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Where There Is A Glut And Supply And Demand Are Out Of Balance

It’s Friday desk clearing time for this blogger. “Americans treated their homes like ATMs last year, withdrawing $152.7 billion amid a cash-out refinancing spree not seen since before the 2008 financial crisis. Mortgage rates fell below 3 percent for the first time last year, making refis a no-brainer for many homeowners. Last year, there were $2.4 trillion refinancings, according to Black Knight. But economists don’t consider today’s cash-out refinancings as risky as in the run-up to the 2008 crisis: home prices are rising now, while values plummeted then.”

“The big iBuyer experiment continues to be very, very costly. Opendoor and Zillow lost a combined $1.2 billion buying and selling homes over the past two years, including $607 million in 2020, according to industry observer Mike DelPrete. ‘That’s a loss of about $40,000 on each home bought and resold — about $1.6 million every single day or $1,100 per minute in 2020,’ he wrote. In DelPrete’s analysis, Opendoor’s net loss per home topped $100,000 last year.”

“A penthouse duplex at 215 Chrystie St. in the Lower East Side has sold for $18 million, according to property records. It is the first resale in the Ian Schrager building, and it represents a $1 million loss for the seller.”

“Rick Ross just paid $3.5 million in cash for Amar’e Stoudemire’s custom home, striking a deal less than a week after it hit the market. The Florida home is found in Southwest Ranches. Stoudemire got his full asking price but still took a loss on the property. Records show he paid $3.7 million for it a decade ago.”

“David Coverdale appears to be close to selling his rock star home. The Lake Tahoe-area getaway is in contingent status, and was last priced at a heavily discounted $6.8 million. The musician initially listed the home in 2019 for $9.85 million. But a year later, with no takers, Coverdale significantly cut the price to $7.65 million.”

“Edmonton’s apartment starts are seeing triple-digit percentage growth, a recent report has found. Covering data from the last three months of 2020. And it shows apartment starts in the city grew by 114 per cent, year over year. Emmett Hartfield, partner at Intelligence House, notes the downtown market is very competitive with a ‘glut’ of rentals available.”

“Melbourne homeowners are so accustomed to homes selling under the hammer for well above the quoted price range that some properties with ‘realistic’ price guides are being passed in. Buyer’s advocate Cate Bakos said there were other reasons properties were still passing in at auction despite strong buyer demand and increasing competition. ‘The categories that are tending to pass in are properties where there is a glut of stock – where, for example, there are high levels of apartments and where supply and demand are out of balance,’ she said.”

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  1. This post is a bit abbreviated as I got in late last night and need to catch up on all the crater. Lots of CRE devastation and more to come this weekend:

    ‘Opendoor and Zillow lost a combined $1.2 billion buying and selling homes over the past two years, including $607 million in 2020, according to industry observer Mike DelPrete. ‘That’s a loss of about $40,000 on each home bought and resold — about $1.6 million every single day or $1,100 per minute in 2020,’ he wrote. In DelPrete’s analysis, Opendoor’s net loss per home topped $100,000 last year’

    OK, so the pro shack flippers are taking a yuuuge a$$ pounding on every flip. But we’re supposed to believe it’s red-hotcakes?

    2. “Last month, Zillow said its 2020 revenue surged 22 percent thanks to the hot housing market.”

      I guess it really was hotcakes? From the article, it’s hard to tell what’s going on. Opendoor had a loss of $100K/home, but had a gross margin of 15%.* Last spring Zillow stopped buying homes but continued to sell, but then they started buying again last fall. I don’t know if that translates to gains and losses. But both zillow and opendoor are still in favor of continuing, so 🤷‍♀️

      ————
      *what is a “gross” margin? Is it different from a net margin? I thought margin was net by definition.

      1. Gross margin is what you sell it for less what you bought it for. Not considered are all the expenses you paid in between. Net margin considers those expenses.

