By Pucklore | September 27, 2023 | Comments Off on Financial historian Jim Grant reiterates that we are in a long-term bear trend for bonds after 40 years. “Interest rates are unusual if not unique in financial menagerie, because they tend to trend in generational length phases…. It’s been true in this country since the Civil War.”

“Every big move in financial markets… tends to climax in some absurdity, some valuation excess.” This one ended with negative interest rates to the tune of $15T of bonds. “So we had 40 years down. Before that, we had 35…

Will higher rates weed our economic garden?

By Pucklore | September 25, 2023 | Comments Off on Will higher rates weed our economic garden?

Fair growth policies encourage responsible financial practices and the proper balance of savings and investment. But beginning in 2015-2016 the real estate market was flooded with easy money, especially, through smaller banks. This also transferred to the venture capital world…

“We’re still playing catchup, Joe, to the fact that people are earning less than the inflation rate, and now they’re making up for that in spades,” says former Dallas Fed President Fisher. “You have to look at the employment data.”

By Pucklore | September 20, 2023 | Comments Off on “We’re still playing catchup, Joe, to the fact that people are earning less than the inflation rate, and now they’re making up for that in spades,” says former Dallas Fed President Fisher. “You have to look at the employment data.”

Only 10% of labor is unionized in the U.S. (7% of it is private sector.) But small and medium sized businesses are being pressured to raise wages as well, as they are having trouble finding skilled workers. Consumption demand is…

Cash is no longer trash for Ray Dalio of Bridgewater Associates. Don’t buy long-term bonds either. “The world will be radically different in 5 years.”

By Pucklore | September 15, 2023 | Comments Off on Cash is no longer trash for Ray Dalio of Bridgewater Associates. Don’t buy long-term bonds either. “The world will be radically different in 5 years.”

He says that, temporarily, cash is a good place to have your money, as one is adequately compensated. However, he doesn’t think these interest rates will be sustained at the current rate, as the global debt dynamics start shifting. Additionally,…

“The majority of fund managers expect lower interest rates,” says Jim Bianco. Therefore, expect higher-for-longer and a “no landing,” as this is still the contrarian play.

By Pucklore | September 12, 2023 | Comments Off on “The majority of fund managers expect lower interest rates,” says Jim Bianco. Therefore, expect higher-for-longer and a “no landing,” as this is still the contrarian play.

Mr. Bianco shows multiple graphs to support this thesis, but the first ones are deceptive. While showing a surge in the shorting of the Treasury market – which on the surface would indicate a general positioning for lower rates in…

Jeff Greene says, “I think we’re just in the first inning of this (commercial RE) correction… and hold on to your cash.” He thinks there will be opportunities in 12-24 months, “when the well runs dry.”

By Pucklore | September 11, 2023 | Comments Off on Jeff Greene says, “I think we’re just in the first inning of this (commercial RE) correction… and hold on to your cash.” He thinks there will be opportunities in 12-24 months, “when the well runs dry.”

Mr. Frank gives an example of a family office being offered two premier office properties in Manhattan that still aren’t priced low enough. Mr. Greene thinks the worst is yet to come for Class B and C properties as well…

“I’m one of the few people who don’t think interest rates are all that high,” says Leon Cooperman. “I wouldn’t be surprised if the 10-year got to 5.5%…. There is no indication that the Fed is restrictive…. I don’t expect we see another high in the market for a long time.”

By Pucklore | September 8, 2023 | Comments Off on “I’m one of the few people who don’t think interest rates are all that high,” says Leon Cooperman. “I wouldn’t be surprised if the 10-year got to 5.5%…. There is no indication that the Fed is restrictive…. I don’t expect we see another high in the market for a long time.”

Mr. Cooperman also says that the S&P 500 is trading at 19 or 20 times earnings – too high, i.e., the equity risk premium is too low. He also doesn’t see a recession on the near horizon, just eventually. As…

T-Bills get 5.5%. Cap rates on decent Midwest homes are a conservative 9%, but there is actual work to do, and it dries up your liquidity if there is indeed a major shock like 2008.

By Pucklore | September 3, 2023 | Comments Off on T-Bills get 5.5%. Cap rates on decent Midwest homes are a conservative 9%, but there is actual work to do, and it dries up your liquidity if there is indeed a major shock like 2008.

Competition is still fierce. The I-will-buy-your-house mailers still stream in. Some of the overleveraged are selling into the market, but there aren’t any screaming deals anymore, and if there are, they get bid to low returns with lots of improvement…

The most important line of Chairman Powell’s Jackson Hole speech: “The wide range of estimates of these lags suggests that there may be significant further drag in the pipeline.”

By Pucklore | August 28, 2023 | Comments Off on The most important line of Chairman Powell’s Jackson Hole speech: “The wide range of estimates of these lags suggests that there may be significant further drag in the pipeline.”

It may behoove the younger generations to speak with someone over 65 years old about their history and experience of interest rates. For everything, there is a season, and we may be headed away from constantly falling interest rates for…