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  1. #8301
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    Quote Originally Posted by iceman View Post
    Zuckerberg has a mortgage?
    Yup.

    It's a matter of tax avoidance. These guys borrow on their perceived equity, therefore, never cashing out and paying zero taxes. Bezo's lives like this. They get super low rates. Fuck, who knows, maybe their accountants figured a refund in there.

    Let's do some livin'
    After, we die

  2. #8302
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    Quote Originally Posted by rideit View Post
    Iíll take your ĎFuck Meí, and raise you one...Fuck Trump. The end net result of his fiscal policies are going to be absolutely devastating in ten years or so, we need to stop him before he does more damage, even if it means short term pain.
    Look at the big picture.
    Four more years could destroy this nation.
    4 more years of anyone is not going to destroy or save the past 40 years of poor decisions and trillions spent on foreign wars. Plus deficits weíve built up and poor tax codes. You donít like trump, great, youíre still an asshole wishing pain on anyone.
    If you lose your job and struggle youíre not going to care who is in office.


    Sent from my iPhone using Tapatalk

  3. #8303
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    Is the stock market going to tank?

    Quote Originally Posted by Cono Este View Post

    Always interested to hear from those who understand the money supply better than I.
    Money supply, m1,2,3 etc., were important when Friedman was the prevailing economic theorist. Itís been proven a false narrative. Velocity is probably important but itís been dead for so long. Monetary and fiscal stimulus are the biggest (only) drivers of growth these days.

    https://fred.stlouisfed.org/series/M2V

  4. #8304
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    Quote Originally Posted by iceman View Post
    I really hope we get below January 20, 2017.
    Thatís still my forecast, pre election levels. Wipe out the Trump gains.

    End of 2018 we were on our way, so Iím not 100% that we didnít already fill that gap. But technically we did not.

    If we do, Iím probably going back to college, for free. If theyíll take me, I imagine theyíll be a long line.


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  5. #8305
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    Quote Originally Posted by ncskier View Post
    4 more years of anyone is not going to destroy or save the past 40 years of poor decisions and trillions spent on foreign wars. Plus deficits we’ve built up and poor tax codes. You don’t like trump, great, you’re still an asshole wishing pain on anyone.
    If you lose your job and struggle you’re not going to care who is in office.


    Sent from my iPhone using Tapatalk
    I don’t think you entirely understand the severity of the situation.

    https://www.rawstory.com/2020/02/us-...-fed-official/
    Forum Cross Pollinator

  6. #8306
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    Nov 2014
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    Quote Originally Posted by 4matic View Post
    What's missing other than short term rates at zero? 30 year rate is barely off its all time low. I agree that there is a minimum administrative rate.

    https://fred.stlouisfed.org/graph/?g=NUh
    Sorry for drift. I realize this isn't the topic of the thread, but it's what I know. I'm into bonds and the secondary mortgage market. No dickwaving portfolio claims. Just leaving this for posterity and I'll try to check back in as shitter time allows... Lots of buzzwords depending on one's background, but goggleable for those who are super interested. Saves me another 5 paragraphs not having to define things like "option adjusted duration."

    Short term rates apply to short term loans. Option adjusted duration on an average mortgage varies between 4 and 12 years historically and is hugging the low end of that range now due ti 2017 and 2018 vintages of MBS/mortgages being unequivocally in the money. Anyway, those duration realities make 5s, 10s, and a 5/10 blend the preferred benchmarks for tracking MBS spreads.

    The reason mortgage rates aren't falling as fast as treasuries is almost always negative convexity. Long story short, mortgages are bonds that can be called by the consumer any time they want to sell or refi. Mortgage investors pay a premium for the right to collect interest in those loans/bonds. If the consumer calls early, investor is left holding the bag and thus pays much less premium for the next one. Lower premium = lower mortgage bond pricing= higher mortgage rates relative to benchmarks.

    This is compounded by lender pipelines where adjusting rate offerings too aggressively risks lock fallout and lost business. Long story short, if people refi too quick, the investors fronting the money aren't going to pay as much because they won't collect as much interest. Investor prepayment expectations cause mortgage rates to move lower like a tortoise to the Treasury market's hare.

