Bond Traders Are Preparing for a 5% Yield, No Rate Cut World - Bloomberg

[whitemice]

1 hour ago, Grayphil said:

majority of posters essentially hate the west, and capitalism

Socialism for the rich, via governments protection of asset values, isn't capitalism.

[TenYearToGetMyMoneyBack]

7 hours ago, Dreamcasting said:

In the beginning, once the Fed and BOE saw inflation was rocketing, they needed to get base rates up very swiftly above 10% to kill it stone dead. Pussyfooting around with small increases over time just allowed inflation to become embedded. Now we see that inflation is about to go on the rise again, many people are extremely worried because they know that the central banks are going to make the same mistakes for a second time. This next episode will be devastating because it's compounded from the first batch of inflation.

Inflation has been rocketing for at least a decade but since they don't include most peoples biggest asset / purchase (a house) they didn't measure it correctly. I follow the American Auto market with fascination. They keep saying how the average new vehicle  costs over $60000. Much cheaper and more economical vehicles are available like Honda Civics, but why buy A "poor persons car" when you can demonstrate your recently gained housing wealth by borrowing $60000+ and buying a V8 powered truck ?

I guess the same thing happened in the U.K. with people buying Range Rovers.

[spyguy]

1 hour ago, TenYearToGetMyMoneyBack said:

Inflation has been rocketing for at least a decade but since they don't include most peoples biggest asset / purchase (a house) they didn't measure it correctly. I follow the American Auto market with fascination. They keep saying how the average new vehicle  costs over $60000. Much cheaper and more economical vehicles are available like Honda Civics, but why buy A "poor persons car" when you can demonstrate your recently gained housing wealth by borrowing $60000+ and buying a V8 powered truck ?

I guess the same thing happened in the U.K. with people buying Range Rovers.

Its credit and government splurging cash.

Thats all.

And it wont end well, even in the US. Less so in the UK.

When walking mrs spys to school, Ive become immune to being passed by various potless scratters - mrs spys 'special parents' - who park up in large 3x3 a good ~30 minutes before the gates open, just so they an park close to the school.

 

[hotblack42]

11 hours ago, scottbeard said:

Finished?  No - a billion people living in countries awash with resources and infrastructure will be fine.  They just need to adapt to a standard of living about 30% worse than currently, which they won’t like 

Common sense, cold analysis, that the West faces decades of mundane bleakness, rather than a dramatic bust then forgiveness and rebound, is unpopular on here, and amongst friends, family and colleagues in my experience.
Something isn't likely to 'turn up'.  And if it does, those with experience and resources will be quick to take opportunities ahead of those who need them more.  Its human nature and only regulation can help.  There is no political appetite for this in the West.

Years and years with no get out of jail option is horrible prospect for the over leveraged, or young adults with scant resources or prospects of acquiring them before middle age at best.

[hotblack42]

17 minutes ago, spyguy said:

Its credit and government splurging cash.

Thats all.

And it wont end well, even in the US. Less so in the UK.

When walking mrs spys to school, Ive become immune to being passed by various potless scratters - mrs spys 'special parents' - who park up in large 3x3 a good ~30 minutes before the gates open, just so they an park close to the school.

 

30 mins?  Any school day I can laugh to myself scornfully as I run past a sad sack parents and grandparents parked outside the nearby school ONE HOUR before kicking out, pawing at their phone, reading or staring into space.

What are they doing?  Avoiding their partner?  Waiting to die?

There's a load of parking 2-3 mins walk away at the peak of picking up.
I love the geography of the South Coast and there are some interesting, intelligent, creative people here, but there's also a huge number of slack jawed idiots.

I have to ask - 3x3?

[Will!]

18 minutes ago, hotblack42 said:

I have to ask - 3x3?

I'm picturing a Reliant Robin crossed with a Land Rover Discovery.

[bartelbe]

The reality is, a world in which you could pretty much print as much money as you liked without stoking inflation was abnormal. That world has gone and we have returned to a more normal position in which to have low inflation, you have to have moderately higher interest rates.

I say moderately higher interest rates because base rates at around 5% is not high by historic standards.

The problem is, all the "experts" have this bizarre idea that these higher rates are a blip and we can go back to virtually zero rates. That is what all these predictions of the housing market bouncing back are based on.

It is not realistic. Sure rates will come down but they are not returning to 0.25% levels required to restart the bubble.

[Stewy]

4 minutes ago, bartelbe said:

 

It is not realistic. Sure rates will come down but they are not returning to 0.25% levels required to restart the bubble.

The thing is, even at 5.25% the so-called bubble is floating along and shows no sign of popping. 

