10-20-26 carib
| Hence my suggested remedy of portable mortgages.. |
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10-20-26 carib
Goldman Sachs US economics team estimates that more than 95 per cent of mortgage borrowers have interest rates below current market rates, while 65 per cent have rates 2 percentage points below market rates. This acted as a strong disincentive for homeowners moving, they said in a note on Tuesday.
FT
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10-20-26 carib
as I was writing..
A leading indicator of US housing activity fell to its lowest level on record in September, underscoring the adverse impact of high mortgage rates on the real estate sector. |
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10-20-26 carib
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10-20-26 carib
Savo: to my uneducated eye.. it looks like there is going to be a correction of US lower tier real estate prices, as you say, but the first reaction is for owners to refrain from selling, and perspective buyers resorting to .. renting.
I suppose some owners bought with very low rates mortgages, and many more re-financed at such low levels. 4% average rate looks very sustainable to me.
Question is: newly build houses are not cheap, because lavor and material costs are high. If there are few buyers, construction will slow down fast.
Correct? |
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10-20-26 savo
carib.. on the wsj .... The top third of the market is still buying
i doubt this is true... may be the top 5% of the market is mortgage rate insensitive... as they pay cash...
but from there downwards people buy with mortgages... and a 7.5% mortgage requires substantial falls.
Using a mortgage calculator...on a 1MM mortgage...a rate of 4% pa produces a monthly payment of 4,775. If the rate goes up to 7.5% the mortgage has to fall to 700k to maintain the same monthly payment.
Imagine a 30% fall across all real estate in the US excluding those of the top 5%.
people will start mailing the keys to the banks. The banks will have to sell and then unrealized HTM loses will become real loses.
The entire banking sector will require a bail out... but by whom? the federal government is already bankrupt... and the FED already owns 7 trn under water USTs with PPI running at 17% pa. |
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10-20-26 carib
Yttrium oxide prices outside China have skyrocketed to $1,150 per kilogramme, a 179-fold increase versus two years ago, compared with $9 per kilogramme in China, according to price assessments by Argus.
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10-20-26 carib
Savo: everybody can look at the graph and draw conclusions.
My point is that the extra-low rates of the last decade were the anomaly, rather than the norm.
As I wrote, the central issue is the real rate, rather than the nominal one. High real rates are not sustainable on a very large debt. I do not think the real rate is high, at the moment, considering all the uncertainties. |
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10-20-26 savo
carib.. how you equate average rate with normal rate?
my understanding when you said normal was that you meant the most frequent rate during those 40 years...
5% was the "normal rate" between 2001 and 2004... before it was higher ... and after it was lower. |
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10-20-26 carib
Savo: if you take the average yield of UST30Y during the last 40 years, I guess not far from 5%.
2% was an anomaly.
All that said, one should look at real rates, IMHO. |
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10-20-26 carib
US Defense Secretary Pete Hegseth and Prime Minister Benjamin Netanyahu met in Israel on Monday, two sources confirmed to Walla on Tuesday.
US sources confirmed to The Jerusalem Post that representatives of the United Arab Emirates were not present at the meeting, following reports indicating otherwise.
The unannounced meeting comes eight days before Israeli elections and amid US-Israel discussions to resume combat operations against Iran, according to the report. |
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10-20-26 savo
here is the chart of 30 year UST yields
https://fred.stlouisfed.org/series/DGS30 |
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10-20-26 savo
carib... look at the following 40 years chart...
30 year yields peaked in 1981 at 15%.... since then all the way down to 1.49% in 2021. Since then up...
so there hasn't been a normal 5% rate..
1981 2021 are the 40 years of housing tailwind.. refi... equity withdrawal... lower payments.. higher consumption...houses turned into ATMs.
Now the process has reversed... and housing has become a drag on the economy...
not surprisingly consumer confidence hit an all time low in september 2026.. and "by all time" meaning since inception in 1960
look at the following graph:
https://fred.stlouisfed.org/series/USACSCICP02STSAM
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10-20-26 carib
5% on long UST used to be the normal rate, not odd.