  7. #8307
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    Is the stock market going to tank?

    Negative reaction to next Fed easing could be a catalyst. Theyíve already announced exit from the repo market in April.

    I think oil is going to be the next market to fail. If it does there could be trouble in the junk market. Lots of shale energy debt is maturing and they wonít be able to refinance with low energy price

    https://www.google.com/amp/s/amp.ft....d-25e377c0ee1f

  8. #8308
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    Quote Originally Posted by 4matic View Post
    Money supply, m1,2,3 etc., were important when Friedman was the prevailing economic theorist. Itís been proven a false narrative. Velocity is probably important but itís been dead for so long. Monetary and fiscal stimulus are the biggest (only) drivers of growth these days.

    https://fred.stlouisfed.org/series/M2V
    Wholeheartedly agree. Always chuckle when my clients tell me something else should be happening due to money supply/velocity.

    There's a lot of old guy thinking that no longer applies.

  9. #8309
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    Quote Originally Posted by rideit View Post
    I donít think you entirely understand the severity of the situation.
    I think letting your emotions put the blame at the feet of a single individual is childish and immature.
    You rail against trump, but you know in the midst of impeachment, Nancy and Chuck passed the largest federal budget of all time knowing full well the deficit was a trillion fucking dollars. Not to mention during the Obama years where he doubled the deficit, the republican house and senate passed his spending bills. So in the end, the all fucking spend money we don't have.
    I didn't give him credit for the stock run and I won't give him blame for a correction.
    Like a bunch of fucking children in here.

  10. #8310
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    Quote Originally Posted by 4matic View Post
    Negative reaction to next Fed easing could be a catalyst. Theyíve already announced exit from the repo market in April.

    I think oil is going to be the next market to fail. If it does there could be trouble in the junk market. Lots of shale energy debt is maturing and they wonít be able to refinance with low energy price

    https://www.google.com/amp/s/amp.ft....d-25e377c0ee1f
    Good point. Copper too


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  11. #8311
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    Quote Originally Posted by mattig View Post
    Sorry for drift. I realize this isn't the topic of the thread, but it's what I know. I'm into bonds and the secondary mortgage market. No dickwaving portfolio claims. Just leaving this for posterity and I'll try to check back in as shitter time allows... Lots of buzzwords depending on one's background, but goggleable for those who are super interested. Saves me another 5 paragraphs not having to define things like "option adjusted duration."

    Short term rates apply to short term loans. Option adjusted duration on an average mortgage varies between 4 and 12 years historically and is hugging the low end of that range now due ti 2017 and 2018 vintages of MBS/mortgages being unequivocally in the money. Anyway, those duration realities make 5s, 10s, and a 5/10 blend the preferred benchmarks for tracking MBS spreads.

    The reason mortgage rates aren't falling as fast as treasuries is almost always negative convexity. Long story short, mortgages are bonds that can be called by the consumer any time they want to sell or refi. Mortgage investors pay a premium for the right to collect interest in those loans/bonds. If the consumer calls early, investor is left holding the bag and thus pays much less premium for the next one. Lower premium = lower mortgage bond pricing= higher mortgage rates relative to benchmarks.

    This is compounded by lender pipelines where adjusting rate offerings too aggressively risks lock fallout and lost business. Long story short, if people refi too quick, the investors fronting the money aren't going to pay as much because they won't collect as much interest. Investor prepayment expectations cause mortgage rates to move lower like a tortoise to the Treasury market's hare.
    Thanks.


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  12. #8312
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    This was only the 109th largest two day decline. As Iíve said, daily volatility used to be much greater than our current fed mitigated volatility.

  13. #8313
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    To answer the threads title question: yes, the stock market is going to tank. Yesterday and today.

    If it takes another leg down tomorrow Iím piling in. Fear and greed index is down to 20. Thatís usually a good indicator of a bottom.

  14. #8314
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    Some folks are going to make serious bank buying this virus du jour dip.

