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Is a recession on the horizon or is this just a blip

Discussion in 'Politics Forum' started by Blk04L, Aug 14, 2019.

  1. thomas91169

    thomas91169 # of bans = 5203 Established Member

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    100% agreed. I know you guys probably hear me talk about my area a bunch but its nuts to see stuff that was built 04-05ish that sold for $350 new going for $800k today, or dumps that arent even tangibly worth over $120k going for half a mil and still needing $100k easy to update to modern standards. And the banks arent lending to couples like us cause these homes dont actually appraise at that level, so only ones buying are rental companies and investors with cash on hand to circumvent the banks.
     
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  2. VenomVeins

    VenomVeins Well-Known Member Established Member

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    Agree with everything but the "Banks aren't lending to couples like us" excerpt. They are, you just aren't one of the dumb****s trying to buy a home at its all time high. Which is good.

    The huge drawback in NOT buying here is that rent is Out. Of. Control.

    It is so out of control that whoever buys my condo when I list it next month for anywhere near my asking price will be saving $500-900 a month in rent in my area for something that isn't upgraded to the tenth degree like my place is (which is why my neighbor is putting a bid in the day it hits the market). Its absolutely crazy.

    Im cashing the hell out and living a better life elsewhere in the western US.
     
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  3. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    The collapse will not start in the USA. It will start most likely in Europe. Do you really think that if the EU bond market collapsed, like it almost did, that the USA couldn't get caught in the hysteria in our extended position?

    That debt to tax collection curve does not just apply to Japan.

    The debt the USA is carrying now makes us vulnerable, it limits our options and that is unnerving.
     
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  4. thomas91169

    thomas91169 # of bans = 5203 Established Member

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    I have coworkers who have struggled to find their home because multiple homes failed to appraise close to asking value, which would mean hundreds of thousands down to meet the difference.

    Ay yoo lemme get your condo for homie hookup pricing lol. Wheres your current place and where you moving to?
     
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  5. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    What it illustrates is how quickly a well managed country can become undone.
     
  6. ViciousJay

    ViciousJay Well-Known Member Established Member

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    The only issue coming about is the student lend loans, That's the NEW default

    Buy against the default's people have boughten into. The current gen can't buy homes and cannot recoup the past gen's market crash help the baby boomer's and now Gen X plus save for a 401K and superman the bubble, but I love most of you all, my gen is ****ed and we will work to our death beds which I couldn't care about unless health care is in order.
     
    Last edited: Aug 15, 2019
  7. VenomVeins

    VenomVeins Well-Known Member Established Member

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    Yep, certain areas around here are notorious for that. Luckily my block has had 5+ homes/condos sell in last year without hitting that appraisal snag.

    La Costa area in Carlsbad. I have a view of the La Costa Resort from one of my balconys.

    I bought low as a fixer and it looks straight out of HGTV now. A ton of sweat equity was put it by me and a contractor family member. I was fortunate to get his discounts on flooring, closets, lighting, drywall and just about everything else under the sun.

    Im heading out to meet up with family in Sedona AZ, Laughlin NV, and Whitefish MT. We'll see where I end up.

    You have any plans to relocate or are you going to tough it out here in Kali?
     
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  8. VRYALT3R3D

    VRYALT3R3D Well-Known Member Established Member

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    When the ECB chose to keep the rate on deposits negative, it was a part of a monetary stimulus package aimed at encouraging lending and discouraging and preventing deflation. As interest rates become lower, German bond prices went up as the cost of borrowing went down due to the lower interest rate. As with any change in monetary policy, banks become susceptible to change in its banking behaviour. The unconventional nature of a negative interest rate has posed challenges to a bank's profitability by altering the composition of its balance sheet and shifting the types of loans they make along with the interest rates they charge. The banks that are dependent on retail deposits will have difficulty funding and adjusting its costs as it changes the interest rate charged. This in turn may result in banks raising loan rates to maintain profit margins. I don't really see this happening in the US anytime soon, or ever.
     
  9. thomas91169

    thomas91169 # of bans = 5203 Established Member

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    Nice. Yeah some places like Clairmont or Santee/El Cajon are like that where sellers asking way more than the house will appraise for.

