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Heck ....the housing market hasn't even felt the effects of these higher rates yet . Pulte was up 9% yesterday and 2.5 % today .
It slowed things here; some places have even dropped somewhat. And houses are staying on the market for weeks at a time. It was days...
 
Heck ....the housing market hasn't even felt the effects of these higher rates yet . Pulte was up 9% yesterday and 2.5 % today .

Irrational exuberance ?

I’m 90% cash and trading 10% for some very quick gains. I know the edge of the cliff has a very slippery slope.
 
Heck ....the housing market hasn't even felt the effects of these higher rates yet . Pulte was up 9% yesterday and 2.5 % today .
I am also in the "housing has to fall" camp. However in the 70's house prices tripled. Everyone wanted tangible assets due to inflation. I think that has to be considered, even if its very likely an outlier.

With Powell going only 25 basis points I am confused - in December alone core inflation was up 0.2% MoM. So is he really giving the all clear, or backing up 15 yards to punt?
 
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Heck ....the housing market hasn't even felt the effects of these higher rates yet . Pulte was up 9% yesterday and 2.5 % today .

The most dramatic economic indicator I've seen in the past few weeks has been the personal savings rate which spiked during CV-19 and just fell off a cliff. Credit markets are getting more expensive and savings rates falling = the chickens are coming home to roost with a big liquidity crunch on the way. This will most assuredly affect the housing market soon.

 
I am also in the "housing has to fall" camp. However in the 70's house prices tripled. Everyone wanted tangible assets due to inflation. I think that has to be considered, even if its very likely an outlier.

With Powell going only 25 basis points I am confused - in December alone core inflation was up 0.2% MoM. So is he really giving the all clear, or backing up 15 yards to punt?
I'm currently taking a graduate-level finance class and it is essentially all about the Federal Reserve System. You can imagine we've talked A LOT about the current moves of the Fed. I can say 99% of the class and both profs "predicted" this move a month ago.

The Fed has two mandates - price stability and maximum sustainable employment. Those two mandates are in many ways opposite goals with the term "sustainable" being important. When everyone is employed that puts upward pressure on pricing because people have money. When prices/rates are high that puts downward pressure on employment. The goal of 2% inflation and 5% unemployment has been a sweet spot for balancing these mandates. The Fed moved the federal funds rate to zero during CV-19 based on lessons learned during The Great Depression when rates were high enough entering the initial economic downturn that credit markets could not provide adequate liquidity to keep people/businesses going and so there was a run on the banks. Makes sense, going into CV-19 if you lost your job or had to stay home low rates gave people options for loans, revolving credit, home refi, etc to keep the lights on and families fed. The question now is did rates stay too low for too long? Probably but hindsight is 20/20. If the Fed didn't keep rates low enough for long enough liquidity problems stifle the economy. If you keep them low for too long inflation becomes a problem and eventually, that too stifles the economy. The Fed got it wrong when they thought inflation was "transitory" but again hindsight is 20/20.

So right now we have mixed signals - employment is at record levels, the housing market is still going strong in most places, the market is down from the CV-19 bubble but not too far off from where it would've been based on pre-CV-19 slopes, my business just had its best month ever in January 2023 after having it's worst month ever in Jan 2022, inflation is still high but it is showing signs of easing. Theoretically, the rate hikes have not yet hurt the economy enough but it's a balance - the goal is to hurt it just enough to get price stability under control while maintaining employment but not so much that the hikes themself cause a recession. I think the Fed made a solid decision yesterday - certainly, we are not out of the woods yet and there are economic indicators suggesting things are easing but the rate hikes have had a minimal effect so far and unemployment is still too low at 3.5%.
 
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Irrational exuberance ?

I’m 90% cash and trading 10% for some very quick gains. I know the edge of the cliff has a very slippery slope.
I have to admit it's driving me crazy, close out two positions a few weeks back in WFC and TMUS ... held WMT and well, what now!?!?
This is my personal ROTH

I do have a 401k in index funds, been beaten up pretty good but not touching it, its mostly all index funds with some company WFC stock that I could sell at anytime and much profitable on the WFC

We all have thoughts, would haves, should haves could haves and the one on my mind was Tesla when it was below 107 I think but a stock like that is tough to figure ... so I didnt, would have been a nice ride and then dump even if I only held to 150.