        2. It took a financial reporter to ask, if Enron was so profitable, why was their cash flow negative? You can play all kinds of games with numbers.

          ‘That’s a loss of about $40,000 on each home bought and resold — about $1.6 million every single day or $1,100 per minute in 2020’

    3. ‘Opendoor and Zillow lost a combined $1.2 billion buying and selling homes over the past two years, including $607 million in 2020, according to industry observer Mike DelPrete. ‘That’s a loss of about $40,000 on each home bought and resold — about $1.6 million every single day or $1,100 per minute in 2020,’ he wrote. In DelPrete’s analysis, Opendoor’s net loss per home topped $100,000 last year’

      My gawd. Why in the world would they do this? Fire the person who came up with this idiotic business model.

      1. “Opendoor’s net loss per home topped $100,000 last year’ My gawd. Why in the world would they do this? Fire the person who came up with this idiotic business model.”

        I can’t see how you could possibly lose that much unless you are
        WAY overpaying for the house. And why would you do that, makes no sense.

        2. They do this because they hope to hit the stock bonanza. Like silicon valley, losing money is irrelevant. And they are big on sh$tholes like Phoenix, which as we all know is red-hotcakes.

    4. “‘Opendoor and Zillow lost a combined $1.2 billion buying and selling homes over the past two years, including $607 million in 2020, according to industry observer Mike DelPrete.”

      ¡Guau! Is $1.2 billion alot?

  2. ‘Americans treated their homes like ATMs last year, withdrawing $152.7 billion amid a cash-out refinancing spree not seen since before the 2008 financial crisis…economists don’t consider today’s cash-out refinancings as risky as in the run-up to the 2008 crisis’

    Of course they don’t. These REIC dogs would sell their grannies for one more months commission. When I look at a foreclosure history, the most common factor is cash out refis. Maybe 10 years ago, maybe 2.

  3. Today is Friday, March 12th and Joe Biden is not the legitimately elected president of the United States.

    P.S. welcome back Ben!

    1. It’s good to be back. Man that was a long two day drive. The stretch through oil country is brutal, dangerous commercial traffic. I did see auction billboards ditching oil field equipment.

  4. And we will get years of sob stories of 60+ year olds getting foreclosured and kicked out of the houses they have been living in for 30+ years…

    And not one journalist will ask the question “WHERE DID THE MONEY GO?????”

    “making refis a no-brainer for many homeowners. Last year, there were $2.4 trillion refinancings…”

    1. “And not one journalist will ask the question ‘WHERE DID THE MONEY GO?????’”

      Bahahahahaha … If you really want to know the answer to part of this question then ask a banker.

      Bahahahahahahahahahahahahahaha.

      Pukes work, bankers reap. God’s Plan.

    2. “…And we will get years of sob stories of 60+ year olds getting foreclosure…”

      “…WHERE DID THE MONEY GO?????…”

      Can’t think of single more consumer level financial ‘innovation’ ever devised more dangerous and destructive than a HELOC.

      HELOC’s are the financial crack cocaine drug of choice for way too many irresponsible, ignorant, undisciplined consumers.

      As Mr. Banker has noted many times “they run to me” to sign a contract morphing themselves into financial slaves for perhaps the rest of their lives.

      1. True story, my Dad’s neighbor, who’d been in banking and home finance for 40+ years, was trying her best to convince Dad that a HELOC was “his money” and he “deserved it”.

        He tried to convince her that by having to pay interest on “his money” it wasn’t really “his money”.

        Typical Upton Sinclair moment: “It is difficult to get a (wo)man to understand something, when (her) salary depends upon (her) not understanding it!”

        1. “… my Dad’s neighbor, who’d been in banking and home finance for 40+ years, was trying her best to convince Dad that a HELOC was ‘his money’ and he ‘deserved it’.”

          Words are cheap. Throw a few well selected words at a puke and the puke just may fork over to you huge chunks of his paycheck each and every month for thirty years or so.

