A few very insightful tweets came out of a very unexpected place after the Bank of Japan waded into the waters of negative interest rates. It was from none other than Jose Canseco, the former home run king, wrestler, and iconoclast. This is what he had to say courtesy of Business Insider:
He is pretty much spot on in asserting that negative interest rates have a deflationary impact.
…
Last week my daughter and I went to see the Improvised Shakespeare Company in Los Angeles. Wow, what a mind-blowing experience that was. It was extraordinary to see the four actors take an idea thrown out to them by the audience and turn it into a 90 minute Shakespeare play.
…
As the following headline shows, interest rates fell quite sharply on Friday to current cycle lows in the wake of a very weak non-farm employment report.
One can see how inverted the 10-year Treasury note yield has become versus the 3-month T-bill yield in the following chart.
…
Jeff Chimenti is a highly accomplished keyboard player who has played with Grateful Dead spin-off bands to great acclaim for a number of years. His background is in jazz and he embarrassingly admits that he never heard the Grateful Dead’s music until he joined Grateful Dead member Bob Weir’s solo band Ratdog.
…
Mohamed El-Erian, the former CEO of PIMCO, said recently on CNBC that if you want to know what’s going to happen to U.S. long-term interest rates, then all you have to do is look to Germany. And so that is what I did.
…
In some ways, it is understandable why the subprime meltdown took place. Prior to 2006 home prices in the United States in the post World War II era rarely, if ever, declined materially on a sustainable basis. Based on this rearview mirror modeling investors in mortgages were led to believe that default rates would be manageable and if they did default then losses would be negligible because recovery rates would be strong because home prices kept rising.
…
Gary Carmell
Posted in Advice, Apartments, Economy, Interest Rates, Investing, Wealth
No Comments ↓
“When clouds appear, wise men put on their cloaks.” – Shakespeare
Hyman Minsky famously said that stability creates instability. Good times sow the seeds for bad times because people believe that stability will be the norm and growth will continue uninterrupted.
…
It’s been a very busy three weeks of travel so I’m going to keep this one pretty short and sweet. And while I often write a thousand words or more, this post will hopefully support the adage that “a picture is worth a thousand words.”
The Federal Reserve finally responded to the market’s beseeching that it pauses its rate increases and not be on a “damn the torpedoes” path of raising interest rates and shrinking the balance sheet.
…
The fact that I’m not going to spend much time on this chart must mean that I still feel the need to release things deep within my subconscious with regard to the loss of Roneet.
While rates were rising I wrote a few times that I was perplexed that they were doing so given the headwinds of tariffs and increasing tension with China,
…
Are We Opening Pandora’s Box to a New Housing Crisis?
With the regulator of Fannie Mae and Freddie Mac announcing that the Government Sponsored Agencies will probably start purchasing loans with 3% down payments, it’s understandable that people would be concerned that we’re opening up Pandora’s Box again to a new housing crisis precipitated by terrible lending practices.
…