AS far as Warstud post on Pulte, all I can say, in our very small corner of the USA = Florida and North Carolina communities we considered buying a new home and in the NC community we are actually almost at completion of our new home. To our relief we have truly and honestly not seen any price decreases.
I would even go out of a limb for the coastal NC area to say the prices seemed to firm up. I dont think we can buy the same house in the community we are building in at the same price as when we signed contracts last August 2022. We got a nice discount back then and I am not seeing that on the new ones being built and selling.
Florida did have some killer deals before the end of 2022 clearing out some homes but those deals seemed to have stopped at this point. The Florida community was also brand new and construction so far behind I think people were just dropping out and why the lots became available again. But I dont know that, all I do know is where we are building in NC so far I am actually seeing price increase if anything rather than decrease.
 
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I'm currently taking a graduate-level finance class and it is essentially all about the Federal Reserve System. You can imagine we've talked A LOT about the current moves of the Fed. I can say 99% of the class and both profs "predicted" this move a month ago.

The Fed has two mandates - price stability and maximum sustainable employment. Those two mandates are in many ways opposite goals with the term "sustainable" being important. When everyone is employed that puts upward pressure on pricing because people have money. When prices/rates are high that puts downward pressure on employment. The goal of 2% inflation and 5% unemployment has been a sweet spot for balancing these mandates. The Fed moved the federal funds rate to zero during CV-19 based on lessons learned during The Great Depression when rates were high enough entering the initial economic downturn that credit markets could not provide adequate liquidity to keep people/businesses going and so there was a run on the banks. Makes sense, going into CV-19 if you lost your job or had to stay home low rates gave people options for loans, revolving credit, home refi, etc to keep the lights on and families fed. The question now is did rates stay too low for too long? Probably but hindsight is 20/20. If the Fed didn't keep rates low enough for long enough liquidity problems stifle the economy. If you keep them low for too long inflation becomes a problem and eventually, that too stifles the economy. The Fed got it wrong when they thought inflation was "transitory" but again hindsight is 20/20.

So right now we have mixed signals - employment is at record levels, the housing market is still going strong in most places, the market is down from the CV-19 bubble but not too far off from where it would've been based on pre-CV-19 slopes, my business just had its best month ever in January 2023 after having it's worst month ever in Jan 2022, inflation is still high but it is showing signs of easing. Theoretically, the rate hikes have not yet hurt the economy enough but it's a balance - the goal is to hurt it just enough to get price stability under control while maintaining employment but not so much that the hikes themself cause a recession. I think the Fed made a solid decision yesterday - certainly, we are not out of the woods yet and there are economic indicators suggesting things are easing but the rate hikes have had a minimal effect so far and unemployment is still too low at 3.5%.
Well said. Your post was finance based but could easily have been Econ based. It is important to understand that these topics tend to be backward looking; we evaluate the past scenario, what was done and what happened. There is never a magic bullet and change occurs slowly.
While there is a long way yo go, the Fed's dream of a soft landing has, so far, been happening.
 
I think the Fed made a solid decision yesterday - certainly, we are not out of the woods yet and there are economic indicators suggesting things are easing but the rate hikes have had a minimal effect so far and unemployment is still too low at 3.5%.
Yet there are 11 million unfilled job openings, but nobody wants to work them, so maybe there should be a "don't want employment" percentage. Guess if someone doesn't want a job then it's not "unemployment". Those 11 million jobs is about twice the unemployment rate of 3.5% (5.6M) of the current working force (160M).
 
Yet there are 11 million unfilled job openings, but nobody wants to work them, so maybe there should be a "don't want employment" percentage. Guess if someone doesn't want a job then it's not "unemployment". Those 11 million jobs is about twice the unemployment rate of 3.5% (5.6M) of the current working force (160M).
That's heading in the right direction too...



Probably because of this...



After three years of hiring problems, we are finally seeing more qualified applicants looking for work.
 
