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Fed Reserve and Interest Rates
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Real Estate Guy
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PostPosted: Wed Oct 04, 2017 1:26 am GMT    Post subject: Reply with quote

Your on. I'll take that bet. I can't guarantee Wash, but I am pretty certain Yellen's out.

I understand your argument. I disagree. Time will tell.


Quote:
MPR, what's your excuse? Let me guess, your a professor? Curiosity kills the cat, but I'm pegging you for an academic.


Well...........
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Guest






PostPosted: Wed Oct 04, 2017 3:00 am GMT    Post subject: Reply with quote

Real Estate Guy wrote:
Quote:
I have to say this discussion with you is kind of sad, because you obviously have some intuition that 'something is wrong', but whatever information sources you use have persuaded you that up is down and down is up, so that you end up arguing for policies which would benefit creditors at the expense of average people. (Or maybe you are a creditor and are just talking your own book).


I am not a creditor. I am an "average person". I am an investor, first and foremost in real estate(commercial and residential). I'm tired of navigating in asset pricing set for years of stagnation or more likely decline. I own stocks, never loved stocks but own some. I certainly invested 2012-2016/17 knowing these policies would falsely the high valuations in equities. I also hedged in emerging markets and some metals. 2012-2017 has not been proper investing. It has been investing based on the FED. That's not being free, that's being controlled. I want to again invest in real estate and other capital investments that will truly rise because of their value, backed by a good economy. I want wages to rise as this happens and hope many GOOD paying jobs result. I wish this for younger Americans also they wish to invest without fear of a massive correction due to the Fed's intervention and bubbles they have created. I also wish people could buy housing at a fair market value again. Values that would appreciate normally over time based on wage growth and solid economy. Slow, normal growth. REAL GROWTH. Unfortunately, this will only happen when rates are normalized, QE is removed and I suspect a correction ensues.


Investing in emerging markets is not hedging; they tend to be reasonably correlated with domestic performance. Regardless, valuations in equities have increased because inflation expectations in the future are muted. The NPV of future earnings are therefore higher, and earnings growth has remained reasonable albeit far from spectacular. I guess you can grumble at the low Fed rate, but the alternate would be to raise it substantially and choke off domestic growth. You seem to fear stagflation.

Stock buybacks are just a more tax-efficient version of a dividend distribution. Would you complain about high dividend yields? The pace of buybacks is slowing, however. Capex spending has increased nicely after bottoming in 2009/10.
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Real Estate Guy
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PostPosted: Wed Oct 04, 2017 12:26 pm GMT    Post subject: Reply with quote

It's amazing to me how many people like yourself are addicted to the punch bowl. Your not investing in good corporate fundamentals, your investing in the melt up.in valuations due to Fed policies, all while being to complacent in the free gains, greatly underestimating the correction.

Quote:
Investing in emerging markets is not hedging; they tend to be reasonably correlated with domestic performance


Well, I consider it a hedge. Would "better opportunity" have been a more proper phrase to use? I believed last year that stocks in emerging markets were a better choice because:

Emerging markets were materially undervalued in comparison to the U.S.
Economic growth and corporate earnings in emerging markets were moving in the right direction.
Attractive valuations and improving fundamentals are generating superior returns for emerging markets stocks lately, and this could be a sustained trend over the middle term.


I did 10% better than US holdings this year. However, I believe they've caught up to the melt up under these loose policies. I've sold.

Quote:
I guess you can grumble at the low Fed rate, but the alternate would be to raise it substantially and choke off domestic growth.


We don't have domestic growth, that's the whole point! PE ratios at highest levels only comparable to 1929 and possibly late 90's, just before both crashes. That's the problem with prolonged stimulus with no true consumer demand. Everything gets false propped up, without true growth supporting it.

So, the real issue is where to invest now? I believe we are at the "top" of all markets. Stocks upside is low, it's down side is enormous. Same for real estate. Metals are also uncertain until we know the new Feds direction and if it will strengthen or weaken the dollar. Although this is the one area I would bet on if I got back in. Personally, I'm out. Cash is king for me. Aside from retirement stocks I already own and/or real estate holdings I've purchased when numbers made sense, I think I'm going to wait it out. This is very aggravating, but this is what happens when Fed Bank controls markets like this. Either I'm wrong, and I loose very slow upside(in my opinion) or I'm right and there are significant corrections. Given the severity of the Fed intervention, and my lack of faith in underlying fundamentals I simply do not see how investing in stocks or real estate makes any sense until a few years. If in 2020, rates are up(Fed Fund 3% range) and QE is "off the books", and assets are still looking solid, I'll admit I was wrong and QE worked. Until then, the possibility upside is not worth what my intuition is telling me.
Anybody else care to share good investment options? I'm curious of the different thought processes out there.
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mpr



Joined: 06 Jun 2009
Posts: 344

PostPosted: Wed Oct 04, 2017 2:14 pm GMT    Post subject: Reply with quote

Real Estate Guy wrote:
Your on. I'll take that bet. I can't guarantee Wash, but I am pretty certain Yellen's out.


I'm half hoping for Warsh actually. He'll likely tank the economy and Trump's popularity with it.

People need to learn that electing a fascist clown has consequences.
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Real Esate Guy
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PostPosted: Wed Oct 04, 2017 4:12 pm GMT    Post subject: Reply with quote

Quote:
I'm half hoping for Warsh actually. He'll likely tank the economy and Trump's popularity with it.

People need to learn that electing a fascist clown has consequences.


