates would stop the housing market. My WAG had always been 9%, I'd probably  say 10 now, but regardless, until the supply and demand mismatch resolves, which i probably won't live to see, the housing market will keep on trucking.

 

The essentially free money of the last 15 years has warped so many people. We smack dab in the middle of historic interest rates. And dropping.

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BabaYaga

BabaYaga 15215

Posted
Posted
7 minutes ago, Rex Kramer said:

Knowing rates will be coming down a lot further, I imagine transactions will be slim through the next 9-15 months, and then kinda explode. 

The first wave will be streamlines - specifically FHA and VA.  Non-credit qualifying, no cash-out transactions.  Many will have HE loans subordinated behind them if applicable.  

The next wave will be the "blended yield" crowd.  First is low, second is higher - so they take a blended rate in the 5's to have a single payment.  Maybe take a little more cash out, etc.  

FHFA is about to green light a FNMA pilot with a few early adopters on title premium waivers as well.  80% LTV, a few other black-box AUS requirements, and the loans have no title premiums, similar to a PIW in lieu of an appraisal.  That will hook a few more people as well.  

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Incredulity

Incredulity 11566

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1 minute ago, G650 said:

but how does that equate to anyone being turbo fucked?

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

4 minutes ago, G650 said:

The essentially free money of the last 15 years has warped so many people

totally agree.   

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UTPhil2006

UTPhil2006 3795

Posted
Posted
2 minutes ago, Incredulity said:

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

totally agree.   

Can confirm. 

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BabaYaga

BabaYaga 15215

Posted
Posted
Just now, Incredulity said:

housing sales stop.....no income for mortgage guys, no income for realtors, title guys..... Cut your income in half for even six months is turbo fucked for the vast majority of Americans.

totally agree there is lag in low demand impacting trades/contractors and a housing shortage so obviously that's not as immediate as the financial end.     

 

totally agree.   

Shit ton of lenders have left the space - this much is true.  Especially on the individual broker, LO, RE agent side of the house.  That being said, the good ones are still around and lender have ramped back up on hiring biggly.  

This new premium waiver is going to impact low-margin, brick & mortar title companies as well, but not all of them.  Market's are changing, but with demand still high, it's not going anywhere soon.  

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Incredulity

Incredulity 11566

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Posted
1 hour ago, G650 said:

On what planet is 7% interest rates going to stop the housing market? I wouldn't have postulated that even in 2018.

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

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Bozo_Casanova

Bozo_Casanova 26336

Posted
Posted (edited)
12 minutes ago, Incredulity said:

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

Low interest rates, Covid, Covid stimulus, and a housing shortage. Is this a serious question?

1 hour ago, G650 said:

Yeah, that's one thing I'm getting at. On what planet is 7% interest rates going to stop the housing market? I wouldn't have postulated that even in 2018.

On a planet in desperate need of a real estate correction, the one market sector that struggled with historically normal interest rates. 
If the real estate market can’t function at 7%, it’s non-functional. 15 years of stimulus was way too much.

Edited by Bozo_Casanova
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G650

G650 14117

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Posted
1 hour ago, Incredulity said:

Avg home price went from approx $350K in 2018 to $550K in 2023, with the majority of that run up being '20 and '21.  Mortgage rate bottomed out early 21 being cut in half.

What caused the absurd house price appreciation in 20 and 21?

 

Ok... Still not remotely answering what I'm asking. How are 7% rates turbo fucking anyone?

 

1 hour ago, Bozo_Casanova said:


If the real estate market can’t function at 7%, it’s non-functional. 15 years of stimulus was way too much.

I agree.

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52-80

52-80 19110

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On 9/26/2024 at 5:59 PM, Storm the Field said:

Let's all not forget that ZH is owned by a former member of the Soviet-aligned Bulgarian Communist Party. He also runs a similar website in Bulgaria that frequently pushes conspiracy theories, anti-semitism, anti-LGBT, pro-Russia/anti-Ukrainian crap. Sound familiar? 