Yet there are 11 million unfilled job openings, but nobody wants to work them, so maybe there should be a "don't want employment" percentage. Guess if someone doesn't want a job then it's not "unemployment". Those 11 million jobs is about twice the unemployment rate of 3.5% (5.6M) of the current working force (160M).
There has to be a reason nobody wants to work them. I have to believe many of those positions are not attractive from a pay standpoint or there are not sufficient qualified candidates.

Would you work for $15 per hour ot $20 per hour, all else equal? I don't know about the rest of the country, but no experience employment around here starts at $18+ per hour. I think Mickey D's starts at over $20 locally. Hard to believe.
 
There has to be a reason nobody wants to work them. I have to believe many of those positions are not attractive from a pay standpoint or there are not sufficient qualified candidates.

Would you work for $15 per hour ot $20 per hour, all else equal? I don't know about the rest of the country, but no experience employment around here starts at $18+ per hour. I think Mickey D's starts at over $20 locally. Hard to believe.
I'm sure not all of those 5.6 million reportedly 3.5% unemployed people looking for work are all PhDs looking for a CEO job. Lots of people don't want to work. At some point they may have to take a job they don't really want to keep living in something besides a tent.
 
There has to be a reason nobody wants to work them. I have to believe many of those positions are not attractive from a pay standpoint or there are not sufficient qualified candidates.

Would you work for $15 per hour ot $20 per hour, all else equal? I don't know about the rest of the country, but no experience employment around here starts at $18+ per hour. I think Mickey D's starts at over $20 locally. Hard to believe.
Purely my "man on the street" research says its a tale of two cities.

The low end jobs aren't real. There used by places that use them as a crutch to overwork their current employees. The places want to understaff because they don't want to pay 20 an hour, then they tell their current staff they can't find anyone - and won't raise pay, and treat them like crap, and won't hire there friends when they come to apply.

Then there is the other end - skilled positions like electrician or mechanic, and some white collar stuff - healthcare, engineering, skilled maintenance, etc. - there aren't enough people to fill those positions. Several people I know have switched jobs recently for better pay elsewhere, but a lot of places don't want to pay better, the expect people to switch jobs for the same pay? What they need to do is train, but they won't do that because as soon as someone is trained they jump too.
 
There has to be a reason nobody wants to work them. I have to believe many of those positions are not attractive from a pay standpoint or there are not sufficient qualified candidates.

Would you work for $15 per hour ot $20 per hour, all else equal? I don't know about the rest of the country, but no experience employment around here starts at $18+ per hour. I think Mickey D's starts at over $20 locally. Hard to believe.


I hear it all the time from managers in various fields and long time workers themselves. It’s not the pay. It is just that people are not willing to work. It has been going for quite a while now.

Managers can’t keep people. They suddenly quit out of the blue. Some show up for the interview and suddenly back out when they find out work starts at 0600 or they have to pass a drug test or abide by certain dress codes.

I knew a restaurant owner of a fairly large place that couldn’t keep staff despite offering $25 an hour. He had three or four people that were dependable and everyone else was a rotating crew in and out the door as they decided to quit. The place was busy so work was there. He just sold the place. He got tired of it all.
 
I'm sure not all of those 5.6 million reportedly 3.5% unemployed people looking for work are all PhDs looking for a CEO job. Lots of people don't want to work. At some point they may have to take a job they don't really want to keep living in something besides a tent.
That's always true. But I would not assume that's why there are so many unfilled jobs, unless there was data to show it.
And I doubt that there are many open CEO jobs. But it appears there may be some bad CEOs out there who cannot staff their companies.
 
There has to be a reason nobody wants to work them. I have to believe many of those positions are not attractive from a pay standpoint or there are not sufficient qualified candidates.

Would you work for $15 per hour ot $20 per hour, all else equal? I don't know about the rest of the country, but no experience employment around here starts at $18+ per hour. I think Mickey D's starts at over $20 locally. Hard to believe.

Yep.

Very big difference between a full time job paying $50-60 an hour…… verses a part time McJob with no benefits.

Thats why lots of younger folks don’t want to work and live in parents’s basement.
 
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