Repeat?

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Submitted by moneymaker on October 12, 2018 - 6:59am

So was just thinking that a lot of companies are heavily in debt. How is this any different from home owners that used their equity to take out second mortgages during the last bubble? So yes a business is an investment where as a house is a liability, but for that to be true the business has to actually make money which a lot of companies (new tech/recently ipo'd ) don't actually do. Though I wish I had bought Tesla when they ipo'd. Now however might be the time to think defensively.

Submitted by moneymaker on October 12, 2018 - 7:46am.

The Fed is like a vehicle trying to tow another vehicle with a rope and the slack was just taken out of the rope with the last rate hike. So now the rope will stretch a little before the towed vehicle moves or it will break. The factors of vehicle weight, horsepower, type of rope, and whether the brakes (read tariffs) are on or not will be critical. I think 1 more hike will be okay just not sure when it should be done.

Submitted by moneymaker on October 12, 2018 - 7:56am.

Perhaps the fed rate should be more like the LIBOR and change daily based on some solid fundamentals, in that way it would be more like a tow bar rather than a rope.

Submitted by The-Shoveler on October 12, 2018 - 9:34am.

I think there is a small chance the fed will walk back their aggressive rate remarks and slow down or even pause maybe.

The Markets do matter (housing and stocks).

pensions and household wealth do matter to the economy and the fed does need to pay attention.

Anyway there is one thing for sure IMO, they keep hiking rates it will crash the economy at some point (IMO we are almost there with 5% mortgages and car loans etc..)

Submitted by spdrun on October 12, 2018 - 10:24am.

They didn't walk back in January 2018, stocks rebounded, and official economic numbers stayed good through the summer. Here's hoping they keep at it, US needs a housing correction even if speculators/flippers get burnt. Tech firms which profit from privacy theft also need a bit of wind taken out of their sails.

Submitted by The-Shoveler on October 12, 2018 - 10:44am.

Mortgage rates were not over 5% in January.

So what you are saying is we need a recession, people need to lose jobs etc...?

Submitted by spdrun on October 12, 2018 - 11:03am.

Sorry, but no one is entitled to a job, especially if their job is with a tech behemoth that's doing its best to decrease human privacy. Also, a recession combined with millennial angst/rage might be the only thing that pushes the US to extend its safety net while cutting on harmful spending (mass incarceration, military contractor welfare). The 2008 recession was the thing that finally forced states to reconsider marijuana prohibition, excessive bail, and excessively punitive laws in general. It also probably put Obama in office, giving us the (half ass, but better than nothing) solution known as the Affordable Care Act.

Mortgage rates? Hope they hit 6%, frankly. Higher rates mean a given down payment goes further since total purchase prices will be lower. God forbid that younger people will again be able to afford to buy a home or condo in an area that's not part of an exurban asteroid belt.

Submitted by FlyerInHi on October 12, 2018 - 11:23am.

The Fed is doing a good job managing the money supply.
overlerage caused the 2008 financial crisis and we have seen releveraging since, thanks to accommodative policies. increasingly interest rates is wise.

Submitted by FlyerInHi on October 12, 2018 - 11:30am.

spdrun, I don’t see millennial angst/rage translating to results at the ballot box.

We did however see deplorable nationalist rage, in USA and Europe. Europe might split apart because of it. In USA we see the split between urban and rural areas.

Nationalism is the most irrational outcome of financial crisis because it does nothing for workers. International solidarity with better trade deals actually do more for worker welfare.

Submitted by spdrun on October 12, 2018 - 11:52am.

Imagine if the Trumpites suddenly realize they've been sold a bill of goods. Now imagine Occupy Wall Street allied with Pepe the Frog...

Submitted by FlyerInHi on October 12, 2018 - 12:16pm.

spdrun wrote:
Sorry, but no one is entitled to a job, especially if their job is with a tech behemoth that's doing its best to decrease human privacy. Also, a recession combined with millennial angst/rage might be the only thing that pushes the US to extend its safety net while cutting on harmful spending (mass incarceration, military contractor welfare). The 2008 recession was the thing that finally forced states to reconsider marijuana prohibition, excessive bail, and excessively punitive laws in general. It also probably put Obama in office, giving us the (half ass, but better than nothing) solution known as the Affordable Care Act.

Mortgage rates? Hope they hit 6%, frankly. Higher rates mean a given down payment goes further since total purchase prices will be lower. God forbid that younger people will again be able to afford to buy a home or condo in an area that's not part of an exurban asteroid belt.

I don't think incarceration rate decreasing has anything to do with millennial activism.

Drugs took hold at first in the inner cities with mostly minorities so White voters wanted a tough lock-them-up approach.

Like any consumer product, illegal drugs seek new growth markets and the growth in now in the suburbs and rural areas (good old supply and demand). Cities are gentrifying and the older suburbs are declining. Places like West Virginia are now illegal drug central.

People who vote now see their fucked-up kids and family members, hence they support criminal justice reform.

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