A thirty-year fixed rate mortgage is now over 7%. A year ago rates were around 5%.
Wall Street Journal
As we have explained in this space, rates bottomed 39 years later in March, 2020, from the 1981 peak. The greatest acceleration has been from that low, and here we are. The yield curve remains inverted with the 3 Month T bill at 5.3%. The 30 year bond is 100 basis points lower at 4.3%.
The result is that fewer buyers can afford the house they want. Offerings are shrinking and some prices are falling. As also noted here, companies and governments will be pressed when existing debt has to be renewed at far higher than their original rates.
Bidenomics touts a low unemployment rate of 3.6%, as there is nothing else to tout. The cost of a casual lunch has gone from about ten bucks to fifteen, or far higher. Childcare costs are rising.
Crude oil prices hit some resistance at $85 and fell briefly to $79. I suspect oil is again a buy with targets over $90. Nustar common has fallen from $17.75 to $15.25 and now is about $16. The dividend is around 10%. An additional offering is panned but this appears to be good value.
Any bet on gold or silver is just that, but gold has fallen from $2,010 to $1,915. Silver is down from $25.50 to $22.72. CEF is a fund of actual gold and silver. It is a closed end fund meaning it does not create more shares to meet demand. Instead it trades at a premium or discount to its net asset value of the metals it holds. It is now trading near a 5% discount. This has been a buy level in the past. Tread carefully in gold and silver.
Stocks measured by the Dow Industrials have dropped about 1,000 points this month. Next week looks rocky but a final burst higher may occur.
There is always a mix of social mood but it is the thrill of Meme stocks is back. Vinfast is a Vietnamese EV car company. It went public on the NASD this week. Gee remember when the U.S. thought it was going Communist? High irony, its stock exchange is named for Ho Chi Minh. The initial price with only 1% of shares trading soared and has now pulled back but it is still worth more than General Motors.
Sotheby’s is offering a 1964 Ferrari 250 GTO for $60M at its September auction. The last sale in 2018 was for $48.4M. As a final last chance offering, Dodge is offering 300 ‘Black Ghost’ Challengers with 807 supercharged horsepower. Available including the gas guzzler tax for a total of $103,010. I wonder if they are already taken. But that’s positive social mood for you.
