2053 JUST IN - U.S. Federal Reserve hikes interest rate by 0.25% (media.patriots.win) posted 67 days ago by CyanScales 67 days ago by CyanScales +2053 / -0 355 comments download share 355 comments share download save hide report block hide replies
Bank buys government Bonds.
Government causes inflation.
Interest rates go up.
Bonds becomes less valuable.
Government bails out banks.
Government causes more inflation.
Interest rates go up.
Bonds becomes less valuable.
We need a bank Ron
Cries in homeowner
Digs grave for 401K
Why are you crying? I’m going to pay off my mortgage next year in a single $500,000 paycheck!
Only fixed interest people think this is funny
Who doesn't get fixed interest today? I thought all the balloon rate mortgages are a mega scam, especially in this financial environment and with the ability to refinance any existing loan for better at the beginning of Covid.
This- if you didn't learn from the last housing - economy crash or the one before it, you would know to lock rates for the life of the loan. I watched many neighbors and friends lose their shit (car - house - toys) due to over extending on HELOCs that were not fixed, to buy toys or a new car lease every two years or that virtue signaling rain forest vacation. That is on top of the fact that they did a primary and secondary note (to cover down payment) to get into the house in the first place, with a 5 or 7 year ARM. 2008 wasnt that long ago.
We're going to watch the same implosion, by design. Waiting for the job losses to speed up the process. A LOT of people are underwater on their loans. As I and others have said, these people who moved out to vacation areas and assumed they could WFH for ever, made me chuckle. Now their companies refined their remote processes and offshored the jobs, which will be well received by the stock holders, since they are the only ones that matter, f-ed up but true. Booming areas like Boise and Austin.. lol. The fun hasn't even started yet.
Those sitting on cash will have a lot of opportunities.
Basketball Americans get adjustable rate loans. I locked down my student loans as low as I could when the rates were rock bottom.
Glad I never invested. Glad I locked my interest rate down in 2019.
One thing i don’t havea grasp on, why are bonds worth less when rates go up? Arent they a fixed rate? Or is it because the banks have to offer higher interest rates, with a net effect of losing money?
Imagine tying up,$5000 with the promise that in five years you'll make $50.
Now imagine next week you could have gotten the same deal but with the new interest rates there is a promise that you'd make $500.
The older bond is $450 less valuable than the new one.
Just call JG Wentworth and cash out now.
877 CASH MUTHAFUCKIN NOW!
"it's my money and I want it now!"
Govt: "whoa whoa whoa hold up their partner you mean our money"
"whats yours is mine and whats mine is ours"
And by "our money", I mean "my money".
Opera ad was an all time classic.
I saw the name JG and before I read Wentworth was humming the opera tune. Incredible advertising
It’s my money, and I want it now!
Additionally, in this type of market you’re better off with hard assets since you’re almost taking a risk with bonds.
Housing market bubbles >> invest in bonds to be safe >> bonds suck cause increased interest >> housing market collapses >> you get $50 for your $5000 and lose your job.
Phenomenal, anon. [Say that 3x fast]
This is the kind of explanation people like me need (born with a bunch of great genes but without the finance gene :)
You could write maybe a children's book on how the economy in general works, simplifying the hell out of it, to start the financial literacy young. What if it sold a million copies, or 100 million.
Yes, bond = future money. Future money =/= current value. When current value (new interest rate) goes up, your 'old' future money is worth less.
No one wants to by bonds at 2% when they can now get 5%
No one wants a bond at 5% when at the end of the year they'll be double digits.
CD's and treasuries is where its at now.
TIPs are something you might want to consider.
Do your own due diligence. This is not investment advice.
Tip's are like a First Class Cabin on the Titanic
edit : my Forgetfulness "Olympic"
Too late for the tips trade. They don’t trade on inflation, they trade on inflation expectation. No way to beat the market on these as a retail investor. Plus the accounting is insanely weird and you’ll lose your ass if you sell or inflation expectations fall.
It's what I've been doing.
Agree. Here comes the house of card
The real rate of return is atrocious when you consider inflation
Yes it is
I see your 5% and raise it to 7%
I’ll raise to at least 20%, and call anything up to 30%… The Fed Funds Rate hit 20% in 1980, and the out of control money printing is far worse now, without even mentioning the failing petrodollar.