          There is no shortage of ignorant pukes; If the words do not work on this particular puke then move on to the next puke and throw the words at him. Do this enough times and eventually you will reach a point where you will never have to do any actual work in your entire life.

          1. More than ignorant, I would say that they are greedy. They want that $60K pickup, the boat, the Harley, etc. and there is no way they could afford them without a HELOC. And if he resists the temptation he will have to watch his neighbors flaunt their toys. Telling himself that he’ll be glad he resisted as he approached retirement age is all too often a small consolation in the present.

        2. “…he “deserved it”….”

          The catch phrase ‘You deserve it’ has now morphed into ‘If you want it and can’t pay for it the Government will..”

          If (as Mr. Banker put it) ‘ignorant pukes’ what to shoot themselves in the financial foot, go ahead, make my afternoon.

          But, then again, don’t come knocking on my door asking for a bailout to cover ‘our’ mistake. Ain’t gonna happen!

  5. Lockdown Lovers image file, Sic Temper Tyrannis edition:

    https://i.redd.it/ggxeoxg8elm61.png

    The CCP Flu didn’t destroy the economy, tyrannical governors destroyed the economy. Nobody elected Anthony Fauci. There is no “pandemic clause” in the U.S. Constitution.

    The 2020 election was stolen. It was the greatest coordinated fraud ever perpetuated on the American electorate.

    We are the leaderless resistance.

    1. A disease so serious you have to be tested to know if you’ve got it. A cure so safe, you have to be threatened to take it.

      1. Reason Magazine — Despite Its Much Stricter COVID-19 Policies, California’s Per Capita Death Rate Is Only Slightly Lower Than Florida’s (3/10/2021):

        “California led the country in imposing COVID-19 lockdowns last spring, and Gov. Gavin Newsom (D) kept broad restrictions in place longer than many other governors, lifted them more gradually, and repeatedly re-imposed them. Florida Gov. Ron DeSantis (R), by contrast, was widely criticized for belatedly ordering a less sweeping lockdown, lifting it too early, and allowing social, educational, and economic activity to continue with modest restrictions even as cases surged in the summer and winter. Yet California’s per capita COVID-19 death rate, according to Worldometer’s numbers, is just 7 percent lower than Florida’s, despite Florida’s substantially older population, which should have made the state more vulnerable to the disease.”

        https://reason.com/2021/03/10/despite-its-much-stricter-covid-19-policies-californias-per-capita-death-rate-is-only-slightly-lower-than-floridas/

        1. The Federalist — Did The Shutdowns Save Lives? A Year Later, Statistical Analysis Suggests Not (3/12/2021):

          “There is no evidence shutdowns did anything but deepen the economic suffering, increase suicides, and prevent lifesaving medical tests and treatments.

          The change in private employment among the states from January 2020 to December 2020, the latest month for which data is available, can be used as a proxy for the severity of government edicts to slow the spread of the virus. It represents closed restaurants and family-owned businesses, destroyed lives and life’s savings.

          In theory, this pain should have been rewarded with a lower COVID fatality rate. That’s what we were told as we obediently stayed at home. Yet the data shows no benefit earned by the states that inflicted the largest destruction on their job base, judging by the fatality rates from COVID.”

          https://thefederalist.com/2021/03/12/did-the-shutdowns-save-lives-a-year-later-statistical-analysis-suggests-not/

          2. The data can’t support their claim. No data exist for what would have occurred without the shutdowns.

          3. Associated Press (3/12/2021)

            This article is titled “Global rise in childhood mental health issues amid pandemic” when in reality it should be tyrannical government genocides an entire generation of children. Lockdown Lovers, you are responsible for all of this:

            “For doctors who treat them, the pandemic’s impact on the mental health of children is increasingly alarming. The Paris pediatric hospital caring for Pablo has seen a doubling in the number of children and young teenagers requiring treatment after attempted suicides since September.