  15. #8315
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    Good points.
    But geniuses don’t post black on a blue background.
    Forum Cross Pollinator

  16. #8316
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    Quote Originally Posted by rideit View Post
    Good points.
    But geniuses don’t post black on a blue background.
    It works with the white background just fine but it's a cut-and-paste job or just copied in. bots are thick around here lately.

  17. #8317
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    Quote Originally Posted by Benny Profane View Post
    Yup.

    It's a matter of tax avoidance. These guys borrow on their perceived equity, therefore, never cashing out and paying zero taxes. Bezo's lives like this. They get super low rates. Fuck, who knows, maybe their accountants figured a refund in there.
    There's no tax avoidance with a mortgage. Interest deduction is way limited now.

    And not everyone has a mortgage, i don't.



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  18. #8318
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    You don't get it. It's why little old Benny buys a lot of stuff over time, because my IRA isn't cash, it's taxable income. It's sort of the same thing for Zuck and Bezos on super steroids.

    Let's do some livin'
    After, we die

  19. #8319
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    Quote Originally Posted by rod9301 View Post
    There's no tax avoidance with a mortgage. Interest deduction is way limited now.

    And not everyone has a mortgage, i don't.



    Sent from my Redmi Note 8 Pro using Tapatalk
    Once you have a sufficiently high net worth a mortgage (or multiple mortgages) is a hedge against inflation. Not that Bezos or Zuckerberg are hedging against inflation with .01% of their net worth, but for someone with say several million to tens of millions in net worth mortgages can be a good hedge.

  20. #8320
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    Quote Originally Posted by Kevo View Post
    Once you have a sufficiently high net worth a mortgage (or multiple mortgages) is a hedge against inflation. Not that Bezos or Zuckerberg are hedging against inflation with .01% of their net worth, but for someone with say several million to tens of millions in net worth mortgages can be a good hedge.
    Only if you sell the house and buy a cheaper one

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  21. #8321
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    Quote Originally Posted by rod9301 View Post
    Only if you sell the house and buy a cheaper one

    Sent from my Redmi Note 8 Pro using Tapatalk
    No. It's not about the value of the house. It's about paying a set amount monthly for the house over a long period of time with dollars that are decreasing in value.

  22. #8322
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    Exactly. One house we have has four years left on the mortgage, and the payments are peanuts. (But felt huge when we bought 21 years ago). Great for a rental.
    Forum Cross Pollinator

  23. #8323
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    Quote Originally Posted by Kevo View Post
    No. It's not about the value of the house. It's about paying a set amount monthly for the house over a long period of time with dollars that are decreasing in value.
    That's true, but buying a house with a mortgage, and investing in the stock market means basically that you're buying stocks on margin, which many studies show it never works.

    I understand that most people needed a mortgage, but to say that somebody that had lots of money should not pay cash is stupid.

    Sent from my Redmi Note 8 Pro using Tapatalk

  24. #8324
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    There are plenty of scenarios where it makes sense to hedge against inflation with a mortgage, especially if your net worth is many multiples the value of your house or if you are receiving a fixed pension.

  25. #8325
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    Listen, let me explain. Zuck wants to buy ten million dollar house. If Zuck sells equity to do so, Zuck doesn't own rapidly appreciating equity value anymore. (somebody else does, sort of). Then, on top of that, Zuck is taxed on that gain. I know it's not too much these days in the era of rich guy tax relief, but, it's substantial. So, double hit on his net worth. Now, if this is done in a rapidly rising RE market, then, maybe, a wash. But, no, RE is not there anymore, and certainly is not reliable. Now, Zuck borrows on the value of that stock at bank rates, (I think I read 1.8 at the time) which any bank would give him because he's Zuck, more than good for the loan, but, more important, they want to be nice to him and get his biz. Meanwhile, stock continues rocketing up, making a 1.8 loan literally look like pocket change. No tax burden.

    It's like me buying a new car. I take 25 grand out of my IRA, the only real "cash" I have. I am taxed maybe 30% on that money, since it's income, making that car cost me 32,500. And my IRA is 25,000 lighter. Actually, 32,500 plus lighter, because the next April, I'll have a higher tax bill to pay.

    Ok?

    Let's do some livin'
    After, we die

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