"Tyler Durden" is essentially his son, who is the primary editor of the site, which is pretty much his full time job, because he got barred by FINRA for insider trading and lost his career in investment banking.

ZH is his/their full time job. It get insane traffic, im confident it outearns any career in banking below MD. 

Like a newspaper, it has a news side and an opinions side. The opinions side is very obviously anti-establishment for politics and doomer/bearish for finance.

The news side is basically just a squawk service (aka a newsfeed) for market events, and basically everybody uses their social media as a sounding box. Their account is followed by the entire bloomberg team, dan loeb, cliff asness, kyle bass, taleb, any active money manager on social media …

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LCHorn

LCHorn 2585

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Posted
4 hours ago, BabaYaga said:

80% LTV, a few other black-box AUS requirements, and the loans have no title premiums, similar to a PIW in lieu of an appraisal

That would be awesome but good luck getting a PIW right now.  Fannie and Freddie tightened eligibility requirements for automated underwriting software and I mostly can’t get borrowers to meet them, even with 30%-40% equity in purchase made 12 months ago.  

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Captainant

Captainant 27497

Posted
Posted
Just now, B00M said:

Earth? Its relatively stopped, dawg

US_Existing_Home_Sales.png

IMO, it's less the interest rates and more that builders more or less stopped after 2008 and haven't gotten anywhere close to the scale they used to build. Can't buy a house if there's not enough for sale to satisfy the rent seeking boomers getting their fourth rent house and new home buyers getting their first home

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Dbeasy

Dbeasy 14992

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Posted

A question for the diverse folks on this thread. It seems very obvious to me that the Covid brrrr machine/cash giveaway  initated by the Trump administration is heavily responsible for the inflation mess we’ve been dealing with. The Biden administration also did not initiate policies to deal with it more strongly. So given this, why aren’t economists and other experts placing blame on the Trump administration? Why aren’t they being fried for their inflationary policies? Trump supporters don’t acknowledge or realize this. 

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Conqueeftador

Conqueeftador 123

Posted
Posted
35 minutes ago, Dbeasy said:

A question for the diverse folks on this thread. It seems very obvious to me that the Covid brrrr machine/cash giveaway  initated by the Trump administration is heavily responsible for the inflation mess we’ve been dealing with. The Biden administration also did not initiate policies to deal with it more strongly. So given this, why aren’t economists and other experts placing blame on the Trump administration? Why aren’t they being fried for their inflationary policies? Trump supporters don’t acknowledge or realize this. 


First of all Biden gets more blame because he was actually President when inflation took hold


Also, government spending is a both sides issue, but there are some differences between the monetary stimulus passed during each administration.  


The Covid Cares Act was $2.2T in stimulus passed in March 2020 with nearly unanimous support in both houses of Congress. Essentially emergency legislation. 
 

The American Rescue Plan Act was $1.9T in stimulus passed in March 2021 along a strict party line vote. Discretionary stimulus. Make of that what you will. 
 

CPI report from March 2021. 
 

https://www.bls.gov/news.release/archives/cpi_04132021.pdf

 

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52-80

52-80 19110

Posted
Posted (edited)
10 hours ago, Dbeasy said:

A question for the diverse folks on this thread. It seems very obvious to me that the Covid brrrr machine/cash giveaway  initated by the Trump administration is heavily responsible for the inflation mess we’ve been dealing with. The Biden administration also did not initiate policies to deal with it more strongly. So given this, why aren’t economists and other experts placing blame on the Trump administration? Why aren’t they being fried for their inflationary policies? Trump supporters don’t acknowledge or realize this. 

 

here's the govt spending by year.  trump's non-covid spending was flat vs GDP compared to obama.

the delta between 2020/2021 and 2019 is $2.2T -- the size of the CARES act approved 419-6 in the House and 96-0 in Senate. 

presiding in fed chair was first yellen, an obama apointee, and then powell who was also obama apointee, later reconfirmed by biden.

so if you wanna point out an anomaly, ask why is 2023 is high, and e2024 even higher?

image.thumb.png.40cddea9c660b9d1e8f9fe04c500d90c.png

 

 

Edited by 52-80
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