            Doctors elsewhere report similar surges, with children — some as young as 8 — deliberately running into traffic, overdosing on pills and otherwise self-harming. In Japan, child and adolescent suicides hit record levels in 2020, according to the Education Ministry.

            Pediatric psychiatrists say they’re also seeing children with coronavirus-related phobias, tics and eating disorders, obsessing about infection, scrubbing their hands raw, covering their bodies with disinfectant gel and terrified of getting sick from food.

            Also increasingly common, doctors say, are children suffering panic attacks, heart palpitations and other symptoms of mental anguish, as well as chronic addictions to mobile devices and computer screens that have become their sitters, teachers and entertainers during lockdowns, curfews and school closures.”

            https://apnews.com/article/pandemics-mental-health-epidemics-coronavirus-pandemic-paris-8392ceff77ac8e1e0f90a32214e7def1

          4. Reuters — Americans support restricting unvaccinated people from offices, travel (3/12/2021):

            https://www.reuters.com/article/us-health-coronavirus-vaccines-poll-idUSKBN2B41J0

            The thread about this article on the coronavirus sub-Reddit is full of upvoted comments begging the government to exterminate liberty, forever.

            Gothamist — NY’s Vaccine Passport App Raises Concerns About “Digital Segregation” (3/11/2021):

            https://gothamist.com/news/nys-vaccine-passport-app-raises-concerns-about-digital-segregation

            Remember, this has never, not once, had anything to do with public health. I no longer recognize the country I was born in and grew up in.

          6. “Americans support restricting unvaccinated people from offices, travel”

            It will take a couple of months after new cases drop to zero for the pandemiconia to die down, before we can
            all return to our offices without suspicion of being a latent carrier.

          7. “Thanks again Ben Jones for allowing us to share and discuss these topics.”

            Be sure to hit that Paypal logo too!

        1. My mom and stepdad are in their 70s and both had the CCP Flu back in September and they’re still alive.

          Life without risk is not possible, and it’s not a life worth living. Read the article about children’s mental health posted above.

          Most of us expect that we will outlive our grandparents and parents, and although very sad when they do die, it will never exceed the grief that a parent will experience when they come home to find their child dead from suicide.

          1. “Life without risk is not possible, and it’s not a life worth living.”

            I agree. For the most part, I lived the past year of life as I would have chosen to do without a pandemic underway. But I had to adapt to society’s pandemic response. For example, had to ignore many dirty looks while hiking in Joshua Tree National Park a couple of months ago without wearing a mask, from those who think a vast desert the size of Rhode Island is a Covid-19 radioactive zone.

            “Read the article about children’s mental health posted above.”

            I have first hand experience in this area.

          2. What’s with these outdoor Karens? I walked my neighborhood streets extensively over the past year and if I had to pass another person I would just move 10-12 feet away, either out to the street or cross the street. I never wore a mask but I kept one on my pocket. No biggie.

          3. I finally knuckled under and bought a sheepy cloth mask:
            https://files.catbox.moe/dckd5n.png

            It’s even more stifling than the paper ones, so I don’t use it much. I comply because I’m too old to duke it out with some crazy in a supermarket aisle. Nevada’s governor plays “do as Newsom do” so who knows when it’s going to end here. “Battle Born” (state motto) – pfft.

      3. “A disease so serious you have to be tested to know if you’ve got it. A cure so safe, you have to be threatened to take it.”

        absolutely brilliant! (as the Brits say)
        if only there was room to print that on my mask for the times when forced to wear it . . . just to avoid the confrontational Karen’s here in N. Cal.

        well done, sir/madame 2banana

    1. Because they are going to meme stocks and digital tulips. It’s going to be fun to watch.

      2. With long-term bond yields poised to revert to normalcy from historic lows, my gut feeling is there’s a lot more downside to stonk market investing than upside right now. But I have persistently underestimated the central bankers’ willingness to pour gasoline onto an open flame in recent years. However, I know that this practice will eventually lead to alot of people getting burned.

