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"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
The Creature from Jekyll Island:
We're being governed ruled by a geriatric Alzheimer patient/puppet whose strings are being pulled by an elitist oligarchy who believe they can manage the world... imagine the utter maniacal, sociopathic hubris!
The Fed's $2.7 trillion mortgage problem
https://www.axios.com/2022/05/18/fed-mortgage-portfolio
If you took out a mortgage over the last couple of years, there's a good chance the holder of that loan is America's central bank — a consequence of its monetary stimulus efforts throughout the pandemic.
Why it matters: The Fed will face a series of political and economic headaches as it attempts to move away from subsidizing home lending by shrinking its portfolio of mortgage-backed securities.
The problem: Extracting itself from this market risks crashing the housing industry and creating intense political blowback for incurring financial losses.
By the numbers: Back in February 2020, the Fed owned $1.4 trillion in mortgage-backed securities, and the number was falling rapidly. But when the pandemic took hold, the central bank began a new round of bond purchases (known as "quantitative easing"), swelling that number to $2.7 trillion.
The policy contributed to ultra-low mortgage rates that stimulated home buying and refinancing activity until recently.
State of play: Now, as the Fed seeks to tighten monetary policy to combat inflation, it wants to shrink that portfolio. It may turn out to be easier said than done.
The Fed says that by September it will reduce the mortgage portfolio by up to $35 billion per month. Emphasis on "up to."
In fact, the numbers will probably undershoot that.
The reason: For now, the Fed is just looking to let its holdings shrink as securities get paid off. But with mortgage rates way up in recent months, people have little incentive to sell their home or refinance a mortgage — so these mortgages are likely stay on the Fed's books longer.
That will leave the Fed with unappealing options. It could simply accept that it will continue to have an outsized role in the housing market and a bigger balance sheet than it might prefer.
Or it could begin selling the securities on the open market — a possibility that the minutes of its March policy meeting said could happen down the road.
What they're saying: "Let's get the program we've got underway and up to speed, but then once we've got it underway, I think it'll be worth taking a look at what is happening to the mortgage-backed [securities] on our balance sheet," Thomas Barkin, president of the Federal Reserve Bank of Richmond, tells Axios.
"I'm certainly open to a targeted and disciplined way to sell into the market if we're not headed toward the primarily Treasury balance sheet that we've said we want," he said.
Yes, but: That will create its own problems. If the Fed sells mortgage securities that pay low rates at a time when prevailing rates are much higher, it will incur big financial losses that reduce the funds the central bank returns to the Treasury.
In that scenario, expect officials to face tough questions from Capitol Hill to explain why they've lost billions of dollars on behalf of the American people.
Plus, the selling would likely push mortgage rates up further, at a time the housing industry is already starting to groan under the pressure of rising rates. Homebuilders, real estate agents, and other influential industry groups will make their unhappiness known to elected officials.
The bottom line: The Fed's pandemic actions fueled a housing boom. As it tries to withdraw that support, it could be bad news for housing — and the Fed's standing on Capitol Hill.
The Creature from Jekyll Island:
We're being governed ruled by a geriatric Alzheimer patient/puppet whose strings are being pulled by an elitist oligarchy who believe they can manage the world... imagine the utter maniacal, sociopathic hubris!
Ya , I think the fed lowering the balance sheet wont be much of an attempt for awhile.
Do something Danke
I do not think the pandemic fueled a housing boom. I think prior to the pandemic costs of building materials had already soared. That was one of the first things I noticed. OSB went from $8 a sheet to $30 almost overnight. I don't think houses are overvalued based on the costs of goods to build a house or repair one. Interest rates have been at record lows for many years. 2-3% interest was crazy stupid low and it effected real investors from lending. Rates on savings have been in the toilet for probably 20 years. This is not a new or a COVID pandemic problem. This is a pandemic problem of its own that started probably back in the days of Clinton with housing for all. The issue I see the consumer facing is that inflation and higher prices only make the government richer. The value of everything goes up and people pay more sales tax on everything they buy. The value of your home increases and you pay more property tax. The consumers wage cannot keep up with the rising costs. The government beast is never satisfied. Their rhetoric will be they need to raise taxes/mill rates even higher because even though their coffers should be overfilling because they take in double the sales tax they were a year ago because items have doubled in price, their expenses have gone up and they don't ever have enough money to function.
