For the last four or five days I have had people ask me, is this the time to get back in or will there be other chances to pick a bottom? Giving investment advice like that is a precarious thing. You are right sometimes and you are wrong sometimes and trust me, when you are wrong, people are much more vocal than when you are right. With that being said, I try not to give specific investment advice. I like to first give my opinion as to what I think is going on presently, what may potentially develop in the future and sometimes explain what just happened. I try to do it honestly. No one is giving me money to invest. I am not looking to build assets and become some late blooming hedge fund or private equity millionaire. I just call it as I see it and try to make seemingly complex scenarios into something a little easier to understand.
Hi Peter, today was a well written thought process by you, but I think you might be a bit off base on home interest rates in home buying as most forget and you failed to mention the point of down payments plus the increase of added 2.75% on a monthly payment. So, when you factor in a 20% down payment at $60,000 on a $300,000 house, the same house that was $200,000 last year, the reality of this kicks in for a new home buyer, not the one that is trading up or down.
Regarding the market, I feel most earnings will remain strong, possibly not as high as a year ago, but for most consumers are still spending the liquidity built up during the two years of pandemic. However, you only need to look at the butcher. Are to see people are not buying steak, but more pasta and the creative meals learned by being cooped up for 2 years, so I feel the consumer today are much wiser and will ride the highs and lows accordingly.
Recession? It may just come and go, as mentioned above nothing more than the ocean, up and down, but it will hardly affect the normal consumer household.
Government gas holiday is a total charade, the average driver, doing the math which I won’t in this, equates to about $28 a month, not enough to change driving habits, $2.50 a gallon to $5.00 a gallon only pisses people off but not much more than that. Olive Garden had higher than expected earnings, reflecting the consumer is still eating out at their affordable restaurants…… pasta, Mexican
Chinese, steak house and higher end restaurants are all booked up, by “us”, those that can afford a $50 steak, still pissed off at a $20 increase , while ordering anyway !
What we are in agreement with or at least normal people, is the government, each and every part, beginning with the Supreme Court and their firestorm rulings of, why not leave what has been on the books a century alone, alone? We are now having to navigate hateful Diatribe, all for political gain, chasing Trump down as a lynch mob, for why ? just political theater……. Summarizing the whole world is f**ed up, but we will survive, just don’t fly …. Drive !
.
Just some of my thoughts generated by yours, and hope to see you soon Peter !
Peter, I've been enjoying your posts, but you are way off base here. 30-year mortgage rates have gone from roughly 3% last June to 5.85% currently. On a $300,000 mortgage that is an increase in monthly payment from $1,265 to $1,765. If you think that difference doesn't matter to the typical American household, then I've got news for you. That is a MASSIVE difference for a 2-income household with a combined income of, say, $135-175K. You and I might spend that difference on a really nice bottle of wine, and not even check our Amex statement. But for ordinary working-class Americans, living outside the NY-DC-LA-SFO metro, it's the difference of around $25K in annual income needed to qualify for the mortgage. In other words, it's the difference between qualifying for that mortgage, and being totally priced out of the market. Go ask a school teacher or a cop in St. Louis,Missouri if $500/month matters.
I stand corrected about my reasoning. You are not the only one who has taken me to task and that is the reason I write this column. To learn and be taken out to the woodshed occasionally.
Thank you so much for the educated and informed rebuttal.
I am obviously a bit myopic regarding peoples situations.
I still will stand by belief that people regardless of financial strata will not make that move if they have a fear of losing one of those incomes.
500 dollars a month is significant and I did not do my math properly. I blame that on the public school system or Covid or whatever else people are passing the Buck on now.
Thank you for correcting me and giving me more food for thought. It’s why I write this column. To learn.
Hi Peter, today was a well written thought process by you, but I think you might be a bit off base on home interest rates in home buying as most forget and you failed to mention the point of down payments plus the increase of added 2.75% on a monthly payment. So, when you factor in a 20% down payment at $60,000 on a $300,000 house, the same house that was $200,000 last year, the reality of this kicks in for a new home buyer, not the one that is trading up or down.
Regarding the market, I feel most earnings will remain strong, possibly not as high as a year ago, but for most consumers are still spending the liquidity built up during the two years of pandemic. However, you only need to look at the butcher. Are to see people are not buying steak, but more pasta and the creative meals learned by being cooped up for 2 years, so I feel the consumer today are much wiser and will ride the highs and lows accordingly.
Recession? It may just come and go, as mentioned above nothing more than the ocean, up and down, but it will hardly affect the normal consumer household.
Government gas holiday is a total charade, the average driver, doing the math which I won’t in this, equates to about $28 a month, not enough to change driving habits, $2.50 a gallon to $5.00 a gallon only pisses people off but not much more than that. Olive Garden had higher than expected earnings, reflecting the consumer is still eating out at their affordable restaurants…… pasta, Mexican
Chinese, steak house and higher end restaurants are all booked up, by “us”, those that can afford a $50 steak, still pissed off at a $20 increase , while ordering anyway !
What we are in agreement with or at least normal people, is the government, each and every part, beginning with the Supreme Court and their firestorm rulings of, why not leave what has been on the books a century alone, alone? We are now having to navigate hateful Diatribe, all for political gain, chasing Trump down as a lynch mob, for why ? just political theater……. Summarizing the whole world is f**ed up, but we will survive, just don’t fly …. Drive !
.
Just some of my thoughts generated by yours, and hope to see you soon Peter !
Peter, I've been enjoying your posts, but you are way off base here. 30-year mortgage rates have gone from roughly 3% last June to 5.85% currently. On a $300,000 mortgage that is an increase in monthly payment from $1,265 to $1,765. If you think that difference doesn't matter to the typical American household, then I've got news for you. That is a MASSIVE difference for a 2-income household with a combined income of, say, $135-175K. You and I might spend that difference on a really nice bottle of wine, and not even check our Amex statement. But for ordinary working-class Americans, living outside the NY-DC-LA-SFO metro, it's the difference of around $25K in annual income needed to qualify for the mortgage. In other words, it's the difference between qualifying for that mortgage, and being totally priced out of the market. Go ask a school teacher or a cop in St. Louis,Missouri if $500/month matters.
Mike,
I stand corrected about my reasoning. You are not the only one who has taken me to task and that is the reason I write this column. To learn and be taken out to the woodshed occasionally.
Thank you for being gentle.
Dean.
Thank you so much for the educated and informed rebuttal.
I am obviously a bit myopic regarding peoples situations.
I still will stand by belief that people regardless of financial strata will not make that move if they have a fear of losing one of those incomes.
500 dollars a month is significant and I did not do my math properly. I blame that on the public school system or Covid or whatever else people are passing the Buck on now.
Thank you for correcting me and giving me more food for thought. It’s why I write this column. To learn.
Peter