        I’ve seen this movie before,
        And I have to admit it’s no bore.
        The lying, the dying, the late night crying,
        All make me want to watch it no more.

    2. 10-year yield is up. DXY (dollar strength) is up. Gold spot always drops when that happens. But premiums are sky-high. BTW silver is cratering worse.

      1. It was beautiful here today. I really enjoyed getting fresh air and some exercise. It releases some chemicals that make you feel better.

        Didn’t watch the metals. They move up and down a lot. Uncertain, the future is.

      1. The tech-heavy NASDAQ is falling in response to the action in the 10-year and the DXY. Meanwhile, the commodity and non-digital components of the DOW are anticipating the reopening of the economy and have enough demand to overcome the bond market (for now).

    1. Ask your kids. 🙄 I reminisce about the days when kids would actually shine shoes for a living instead of playing games.

      2. One of my 20-yo sons wants me to establish a brokerage account for him so he can invest in Roblox stock. I tried to convince him that it’s a unicorn and likely to crater. He wants to invest “alot” ($200). I asked him if he was willing to lose it all and walk away (yes).

        He’s in a life situation which doesn’t allow him to establish an account for himself. Would I be enabling the start of a gambling career by helping him?

          1. And yes, his interest to invest in Roblox is a shoeshine boy indicator.

            I’m seeing them constantly at work here in Boise the last few months. 4 coworkers have purchased homes or having them built, 2 or 3 are trading digital-tulips, and everybody has forgotten artificially low rates and moratoriums have driven the median home price up 18% in the last 12 months here. Absolutely blind to cause and effect, they just know they need to borrow and buy their homes, stonks, and cryptos.

          2. “Absolutely blind to cause and effect, they just know they need to borrow and buy their homes, stonks, and cryptos.”

            Like it, love it, want more of it.

            😁

          3. “…artificially low rates and moratoriums have driven the median home price up 18% in the last 12 months here.”

            If those are working so well to make people ever wealthier, I see no need to phase them out when the pandemic ends.

            Where is the downside?

          3. Maybe.

            Part of me feels like that the younger generation has been so thoroughly screwed by central banking policy that one shouldn’t stand in the way of young people’s efforts to get a slice of the trillions and trillions of stimulus dollars that have been pumped into the financial system.

            And what do you have to lose when you are 20 by taking a gamble with unlimited upside potential and limited downside? (Or so I’ve been told…)

          4. Part of me feels like

            Try to get your story straight. He’s asked you to open an account for him that he can’t legally have to do something you think is foolish and you hope he learns a lesson, this grown man who is not your child. Or, you want to facilitate his revenge on a robber baron system. Conflicted?

            Just as an LOL, my FIL facilitated my first speculative investment in Gold, Good Lord fifty years ago. I got an a$$ pounding.

    2. I admit my kids are addicted. And I am addicted to Stonks gambling like my wife in-laws in-laws. I brought RBLX at open for $61. Kicked myself for not buying more but I sold them at $71 and made almost $4k in 20 minutes. This is stupid I told me wife.

      Why work?

      2. I brought RBLX at open for $61. Kicked myself for not buying more but I sold them at $71 and made almost $4k in 20 minutes.

        We always hear about this, but never the losses.

        1. We always hear about this, but never the losses.

          Failure is an orphan, while success has many fathers.

          1. I did notice RBLX dropped by 5.63% just today, with more losses after hours.

            Time for dips to buy?

  9. You judge something by the fruit it bears. Globalist Monopoly Fat Cat rule has made societies more poverty stricken and systems not sustainable ,with nothing but looting going on.

  11. Do you expect long-term Treasury bond yields to stay below 2% forever, in defiance of centuries of financial history?