I realized that when Nixon moved America off the gold standard it made the petrodollar the de facto currency since oil is/was the most traded commodity. The failure of subsequent administrations was not drilling the fuck out of our own oil and gas reserves so that OPEC could eat a dick. Now petrodollar is tanking? I suspect it's a little more resilient than that. Energy is a long term win not just economically but for national security.
Those are still rookie numbers. Fed boys gotta get those up!
Yeah, they try to resell them. The market isn't interested in shitty rate bonds. When depositors want their money out, the bank has to sell the bonds at a loss for liquidity.
Thank you, this makes the most sense to me. Depositors want their money back and they can’t convert the bonds back to cash because of shitty rates.
That, in a nutshell, is why Silicon Valley Bank failed.
Not entirely accurate. MSM is as wrong on all this as they are politics, don’t follow the headlines
So if you borrow money from the Fed window at 0% and then use that money to buy bonds that pay 3% how could you lose? Well... the gains from those bonds are not a constant stream. So if your bank has a bunch of depositors that demand or withdraw their funds from your bank you have to sell those bonds you just bought to replace those deposits.
However, if the Fed has raised treasury rates then your bonds are now competing against this new higher interest rate. Say 4%.
Since the interest rate is a contractual factor you can't change it on your existing bonds. This requires that you discount the face value of your bonds to bring their future value to match the new higher interest bonds. (Bond buyers don't care as long as the realized value matches.)
Banks are using these bonds to back their deposits... so as the face value erodes, their deposit backing is eroding as well. Which leverages the issues and accelerates the problem.
Things are clicking by reading your explanation, so thanks for that. So in an economic situation where interest rate hikes are almost certain, is the name of the game "buy and sell quick" or are these banks just under the impression that they are immune from depositors withdrawing their money? Are banks required to purchase bonds to back their deposits?
No bonds ‘back’ any deposits. Your second assumption is correct. Banks model the volatility of their deposits and value of their assets, it’s called Asset/Liability Management (ALM). SVB was not modeling their liabilities correctly (deposits). Where they really f’d up was not having capital in place before selling the bonds and taking the loss. Guess who they engaged to do the capital issuance?… if you guessed the small hats at GS you would be correct
It is about risk. All bonds are risk rated. Let's say that AAA bonds are paying 4% at issue. So on a $1000 bond I'm going to get $40 per year plus I will get my $1000 investment back. But let's say the fed increased rates to fight inflation and the new market rate for AAA bonds is 8%. If I need to sell my bond to raise money- I cannot sell it for $1000 because no one will buy my bond that pays a 4% interest rate. So since the bond issuer won't increase the interest payment, I am forced to sell my bond for $500 to give the buyer a AAA bond that now pays the current 8% interest rate.
The rating is irrelevant. Yes you have to sell lower rated bonds cheaper if rates go up than a AAA, but you also bot it cheaper. Ratings are credit risk based, this event was liquidity based but the valuation issues resulted from interest rate (or market) risk
I was trying to keep it basic. I didn't go into sector risk, duration, collateralization, liquidity or any of the myriad factors that go into determining the ultimate price.
Fair enough. Your math however has to take into account those factors tho to assume a doubling of interest rates halves the price
I’m liking this handshake.
To be fair, the only way to slow inflation down is to raise rates at this point. Because government spent trillions of bullshit made up money, so this would at least pull some of that off. Look at the fucking prices of everything, inflation is nutty.
Ukraine called and wants more billions
Not all banks. They basically said large depositors in small banks are fucked. Also not quite a bail-out for the banks themselves (or bond holders), just the big depositors who happen to be tech firms and venture capitalists.
SVB wasn't too big to fail, venture capital is one of the places where the ruling class gets special "ground floor" opportunities and launder money and grants. I'd wager that a hefty chunk of the "inflation reduction act" was written specifically for companies that would have folded if SVB had to go on the auction block.
It was a bailout of Congressional and The Fed's investment portfolios.
Good take. No bank got bailed out, Silicon Valley’s vc firms got bailed out
This is all incorrect
You fucker stole my line
The Federal Reserve is a private banking cartel owned and run largely by foreign interests.
Also, the Rothschilds own a considerable chunk of the Federal Reserve.
