How international market forces affect NZ property

[Jeffa]

Good to see you keeping up Mcdee


-Markets pricing in Fed will cut rates as early as June

-Bond market is pricing in rate cuts this year

-Bond market is always right

-Bond market is the largest market in the world

-All of us invest in the bond market through Super and kiwisaver


I continue to buy into this market.

[Jeffa]

For those of you who don't understand how credit works in the economy and why cutting of credit and liquidity will always lead to a recession, and why the Fed/RBNZ will eventually cut rates

It involves a landlord, a carpenter, a prostitute and a hotel manager

If you can't keep up or understand this short 3 minute clip you deserve to be broke.

[Jeffa]

Bill Ackman:

"Consider recent events impact on the long-term cost of equity capital for non-systemically important banks where you can wake up one day as a shareholder or bondholder and your investment instantly goes to zero. When combined with the higher cost of debt and deposits due to rising rates, consider what the impact will be on lending rates and our economy.

The longer this banking crisis is allowed to continue, the greater the damage to smaller banks and their ability to access low-cost capital.

Trust and confidence are earned over many years, but can be wiped out in a few days. I fear we are heading for another a train wreck. Hopefully, our regulators will get this right."

[Jeffa]

Bill Ackman:

"Consider recent events impact on the long-term cost of equity capital for non-systemically important banks where you can wake up one day as a shareholder or bondholder and your investment instantly goes to zero. When combined with the higher cost of debt and deposits due to rising rates, consider what the impact will be on lending rates and our economy.

The longer this banking crisis is allowed to continue, the greater the damage to smaller banks and their ability to access low-cost capital.

Trust and confidence are earned over many years, but can be wiped out in a few days. I fear we are heading for another a train wreck. Hopefully, our regulators will get this right."

Translated, the Fed is sending the world economy to hell, and the middle class with it.

Rates in the US are now what they were during the global financial crisis in 2008

This will not end well..

[Genkiwi]

For those of you who don't understand how credit works in the economy and why cutting of credit and liquidity will always lead to a recession, and why the Fed/RBNZ will eventually cut rates

It involves a landlord, a carpenter, a prostitute and a hotel manager

If you can't keep up or understand this short 3 minute clip you deserve to broke.

Sorry. Just seems like the motel is down $100 as they don't have the cash or the credit from the hooker.
Maybe I am missing something.
Cheers

[Jeffa]

Fed fund rate was raised to 5% this morning, the same as the global financial crisis.

J Powell said they didn't expect rates to be cut this year,

The market disagrees, and thinks J Powell is talking through a hole in his ass,(similar to politicians) just like the market disagreed when J Powell said inflation was transitory, the market sold off several months before the Fed starting raising rates.

Don't follow what the Fed says, the market is already pricing in rate cuts starting in June

Today's round of 3 month Bond yields(June 2023) was down to 4.66% from today's 5% fed fund rate.

Which is a rate cut..

[Frezzinghot]

https://youtu.be/DhXWCcFW47Y

anastisiadas thinks rates have peaked

[donna]

On Reuters the Fed said no more interest rate rises.

[Frezzinghot]

https://youtu.be/1ms-pvNdh0w

another one saying rates have peaked. A stand off in the property market due to uncertainty is not helping the flow of money so banks should be nervous atm.

[Jeffa]

Sorry. Just seems like the motel is down $100 as they don't have the cash or the credit from the hooker.
Maybe I am missing something.
Cheers

He never had $100 in the first place

It was all a short term loan to get through the next phase or economic cycle

My point being, If the rich guy didn't show up, the whole system falls over, the rich guy represents the central banks, if they don't print money to by the debts or in reality mortgage bonds ,securities, government debt etc, the whole economy goes into a recession, the longer the recession, the higher chance the world economy collapses.

The hotel owner, grocer, carpenter and hooker represent the world economy while the rich guy represents the central bank.

The motel owner isn't down $100 because he never had it on the first place , he owned an asset, he leveraged the asset to pay of his debt, now he has to give back the $100 which was never his in first place.

We don't own our property, even when they are mortgage free we still have thousands in rates and insurance and maintenance to hold the property, we will always be in debt to the next guy and so on and so on, this is how the economic debt cycle flows.

Until they stop the flow of debt/liquidity...then it all comes crashing down as has started in the US banking system.

[Jeffa]

The amount of lies that came out of Fed chair Jerome powell made me nauseous this morning

He blatantly lied in saying they hadn't started Q.E

Wtf? When is QE not QE?

It's all over there balance sheet ? They printed 300 billion to buy the bonds/securities from these struggling banks, at a higher price than these banks paid for?? seriously this is inflationary !

Not one of those government sponsored mainstream media had the balls to ask this question or most likely were not allowed to ask this question...the whole system is corrupt as fk.

Don't trust what comes out of any of these central planner's mouths.

[Frezzinghot]

He never had $100 in the first place

It was all a short term loan to get through the next phase or economic cycle

My point being, If the rich guy didn't show up, the whole system falls over, the rich guy represents the central banks, if they don't print money to by the debts or in reality mortgage bonds ,securities, government debt etc, the whole economy goes into a recession, the longer the recession, the higher chance the world economy collapses.

The hotel owner, grocer, carpenter and hooker represent the world economy while the rich guy represents the central bank.

The motel owner isn't down $100 because he never had it on the first place , he owned an asset, he leveraged the asset to pay of his debt, now he has to give back the $100 which was never his in first place.

We don't own our property, even when they are mortgage free we still have thousands in rates and insurance and maintenance to hold the property, we will always be in debt to the next guy and so on and so on, this is how the economic debt cycle flows.

Until they stop the flow of debt/liquidity...then it all comes crashing down as has started in the US banking system.

Great analogy!

[McDuck]

"DEBT BECOMES IRRELEVANT WITH INFLATION".

And debt junkies will come up with all sorts of lame excuses to continue their habit.
"DEBT BECOMES A FOOL CULLING TOOL WITH DEFLATION".

[Jeffa]

Great analogy!

Did you notice The last part of the clip?

Just like in real life,

The money always finds its way back to the rich or the top 1%...


If the top 1% gave everyone in the world 10k today, it would eventually find it's way back to its original owner

Because what you spend that 10k on is likely owned by the top 1% and it's shareholders.

[Frezzinghot]

Did you notice The last part of the clip?

Just like in real life,

The money always finds its way back to the rich or the top 1%...


If the top 1% gave everyone in the world 10k today, it would eventually find it's way back to its original owner

Because what you spend that 10k on is likely owned by the top 1% and it's shareholders.

Funny that