      1. Are you riding the storm out in Treasurys?

        Ridin’ the Storm Out
        REO Speedwagon

        Ridin’ the storm out, waitin’ for the thaw out
        On a full moon night in the Rocky Mountain winter.
        My wine bottle’s low, watching for the snow
        Thinkin’ about what I’ve been missin’ in the city.
        …

        1. The Financial Times
          US Treasury bonds
          US bonds endure fresh bout of selling after ‘storm’ sweeps market
          Ten-year Treasury yield jumps to highest level since last February in choppy trading
          Federal Reserve chairman Jay Powell rattled investors earlier this month after he opted against pushing back forcefully on the recent rise in Treasury yields
          Colby Smith in New York
          24 minutes ago

          A “storm” swept through the US government bond market on Friday, sending a key measure of long-term borrowing costs to the highest level since last February.

          Treasuries dropped in overnight trading after a large sale of long-dated bond futures in Asia, according to people familiar with the matter. Yields on the benchmark 10-year note, a key marker across global asset markets, jumped to 1.63 per cent, having traded at about 1.53 per cent the day before, and remained around that level throughout the day.

          Analysts said the scale of the move underscored how jittery the $21tn market had become against the backdrop of a more robust economic rebound. The US Treasury market is the biggest and deepest in the world, which typically insulates it from sharp rises and falls in prices.
          …

  12. Nobody’s mentioned it yet but there were violent far-left riots in Portland again last night, smashing windows and setting fires at the federal courthouse downtown.

    Next up: Minneapolis.

    1. Nobody’s mentioned it yet but there were violent far-left riots in Portland again last night

      It’s only news when there are no riots in Portland.

    3. Minneapolis

      George Floyd’s family scored a $27M settlement. No way Chauvin gets a fair trial there.

      2. OK, legal eagles, does Chauvin’s defense team have a case to ask for a dismissal, or for moving the trial to another state? If the city admitted fault, can Chauvin simply cite that he was “just following orders?” That defense didn’t work at Nuremberg, but I thought that applied more to war crimes than to not police actions.

        1. I’m not following the trial closely but you’re conflating a lot of general legal concepts in that post. I know that they are seating a jury in Minneapolis, the judge reinstated a lesser charge of third-degree murder, and the city just settled with the family. Chauvin’s attorneys should have and may have asked for a change of venue. I’m not sure where they would find a jury pool that isn’t familiar with the case however. Chauvin is legally considered an agent of the city. The city’s settlement with the family can be interpreted as an admission of responsibility in Floyd’s death. This isn’t a situation of following orders.

          1. the judge reinstated a lesser charge of third-degree murder

            Likely because the facts don’t support the other charges. Now that Biden is occupying the White House, it’ll be interesting to see if there will be more riots should Chauvin be found not guilty.

          2. This isn’t a situation of following orders.

            From what I have read it may well be a case of going by the training and protocol to the letter. The recordings not shared in the media “news” are quite vindicating.

        2. You’d think that the city could avoid the trial with that hefty settlement. FWIW, $27M is chump change especially considering the Floyd clan.

        3. just following orders

          A legal argument probably meant to vitiate the mens rea element of a crime.

  13. This may be true but Portland is still able to offer up a lot of laughs. For example …

    “PORTLAND, Ore. (AP) — The mayor of Portland, Oregon, announced Thursday he would seek $2 million in one-time funding for police, other agencies and outreach programs to try to stem rampant gun violence in the city.

    “The move by Mayor Ted Wheeler represents an about-face after city leaders in June voted to cut nearly $16 million from the police budget, reductions that included the elimination of a gun violence reduction unit. The cuts came amid racial justice protests following the police killing of George Floyd in Minneapolis.

    “Oregon’s largest city has seen a spike in violence. So far this year, there have been 20 homicides, most the result of shootings. During the same period of 2020 — the deadliest year in the city in more than a quarter century — there was one.”

    Go here for more …

    Portland mayor seeks $2 million to stem rampant gun violence
    https://www.yahoo.com/news/portland-mayor-seeks-2-million-015529813.html

    1. Portland Mayor Ted Wheeler is an effeminate and spinless cuck who has turned his back on the city’s business owners and taxpayers.

