1776 Posted June 15, 2022 Share Posted June 15, 2022 (edited) I’m expecting a 75 bps now. There has been so much conversation about the 75bps option that I wouldn’t consider it as an unexpected move at this point. A week ago, yes. I believe the Fed may be apprehensive in a full point move today in that it hasn’t been in the discussion for June. Retail sales declined 0.3% in May, fwiw. No surprise there. Edited June 15, 2022 by 1776 Quote Link to comment Share on other sites More sharing options...
1984Echoes Posted June 15, 2022 Share Posted June 15, 2022 1 minute ago, gehringer_2 said: The last time the US was suffering serious inflation, the idea of the central bank raising interest rates in response was still considered a controversial new approach. Today it's what everyone expects and has already discounted. I don't see much reason for the Fed to slow walk it. They need to do 100pts. I would be on board with that. It's why I was thinking about it since Friday. Stop (or at least attempt to stop) inflation in its tracks. It might cause us a mild recession though... Housing/ mortgages will get hammered. Spending will drop, at least in the short term. Causing backwash all along the supply chain... Just need to fix this refinery/ oil/ gas price issue as the final piece IMO. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 24 minutes ago, 1984Echoes said: It might cause us a mild recession though... the quicker they squelch it, the shallower the recession will be. Quote Link to comment Share on other sites More sharing options...
oblong Posted June 15, 2022 Share Posted June 15, 2022 What's the downside for housing/mortgage getting hammered? I'm of the impression that there's so much activity when rates are low because.... there can be. But it's not satisfying a need. It's satisfying a want. "Oh, I can move into a bigger house now because of low rates and equity?" It's people just extending 15 or 30 year mortgages down the line. All the people doing side gigs as agents will get hurt (I think I know 8 people doing this). But I might be full of shit, I know. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 (edited) 13 minutes ago, oblong said: What's the downside for housing/mortgage getting hammered? I'm of the impression that there's so much activity when rates are low because.... there can be. But it's not satisfying a need. It's satisfying a want. "Oh, I can move into a bigger house now because of low rates and equity?" It's people just extending 15 or 30 year mortgages down the line. All the people doing side gigs as agents will get hurt (I think I know 8 people doing this). But I might be full of shit, I know. but mortgage rates have already discounted the increases also. Mortgages are hitting 6%, the 10 yr Treasury is still only at 3.5%. Typical spread is only 1-1.5%. So the mortgage lenders are already assuming more inflation than bond investors. The paradox is that if the Fed moves aggressively, the yield curve flattens because it reduces future inflation expectation and supports the price (lowers the yield) of longer term bonds. That in turn should keep mortgage rates contained. Edited June 15, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 15, 2022 Share Posted June 15, 2022 They raised it 75bps. Largest increase since 1994. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 (edited) 46 minutes ago, Deleterious said: They raised it 75bps. Largest increase since 1994. 1.75 is still pretty cheap money. I doubt they get much traction until 3.5% But, OTOH the Fed is also clearing its balance sheet by something like 100 billion a month in bond sales. If QE had any effect, then QT should make some difference also, so that is working in tandem with interest rate hikes. Edited June 15, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 15, 2022 Share Posted June 15, 2022 Except it would take over 40 years to clear their books at that rate. But wait there is more. Last Friday their MBS auction went no-bid. Meaning nobody wanted to buy the junk they were peddling. Which I guess is why they own it in the first place. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 15, 2022 Share Posted June 15, 2022 (edited) 27 minutes ago, Deleterious said: Except it would take over 40 years to clear their books at that rate. But wait there is more. Last Friday their MBS auction went no-bid. Meaning nobody wanted to buy the junk they were peddling. Which I guess is why they own it in the first place. LOL - Isn't the number 9 trillion? That's more like 8 yrs, but point taken, it's no fire sale. Interesting to think about what it means if they end up having to discount it deeply to sell it. You can argue that it become stimulative in some sense if they are sold below market..... There actually seems to be some contradiction in the statements from the governors recently with some saying they want to transition to purely treasury holdings and other saying they won't sell MBS in the early stages of the sell off (prolly because they would have to discount them too much....). Edited June 15, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 15, 2022 Share Posted June 15, 2022 JJ Watt hits companies just as hard as he hits QB's. Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 16, 2022 Share Posted June 16, 2022 Tesla just went below my target price ($639). Still not interested in buying though. Sort of a commentary on how conservative I am. Currently watching 6 stocks and even with how bad things have been, Tesla is the only one below my target price. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 16, 2022 Share Posted June 16, 2022 4 minutes ago, Deleterious said: Tesla just went below my target price ($639). Still not interested in buying though. Sort of a commentary on how conservative I am. Currently watching 6 stocks and even with how bad things have been, Tesla is the only one below my target price. My target price for Tsla would be closer to $200. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 17, 2022 Share Posted June 17, 2022 cute result. Fed ups the funds rates, and all T bond yields actually go down the next day. Goes to show a) the big hike was already fully anticipated b) Longer term buyers don't expect this inflation to last. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202206 1 Quote Link to comment Share on other sites More sharing options...
ewsieg Posted June 17, 2022 Share Posted June 17, 2022 9 hours ago, gehringer_2 said: My target price for Tsla would be closer to $200. I remember reading a deep dive into Tesla stock and they stated that if Ford and GM's electronic push even provided a moderate competition to Tesla, Tesla would be about an 80 dollar stock in 2-3 years, that was about a year ago. Ford has since made it clear they are 100% all in and Barra just this week said hybrids are not an option. Guess we'll see. Quote Link to comment Share on other sites More sharing options...