    Nah looking to stay in SD, I love this area too much to leave willingly. Wife is Director of HR at her company and HR doesnt pay as well in other areas of the country as CA does (since CA is so HR heavy). I'm back in school now going to get my civil engineer certs/stamp, transferring to UCSD or SDSU and going full time by end of next year so hoping to be done and have it all by 2022ish where we can hopefully purchase a home right smack dab in the recession if it does hit. I don't see either of our industries affected too much by a recession, and hard because both our industries are much more prevalent here in CA (mine specifically, the type of engineering design work we do for earth retention/shoring isn't needed in other places that are still building out instead of up/down). But we do have backup plans to just bounce to DFW area if CA just continues to become more of a dump, but would like to own a home so can get a good 5-10yrs equity, sell high and bounce. If a married couple with no kids still cant buy a house with one being an Engineer and the other Executive level HR, then shits way ****ed up.
     
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  10. me32

    me32 BEASTLY SHELBY GT500 TVS Moderator

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    Alot has to do with inspection finding something that keep it from appraising at said value.
     
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  11. me32

    me32 BEASTLY SHELBY GT500 TVS Moderator

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    The problem with your gen is that they dont want to work. They want everything handed to them. I see it on the daily.
     
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  12. VenomVeins

    VenomVeins Well-Known Member Established Member

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    Sounds like a good game plan. I honestly hope it works out in your favor once you want to buy.

    I’d love to stay here, but im absolutely sick of the bullshit from NoCal dictating what happens down here. If they split the state up, i’d come back. Other than that, Kali can **** off.
     
  13. Klaus

    Klaus Premium Member Premium Member Established Member

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    Everything you typed is a truism. There is really nothing special about the US and our rates can go negative, too. FYI, real rates did go negative in the US in 2008 (look up nominal rates and real rates if you do not know difference).
     
  14. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    Not worried about negative rates, although that would be bad, I am worried about worse. Look at PR, 3 different governors in a week, does anyone really believe they can successfully reorganize. Hell, look at what IL is doing with taxes and they are only really putting a finger in the dike.

    Maybe we will just muddle along and no crash will happen, I see a lot of canaries looking pretty damn bad, I am not optimistic.
     
  15. Klaus

    Klaus Premium Member Premium Member Established Member

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    Venezuela was never a well managed country. The comparison to the US fails on every level.
     
  16. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    They were king of the hill in South America, and then they were eating the zoo animals, LOL. You are listening to what the D presidential candidates are saying aren't you?

    I forget, were you a CPA or a financial planner, I know you are in that part of the house, I think.
     
  17. Klaus

    Klaus Premium Member Premium Member Established Member

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    .
     
    Last edited: Aug 27, 2019
  18. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    Well, here's to hoping we never go down the worst case road.

    It is pretty clear from reading the economists debating the merits of MMT that it is far from settled. It is more unnerving to read about them debating how MMT is being used to address "income inequality".

    It is interesting that the Bank of Japan owns a LOT of the debt, I wonder what would happen if Japan just canceled it.

    I think I better stop reading about MMT and world bond debt, I am scaring myself worse than I was scared before.

    15 trillion dollars of world bond debt has a NEGATIVE yield. All of Germany's bond issues are now negative, crazy! What happens when all bond debt goes negative? No private individual will buy. Are there enough institutional buyers to support the myriad of town, county and state agencies that issue bonds to get stuff done?

    When I was searching for a good municipal bond fund, they all sucked, the yields were pathetic and the prices have sky rocketed, I am catching a glimmer of why.

    Financial World Gone Nuts: $15 Trillion Negative Yielding Debt
     
  19. Klaus

    Klaus Premium Member Premium Member Established Member

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    Not a muni but if you are looking for high yield, check out BSM. Div is 10% and it is bulletproof. You will have to deal with k1s at end of year but it is worth it. I also like O which is a triple net lease play. I own shit ton of both in my personal account.

    There are different degrees of MMT but I am a buyer of the idea that deficits dont matter. Japan is the test case. And both parties are in consensus on this, BTW. The left is willing to run deficits to finance social programs, the right is willing to run deficits to finance corp tax cuts. RIP fiscal conservatism.
     
  20. Weather Man

    Weather Man Persistance Is A Bitch Premium Member Established Member

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    I suppose that is where we disagree, along with tax versus spending, money has value because people believe it has value, if Japan waves the wand and says poof to 10 trillion in bond debt ????????

    I do agree with you that if Trump does nothing, and maybe it is to late even now, in his 2nd term, we will all get to find out what happens when governments all around the world say poof, and we do too.
     

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