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.
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Blog Archives
Housing - Is It The Best Long-Term Investment?
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.
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Stressless Stress for Commercial Real Estate Investors
by 
Gary Carmell
Posted in Advice, Apartments, Economy, Interest Rates, Investing, Wealth
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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.
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Federal Reserve Response to the Market’s Beseeching - Power of Structural Forces
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.
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From Interest Rates to Insights - Feel to Heal
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,
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The Mortgage and Housing Crisis - Is History About to Repeat Itself?
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.
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Election Aftermath Fiscal Data What Will Be the Bottom Line?
by Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Trends, Uncategorized, Wealth
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Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Trends, Uncategorized, Wealth
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For the last few years, the Fed has been telegraphing that monetary policy cannot do all of the heavy lifting and that fiscal policy had to play a role as well. The market seemed to agree with the Fed and is also the reason that the market very rarely believed the Fed’s dot plot of the future path of interest rates.
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What Were Trump Voters Really Looking For?
by Gary Carmell
Posted in Interest Rates, Investing, Manufacturing, News, Uncategorized
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Gary Carmell
Posted in Interest Rates, Investing, Manufacturing, News, Uncategorized
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With the midterm elections kicking into high gear and political rhetoric heating up and true believers huddling in their echo chambers and cocoons, I thought it would be interesting to look at some research carried out with regard to the 2016 presidential election and some of the surprising findings.
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Man Up Revisited - Winners Like Apple and Amazon
by Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Stock History, Trends, Uncategorized, Wealth
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Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Stock History, Trends, Uncategorized, Wealth
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In an earlier blog, I discussed a fascinating study that asked whether stocks outperformed T-Bills. Surprisingly, the answer was that most stocks do not and the bulk of stock market returns have come from an incredibly small number of companies that have produced the estimated $32 trillion in wealth (returns in excess of T-Bills) between 1926 and 2015.
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What You See Is What You Get? LIBOR & The Flat Yield Curve
by Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Trends, Uncategorized, Wealth
2 Comments ↓
Gary Carmell
Posted in Economy, Interest Rates, Investing, News, Trends, Uncategorized, Wealth
2 Comments ↓
Under most economic environments longer-term debt instruments yield more than shorter ones. This is the case in order to compensate investors for risks related to purchasing power eroding and more uncertainty and volatility that can increase the probability of default (outside Treasuries). In addition, our banking system is based on banks accessing short-term deposits and being able to make longer-term loans and investments which necessitates longer rates being higher than shorter ones so banks can be profitable.
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