Deleterious Posted June 17, 2022 Share Posted June 17, 2022 Not sure how relevant Ford and GM are to Tesla. Tesla is a luxury brand and Ford won't even be competing in that market now that they are down to one or two sedan models. I suppose when Tesla starts to sell trucks it will be a little competition. VW and Toyota are the two for Tesla to worry about. Both will compete in the luxury sedan market and both are a lot more international than Ford or GM. Both are also a lot larger. You can combine Ford and GM revenue and they are still smaller than VW and Toyota. I would also probably be more worried about Rivian or some other upstart company. Lucid is supposed to be making a nice luxury sedan. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 17, 2022 Share Posted June 17, 2022 (edited) The question for Tesla stock is whether the company has any conceivable route to it's earnings growing enough to justify its valuation, and in a market as mature as autos with as many established competitors over which you hold no unique sustainable advantage that's very hard to see for Tesla. I think Tesla's valuation was driven by the idea that they were an Amazon or Google or Apple kind of company, but they are not. They don't have a product or technology that has created an entirely new market that never existed before and whose size ultimate can only be guessed at. They build cars. A car with at the time new design features, but a car that was going to be used exactly as cars before it had. No-one is going to buy a Tesla beyond someone who was already going to buy a car. Edited June 17, 2022 by gehringer_2 1 Quote Link to comment Share on other sites More sharing options...
1776 Posted June 17, 2022 Share Posted June 17, 2022 The silver lining in the decline…. The Vanguard funds we hold are paying distributions (dividends) today for the second quarter. We reinvest the $ back into the funds. The pullback has created a better buy point. Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 17, 2022 Share Posted June 17, 2022 (edited) 10 hours ago, ewsieg said: Barra just this week said hybrids are not an option. Guess we'll see. I see this as a bit of a gamble. I'm not sure the grid gets to where it can sustain all the plug in cars as fast as the manufacturers want to build them. It for sure is not going to get there all on renewables. But the E car is like god-send to the auto companies. Gets them out from under the EPA, decouples them from fuel standards issues, simplifies the manufacturing tech, reduces parts count, increases reliability. It's all positive from every direction. So their enthusiasm is no mystery. OTOH, they (except Toyota) hate hybrids for almost all the same reasons - but that doesn't mean they may not still be a needed transitional piece of the puzzle. Edited June 17, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
Tigeraholic1 Posted June 17, 2022 Share Posted June 17, 2022 9 minutes ago, gehringer_2 said: I see this as a bit of a gamble. I'm not sure the grid gets to where it can sustain all the plug in cars as fast as the manufacturers want to build them. It for sure is not going to get there all on renewables. But the E car is like god-send to the auto companies. Gets them out from under the EPA, decouples them from fuel standards issues, simplifies the manufacturing tech, reduces parts count, increases reliability. It's all positive from every direction. So their enthusiasm is no mystery. OTOH, they (except Toyota) hate hybrids for almost all the same reasons - but that doesn't mean they may not still be a needed transitional piece of the puzzle. 1 Quote Link to comment Share on other sites More sharing options...
1984Echoes Posted June 17, 2022 Share Posted June 17, 2022 28 minutes ago, gehringer_2 said: I see this as a bit of a gamble. I'm not sure the grid gets to where it can sustain all the plug in cars as fast as the manufacturers want to build them. It for sure is not going to get there all on renewables... That depends on how fast we roll out the Infrastructure Bill. Which includes a huge investment in a rechargeable-station grid. Can they roll that out faster than E-Cars can be built/ put on the road? Quote Link to comment Share on other sites More sharing options...
1984Echoes Posted June 17, 2022 Share Posted June 17, 2022 (edited) 22 minutes ago, Tigeraholic1 said: How many volts/ amps needed to recharge an E-Car? I'm pretty certain it's not just taking a jump start from a 12-Volt 'nother cars battery... Edited June 17, 2022 by 1984Echoes Quote Link to comment Share on other sites More sharing options...
Tigeraholic1 Posted June 17, 2022 Share Posted June 17, 2022 24 minutes ago, 1984Echoes said: How many volts/ amps needed to recharge an E-Car? I'm pretty certain it's not just taking a jump start from a 12-Volt 'nother cars battery... Here is a good read on the subject. https://www.diy-experts.net/charge-ev/ Quote Link to comment Share on other sites More sharing options...
1984Echoes Posted June 17, 2022 Share Posted June 17, 2022 Thanks for that...! Quote Link to comment Share on other sites More sharing options...
gehringer_2 Posted June 17, 2022 Share Posted June 17, 2022 (edited) 2 hours ago, 1984Echoes said: How many volts/ amps needed to recharge an E-Car? I'm pretty certain it's not just taking a jump start from a 12-Volt 'nother cars battery... The smaller battery offered on an E-Mustang is 68kWh, the larger battery offered on the F150 is 130kWh. A typical level 2 charger for a home installation draws 40A at 240V, and so delivers 9.6kW to your car. Level 2 chargers are available to twice that size if your home has a service that can support one. In any case, assuming a typical charge cycle of 80%, your 40A level 2 is going to take 9 hrs to put an 80% charge into a 100 kWh car battery. A single lithium ion battery operates at about 4V. The car's drive train runs at ~400V and that will be likely be going up, so you have have multiple blocks of more than 100 cells in series in the vehicle. Edited June 17, 2022 by gehringer_2 Quote Link to comment Share on other sites More sharing options...
Screwball Posted June 17, 2022 Share Posted June 17, 2022 Let me know when they have battery powered excavators too. Quote Link to comment Share on other sites More sharing options...
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