Stock market today

Indeed. I just put in some buy limit orders for the pre-market.

Major european indexes are down 3%, Russian stocks are down 45%.

How aggressive is a Vanguard Target 2020 and 2025 fund. I have money in both (and some others that are still considered very conervative., and these safe and conservative funds are taking a nice beating.

It would be nice if I could put ibonds in my IRA and it would be nice if I could by more than $10k per year.l

And it’s great that you are working for your kids future because I think we are on the cusp of becoming an inheritance economy.

Was slashing interest rates over the past couple of decade a good idea?

It transferred wealth from wage earners, most of whom were already poor, to asset owners, most of whom were already rich.

That’s the real reason we have so many homeless people now.

Interest rates should be kept as low as possible until inflation comes in. That’s what promotes economic growth, which is the Feds job.

And we promoted the hell out of growth, haven’t we? And now inflation IS hitting, and wouldn’t you know it, it happens at the same time a war is started. So the war is scarring investors and the sell. And inflation is threatening, but you can barely get 1% in an savings rate AND the fed tries to raise interest rates and the market fucking rebels, sending stocks further down.

So it sure as hell looks like economic growth is shrinking…should the fed lower the rate to zero or what? As I said, we may well be facing the consequences of all this tremendous growth.

Oh yeah…while I know that all my righty friends want to blame Biden for this, way back in 2016 one of the candidates that was running said that “We are in a bubble. Believe me…a big fat ugly bubble. And the only thing that is doing well is the stock market, but that is only because the very political fed has not been allowed to do it’s job. Anf if the feds raise interest rates even a little bit, that will all come crashing down”.

Then he got elected and took out the very political fed chair and his replacement tried to let the Fed do it’s job. They raised interest rates less than 1%. And all of the sudden, he forgot everything he said in the campaign. I mean…if it ain’t broke, why fix it? That was 4 years ago.

It was great for smart people who bought a home, paid it off early giving them a lot more money to invest for retirement than they would have if mortgage rates were higher.

Oil prices are now $100 and likely going higher as the dust settles and reality sinks in. I suspect that we are on the verge of double digit inflation. Supply chains just got hammered again as resources and energy is diverted to the conflict. The unknown is does this trigger the consumers to not spend spend spend? Will the melting stock market prompt the fed to not raise rates?

My opinion… Stock market has at least another 10% downward movement in the next few weeks. Energy prices are going to soar!!! Pain at the pump just got worse. Europe energy is going SKY HIGH. This will push up domestic natural gas and coal prices (assuming this war doesn’t trigger a massive worldwide recession).

I’m thinking 30-40%. This is a very big deal.

Now here’s the funny part that you missed since you’ve never known interest rates above 6%…People still bought homes and people still retired. AND to offset that higher interest rate…the $400k house you buy today was only $180k…so that savings left a nice chunk to be invested. WE worry about inflation now, but adjusted for inflation, the house I bought for $92,000 in 1991 should be worth $189,000. But it’s worth $400k today. But we kept housing out of the inflation rate calculation, then maybe inflation was artificially low (as well as interest rates)

My first mortgage was almost 9% in the mid 90’s, then 7%, then 5% and finally a little over 4% when I paid off my mortgage around 5 years ago. Every time I refinanced I didn’t take cash out or buy a bigger house like many people did.

And people have been buying homes AND have had more cash to invest because their mortgage rate was hundreds less a month over the last 10-15 years, allowing a lot of people to retire earlier with more money in retirement savings.

Yep…But once again…if you have an 11% rate on a $92k home and a 3% rate on a $400k home, how much do you really have left to invest?

I hope the SEC takes a long hard look at those who shorted the market in the last 1-2 weeks. Might be a few Russian oligarchs lurking in the weeds.

Most likely they’ll focus on something else.

They never did figure out who shorted the airlines in 9/11

You’re assuming a $92k home would cost $400k because of a lower interest rate. Like everything else housing costs are based on supply and demand.

A friend’s daughter got married in October and they built a new home in Wisconsin, they put $125k into it, borrowed $225k and it appraised for almost $425k. Their principal and interest is just over $1,600 a month on a 15 year fixed rate and they plan on paying extra every month to pay it off sooner. If their interest rate was 11% their P&I would be almost $1,000 a month more which would mean either a smaller home, a 30 year mortgage and/or less money to invest for retirement. Low interest rates are great for this young couple.

I cant figure out what you are actually upset about here. I know you want 10+% interest rates, which probably wont happen ever again in our lifetime. Other than that, what is it ?

I disagree slightly @Bears54 with your point about buying homes and paying off early. We have been buying lots of real estate over the last 20 years and with historic low rates, no reason to pay them off early.

I agree that having a mortgage is a good idea for some people, for us we were already maxing out retirement savings and liked the idea of no debt.

People that carry mortgages are often buying more house than they need.

Paying down a loan is also a matter of risk assessment. If you need to sell the house during an economic downturn/bear market, you’ll do much better if you’ve built a ton of equity.

Anybody else notice the massive turnaround in stocks? I’ve been unplugged, no idea what happened.

Yep, hard to miss. Some of my orders filled pre-market, others got left in the dust…