The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”

[Corcaigh]

9 minutes ago, gbear said:

I have split investments with some in S&P 500 index, some in high dividend stocks, some in utilities, and some in a small cap index.  Then I have some in short term intermediate size firm corporate bonds.  So far, I have done OK. I figure to stay in this position fairly long term in addition to some investments in individual companies that strike my eye.  Those I tend to buy for a longer term view of where I think the economy will have to go.  So I tend not to care about the normal fluxuations in the market during a normal up/down cycle.

i haven’t changed this year in response to COVID and don’t plan to. Over the prior few years because of growth in equities in the last decade, and meeting certain financial goals, I decided to go more conservative and shifted to 60% equities/40% bonds. All are in total market index funds with a mix of domestic an international aligned with the strategy used by the Vanguard and Fidelity target date funds that match my time horizon. 
 

I’m fortunate in that my cash and bond holdings mean I can wait out a very long rollercoaster road in equities before I need to sell any.

[techboy]

32 minutes ago, Corcaigh said:

 

Getting back in? Or are you committed to a lower risk strategy for the long haul?
 

 

Market timin' ain't easy.

 

I think the accepted response is to blame the Fed, which reminds me of Laurence J Peter's definition of an economist:

 

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

[Corcaigh]

10 minutes ago, China said:

 

Yeah, I posted an article a while back that the average age of a car is increasing because people are holding on to their cars longer due to the pandemic (among other reasons)

 

With the increasing trend in reliability it does not surprise me.

 

I accept that I’m a frugal person but the last couple of cars I finally sold was not because they weren’t 100% reliable to get me from A to B.

 

It was to take advantage of all the new electronics and safety features, plus the interior was getting a little worn.

 

I’m never impressed with the folks who are whining about cost of living and how much their kids activities cost as they swap out their cars every 3-4 years. Bah humbug.

[PleaseBlitz]

I recently bought (my wfie) a new car.  #1, @TryTheBeal! was extremely helpful.  #2, we initially looked for a slightly used car, and there was very little out there.  #3, the dealer initially offered us KBB value for our 2014 trade in, I asked him for $1000 more (which i thought would be a starting point and we'd settle on $500 more) and he did not blink and just said ok.  

[Corcaigh]

1 minute ago, techboy said:

 

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

Have you read Super Forecasting by Tetlock and Gardner?

Somewhat related ... the software company I now work with helps certain types of company do forecasting based on answers to questions and assumptions that are continually refined as you gather more data. Some people push back on the idea of getting a better forecast simply by applying new information that they actually have in hand. It’s so much more reassuring to stick with their original guess, rather than admit they may need to change their mind, even if new evidence indicates they should.

 

[PleaseBlitz]

11 minutes ago, techboy said:

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

 

"Economics is a subject that does not greatly respect one's wishes."

–Nikita Khrushchev

[Corcaigh]

4 hours ago, PleaseBlitz said:

 

"Economics is a subject that does not greatly respect one's wishes."

–Nikita Khrushchev

I attended a business dinner once where the after-dinner speaker was an economist, and he started by explaining how economics was very complex and you routinely would hear economists explain  “On the one hand this will happen ... while on the other hand something else might happen.” Which led to Harry Truman’s famous quote “Get me one-handed economist!”

At this point the speaker stood up and revealed he had a hook for his right hand.

 

That got our attention.

Edited August 13, 2020 by Corcaigh

[PleaseBlitz]

If you are thinking about refinancing your home, you need to do it now.  

 

https://www.housingwire.com/articles/new-fee-on-mortgage-refinances-could-cost-homeowners-1400/

 

Quote

Refinance mortgage loans sold to Fannie Mae and Freddie Mac after Sept. 1 will include a new adverse-market refinance fee of 0.5%, the two government sponsored enterprises announced Wednesday night. This fee will be assessed for both cash-out and no-cash-out refinances.

 

[Springfield]

2 minutes ago, PleaseBlitz said:

If you are thinking about refinancing your home, you need to do it now.  

 

https://www.housingwire.com/articles/new-fee-on-mortgage-refinances-could-cost-homeowners-1400/

 

 

 

Yeah, I did it in January before they rates dropped another .5% or so.

[PleaseBlitz]

Just now, Springfield said:

 

Yeah, I did it in January before they rates dropped another .5% or so.

 

I refinanced in March.  I am doing it again now, locked in yesterday.  

[CousinsCowgirl84]

1 hour ago, Corcaigh said:

Changing the topic from spinning unemployment numbers ... the S&P is back to its record high. No one knows for how long, and no one knows what we will see in the next 6-36 months and beyond.

 

For those who decided to sell equities to buy lower risk investments or for cash once the rapid fall was underway in late Feb/March, what do you think looking ahead?