    2. While irrational leftist mistakes like cutting police forces can be undone, I am concerned about their desire for saber rattling with Russia. There is no “undo button” for mushroom clouds.

      1. This. The globalists will overplay their hand. Innocent people will get hurt. In the end, no one will remember what it was about. It was about the lust for power amongst a small group of competing individuals.

        1. Even if nukes do not fly, I could see an invasion of Russia (which the leftists would love) ending in a humiliating and costly defeat for US forces.

          1. The traditional European centers of power and finance (our owners) are naval based. They have always dreamed of dominating landlocked Asia, and still scheme to do so. The ‘Belt and Road’ reduces the ability of those traditional concentrated interests to dominate Russia and China. There will be a fight. Indeed, the fight goes on now. I don’t see how we avoid a significant conflagration. History strongly suggests we won’t. All means are on the table.

          3. Believe me Ben, I feel the exact same way. I don’t know if it comes through, but I have nothing but contempt for their corrupt and rigged system. I never miss an opportunity to avoid participating in it. At least that isn’t hard. The innocent people who are harmed by it, and those who will be, are where my sympathies lie.

            What I struggle with is how to oppose them without anger and without hating them. The inability to do so is a weakness on my part.

            Thanks Ben for all you do to give people a voice.

  15. Do you have the feeling that the Fed is about to take away the punchbowl, just as the Millennial lovefest with stonks, SPACS, cryptocurrencies and margin loan investing is going into full swing?

    1. The Financial Times
      Bridgewater Associates
      Bridgewater’s Prince warns on risky assets after bond decline
      Hedge fund manager links boom in blank cheque companies and cryptocurrencies to Fed policies
      Inflation expectations have picked up this year, hitting the price of US government bonds and pumping up their yields
      Eric Platt and Ortenca Aliaj in New York
      3 hours ago

      The world’s biggest hedge fund is warning that the recent sell-off in US government bonds could accelerate, in a shift that threatens high-flying assets including blank cheque companies and cryptocurrencies.

      Bob Prince, who runs Bridgewater Associates with Ray Dalio, told the Financial Times that a new phase of the downturn in the $21tn Treasury market looms as economic growth improves and inflationary pressures push the Federal Reserve to consider reeling back its stimulus measures.

      The rally in risky assets, which has been running for nearly a year, “really depends on . . . whether [the Fed] bumps into constraints”, said Prince, “which will typically be inflation, currency deflation or call it the bond vigilantes, where people just say, ‘Hey, forget it. With that much [money] printing I just don’t want to own bonds.’”

      Inflation expectations have picked up this year, hitting the price of US government bonds and pumping up their yields. That has already hit fast-growing technology companies such as Netflix, Amazon and Tesla, since their elevated valuations have been underpinned by low rates.

      The Bridgewater executive said he also believed the boom in special purpose acquisition companies and the surge in cryptocurrencies like bitcoin was a “manifestation of that environment” created by the loose monetary policy of the US central bank and stimulus provided by Congress.

      Fed policymakers have brushed off the Treasury sell-off as a healthy reaction to the budding US economic recovery. But Prince said investors could face trouble as the central bank responds to higher long-term yields.
      …

    2. Would you promise to HODL your favoritist stonks forever, even if they took a one way trip to Craterton?

      1. Even if the Market Crashes, I’m Not Selling Rocket
        The leading home mortgage company has been volatile but remains a good long-term play.
        Dave Kovaleski
        Mar 10, 2021 at 8:08AM

        Rocket Companies (NYSE:RKT) has been one of the hottest, and most volatile, stocks in the financial sector this year. The nation’s leading home mortgage company has gone through some wild swings, fluctuating from lows around $19 per share to a high over $41 in just the past few weeks. At Tuesday’s close, it was at $25.49, good for a 26% gain so far in 2021.

