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Josh Brown: Why Did The Stock Market Plummet Yesterday ?
I'm not as down on the future as he seems to imply.
Would be good to get back to a more normal monetary policy, consistent earnings growth, more realistic IPOs, and attendant modesty in market expectations.
Higher wages, continued reduction in unemployment, increased capital expenditure.
All the while, interest rates remain low. Credit available.
JB is really one of the few good things about CNBC. That said, 1: the Fed may want to leave but I continue to think that this is the monetary version of "Hotel California." If things start deteriorating rapidly, they'll not only push out rate increases further into the future, but I wouldn't be shocked if you have another congressperson tell Yellen as they did Bernanke, to "get to work." If the Fed leaving winds up being that dramatic a hit to the market, it will become increasingly obvious how little of it was organic.
"All the while, interest rates remain low. Credit available."
LOL, apparently unless you're a former chairman of the Federal Reserve. Interest rates are low, certainly. However, for many reasons those who can get access don't want to (or, in the case of Bernanke, apparently can't) while those who want to (and I think there's a lot of people who actually would find a house cheaper than renting - rents have gotten INSANE in many regions) can't.
As easy as credit was in 2007, it has swung the other way.
Companies and countries, even shaky ones, seem to be able to get loans (eg,. Radio Shack).
And I think that's an example of malinvestment due to tons of money flowing around. I think it's very unfortunate what has happened to Radio Shack, but I question if you didn't not have the monetary environment that you do, would Radio Shack have been gone 1-2 years ago and is throwing money at the problem simply delaying the inevitable? Easy money doesn't fix Radio Shack.
Dave and Buster's IPO'd today. I think that's tried and failed twice.
"And, HELOCs are back again."
There's a joke radio ad in the new "Grand Theft Auto" game about how people are being idiots for having any equity in their house and how they should pull that out to buy new devices that will briefly improve their life.
I say get much tighter in regards to HELOC's and have people who can advise as to the realities and risks of HELOCs. It's not, lets take out HELOCs and go on vacation and buy toys.
I suppose the idea becomes the mortgage officer and underwriters become somewhat less focused on stats and formulas and more on the people who they're dealing with. Effectively, a mortgage officer becomes more of a financial adviser and takes things into consideration rather than the idea that you enter in a bunch of numbers and it says x or y. Obviously, that's not scientific, but I do think the broad idea is if you have someone whose costs could be considerably lessened by buying, how do you make it work?
When you have someone who is the former head of the Federal Reserve not be able to refi, it really would seem more a focus on particular statistics and formulas that say X or Y versus actually looking at the person's situation.
Also, rather amusing that one of the few things that I own that's held up well during all of this is Intercontinental Exchange (ICE), which owns the NYSE.
Comments
As always, Josh brings a fresh perspective.
I'm not as down on the future as he seems to imply.
Would be good to get back to a more normal monetary policy, consistent earnings growth, more realistic IPOs, and attendant modesty in market expectations.
Higher wages, continued reduction in unemployment, increased capital expenditure.
All the while, interest rates remain low. Credit available.
That would not be so bad, would it?
"All the while, interest rates remain low. Credit available."
LOL, apparently unless you're a former chairman of the Federal Reserve. Interest rates are low, certainly. However, for many reasons those who can get access don't want to (or, in the case of Bernanke, apparently can't) while those who want to (and I think there's a lot of people who actually would find a house cheaper than renting - rents have gotten INSANE in many regions) can't.
As easy as credit was in 2007, it has swung the other way.
Wait till tomorrow, it MIGHT happen again!
But every week, my mail box has one or two new credit card offers.
And, we refinanced in late 2012. But granted, not a jumbo.
And, HELOCs are back again.
Companies and countries, even shaky ones, seem to be able to get loans (eg,. Radio Shack).
Can't be too bad.
But OK, would be good to have credit availability continuing to improve...
Dave and Buster's IPO'd today. I think that's tried and failed twice.
"And, HELOCs are back again."
There's a joke radio ad in the new "Grand Theft Auto" game about how people are being idiots for having any equity in their house and how they should pull that out to buy new devices that will briefly improve their life.
I say get much tighter in regards to HELOC's and have people who can advise as to the realities and risks of HELOCs. It's not, lets take out HELOCs and go on vacation and buy toys.
I suppose the idea becomes the mortgage officer and underwriters become somewhat less focused on stats and formulas and more on the people who they're dealing with. Effectively, a mortgage officer becomes more of a financial adviser and takes things into consideration rather than the idea that you enter in a bunch of numbers and it says x or y. Obviously, that's not scientific, but I do think the broad idea is if you have someone whose costs could be considerably lessened by buying, how do you make it work?
When you have someone who is the former head of the Federal Reserve not be able to refi, it really would seem more a focus on particular statistics and formulas that say X or Y versus actually looking at the person's situation.