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On today’s show, we discuss:
- Why the era of historically low-interest rates could be over
- Real interest rates hit 2%
- Misconceptions about individual bonds vs bond funds
- How to get rich and famous from a stock market crash
- Federal Reserve of Atlanta GDPNow
- Business travel spending will top pre-Covid level in 2023
- Banks don’t love rich mortgage borrowers as much as they used to
- Nepo-homebuyers: 40% of under 30s received family money for down payment
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Since 2/19/20 — the peak for the market before COVID hit — the 20+ Year Treasury ETF has posted a total return of -31.9% versus ARK Innovation's $ARKK drop of 30.7%. pic.twitter.com/flFRsaJzn6
— Bespoke (@bespokeinvest) August 21, 2023
A look at all of Michael Burry's recent predictions.
In 2005, Predicted the collapse of the subprime mortgage market
-> Housing market crashes in 2008, Global Financial Crisis.On Dec 2015, he predicted that the stock market would crash within the next few months.
-> SPX +11%… pic.twitter.com/fpBj9V2Shq— Adam Khoo (@adamkhootrader) August 15, 2023
It's not every day you see a strategy go almost all the way to zero in less than two years. But this cannabis ETF–which is slated for liquidation–has nearly done it. It's down ~90% since its Oct. 2021 inception. Leverage and weed stocks, bad combo. pic.twitter.com/h4KEuEUJzD
— Jeffrey Ptak (@syouth1) August 20, 2023
US bonds attracted $1.7bn in the week ending Aug 16 for the 33rd straight week of inflows.
via TD Securities pic.twitter.com/jDLT2kHzMm
— Daily Chartbook (@dailychartbook) August 19, 2023
Money-market funds have dominated YTD flows across asset classes.
via Barclays pic.twitter.com/Nus7ozgqwN
— Daily Chartbook (@dailychartbook) August 19, 2023
All of these are reasonable takes:
-inflation is still too high
-fast growth is compatible with cooling inflation due to supply chain improvement
-growth is still too fast to be consistent with 2% inflation
-over time the economy can’t handle 5%+ Fed Funds— Conor Sen (@conorsen) August 18, 2023
U.S. consumers are still super healthy
Consumer debt as a % of GDP is at 2001 levels–Bofa pic.twitter.com/k0aMtQv2Lk
— Gunjan Banerji (@GunjanJS) August 14, 2023
Reminder that some people are paying mortgage payments for fancy cars.
These are real, active car leases in 5 states: pic.twitter.com/kZwSl0LIbW
— Car Dealership Guy (@GuyDealership) August 17, 2023
Severe delinquency for auto loans is highest since at least 2006. Yet, the jobs market is strong.
So basically, no one has any idea what's going on.
[via Wall Street Journal] pic.twitter.com/i0SvkjCrvB
— Car Dealership Guy (@GuyDealership) August 21, 2023
Closing my week pondering thoughts from an AI professor @Wharton who thinks productivity acceleration from AI will take 10-year bond yield up to 6%.
Is bond sentiment too bullish or bearish – @biancoresearch and @dailydirtnap been debating.
Talk about a 🔥take.
— Jeremy Schwartz (@JeremyDSchwartz) August 18, 2023
2% of mortgaged properties have negative equity, down from 25% in 2011 pic.twitter.com/3GZjXYDrGp
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) August 16, 2023
Excess leverage and real estate speculation?
Only 0.88% of home equity is being used in HELOCs currently
The lowest level since 1988!
It peaked at 6.57% pic.twitter.com/nFKLIx86tI
— TheHappyHawaiian (@ThHappyHawaiian) August 21, 2023
What a monthly mortgage payment would look like for a new home buyer in the US, based on the median existing home price and the average 30Y fixed-rate mortgage, assuming a 20% down payment: pic.twitter.com/GITXvCvI2f
— Michael McDonough (@M_McDonough) August 22, 2023
Macy's is hard to take seriously.
Hikes shrink allowance after physical count… which raises a lot of questions.
Looking for -7% FY comps. Takes credit card delinquencies up.
*This* is what garbage retail accounting looks like. So much gibberish for a $4b mkt cap co. $M
— Jeff Macke (@JeffMacke) August 22, 2023
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