What's ownership even mean if money isn't real
Well therein lies the con. Sure, the money isn't real, but the productivity behind it is tangible and real. And we stupid citizens trade our productivity for those Federal Reserve Notes.
So through the process of taxation and inflation, the central bankers siphon off our tangible productivity in exchange for pieces of paper. And because they're the first to spend the money into the economy, they get to buy assets at pre-inflated prices. Once that money trickles through the economy, it devalues the currency, which invariably forces their pre-inflated asset to increase in value.
If it wasn't tyrannical and destructive, you'd almost have to give them credit for it. It's a damn genius con, but holy shit does it gotta go. End the Federal Reserve and also the income tax immediately.
Fantastic description fren
That you, Mr. Paul?
You will own nothing and be happy or else
I'm glad you included the silent "or else".
Well if the economy collapses I plan on owning a team of Rothschild's, I'll hook them up to yolks and use them to plow my fields. I'm hoping for a pair of 80 year olds for the lols.
What you own is determined by the guy pointing the gun at you
Sorry. Can you explain how ownership of the Federal Reserve Bank of the United States works please?
So is your mother.
Not an argument, you brainless commie parrot.
Retards read the same script about both Putin and Trump.
They are programmed to hate them, for identical reasons.
BTW, it's spelled Putin or Путин. Or even プーチン.
Like my name is Libman or Либман. Or even リブマン.
Anyone spelling it Лібман is getting shot.
Use a real alphabet, faggot.
Putin is to the right of Donald Trump - on economics (sound money, 13% flat tax), family values, as well as national sovereignty.
Why don't you attack communists that want a 90% income tax bracket, open borders, and mandatory faggotry backed by government force?
Oh noes, Putin defends Self-Determination of Russians on communist-stolen Russian lands, he's Satan incarnate... 🙄
Take your "хуйло" back to reddit, brainwashed commie faggot.
No Trump supporter would parrot that.
When you brainlessly insult Putin, you also insult Trump.
Same logic leads to supporting both.
I know your real name
Yes, it's Alex Libman.
I am not anonymous.
Nope, not your real name. Neither do you 'live in the woods', nor in nj. I know your real name but I will let you keep your secret mr a.m.
A.M.? Hmm... Alexander Mercouris? 😆
Your idiotic accusations against me are very easy to disprove.
The owners of the fed are the commercial banks in the US
Are you by Huston?
Please tell me more about these people. Do they have a name?
Muh j00 Rockefellas
Click the fucking link.
If they came up out the gutter from nothing, why can’t you
All people were made in the image of God.
So you blaspheme God's image.
Work harder. Be better.
Lol sound like woke morons making excuse for why minorities can’t succeed because of white ppl
If you really want to know, most religions forbid usury, porn, blackmail, corruption. The big one is usury. In short, they do the dirty jobs that good people throughout history would not do.
If you can’t understand that, then you’ll never get it. Sorry.
In fact, the Vatican set up certain people in charge of all usury and funded them, so that Catholics could imagine they were clean.
Yet many from every religion does all those things
It at the command of their religion to impose this on others you dense motherfucker. Geez no wonder all the downvotes.
Which part of Christianity is the part where it tells you to blame all your problems on jews
And depend on it to buy everything !
Didn't I out you as a socialist already today?
You're repeating, almost verbatim, Marx 's take on them.
didn't expect to find a Jermamite Noticer
Echos is hate speech that is a bannable offense on this site. Enjoy your ban.
Being socialist of any variety is gay af.
Lol, don’t get your panties in a bunch. More people are coming to play the same game I play.
Jews rule you because you’re pathetic and weak.
They gained their power providing unscrupulous and predatory monetary schemes to a people who lived by the European code of honor. I'm not out here loansharking my neighbors and trying to squeeze an extra buck out of every person I come across.
Yeh, no one else has ever exploited their neighbors to make money….oh wait that’s the history of humanity .
When they make money and use the system to gain success it’s different than when every other racial group does it.
It’s funny how on one hand you can point out that these people were put in ghettos and not allowed to live freely amongst the other people in their counties, then at the same time hate on them for being successful at the only business they could participate in.
Name one other race that is known throughout the entire world for being money grubbing schemesters. I'll wait.