The difference is now federal debt is over 100% of GDP.
The real question is.. are REAL rates high?
inflation always solves a big chunk (or all) of the problem.. |
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10-20-26 savo
victor.. the capacity of the fed for financial repression is unlimited... hence i do not know is the answer to your question.
All i do is comment on what I see.
1) debt and deficit growing exponentially
2) buyers of USTs turning into sellers
3) 8 trn of 20 year mortgages at an average rate of 4%, according to the numbers that circulate, significantly under water siting at face value somewhere in the US banking sector, fannie and freddie
4) 7 trn of USTs sitting in the fed's balance sheet underwater
5) trillions of USTs underwater also in the financial sector
6) no political will to bear the cost of solving the above
7) the housing weatlh effect by which people would refi, get lower monthly payments and extract equity and use that to feed consumption and gdp turned into reverse.
8) too big to fail banks becoming too bigger to fail banks
the list can go on. |
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10-20-26 victor
savo, say there is a recession, and the fed aggressively lowers rates.
do you expect the 30 year bond to remain at 5% or more?
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10-20-26 victor
savo, do you think 30-year bond yields in the usa will remain high, in the future?
more than 5%, as now, for the next 2-3 years (till trump leaves office) ?
even if the fed lowers the federal funds rate?
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10-20-26 victor
Jueza de Florida emite orden de arresto contra Raúl Castro por el derribo de dos avionetas de Hermanos al Rescate en 1996
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10-20-26 spal
Yes Carib Brazil's system is chronic - unless you are a rentier of which there are many - normally ex-public servants.
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10-19-26 savo
compare this guy with the crooks in the WH, or the imbeciles in Elysee, 10 or Berlin.
https://ggtvstreams.substack.com/p/clear-and-concise-does-he-sound-evil |
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10-19-26 victor
psoe militants rebelling against sanchez.. :-))
//
Los candidatos del PSOE en Palencia renuncian en bloque después de que Ferraz impusiera otra número uno en contra del criterio de las bases
Crisis abierta para el PSOE en Palencia. Los integrantes de la lista propuesta por la militancia provincial para el Congreso, que encabezaba Álvaro Bilbao, han renunciado en bloque a ocupar sus puestos como protesta por la decisión de Ferraz de sustituirlo por María Luz Martínez Seijo, la candidata impuesta cinco veces consecutiva por la dirección nacional en contra del criterio de las bases. La decisión se ha conocido durante un mitin de Pedro Sánchez en Valladolid en el que precisamente estaba presente la persona elegida por la dirección nacional, diputada desde 2016 y uno de los apoyos del líder del partido en las primarias de 2017 en las que se disputó el liderazgo con Susana Díaz.
Según confirman fuentes internas a este periódico, Luis Ángel Marín Paredes y Alicia García Alonso han comunicado este lunes su "decisión irrevocable" de renunciar a figurar como números dos y tres de la candidatura al Congreso en las elecciones generales del próximo 29 de noviembre, tal y como confirman fuentes internas a este periódico. También han hecho lo propio las dos personas que figuraban como suplentes: Luis Ángel Marín y Mireia Barrios.
En un comunicado, los representantes que han renunciado a concurrir a los comicios argumentan que la decisión de la dirección nacional "choca frontalmente con la voluntad mayoritaria de militancia palentina, que optó prácticamente de forma unánime por Álvaro Bilbao como cabeza de lista". En este sentido recalcan que el ahora concejal contó con 77 votos a favor y una única abstención y "el respaldo de todas las agrupaciones locales".
"La Comisión de Listas optó por eliminarlo y colocar a la actual diputada. Este hecho ha provocado el malestar de los nombres propuestos inicialmente, por lo que su decisión quiere poner en evidencia el nulo respaldo dado por la militancia que con su voto optó por otro nombre distinto al que figurará finalmente", recalcan.