Getting back in? Or are you committed to a lower risk strategy for the long haul?
 

market has got to be at the top.. main problem with the stock market going down is that there is no where else to put your money...

[Springfield]

Just now, PleaseBlitz said:

 

I refinanced in March.  I am doing it again now, locked in yesterday.  

 

Don't you end up losing out by the closing costs/fees. I never even considered it because we JUST refi'ed.

[PleaseBlitz]

4 minutes ago, Springfield said:

 

Don't you end up losing out by the closing costs/fees. I never even considered it because we JUST refi'ed.

 

No, because both times I've taken a slightly higher rate and the lender has paid all of my closing costs.  I went from 4.375 (with a second loan on top) down to 3.5% with a $4000 lender credit towards closing costs, now I'm getting 2.875% with a $3500 lender credit.  All 30 year fixed. 

[Springfield]

6 minutes ago, PleaseBlitz said:

 

No, because both times I've taken a slightly higher rate and the lender has paid all of my closing costs.  I went from 4.375 (with a second loan on top) down to 3.5% with a $4000 lender credit towards closing costs, now I'm getting 2.875% with a $3500 lender credit.  All 30 year fixed. 

 

Guess I need to shoot off an email or two.

[Corcaigh]

12 minutes ago, CousinsCowgirl84 said:

market has got to be at the top.. main problem with the stock market going down is that there is no where else to put your money...

There are plenty of alternatives including commodities, real estate and even hedge funds and private equity options now for regular individual investors.

 

It’s whether the promise of higher returns is worth the risk.

 

Me ... I’m a simple person who only invests in things I think I can understand.

[PleaseBlitz]

3 minutes ago, Springfield said:

 

Guess I need to shoot off an email or two.

 

I'll PM you the contact name of my guy, who is significantly cheaper than the retail lenders that most people use.  

[techboy]

48 minutes ago, PleaseBlitz said:

If you are thinking about refinancing your home, you need to do it now.  

 

I just signed the closing paperwork Saturday. The three day right of recission expired yesterday, so theoretically funding is today. Not being nearly as intelligent and well informed as I think I am, I applied for a couple of credit cards I had been eyeing Saturday and Sunday, since we had closed. I got an email this morning asking about them, and I got a little indignant, though I was polite and provided the information. Then I did a little more digging and discovered that for some reason the lender CAN delay or cancel funding after all the papers are signed, even though the right of recission is for the borrower, not the lender.

 

I sent a followup email informing the loan officer that I have decided that perhaps I shouldn't pursue a career as a real estate attorney and to let me know if she needed anything else. 😳

 

On the positive side, if the whole thing blows up (which it probably won't), interest rates are actually lower now.

1 hour ago, Corcaigh said:

Have you read Super Forecasting by Tetlock and Gardner?

 

No, but I think I've heard of it.

[EmirOfShmo]

2 hours ago, Corcaigh said:

Changing the topic from spinning unemployment numbers ... the S&P is back to its record high. No one knows for how long, and no one knows what we will see in the next 6-36 months and beyond.

 

For those who decided to sell equities to buy lower risk investments or for cash once the rapid fall was underway in late Feb/March, what do you think looking ahead?

Getting back in? Or are you committed to a lower risk strategy for the long haul?
 

I mentioned it in a thread back in July - my broker's recommendation (large financial company) was to pull back from my equity exposure per their top guru. The advise was based on the high price of the S&P, primarily held up by FANG and other tech stocks. I switched to their managed funds that are 35/65 stock/bonds on July 9th. I'm retired & in my early 60s so I'm in more of a capital preservation mode. I was 70/30 before the switch. Eked out 1.6% from July 9th thru yesterday. 

[PleaseBlitz]

35 minutes ago, techboy said:

On the positive side, if the whole thing blows up (which it probably won't), interest rates are actually lower now.

 

Hope it closes.  Rates are lower now because the 50 basis point fee hasn't kicked in yet, but it will soon (like, today) because it applies to loans that fund on 9/1 or after.  

Edited August 13, 2020 by PleaseBlitz

[JSSkinz]

36 minutes ago, techboy said:

I just signed the closing paperwork Saturday. The three day right of recission expired yesterday, so theoretically funding is today. Not being nearly as intelligent and well informed as I think I am, I applied for a couple of credit cards I had been eyeing Saturday and Sunday, since we had closed. I got an email this morning asking about them, and I got a little indignant, though I was polite and provided the information. Then I did a little more digging and discovered that for some reason the lender CAN delay or cancel funding after all the papers are signed, even though the right of recission is for the borrower, not the lender.

 

I sent a followup email informing the loan officer that I have decided that perhaps I shouldn't pursue a career as a real estate attorney and to let me know if she needed anything else. 😳

 

On the positive side, if the whole thing blows up (which it probably won't), interest rates are actually lower now.