All of them!
Name one other race with only a few million people who managed to dominate the world culturally, politically, economically, and through science. As well as having the highest avg IQ.. I’ll wait
And the Romans couldn’t have done it without the Greeks, etc etc
I'm Jewish and I suspect you of also being Jewish. Go to our savior, Jesus Christ who lives. Who Moses told us would come. Who's death at our hands cursed our lineage forever, and yet still forgives those who return to the God of our father, Jacob. Do you believe that it is by accident that Jerusalem was made desolate and the temple destroyed? Do you think it is by coincidence that our fallen brothers have given themselves to Rhemphan, the lord of worldly desire and accumulated riches at the expense of our brothers in the nations?
Nothing more Jewish than hating yourself
Found the nigga who dont know how to grind
Edit: Look at that username. Trumpsupporter35. What's 35-17? Wooop.... I smell a fed.
Ok first, you're right, I don't take advantage of my neighbors because I have a sense of integrity.
Second, A faggot without a sense of morality who refers to taking advantage of people as "grinding." How expected.
Third, look at that username. Ask me how I know you're from California and live in Huston or Austin.
Buy a calculator faggot
Fourth, everyone but me is a fed!!!11
Lmao and they accuse us of shilling.
Their country doesn't have upward mobility. The best job they can find is an ADL posting for shills looking to tie antisemtism to the discussion on our money.
Don't worry. Every clown is now backed by 4 clowns. So in Clown World, we are at 25% clown reserve ratio or something.
Correct, this is basic eCLOWNomics.
Don't even get me started on ClowNFTs
I won't listen to you anyway - I only get my financial information from Jim Clownmer...
Bags of rocks.
These faggots will do this again next quarter so gird your loans.
Gird your loans. Hilarious
Lol, nice play on words.
LOL and all the realtors in my area were claiming rates would drop to 5.2% by end of the year
Ha, yeah that's what they tell people getting themselves into a mortgage right now:
Oh don't worry, interest rates will drop in a few months and you can refinance. You'll only be stuck paying 2x interest your neighbors pay for a little while, go ahead and SIGN HERE
Bite bullet now or bite it when you are old hoping things would have become affordable. Everyone has to learn. Enjoy your Walmart greeter job.
We regret to inform you that because of the non stop theft at your Wal Mart location, we will be closing your store effective immediately. Thank you for your service.
In my area, the realtors are buying properties as soon as they hit the market. Rents are outrageous.
In my area realtors are waiting tables. Nothing is selling.
My area is the same. Huge drop off from last year home sales
As the interest cost on the debt balloons and overtakes defence spending as the #1 cost, high interest rates become utterly unsustainable. They will have to lower rates. Of course, this will heat up inflationary pressure, thereby negatively impacting everyone except for the asset-rich classes.
It’s like there will be a reset or something. A great one.
I was looking for a comment about housing. I would imagine this will really cripple the housing market that has been on a slow steady decline for over a year now.
Rates go up many first time buyers are priced out cause mortgage rates are too high. Then you have sellers like me who are seeing home values drop while rates go up means I'm fucked selling my house and moving to another place
We're going to keep hearing about how everything's strong and analysts quietly speculating that the recession is two quarters away while we're queuing up in breadlines, fren. The government numbers will still look great. Some idiot will be saying "It could be worse, at least we're all vaccinated."
Soooo... Don't buy a house now... Fuck. I want out of renting.
Except the housing prices aren’t going down except at the very high end because Blackrock and vanguard are still coming in at +20% on starter and midrange homes.
This isn’t your boomer grandpa’s world.
This, I am in the process of house buying and my blood pressure has gone up so much due to this crap that it isn't even funny.
I'm out of the loop but sold one property in the craziness 2 years ago, is it really the same with multiple people having extravagant bidding wars with no inspections?
It is pretty bad. You basically have to bid before the inspection, but you can back out if it goes bad. All the decent neighborhoods have houses that are super shitty selling for like 20k more than what they are worth which has made getting a decent house extremely difficult. I've seen crappy houses go for 125k or sometimes even 159k for some of the ugliest ones I've ever seen.