That might be the case but not without the city benefiting. Zoning laws restrict the type of house so there will need to be hearings, fees, and variances in order to change the zoning. Then neighbors will have a chance to object but that will be like anything else. The sleazy palm greasing tycoon that knows all the politicians will be able to do anything they want but the simple citizen that wants to convert his 7000 square foot place into a 4 plex will be restricted by zoning laws and turned down.
Government shouldn't be subsidizing housing any more than it subsidizes education.
The Creature from Jekyll Island:
We're being governed ruled by a geriatric Alzheimer patient/puppet whose strings are being pulled by an elitist oligarchy who believe they can manage the world... imagine the utter maniacal, sociopathic hubris!
Last edited by Krugminator2; 05-24-2022 at 11:56 AM.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
I don't believe in technical analysis but I think you may be right because it looks like the Fed is starting to back off its rate hikes. I think there could be a relief rally as the markets sense an end to the hikes. But eventually they'll start going back down if the Fed doesn't turn the cheap money back on. Especially the printing.
I am concerned that we have gone into a downward spiral. Mainly due to energy costs. They effect the entire economy like a huge tax increase. People buy less, revenue decreases, at the same time business costs go up, leading to layoffs and less profits that can be put back into spending. There have been some disappointing earnings reports.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
Have you ever heard of the analogy that inflation is like adding drops of dye into a bathtub of water? At first the drops make the water at the entry point really dark and then it slowly spreads to the rest of the bathtub. The entry point to the inflation we've been creating is the stock markets and housing markets. Now it's slowly spreading to the rest of the economy, finally everyday consumer prices.
Also I think there's something else about that analogy that doesn't get mentioned. The initial point where the dye is placed is very dark at first but then it gets lighter as the dye spreads. I think that's what's happening with inflation. It hits the stock and housing markets first and makes them go up but then as it spreads to the rest of the economy those markets actually come down. I think that's what we're seeing. The markets are coming DOWN as grocery prices are going UP. Further proof of this is a book I read about hyperinflation. The author lived thru 3 hyperinflations, 2 in argentina and 1 in chile. He said that not all prices rose. I know he said that home prices collapsed and I think he said stock prices did also.
You had three 90% down volume days in a ten day stretch in May. That is an objective way of quantifying panic selling or climax that has held up to historical scrutiny. You had a 90% up volume day on May 13th which shows demand. And a yesterday and today were back to back 80% up volume days.
https://s3.us-east-1.amazonaws.com/d...ll-markets.pdf
The rally might fail but I think this is textbook A+ setup to be long the market.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
I am very leveraged long.
In my opinion and only my opinion, thinking in essentials is better. Washed out breadth and sentiment, steep yield curve and 90% down days followed by either 90% up day and/or two consecutive 80% up days is all that matters. Everything else is noise. I think this is pocket aces. No guarantees. No law against stocks dropping from here. But in my opinion one of the better opportunities in the last couple of years.
Last edited by Krugminator2; 05-26-2022 at 05:15 PM.
Rumors are CEO salaries are up 17 percent on avg . So I'm thinking any stocks you hold in a co where the CEO got a 17 percent raise , profits should be up 17 percent this yr .
Do something Danke
https://markets.businessinsider.com/...ump-1031508983U.S. stocks extended losses midway through trading, with the Nasdaq Composite dropping more than 300 points on Friday.