The economy will tank either way because of the Fed's policies over the last 10 years, not Trump. The economy should have crashed completely 10 years ago and this LIBERAL Band-Aid is the cause of our dire problems now.
Trump is anti-fed. He had a huge picture of Andrew Jackson placed on the side wall of his oval office desk-obviously that speaks volumes. Trump has praised Jackson often and he ran his campaign on the bubbles and the problems caused by the FED. He is quieter now, but I am not giving up hope that he will go straight after them with his appointments. He is being quiet as to settle them in line. We'll see I guess. As for the economy tanking, It's pretty obvious to Americans(especially Trump's base) what is going on. Yellen started raises rates immediately upon him taking office and now after 10 years, the "time is right" to start rolling of QE-what a coincidence. Trump called it too(see link below) and he will once again put the blame where it belongs-on them-after it crashes.
Bottom line is: Trump needs to reform that shit hole filthy FED. Get some Americans in their with more diverse backgrounds(not all academics, different religions, different business backgrounds, etc), then after that they can reform the big corrupt bitch.
Trump is not a Fascist. He is the result of the Fed, Corrupt establishment politicians that have sold us out and compromised our wealth.
I don't believe his chances for re election are any worse even if the FED tanks the economy to bring on its necessary reset. Most of his base understand the Fed. I for one would not factor the economy in my next decision. I will factor it only if nothing is done, and I believe I am not alone. To humor yourself scroll through some of the comments under the video to see some American responses.

https://www.youtube.com/watch?v=0LmCqeMEjVc

https://www.youtube.com/watch?v=8gc6shcftb4
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Real Estate Guy
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PostPosted: Wed Oct 04, 2017 6:28 pm GMT    Post subject: Reply with quote

Here MPR, this one plays nice soft music. You can use it as a lullaby.

https://youtu.be/29DFWZPmnKQ
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mpr



Joined: 06 Jun 2009
Posts: 344

PostPosted: Fri Oct 06, 2017 1:18 pm GMT    Post subject: Reply with quote

Look, we've already established that you're just talking your own book. You don't like the fact that QE makes it harder and riskier for you to make money with your (mostly) passive investments (RE and stocks). Not only that, but you think you're so important that the FED should have allowed millions more people to to lose their jobs and homes after the crisis, just so you could make a better return. Your sense of entitlement would put any welfare queen to shame.

Real Estate Guy wrote:
I am not a creditor. I am an "average person". I am an investor, first and foremost in real estate(commercial and residential).


The fact that you can write this without a shred of irony tells us everything we need to know.
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Real Estate Guy
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PostPosted: Fri Oct 06, 2017 4:56 pm GMT    Post subject: Reply with quote

Ya, that I'm not a liberal free loader and I actually work for my money
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PostPosted: Fri Oct 06, 2017 7:40 pm GMT    Post subject: Reply with quote

mpr wrote:
Look, we've already established that you're just talking your own book. You don't like the fact that QE makes it harder and riskier for you to make money with your (mostly) passive investments (RE and stocks). Not only that, but you think you're so important that the FED should have allowed millions more people to to lose their jobs and homes after the crisis, just so you could make a better return. Your sense of entitlement would put any welfare queen to shame.

Real Estate Guy wrote:
I am not a creditor. I am an "average person". I am an investor, first and foremost in real estate(commercial and residential).


The fact that you can write this without a shred of irony tells us everything we need to know.


The funny part is, I don't even think that QE made it difficult to be invested. With the exception of energy, everything domestically has had really great returns. This year has been even better, with foreign markets matching or exceeding domestic. Volatility is really low. If REG really has made a bunch of money in real estate to the extent that he can retire holding only bonds, so be it. Were that the case, though, would he really be complaining about the present situation?

REG claimed that the great recession was not a true crash. I have no idea what supports that conclusion. By most gauges, it was generationally bad.
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Real Estate Guy
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PostPosted: Fri Oct 06, 2017 9:34 pm GMT    Post subject: Reply with quote

And I wonder why America is such a mess. If only we could put the morons on an island off the coast and start over. It the mean time, not to worry, the free ride is almost over. God bless America.
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mpr



Joined: 06 Jun 2009
Posts: 344

PostPosted: Sat Oct 07, 2017 1:10 am GMT    Post subject: Reply with quote

Real Estate Guy wrote:
And I wonder why America is such a mess.


Yes, if only we could have more people posting anti-semitic links like the ones your put up, everything would be so much better.
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Real Estate Guy
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PostPosted: Sat Oct 07, 2017 2:28 am GMT    Post subject: Reply with quote

MPR you are deranged. Consider seeking professional help
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mpr



Joined: 06 Jun 2009
Posts: 344

PostPosted: Sat Oct 07, 2017 2:57 am GMT    Post subject: Reply with quote

Seriously @admin, you're just going to let anti-semitic links sit in posts on your blog ?
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Real Estate Guy
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PostPosted: Sat Oct 07, 2017 11:35 am GMT    Post subject: Reply with quote

"Seriously @ admin". What are you calling out to your daddy for help? What a loser. I don't have a racist bone in my body asshole, and I resent the false statement. You Antifa types just don't get it, and even when it's dummied down for you, your still clueless. Then in keeping with your play book, cry how everybody is racist in some form or another. Grow up.
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admin
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Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston

PostPosted: Sat Oct 07, 2017 2:07 pm GMT    Post subject: Reply with quote

mpr wrote:
Seriously @admin, you're just going to let anti-semitic links sit in posts on your blog ?

Can you point out which links are anti-Semitic? I’ve only really been skimming this thread and I rarely watch videos because I can’t skim through them to find the relevant parts. I’d be unlikely to take down links to even The Daily Stormer because it’s easier to look away when the problem is hidden and because now is a really bad time to start limiting free speech. An explanation of how it’s anti-Semitic would also be good because if it’s subtle a lot of people will legitimately not see it.

- admin
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