Sorry to hear that, that's rough. However at the end of the day it beats renting. The in-laws had to buy 2 years ago for some reason, and the place they got ended up being accepted for 60k over asking with no inspection because 8 out of 10 new properties would only be listed for a few hours max and it was always someone on the other side of the country you were up against. It was strange.
Good luck to you
Violence will be an eventuality in our children's lifetime as a result of institutional money moving into holding single family homes.
And I would guess institutional investors have a smaller impact than 5-10M illegals moving here every couple years, now that Joe's in charge.
The reason house prices inflated so much is because of how high the cost of raw materials for building new homes has gotten. The only way to lower housing prices is to build more homes, but Biden's policies have destroyed the economy
Except when you refinance you are typically subject to reassessment of your property basis to current market value.
Often that will offset any savings you gain by redinancing into a lower rate.
What? They don’t change your amount owing when you renew your loan, its just based on your current credit rating and the bank rate that your bank has to pay the central bank.
FHA refi does not require reassessment. Just saying.
If you buy at $100k and refinance whatever is remaining that amount is not adjusted to the new value of the home.
It will affect your property tax if you are reassessed
That is a great description if why
Review the history of 1998-2009 while you wait.
Prices are dropping so it evens out. Also, you get a bigger tax write off, but we are at the peak, so you better buy your forever home at these prices!
only time i itemized was after buying a house, and that was before i was married which doubles the standard deduction
I told my 19 year old son the best thing to do right now is find a good deal on some land build some tiny homes on it and rent them to your friends while you live in another one. Not much else to do unless you want to get skinned alive buying a house or renting. And also buy gold and silver or just get 10 packs of wrenches from Harbor freight and store them up on your closet. They'll be worth four times as much in five years.
You'll be able to pick any house you want soon, if China doesn't beat you to it
Is this just going to further fuck the medium/small banks who are locked into long-term low-yield bonds?
This is the plan.
Not all of them. They price loans primarily off prime so they now get to make higher rate loans and buy higher rate bonds, plus get paid higher on cash
All by designed this is a slow burn of the economy so the elites can get their money out of the system and obtain real assets. To really clamp down on inflation they need to raise rates another 10% - it's never going to happen. We're heading into stagflation then a depression that will make the 20s look like the golden years.
Obtain real physical assets nothing can save the system.
I'm impressed by the new batch of feds sent in to downvote posts here. The fact that they can hit the down vote button while getting spit roasted is pretty impressive.
Inflation seems to be slowing. Steaks seem to be holding at about $25 a pound.
Ukraine needs another 50 billion stat!!!
If we spend billions or trillions to stop inflation it should definitely work!
this is an exageration, right?
No they’re so high around me I stopped looking unless they’re in the weekly deals months ago
Ground beef is $20/lb in the PNW.
Been that way for about a year now.
Chicken thighs are $17/lb!!
Prices at the grocery store have SKYROCKETED.
Medium box of cereal, Raisin Bran for example is $7.50!!
Slightly depends on where you go.
Non-grocery stores that also sell groceries too (Walmart, Target) it's not as bad as chain pure grocery stores like Albertsons & Kroger which have just gotten outrageously expensive.
Weirdly the local butcher hasn't raised prices much.
All grass-fed local ground beef is $17/lb at the butcher but it's always been that price for the last 4 years.
It used to be more expensive than like an Albertsons but now it's cheaper. 💁
jesus christ. im paying 3.50 for ground chuck burgers again at ingles
I don't know where the hell steak is $25 a pound. I just paid $12 which is still too high imo. Wherever that guy is, he should move.
Now that's a steal!
Lol good god. Feeling pretty good about my buying cow from local farmer. Price per pound (all cuts and organs including hamburger) has also gone up, all the way to 9$ a pound this year vs. 8.5$ last year.
Go up dammit. 80s had 16% interest rates.
If inflation was figured like it was in the 80s it would be16%+.
And the average home cost 5x your annual salary.
Home prices aren’t going down because governments and massive firms are happily snapping them up with their limitless supply of money. You can’t compete against buyers who can literally print their money.
I remember my car loan was over 10%.
Car loans are very near back to that with excellent credit rating.