Last second credit pulls are a norm on mortgages, surprised the loan officer didn't tell you not to inquire on any new debt but they shouldn't pull the funding.  All their trying to do is make sure you didn't open new credit that incurs new monthly payments that they didn't calculate into the D/R when the loan was cleared to close.

 

You should be able to write a simple letter of explanation saying you have not incurred any new debt, if you did open some new cards and made purchases then they have to recalculate the D/R with those new payments and send to underwriting for a new CTC.

 

It really shouldn't be a big deal.

[Corcaigh]

7 minutes ago, EmirOfShmo said:

I mentioned it in a thread back in July - my broker's recommendation (large financial company) was to pull back from my equity exposure per their top guru. The advise was based on the high price of the S&P, primarily held up by FANG and other tech stocks. I switched to their managed funds that are 35/65 stock/bonds on July 9th. I'm retired & in my early 60s so I'm in more of a capital preservation mode. I was 70/30 before the switch. Eked out 1.6% from July 9th thru yesterday. 

Yeah ... in retirement a higher stock exposure definitely has significant risks unless you don’t need the money any time soon. Or if you do need it because of a shortfall it’s “Swinging for the fences”.

 

With a conservative portfolio it might be fun to ask them at your next review how they compare in returns, after costs, with a Vanguard Target Date Fund with the same allocation. 

1 minute ago, JSSkinz said:

if you did open some new cards and made purchases then they have to recalculate the D/R with those new payments and send to underwriting for a new CTC.

 

If you know @techboy you can be pretty sure he borrowed cash on those credit cards in order to buy Bitcoin. That puppy is going to the moon. Lambos for everyone!

[techboy]

 

48 minutes ago, JSSkinz said:

Last second credit pulls are a norm on mortgages, surprised the loan officer didn't tell you not to inquire on any new debt but they shouldn't pull the funding.  All their trying to do is make sure you didn't open new credit that incurs new monthly payments that they didn't calculate into the D/R when the loan was cleared to close.

 

You should be able to write a simple letter of explanation saying you have not incurred any new debt, if you did open some new cards and made purchases then they have to recalculate the D/R with those new payments and send to underwriting for a new CTC.

 

It really shouldn't be a big deal.

 

Yeah, it shouldn't be a big deal... I wrote a detailed explanation of why I applied for each card, along with a screenshot from each account showing a zero balance (since I haven't even gotten the cards yet). The loan officer seemed happy with that.

 

 I very carefully didn't apply for anything up until I closed, because I knew they often pulled credit even on closing day, and I didn't want to screw up the underwriting. I hadn't realized that they can/will pull credit AFTER all the paperwork is signed. This is not immediately obvious even when doing careful research on it... everything focuses on not doing anything until closing. It took some very specific search results to even find that they can do this now. I'm not sure why they can... we have signed contracts and THEY don't have a right of recission period, but there we are.

 

It'll be fine... I have a very stable job, the loan amount is low next to my income, and I have an excellent credit rating.

 

It was a good lesson in humility, though.

 

47 minutes ago, Corcaigh said:

If you know @techboy you can be pretty sure he borrowed cash on those credit cards in order to buy Bitcoin. That puppy is going to the moon. Lambos for everyone!

 

Bitcoin's for Boomers. I'm all in on Dogecoin. It's got a dog.

[Corcaigh]

34 minutes ago, techboy said:

 

I'm all in on Dogecoin. It's got a dog.

And not just any dog. If any ‘puppy’ is going to the moon it should be Dogecoin.

 

I almost certainly have told the story of my computer engineering student son who is also a gamer, and he mined Dogecoin for a while just to learn about the process. Before long he’s sitting on a several hundred thousand coins that are still worth a few $k.

Now excuse me while I go plant some tulips.

 

 

Edited August 13, 2020 by Corcaigh

[Corcaigh]

2 hours ago, techboy said:

No, but I think I've heard of it.

it’s a very good read. Not only rated highly by the liberal rags NYT and WaPo, but also by the commie publications Wall Street Journal, Economist and Financial Times.

[TradeTheBeal!]

7 hours ago, Springfield said:

Been looking for a new or barely used car lately. Apparently there aren't any. So that's pretty awful. Poor dealers couldn't make money even if they wanted. I'd like to hear @TryTheBeal!'s take on the subject.

Speaking only for the Richmond area, yes...inventories are thin, new and used.  For new stuff, there’s a lot of fluctuation between makers and a lot of fluctuation between models within those makers.  For used, you need to lean heavily on trades and pay too much at auction when you feel you have to.  As it stands right now, we have enough supply to function somewhat normally.  We anticipate things will get worse before they get better, particularly for used inventory.

 

DM me if you have any model-specific questions I can address.