        There has been a lot of interest in this stock on Robinhood and within some of the online trading communities — and for good reason. Rocket is a great company. Even with the short-term volatility, and even if there is a market correction, this is a stock I’m going to hold on to because of its long-term potential.

        The No. 1 home mortgage originator isn’t done growing.

        …Rocket has about an 8% market share and is looking to increase it through investments in technology — about $500 million over the past year — and marketing, including a series of Super Bowl ads. It has built a huge client base and is consistently ranked No. 1 for client satisfaction. So while the digital mortgage market may get more competitive, and the housing market may not be as strong this year, this remains a great long-term investment, despite the near-term volatility.

        The price has come back from its highs and may even sink lower. But if you can buy this stock in the low- to mid-$20 range, you’ve got a fair price for a market leader poised for continued long-term growth. I’m definitely not selling.
        …

        1. “…and marketing, including a series of Super Bowl ads.”

          If blowing millions on Souperbowl ads is the sure path to riches this guy suggests, I’m surprised that more companies don’t use them.

      2. I smell a rat.

        Your kids want to buy Roblox stock? Heed these warnings first
        Last Updated: March 11, 2021 at 9:37 a.m. ET
        First Published: March 10, 2021 at 3:55 p.m. ET
        By Andrew Keshner
        More than half of Roblox’s 32.6 million daily users are under age 13.
        A Roblox developer donference in 2019.
        (Photo by Ian Tuttle/Getty Images for Roblox)
        Referenced Symbols
        RBLX -5.68%

        A year of pandemic living for many preteen kids has meant remote schooling, maybe no summer camp — and a ton of Roblox.

        Traffic on the tween-centric gaming platform has soared since the pandemic tied much of daily life to screens and now more than half of Roblox’s approximately 32.6 million daily users across 180 countries are younger than age 13.

        Roblox began trading on the New York Stock Exchange on Wednesday. Shares obtained a $45 reference price on Tuesday. By mid-day Wednesday, Roblox (RBLX, -5.68%) shares were trading above $73.

        So maybe now your kid wants to play Roblox on the stock market too.

        At a time when more people are getting into the stock market — for better or for worse — parents might be more inclined to say ‘yes’ to the idea.

        Those parents could buy a share in their own brokerage account. Or, they could use a custodial trading account to do it. Those accounts enable parents to buy stocks, bonds, mutual funds and other assets on their child’s behalf. But beware of the tax consequences that lurk — not to mention the weird family dynamics and resentments that can bubble up if investments go wrong.

        Joshua Mungavin, principal and wealth manager at Evensky & Katz, is not a fan of a custodial account devoted to stock picks, especially when it’s a new stock freshly hitting public markets. “This is not an account to bet in, this is an account to take care of the child. … I don’t think it’s a good idea for financial purposes or education purposes,” he said.

  16. Is there a celebrity investment craze indicator akin to the shoeshine boy indicator of yore?

    1. Athletes And Celebrities Join The SPAC Boom, SEC Takes Notice
      Sophia Kunthara
      March 11, 2021

      A handful of professional athletes and other high-profile figures have joined the SPAC boom, prompting the U.S. Securities and Exchange Commission to caution investors about investing in special purpose acquisition companies associated with celebrities.

      Basketball Hall of Famer Shaquille O’Neal, Golden State Warriors player Stephen Curry, tennis champion Serena Williams, and former pro baseball player Alex Rodriguez are some of the notable professional athletes who have been involved in SPACs in some capacity. Former San Francisco 49ers player Colin Kaepernick, now an activist, also formed a SPAC focusing on social justice.

      “Celebrity involvement in a SPAC does not mean that the investment in a particular SPAC or SPACs generally is appropriate for all investors,” the notice from the SEC, posted Wednesday, read. “Celebrities, like anyone else, can be lured into participating in a risky investment or may be better able to sustain the risk of loss. It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment.”
      …

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