No post body was provided.
How This Ends
141–150 of 698 posts
Re: How This Ends
#142My view is that capital and investment will dry up and companies that are operating at a loss(many in tech right now) will either have to downsize or close up completely. This will cause a domino effect. People will lose jobs, and some of those people will have bought a million dollar shack in the past 2 years and they might have to sell at a loss or foreclose. Generally I think we have yet to see any real macroeconomic fallout from the markets cooling. I see many people already comparing this to '08 and saying 'it's definitely not that bad this time' but the reality is we haven't even seen any fallout yet.
Re: How This Ends
#143How does all this look to the federal government and deficit spending?
What happens when they can't borrow money at near-zero any more, and need to borrow more money at 5-10%?
Everyone always said the debt was nothing to worry about. It's been repeated for a long time as our debt keeps rising, but it was most apparent with the recent spending bills and virtually no pushback on trillions in unfunded spending.
Re: How This Ends
#144Earlier quoted context omitted.
It depends on a recession and how bad it is. Even if you're locked into a low mortgage, if you lose your job, can't pay, and due to rising interest rates are now underwater 500K on a mortgage, nothing good happens. Like it or not there's a lot of chaff to cut in software engineering. How many of these SaaS businesses can survive, and how many engineers bought nice homes with massive salaries that might go poof?
> are now underwater 500K on a mortgage it will be very small fraction of homeowners: those who bought in in last 2-3 years. All others will be significantly over water, and may take equity loans instead of selling houses to preserve low mortgage interest rates.
Eventually and all sellers and no buyers market will catch up with prices. Matter of how long it can be bridged. Every equity loan taken out against higher values will shorten that bridge.
Re: How This Ends
#145Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.
Do you really though? If you are a long term investor, just picking a couple of core asset classes and then rebalancing regularly (rebalancing is key because it is an automatic way of selling thing when prices are higher and buying when they are lower), and never paying attention to the news, it's a winning strategy.
When you buy a home -- the largest single purchase one makes in the middle class -- you lock in the purchase price, but not the interest rate. Housing prices still haven't recovered in Japan to their 1990 highs. So if you don't pay attention to the macro environment, you could be costing yourself a great deal. Fortunately, other asset purchases like mutual funds in retirement accounts are DCA'ed in by the paycheck, and not done all at once.
Re: How This Ends
#146Earlier quoted context omitted.
Agreed. Unfortunately, we’ve inherited the mess that our parents and grandparents left for us.
The current government spending sprees are not your parents' and grandparents' fault.
Depends how old you are. Even the youngest member of the UK cabinet is old enough to be my father, but the real decision makers are old enough to be my grandfather. I don't keep close track of US politicians but as far as I can tell, its even worse there.
Re: How This Ends
#147Earlier quoted context omitted.
I was very productive over 2 years working from home. I actually managed to complete a few home construction projects while answering a few slack questions from my phone once in awhile.
I don’t think anyone argues that work from home allows for self beneficial gains. Really you’re just saying the quiet part out loud ;)
Well the other quiet part that executives don't say out loud often is that if the job can be done from home, then it can be done from Mexico, India, or Eastern Europe as well which is where that job is now. To be fair, that was happening before even the pandemic, and I was mentally half checked out too. Now I work in healthcare which has a bit more of a US centric moat to it.
Re: How This Ends
#148> I would be planning to ride this thing out for at least eighteen months or more. I'm betting more like three to five years. I was talking to a friend (another old guy, like me, but really rich, unlike me). We've both been through at least two recessions (big, nasty ones, with teeth and claws). We realized that there's an entire generation of folks; many running companies, that have never seen a real bear market. It…
How could there be a whole generation of CEOs who never saw a recession? Are there 13-year-old CEOs?
As CEOs (also, the 2008 recession didn't hit the tech sector nearly as hard as this one. The 2000 bubble burst would be a better comparison). When you have that job, the priorities are vastly different from as a W2 earner.
But, to be fair, there's plenty that have.
Which is why we're so puzzled at their behavior.
Re: How This Ends
#149[deleted]
Re: How This Ends
#150Earlier quoted context omitted.
> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold What will happen to the housing market?
Expect a steep drop. Leverage is much more expensive (from sub 3% mortgages, we already have 5%+ rates), which means buyers can afford less, plus significant withdrawal of “cash” buyers from the market who were really just borrowing against their (now much smaller) equity positions. I wouldn’t want to be in a forced sale position anytime soon.
5% for a 30 year mortgage is not really that high historically speaking.
The problem is more that prices are very high and supply remains very low.