The Dow traded down 0.99% to 32,919.61 while the NASDAQ fell 2.61% to 11,995.68. The S&P also fell, dropping, 1.66% to 4,107.48.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
94% of Nasdaq stocks and 98% of the tech XLK were above their 10 day moving average after yesterdays close. The short term bias was heavy to the downside/sideways. You just had one of the strongest breadth thrusts that only happen a couple of times a decade. The next couple of months are solidly biased to the upside.
Stock Market Today: Dow Jones, S&P 500 Continue To Slide; Coinbase Stock Plunges Amid Sharp Pullback In Bitcoin Price
On Monday, the Dow Jones Industrial Average is down by over 500 points as investors continue to feel the fallout from higher-than-expected inflation and also rate hikes. The consumer price index (CPI) was up by 8.6% year-over-year for May and could force the Federal Reserve to get even more aggressive with interest rates to help cool the red hot inflation. Many investors will also be closely following the Fed’s latest policy-setting meeting later in the week. There could also be a rate decision set for Wednesday. The S&P 500 has fallen back into bear market territory as major indexes came off at their worst week since January 2022.
Tech stocks like Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN) are down today along with the broader market on fears of a looming recession and more aggressive Federal Reserve action, on top of rising inflation as mentioned earlier. On the other hand, FuboTV (NYSE: FUBO) today announced that it has expanded further into free-ad supported television, launching new FAST channels from Trusted Media Brands.
Among the Dow Jones leaders, shares of Apple (NASDAQ: AAPL) are down by 2.49% today while Microsoft (NASDAQ: MSFT) is also down by 2.33%. Meanwhile, Disney (NYSE: DIS) and Nike (NYSE: NKE) are trading lower on Monday. Among the Dow financial leaders, Visa (NYSE: V) is down by 2.93% while JPMorgan Chase (NYSE: JPM) is also down by 1.94%
Shares of EV leader Tesla (NASDAQ: TSLA) are down by 6.38% on Monday. Rival EV companies like Rivian (NASDAQ: RIVN) are also down by 5.50%. Lucid Group (NASDAQ: LCID) is down by 8.32% today. Chinese EV leaders like Nio (NYSE: NIO) and Xpeng Motors (NYSE: XPEV) are trading lower today as well.
...
https://www.nasdaq.com/articles/stoc...ges-amid-sharp
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
Stock plunge puts S&P 500 on track to enter a bear market: What investors need to know
S&P 500 closed at 3,749.63...The bear is back.
The S&P 500 on Monday was on track to confirm what many investors have been saying for months: The large-cap benchmark is in the grips of a bear market.
Stocks suffered sharp losses Monday after major benchmarks saw their worst week since January. Much of the weakness was attributed to the Friday reading of the May consumer-price index, which surged to 8.6% year-over-year -- a 40-year high. Investors fear the Federal Reserve will have to raise rates even more aggressively than already expected, risking recession in their effort to tame inflation.
A close below 3,837.25 would mark a 20% pullback from the S&P 500's Jan. 3 record finish, meeting the traditional definition of a bear market, according to Dow Jones Market Data. The S&P 500 was down 3.6% near 3,760 with a little over 30 minutes to go in the trading session.
...
https://www.morningstar.com/news/mar...s-need-to-know
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
And still nothing is being done to reduce oil prices...
The radical left has been driven insane by the cult of climate change, and their cult is now in the mass suicide stage.
"Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
"Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
"Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
"Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul
Proponent of real science.
The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.
Pretty big selloff in energy stocks, XLE (along with everything else). Perhaps looking to the future of lower energy prices.
This is a more brutal market than the dotcom bust and 2008. Just no let up. Both of the other bear markets had a number of double digit rallies. This has been six months of almost pure liquidation with two small rallies that got smashed almost instantly.
The great slide is underway it appears. Since WWII its taken the avg s & p bear market 27 months to get back positive with the avg descent being 33 percent.
Last edited by oyarde; 06-13-2022 at 04:34 PM.
Do something Danke
And so far precious metals has not been a haven. Platinum and palladium both look to continue to slide.
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