Wall Street Journal Ranks OKC the fifth-hottest US Job Market

[OKCRealtor]

We should be lucky that rates are as low as they are with the size of our debt load. Besides curbing inflation, having the ability to lower the fed funds rate makes the Federal Reserve appear useful the next time a recession hits.

I guess the question is what is the technical limit we can keep taking on debt before we have to do full blow monetization?

The way I see it the real risk is that we eventually default on our debt due to political instability which will have massive fallout. As government debt continues to deteriorate in terms of credit rating & higher for longer rates while the rest of the world is diverging more cash will flow here while investors demand a higher interest rate of return to assume the risk. Long term post debt default we may not be the reserve currency in the world any longer. If you think inflation is bad now we could see hyper inflation should that occur and assets would be pennies on the dollar.

Hopefully none of this ever occurs but we have a couple of major problems as I see it. One is the government & the other is the Fed itself with the extreme polarization of monetary policy since 08 creating everything asset bubbles. We might kick the can down the road several more years but if we don't get the debt & rates under control who knows. If and when we hit the next rough patch it might be worse than what people think. The government is not in a position for massive bailouts this go around and we found out during Covid most people would be in a bad spot.

[traxx]

We might kick the can down the road several more years

How much further can we kick the can? It feels like we're running out of road.

[Dob Hooligan]

How much further can we kick the can? It feels like we're running out of road.

This is not a snarky reply...I think I first heard "How much further can we kick the can down the road" in regards to the economy, debt and tax structure in the early 1990s. Might have been after the Reagan tax cuts in the mid-1980s.

I'm guessing a looooooong time.

[Rover]

This is not a snarky reply...I think I first heard "How much further can we kick the can down the road" in regards to the economy, debt and tax structure in the early 1990s. Might have been after the Reagan tax cuts in the mid-1980s.

I'm guessing a looooooong time.

Yes, it's a phrase that shows there is no one that can tell you how much of a problem it really is. Theoretically, you can kick a can down the road forever. It will never be fully resolved.

[OKCRealtor]

How much further can we kick the can? It feels like we're running out of road.

No idea but I would guess it's a major issue in 5-10 years. Yellen said last week the debt load is '"manageable" lol.

More than likely this is our economic reality the next 4 years (I'm presuming Dems win & stay in power) but even if they don't I'm not sure anything changes. I think it could be a major issue the next election cycle as we'll be starting down closer to a $50 trillion deficit by then.

[Rover]

No idea but I would guess it's a major issue in 5-10 years. Yellen said last week the debt load is '"manageable" lol.

More than likely this is our economic reality the next 4 years (I'm presuming Dems win & stay in power) but even if they don't I'm not sure anything changes. I think it could be a major issue the next election cycle as we'll be starting down closer to a $50 trillion deficit by then.

You might be surprised to know the best balances has been under democrat presidents. Heck, Clinton actually had surplus. Biggest deficits of the past few decades have been in Republican administrations. We have run deficits for almost all of the last 60 years with the biggest deficits under Bush, Obama and Trump. Every time we get lower deficits the Republicans want to cut corporate and high wealth individual tax rates, exacerbating the deficits.

[OKCRealtor]

https://www.usatoday.com/story/money...s/74211526007/

The CBO last week just raised its estimate for the government deficit this year by an astounding 27% - 408 billion higher just over the February forecast for a 1.9 trillion deficit this year. At a time when we can least afford the government is lighting money on fire keeping inflation burning hot and raising the real rates for us all for years to come with apparently zero regard.

[TheTravellers]

https://www.usatoday.com/story/money...s/74211526007/

The CBO last week just raised its estimate for the government deficit this year by an astounding 27% - 408 billion higher just over the February forecast for a 1.9 trillion deficit this year. At a time when we can least afford the government is lighting money on fire keeping inflation burning hot and raising the real rates for us all for years to come with apparently zero regard.

Inflation's down from a year ago, very much:

"Inflation and the economy are still the biggest issues on many voters’ minds heading into the 2024 election, even though inflation has come down from its dizzying height in June 2022, when prices were climbing at almost 9 percent. Last month, it was a much more manageable 3.3 percent. "

https://www.vox.com/unexplainable/35...interest-rates

[OKCRealtor]

Inflation's down from a year ago, very much:

"Inflation and the economy are still the biggest issues on many voters’ minds heading into the 2024 election, even though inflation has come down from its dizzying height in June 2022, when prices were climbing at almost 9 percent. Last month, it was a much more manageable 3.3 percent. "

https://www.vox.com/unexplainable/35...interest-rates

Real inflation is probably actually higher than it was a year ago when home prices & borrowing costs are taken into account. Neither are factored into CPI data but have a huge effect on real inflation.

[bison34]

Just wait til 2025, when a lot of people who bought home in 2020 on ARMs have them automatically re-priced. We are talking 4% or 5% increases in rates (from sub 3% to almost 7% or 8%).

[BoulderSooner]

Just wait til 2025, when a lot of people who bought home in 2020 on ARMs have them automatically re-priced. We are talking 4% or 5% increases in rates (from sub 3% to almost 7% or 8%).

if you bought a house with a ARM during the lowest fixed rates of all time (to save pennies on the dollar) you deserve what you get ..

[Rover]

Just wait til 2025, when a lot of people who bought home in 2020 on ARMs have them automatically re-priced. We are talking 4% or 5% increases in rates (from sub 3% to almost 7% or 8%).

I doubt very many took ARMs when a historically low rate was available. So tell us what % of people actually did this. This isn’t going to be any problem.

[bison34]

I doubt very many took ARMs when a historically low rate was available. So tell us what % of people actually did this. This isn’t going to be any problem.

Not sure why you take everything so personally. I know of quite a few. They were thinking rates would increase gradually, and would be able to budget their savings early on to cover later interest increases. They thought 1.5% to 2.5% increases. Not 5% to 6% increases.

Many regional banks in OKC I audit are having to work with borrowers on mitigation plans to help smooth out the increases, but they are increasing their CECL loss rates because of it. 2025 will see quite a few foreclosures.

[Rover]

Not sure why you take everything so personally. I know of quite a few. They were thinking rates would increase gradually, and would be able to budget their savings early on to cover later interest increases. They thought 1.5% to 2.5% increases. Not 5% to 6% increases.

Many regional banks in OKC I audit are having to work with borrowers on mitigation plans to help smooth out the increases, but they are increasing their CECL loss rates because of it. 2025 will see quite a few foreclosures.

Just trying to understand what percentage of borrowers would be dumb enough to NOT lock in historically low rates for a long term loan. ARMs are to hedge down, not up. Did the banks make them take ARMs as a condition for loan approval? What exactly was the incentive to float UP? Why?

[BoulderSooner]

Just trying to understand what percentage of borrowers would be dumb enough to NOT lock in historically low rates for a long term loan. ARMs are to hedge down, not up. Did the banks make them take ARMs as a condition for loan approval? What exactly was the incentive to float UP? Why?

exactly this ...

the the bottom when fixed were below 3 ... ARM was what 2.5 on a 500k house they were saving what under a 100 bucks a month ... ...lol yeah they deserve what they get ..

[OKCRealtor]

Yea I don't think there were many ARM's during the pandemic other than commercial which is about to go bust. They make more sense now but even still the % is very low.

Commerical really not even an ARM but a balloon note essentially same effect.