Stock Market Uptrend Reaching Milestone Tells Us This 4/14/23

[Jimi]

6 minutes ago, fxfox said:

There was this guy Martin (?) Armstrong, who made market predictions, while sitting in prison. Guy was quite famous and got cited often 10-15 years ago. What happened to him?

I listened to this back when it came out. Found it pretty insufferable on Armstrong's side.

 

 

[SiP]

[fxfox]

14 minutes ago, Jimi said:

I listened to this back when it came out. Found it pretty insufferable on Armstrong's side.

 

 

I didn‘t know that Armstrong was still alive.

Just 8 min into the interview and already lovin it. Hendry is also a class act, a bit weird, but great guy.

[DrStool]

2 hours ago, sandy beach said:

Asset sales by regional banks in receivership, plus distressed loans tied to office and retail properties, could soon hit the market, creating attractive opportunities for private credit and distressed buyers, according to Ellington’s report. 

Many private credit lenders are also private equity shops with experience working out distressed assets. On Starwood Property Trust Inc.’s most recent earnings call, the company alluded to an office building in downtown Los Angeles that it plans to redevelop or sell, having foreclosed on its associated mortgage loan.

“All of our foreclosed real-estate we’ve sold in the aggregate” at a “significant profit to the value of the loans that we put in place, because we are an equity shop too,” said Jeff DiModica, president of the firm, on the call. 

“We are seeing attractive opportunities in short-term capital injections at the mezzanine level for debt that’s going to mature soon,” he said.

https://www.bloomberg.com/news/articles/2023-04-13/shadow-lenders-to-bridge-real-estate-void-left-by-banks-bonds?leadSource=uverify wall

Been there, done that. I've been warning about this ever since ZIRP resulted in cap rates going to 1.5% on Class A up to 3-4% on class B-C. Back in the day, the class A rate was never less than 8.5%, and class C was often 12-14.

I wrote appraisals on this crap in the last CRE crash. Half empty office buildings. Condo developments that were 90% unsold (Can you say Trump Plaza West Palm Beach). Stuff that was worth 20-30% of loan value. Even had a few with negative value because the cost of demolition was greater than land value. Here we are 30 years later. Same old same old. 

[DrStool]

35 minutes ago, SiP said:

More proof of deflation that the Fed won't see until a year after the fact. 

[fxfox]

Speech over 40 years old, but still gold:

 

[Jorma]

Milton Friedman! Oh no.  That old reprobate con man.

[SiP]

[SiP]

We all know, also fintwit, that deflation is coming, or at least disinflation is happening. We all know about prices of rents and of many other services or product. Inflation is contained, at least in US.

So the main conclusion should be - buy risk because deflation is coming and Fed will pivot. They will lower the Fed rate this year.

The only major Q is, will something blow up while you are invested due to higher rates like CRE? thats the major risk. And in the meantime risk is climbing on the wall of worry.

 

[fxfox]

Has there ever been an anchored recession? I mean even every bull „knows“ right now that a recession will come, right?

When everybody „knows“ something, it won‘t happen, right?