People living in homes financed with a generous rate (~3% like you mentioned) mortgage are unlikely to move - that's correct. However, that's not the only piece of the puzzle. Keep in mind that home builders have recently produced at the highest level since 2008 [1]. When you pair this with high rates [2], it's likely that we will see inventory sitting on the market.
They say you shouldn't try to time the market, which is probably good advice. However, my approach is/was:
- back in April, moved 401k fund from S&P allocation to cash equivalent (2% yield). Note: this wasn't a cash out, just reallocation.
- Bought long-dated treasuries (10 yr and 30 yr). Allocated through July and August. This one is not doing well, but allocation was sized appropriately (< 2% of portfolio).
- pooling any excess capital in a savings account until volatility calms down.
- have a couple rentals and plan to continue holding. It will be interesting to see some buying opportunities in the upcoming year or two.
An increase of MBS offered on the market will cause mortgage rates to rise because there's too many loans for sale and not enough buyers. Buyers will demand higher and higher rates to make it worth their while.
I think the idea is that the Fed is trying to tamper demand by softening the economy. Lower demand will inevitably help prices.
It doesn't help much though if we get a "rough landing" and people can't afford food/housing because they're out of a job.
It is not true that lower (local) demand will inevitably lower prices. For example if Costa Rica lower oil demand to almost 0 by saying only 1/1000 people could buy gas from now on it would not change the local gas price at all. If anything it could go more up as the fixed costs in infrastructure would be more expensive for each unit sold.
> If the Fed sells mortgage securities that pay low rates at a time when prevailing rates are much higher, it will incur big financial losses that reduce the funds the central bank returns to the Treasury.
Why does this reduce the amount of funds to the treasury? The losses are on the Feds balance sheet. My understanding is that the Treasury is not involved here, but the article hints at them being affected. Is it implying that treasury yields will rocket higher???
> In that scenario, expect officials to face tough questions from Capitol Hill to explain why they've lost billions of dollars on behalf of the American people.
If the Fed takes a loss, doesn't this mean that base money supply increases? Sure it will be drawing liquidity out of the system, but in the long run, it will leave more money in the system compared to where they started with QE.
> Why does this reduce the amount of funds to the treasury?
It's an accounting thing [1]. When the Fed makes a profit, it remits it to the Treasury [2]. (I believe this is an anachronism from the gold standard days, but not sure.)
Textbooks won't tell you about Brent Johnson's Dollar Milkshake theory. They also won't have insight on todays inflation and whether it's more similar to the 1970s or 1940s.
Textbooks are great for finance fundamentals, but shouldn't be the sole source of macro.
Here's a list of podcasts that touch on macro:
- Eurodollar University
- The Grant Williams Podcast
- Grant's Current Yield
- Hidden Forces
- Inside Baseball with Old Chestnut
- Keeping it Simple with Simplify Asset Management
- Library of Mistakes
- The Macro Compass
- Macro Musings
- The Macro Trading Floor
- Macro Voices
- The Market Huddle
- Money Sense
- On The Margin
- Real Conversations
- Real Vision Daily Briefing
- The Rebel Capitalist Show
- Super Investors and the Art of Worldly Wisdom
- Wealthion
The best thing you can do is be open to hearing all opinion/theories. Some people will contradict others, but over time you figure out who is right and who is not.
In addition, I also watch a few indices in my stock app for a high level overview. These are the treasury yields, corporate credit spreads, dollar index, s&p 500, nasdaq, etc. I used to follow much more, but it's not needed for higher level macro.
I tend to keep my PRs small enough to where several can be submitted within a day. This being said, I tend to keep my changes un-staged.
When I'm ready to commit:
1. `git diff` to get an overall picture of what changes were made. Which parts of this diff can be packaged into an isolated commit?
2. `git add -p` This is where I selectively stage bits.
3. `git diff --cached` to verify that the staged items are all in place
4. `git commit` with a detailed message.
5. Repeat steps 1-4 until all changes have been committed.
6. `git fetch origin main && git rebase origin/main`
7. Finally, `git push`
When PR feedback is left by peers, some teammates prefer you to not rewrite commits and force push. This makes re-review easier for them (especially if you use the Github features around PR review).
I opt for rewriting commits if it's okay with team members. This way you don't have "fix typo" commits getting merged into the main branch.
`[commit] verbose = true` in .gitconfig makes `git diff --cached` step unnecessary, as you then get the diff displayed in commit message editor (I'm baffled why this isn't the default)
Does anyone have experience with Duplicati [1] or recommend it? I am tentatively looking to make the switch to something a little more sophisticated than manually tar-balling + rsyncing backups.
I’ve that in use on my personal pc (Ubuntu) for my personal files. Bringing in the pictures via Dropbox. It works flawlessly for about 1.5 yr and 150GB to Backblaze. What put me off initially is that the most important part of backups: testing the restore process was / is less documented. Got it tested by just using common sense and a fresh temporary install. (Any pointers to how to do automatic integrity tests greatly appreciated.)
This article does a pretty good job of explaining how green events work. It seems that each of the threads will attempt to accept any/all incoming requests.
[1] https://calculatedrisk.substack.com/p/new-home-sales-decreas...
[2] https://www.freddiemac.com/pmms