So should I pull out on all my stocks and stuff everything into bonds then?
Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
11–20 of 134 posts
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#12So should I pull out on all my stocks and stuff everything into bonds then?
Yes. The only remaining question is when.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#13FTA: "There are more than $27 billion of outstanding bonds backed by non-qualified mortgages now, a small fraction of the approximately $10 trillion mortgage-bond market. In 2007, there were around $1.8 trillion of bonds backed by loans to non-prime borrowers."
I'm gonna need to see a lot more than a tiny fraction of investors / loan makers dealing with non-QM bonds before I'd say that 2007-era silliness has come back.
This looks a lot more like some banks filling in the gaps in the QM market than anything else.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#14Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…
So if the USD becomes weak, who out there could be in a position to become stronger? I don’t see any candidate. Euro growth is weak. CN bookkeeping’s suspect...
Bitcoin.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#15Earlier quoted context omitted.
So if the USD becomes weak, who out there could be in a position to become stronger? I don’t see any candidate. Euro growth is weak. CN bookkeeping’s suspect...
India, still a youngish population compared to China but with 1.4 billion people and still rapidly developing. Also helps they're strong in service industries, deliverable to the world.
Doing the needful?
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#16Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…
Is there a reason why Japan shouldn't monetize the debt? The usual explanation is that it would cause inflation, but I'm not sure how that works for government debt that trades near 0% anyway. It's a tradeable store of value that you can trade 1:1 for money, so might as well be money?
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#17Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…
Is there a reason why Japan shouldn't monetize the debt? The usual explanation is that it would cause inflation, but I'm not sure how that works for government debt that trades near 0% anyway. It's a tradeable store of value that you can trade 1:1 for money, so might as well be money?
Bernanke was pitching them this idea. He suggested the Japanses government issues zero-coupon perpetual bonds and the BoJ buys them. Ha, ha, "bonds".
As crazy as this sounds I think it makes sense - just admit honestly that the situation is fucked up, monetize, generate stagflation and eventual normalization.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#18Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#19Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#20So should I pull out on all my stocks and stuff everything into bonds then?
Anyone that tells you to pull all of your money out of stocks and into another asset is an idiot. Bonds have outperformed stocks in the past few years. You missed the ride, just average down if stocks suffer any serious correction.