Rates are only going to fall, and when they do, it's off to the races again  🐎 

[scottbeard]

11 hours ago, nero120 said:

30%?! And the rest.

30% fall in real GDP in the UK would take us back to about 1999 levels, which to me feels about when the debt madness kicked off.  What is your expectation and logic for it?

10 hours ago, Dreamcasting said:

The markets have completely lost confidence in the central banks at this point. It's now a case of buying anything and everything before your cash says "goodbye". This of course is no solution because eventually there will be nothing left to buy and no society left.

I think it's precisely to AVOID that hyperinflation scenario that rates will not fall after all.

9 hours ago, Zzzzzzzzzzzzzzzzzzzzzzzzzz said:

Only in the last couple of weeks have I started to sense alarm about what comes next, here in bankster land... that's reflected in some media commentary re: debt. 

It feels like interest rates shot back to a normal range so quickly that many people didn't really get their heads around the implications.  It's as if they still in their minds think it's temporary and rates will fall again - or worse that they just don't realise a lot of the last 20 years of "growth" is really just debt.

38 minutes ago, hotblack42 said:

Common sense, cold analysis, that the West faces decades of mundane bleakness, rather than a dramatic bust then forgiveness and rebound, is unpopular on here, and amongst friends, family and colleagues in my experience.

Agreed.  People in the West have seen standards of living skyrocket in the last 150 years and I think it just now is a distant memory that anything other than standards of living skyrocketing is possible.  We're not going to be saved by a magic wand - but then nor are we going to collapse into Mad Max overnight.  It will just be a case that every year more and more luxuries drop off the radar every year until we reach a level that we are actually working to afford and not borrowing to afford. 

2 minutes ago, Stewy said:

The thing is, even at 5.25% the so-called bubble is floating along and shows no sign of popping. 

Rates are only going to fall, and when they do, it's off to the races again  🐎 

🙄

[spyguy]

45 minutes ago, Will! said:

I'm picturing a Reliant Robin crossed with a Land Rover Discovery.

Yeah ... not had coffee.

 

[spyguy]

1 hour ago, hotblack42 said:

30 mins?  Any school day I can laugh to myself scornfully as I run past a sad sack parents and grandparents parked outside the nearby school ONE HOUR before kicking out, pawing at their phone, reading or staring into space.

What are they doing?  Avoiding their partner?  Waiting to die?

There's a load of parking 2-3 mins walk away at the peak of picking up.
I love the geography of the South Coast and there are some interesting, intelligent, creative people here, but there's also a huge number of slack jawed idiots.

I have to ask - 3x3?

Most are scratters i.e. barely or not working.

It becomes part of 'important family time'  - sat there, engine running, for 30- 1h, kids on phones, mam on her phone, radio on.

Like a self propelling family sofa.

Soon as the clock hits 840, out they go, mam speeds back for whatever important telly fills her day.

Why I was govnuring at the school, my 2 monthly meetings used to start will correspondence from nearby house com[plaing about - 1) the fumes, 2) the scratters throwing Starbucks/Costa cups out of the car in the gardens.

Then it was the same ~5-10 people, out of school of what ~200?

 

 

 

[Locke]

5 minutes ago, spyguy said:

the scratters throwing Starbucks/Costa cups out of the car in the gardens.

Then it was the same ~5-10 people, out of school of what ~200?

If I lived there, I would note who had thrown the cup, their numberplate and return the cups to the exhausts of the cars later that week.

[spyguy]

8 minutes ago, Locke said:

If I lived there, I would note who had thrown the cup, their numberplate and return the cups to the exhausts of the cars later that week.

I - well, the school fund on my recommendation - had to fork out to get a lockable bollard installed one sods drive as Fat Shazza was blocking him in every morning.

Yes, hed shouted at her. Wed explained it to her. 

Dont matter - If paid me road tax I can park where I fking like ...

I suggested we take it out of the ADHD budget ther her Tyson n Charminae were on.

[Locke]

4 minutes ago, spyguy said:

I - well, the school fund on my recommendation - had to fork out to get a lockable bollard installed one sods drive as Fat Shazza was blocking him in every morning.

Yes, hed shouted at her. Wed explained it to her. 

Dont matter - If paid me road tax I can park where I fking like ...

I suggested we take it out of the ADHD budget ther her Tyson n Charminae were on.

Fat Shazza would find that she was driving over a lot of screws were it my drive she was parking in.

[Lord D'arcy Pew]

2 hours ago, Will! said:

I'm picturing a Reliant Robin crossed with a Land Rover Discovery.

A good 3X3 can take the school gates and then defend the position.

[bartelbe]

4 hours ago, Stewy said:

The thing is, even at 5.25% the so-called bubble is floating along and shows no sign of popping. 

