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A conservative 10% cap rate after targeted CapEx of 10% of the purchase price with an equity bump of around 15% on a theoretical resale.  Not the glory days of yore….

By Pucklore | November 19, 2023 | Comments Off on A conservative 10% cap rate after targeted CapEx of 10% of the purchase price with an equity bump of around 15% on a theoretical resale.  Not the glory days of yore….

But this is the new reality of Midwest home buying, and this, after a long, difficult search. It’s better than a T-Bill.  If business loans are 7.25%, the margins are too thin, so just use cash. If the 10-Year went…

“But, ultimately, I think we’re going to make new higher yields in the first half of 2024,” says Jim Bianco, with the fair value for the 10-Year Treasury between 5.5%-6%.

By Pucklore | November 18, 2023 | Comments Off on “But, ultimately, I think we’re going to make new higher yields in the first half of 2024,” says Jim Bianco, with the fair value for the 10-Year Treasury between 5.5%-6%.

Consumers aren’t yet concerned about having to re-trench financially.  The job market still seems plentiful.  With a 10-Year at 5.5%, that would bring mortgage rates to about 8.5%-9%, so that might start different discussions about a larger retrenchment in the…

Over 70% of all U.S. residential housing stock is owned by those 50 years and older says Meredith Whitney.  And 86% of the “avocado toast” generation (18-38) does not own a home.

By Pucklore | November 10, 2023 | Comments Off on Over 70% of all U.S. residential housing stock is owned by those 50 years and older says Meredith Whitney.  And 86% of the “avocado toast” generation (18-38) does not own a home.

Over $21T of home equity has been created over the last decade.  Most of this gain has accrued to older generations who own their homes free and clear.  So a 40% drawdown in home prices to pre-pandemic levels over many…

When Jamie Dimon looks over the horizon, he sees sticky inflation.  “I don’t see anything that is future disinflationary.”  Mr. Dimon also thinks that quantitative tightening will eventually “rattle the markets.”

By Pucklore | November 2, 2023 | Comments Off on When Jamie Dimon looks over the horizon, he sees sticky inflation.  “I don’t see anything that is future disinflationary.”  Mr. Dimon also thinks that quantitative tightening will eventually “rattle the markets.”

The Fed will more than likely need to raise rates again.  10-year bond yields should rise.  The size of the deficits, quantitative tightening, and nations selling will add to the supply.  However, he doesn’t think we’ll have a “Volcker Recession”…

“The daily borrowing for the next 90 days… $8.66B a day – a day!”  Next years’ projections are even higher.  “This is driving the yield curve,” says Richard Fisher. Fiscal policy is driving rates higher.

By Pucklore | November 1, 2023 | Comments Off on “The daily borrowing for the next 90 days… $8.66B a day – a day!”  Next years’ projections are even higher.  “This is driving the yield curve,” says Richard Fisher. Fiscal policy is driving rates higher.

Mr. Fisher doesn’t think there is a clearing mechanism for the market when there is so much borrowing.  As long as the fiscal authorities are out of control, we will live in a 5% world.  “They (the Fed) can work…

Leon Cooperman reiterates his conviction that interest rates will go higher, and the S&P 500 (at 19 times earnings) is too high.  He is concerned that the wealthy won’t be able to handle the deficit at 8%.  Even a 6% bond yield isn’t exciting.

By Pucklore | October 30, 2023 | Comments Off on Leon Cooperman reiterates his conviction that interest rates will go higher, and the S&P 500 (at 19 times earnings) is too high.  He is concerned that the wealthy won’t be able to handle the deficit at 8%.  Even a 6% bond yield isn’t exciting.

Mr. Cooperman still thinks the market is going nowhere for a very long time and reiterates the story of the Pharoah’s dream interpreted as having 7 prosperous years followed by 7 lean years.  We’ve pulled forward a lot of fiscal…

Humble victory lap for Jim Bianco – he essentially says stay the course.  “We’ve gone up by 500 bps, but we haven’t tightened by 500 bps….  The first several hundred was just getting back to neutral.”

By Pucklore | October 25, 2023 | Comments Off on Humble victory lap for Jim Bianco – he essentially says stay the course.  “We’ve gone up by 500 bps, but we haven’t tightened by 500 bps….  The first several hundred was just getting back to neutral.”

He reiterates his thesis.  Most people think the economy will turn down with rates to follow.  That hasn’t happened, and hands have been bloodied catching the falling knife.  In fact, we could get a 4% GDP print.  The current yield…

Larry Fink unequivocally reiterates at the FII, “We are going to see higher interest rates, David….  We will not see a hard or soft landing in 2024.”

By Pucklore | October 25, 2023 | Comments Off on Larry Fink unequivocally reiterates at the FII, “We are going to see higher interest rates, David….  We will not see a hard or soft landing in 2024.”

Mr. Fink agrees with Mr. Dimon that the environment right now reminds him of the 1970s.  “The 70s was all about bad policy.  Today it’s about bad policy again.”  Inflation surrounds us everywhere, and it’s going to stay, so, “you…

One of the most accurate higher-for-longer market forecasters, Jim Bianco, says, “Ultimately, I still think we’re going to go higher (on rates) and see a capitulation.”

By Pucklore | October 24, 2023 | Comments Off on One of the most accurate higher-for-longer market forecasters, Jim Bianco, says, “Ultimately, I still think we’re going to go higher (on rates) and see a capitulation.”

Mr. Bianco says that if we are going to un-invert the yield curve, rates need to go higher than the 6 month T-Bill rates of 5.5%.  Again, jobs are strong, we’ll have a 4% GDP print, and the last ten…

JPM’s Oksana Aronov says, “The 10-year is still… very much priced for a 2% inflation world.”  Jay Powell wants to “demolish” the unhealthy relationship between asset prices and Fed policy, so don’t wait for the Fed punch bowl to come back.  Also, the default cycle is underway.

By Pucklore | October 18, 2023 | Comments Off on JPM’s Oksana Aronov says, “The 10-year is still… very much priced for a 2% inflation world.”  Jay Powell wants to “demolish” the unhealthy relationship between asset prices and Fed policy, so don’t wait for the Fed punch bowl to come back.  Also, the default cycle is underway.

Unless we see the economy in complete freefall, the Fed will hold.  The Fed has only raised 25 basis points since May, but the long end of the curve has reacted substantially.  30% of outstanding Treasuries are maturing in a…

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