El mismo viernes, que fue cuando la Comisión de Listas del PSOE cambió nombres en varias papeletas, la alcaldesa de Palencia y secretaria de los socialistas en la provincia ya expresó su disconformidad con la decisión. "Palencia ha debatido, ha participado hasta la extenuación. Y vosotros por quinta vez os habéis pasado la voz de la militancia por el forro", se quejó Miriam Andrés través de un mensaje en X. "¡Viva la democracia interna!", añadió en tono irónico adjuntado un vídeo de Sánchez de 2016 en el que afirmaba que sin los militantes "el partido simplemente no existiría".
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10-19-26 carib
| Government bond yields in brasil are 8%+ inflation index, taxed @15% for locals |
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10-19-26 spal
| Yes - so imagine a less benign Brazil. |
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10-19-26 carib
| Brasil is friendly with practically all other countries...no need of nukes.. |
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10-19-26 spal
| Russia’s Foreign Minister Sergey Lavrov has arrived in Tehran. |
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10-19-26 spal
| America will Brazilianize - poco a poco - imagine a nuclear armed Brazil. |
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10-19-26 carib
Savo.
America’s home-buying market is a house divided.
On one side, near-record home prices and the recent surge in mortgage rates above 7% have relegated buyers to the sidelines. In many cities, sales are stagnant and sellers are cutting prices for lower-end and entry-level homes to lure back buyers.
On the other is a robust luxury market, where wealthier home shoppers swerve around high rates with jumbo down payments or all-cash purchases. The top third of the market is still buying, and spending enough to push up home prices nationally by more than 4% over the past two years.
WSJ |
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10-19-26 carib
| Prediction markets increasingly expect Democrats to seize control of the Senate in November |
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10-19-26 panasonic
Carib, true.
Social media played a huge roll, AI even crazier... |
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10-19-26 carib
| weird days.. all along the last decade, IMHO. |
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10-19-26 panasonic
"OAT did not collapse"
Weird days indeed. |
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10-19-26 panasonic
"the Doomer Colores."
:-))) |
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10-19-26 spal
all valid points, and pls dont steal my place, I'm the pessimistic one here ;-)
===
We need a new sect - the Doomer Colores.
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10-19-26 carib
| Leo: correct. Bond vigilantes are effective at elections time... |
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10-19-26 leopardo
Still to early for a collapse in the OAT Carib
It will come in the first 3/4 months of 2027 imho |
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10-19-26 carib
| Panas: french riots are a political boon for the right. OAT did not collapse. |
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10-19-26 panasonic
| Savo, all valid points, and pls dont steal my place, I'm the pessimistic one here ;-) |
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10-19-26 carib
Donald Trump is Politically Bankrupt. Be Very Afraid
What will he do when he has nothing left to lose?
(Krugman) |
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10-19-26 savo
pana.. the central bank of a country without problem refinancing its debt can fine tune rates to control inflation. Not the US case.
One would say that a country that needs to fund a 3 trn budget deficit, a 1.2 trn trade deficit and roll over 10 trn of debt per annum should be nice to the rest of the world that is being asked to finance those amounts.
Yes the US is anything but nice... hence very few buyers.
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10-19-26 savo
pana... in isolation yes... but then you have the deficit... the debt... the roll over of the debt... debasement... weaponization of the USD and the US banking system... wars,and more wars... tariffs... a WH that lies constantly and is more interested in personal enrichment... a fed of ignorant doves dressed as hawks...
then there is
PPI for september 1.3%.. annualised 17%
CPI for september 0.6% .. annualised 7.4%
how can fed funds at 3.75 mean anything?
and if they raise rates to make them real positive... budget deficit will explode... and what is the benefit of raising rates to control inflation when the government spends and spends? |
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10-19-26 victor
savo, right.
yet another reason to bet that the gop will lose both houses of congress. |
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