Rates are only going to fall, and when they do, it's off to the races again  🐎 

Sigh, it is absurd to claim that higher base rates won't impact the rate of house price inflation.

[Will!]

2 hours ago, Lord D'arcy Pew said:

A good 3X3 can take the school gates and then defend the position.

Outstanding.

[Stewy]

49 minutes ago, bartelbe said:

Sigh, it is absurd to claim that higher base rates won't impact the rate of house price inflation.

They've stopped the HPI and created The Plateau which is where we'll sit...until something changes...

[cdd]

6 hours ago, Stewy said:

The thing is, even at 5.25% the so-called bubble is floating along and shows no sign of popping. 

Rates are only going to fall, and when they do, it's off to the races again  🐎 

https://fortune.com/2024/04/10/disinflation-out-inflation-after-hot-march-cpi-report-rate-cuts-delayed/

‘Disinflation is out, and inflation is in’ after a hotter than expected March CPI report, experts say

 

Some of Wall Street’s more pessimistic economists have warned for years that the “last mile” in the Federal Reserve’s battle with inflation would be the most difficult. Mohamed El-Erian, chief economic adviser at Allianz and president of Queens’ College, Cambridge, argued as far back as the fall of 2022 that inflation had become “entrenched” in the economy, meaning that, even with higher rates, it was likely to get stuck between 3% and 4%. 

For a time, that theory seemed to lack credibility. After hitting a 40-year peak of 9.1% in June 2022, inflation steadily faded over the following year as the Fed raised interest rates, reaching a low of 3% in June 2023. But since then, inflation has been trapped in the 3% to 4% range, just as El-Erian predicted—too far away from the Fed’s target range for it to consider cutting rates to boost the economy and markets. And now, after two hotter-than-expected inflation reports to start the year, Fed officials just got another piece of bad news.

Edited April 12 by cdd

[cdd]

U.S inflation stuck at 3-4% range, despite "high" rates.

Risk of wars escalating and much higher prices. Too bad you never factor these possibilities into your theories, Stewy.

[Stewy]

11 minutes ago, cdd said:

https://fortune.com/2024/04/10/disinflation-out-inflation-after-hot-march-cpi-report-rate-cuts-delayed/

‘Disinflation is out, and inflation is in’ after a hotter than expected March CPI report, experts say

 

Some of Wall Street’s more pessimistic economists have warned for years that the “last mile” in the Federal Reserve’s battle with inflation would be the most difficult. Mohamed El-Erian, chief economic adviser at Allianz and president of Queens’ College, Cambridge, argued as far back as the fall of 2022 that inflation had become “entrenched” in the economy, meaning that, even with higher rates, it was likely to get stuck between 3% and 4%. 

For a time, that theory seemed to lack credibility. After hitting a 40-year peak of 9.1% in June 2022, inflation steadily faded over the following year as the Fed raised interest rates, reaching a low of 3% in June 2023. But since then, inflation has been trapped in the 3% to 4% range, just as El-Erian predicted—too far away from the Fed’s target range for it to consider cutting rates to boost the economy and markets. And now, after two hotter-than-expected inflation reports to start the year, Fed officials just got another piece of bad news.

 

5 minutes ago, cdd said:

U.S inflation stuck at 3-4% range, despite "high" rates.

Risk of wars escalating and much higher prices. Too bad you never factor these possibilities into your theories, Stewy.

 

Check in which country you and I live. 

[Timm]

1 minute ago, Stewy said:

Check in which country you and I live. 

https://www.investmentweek.co.uk/news/4174856/boes-greene-uks-constrained-supply-leading-stickier-inflation-us

Quote

Megan Greene, Bank of England Monetary Policy Committee member, argued UK inflation is “stickier” than that of the US due to the UK supply side being “much more constrained”.

 

[Frankie Teardrop]

Pound crumbing today - thats going to raise imported good prices.
Next move from the BoE might need to be another raise.
 

[Dreamcasting]

6 minutes ago, Frankie Teardrop said:

Pound crumbing today - thats going to raise imported good prices.
Next move from the BoE might need to be another raise.
 

Don't worry about it. If you ask Bailey and the gang what their current thoughts are, they'll be sure to tell you that everything is transitory. Central banks never keep on making the same mistakes over and over you see, and the MPC have it particularly easy as they just take instruction from the Fed, talk a bit of nonsense to put some individual spin on for good measure, then collect a nice big juicy paycheck each month.

[Stewy]

19 minutes ago, Frankie Teardrop said:

Pound crumbing today - thats going to raise imported good prices.
Next move from the BoE might need to be another raise.
 

It's baking in the imminent interest rate cut. ✓