Damn, if it was that high, I would just put all my money in debt instead of stonks.
problem is THEY can't they fucked us all with 0% interest for soooo long that the entire system will collapse onto itself when the rates go too high. Look at current bank crisis and times that by 100
Me first home was 9%
Those were the best times to be alive. I have to get a 4%-6% rate for a 800,000 home or run down shack. Unless I move, which I have no problem with.
My grandpa was a self made millionaire. He told me when I was a young man, if you can't afford to pay for it in cash, you can't afford it. He was a wise man. RIP grandpa.
All debt is slavery
Wise words! Straight and narrow is the path and few there be that follow.
Who needs two buildings and 4 planes anymore when you can destroy an economy through climate change and the fed?
this is the death of the petrodollar .
Actually, Fed rate hikes stengthen the petrodollar. A stable currency (minimal inflation) is preferable as a reserve currency and a trade currency.
This. They might be trying to save the petrodollar.
No, it's just trying to save their political hides. With zero foresight of course.
The immediate problem is that inflation is increasing costs, and that will hurt the DC establishment in 2024. They want inflation under control by then.
The next domino is that rapidly increasing interest rates cause a bond yield inversion. This will result in bank failures as they have to take losses on long term bonds to finance short term buying or loans which have higher rates than the long term bonds. That will cause a recession.
The Fed will either bail out the banks again bring back inflation, or let them fail, causing a deep recession.
And all the while, the federal government is racking up debt. Nut with higher interest rates, the payments on new government debt will increase, leading to more debt, in a vicious cycle. The only way out of that is default - which may be preceeded by hyperinflation.
The "petro dollar" is backed by the future labor of us peasants, not actual oil. There is no future labor if the slaves have no place to live and can't afford to eat.
Lol no it isn't
But I was told inflation was transitory!!
It is, they are transferring it all to you.
Clowns clowning in peak clown world fashion.
This is like trying to extinguish a forest fire with a bottle of water.
This is more like trying to extinguish a forest fire with a firehose spraying jet fuel
This is the one.
This is the way.
Our enemies are in the US, not in Russia. That fact is painfully clear.
Carter level interest rates incoming by the end of Biden's term. At the minimum it'll raise by 2% more by 2024.
I’ll take that bet
Gamestop is doing just fine.
Money is safer in GME than the banks
buy gold, silver, guns, and ammo
How many rounds is enough? I have 1,000 green tip 5.56 rounds and I'm looking to add 1,000 .308 rounds and maybe one day 1,000 AK rounds.
as many as you can reasonablly afford and store... 5.56, 9mm, .308, .22LR and maybe 12 gauge in that order.
It's not enough. Inflation will persist. With the attack on the energy industry and all the new BS regs they roll out non-stop, things simply won't get better. People talk about the business cycle, but that presumes we don't have retards at the top (we do of course).
Their fake system is collapsing
I have a lot of people telling me that I was "very lucky to refinance when I did".
No mother fucker, I didn't happen to magically decide to refinance both my cars and my home for no reason or out of luck.
Paying attention to the real news pays off. Now I have 3% for 2 and a 2.75% for the other while new buyers are stuck with 7.5% at best
Yup. Bought a new truck in 2020, got the low rate then paid it off in Jan 2023 anyway. Refinanced during the scamdemic and got a 2.9% on the house. Chopped 5 years off the mortgage and I pay slightly less.
They are squeezing WEF sources of money laundering. The FDIC is on board with WEF, according to this guy. It makes sense, and he predicted they would raise it by 25 bps.
This is why we are living in clown world. This is what should happen... but its never going to happen. Congress is addicted to debt. If it isnt green energy utopia or reparations, its untraceable money to Ukraine. Its always something.
While we make jokes about the fed and bla bla bla, at the end of the day Congress is going to f everything up because they can't stop spending money on stupid shit.
Excellent article. Thank You.
That's another load of banks up against the wall.
Lol, every god damn "analyst" said that rates will go lower. I fucking knew it.
Rates did go lower today after the fed announced the rate hike
Don’t worry, it’s mostly for show now that the Fed has shown it will take the bonds off of the banks balance sheets.
They actually have done nothing of the sort….
You’ve piqued my interest!
More banks are going to collapse and then the bank bail ins start. Looks at silver and thinks I should have been stacking for at least a decade to prepare for the shit storm.
But the time we get the fucking Fed Coin, the only money of worth will be silver and gold to buy guns, meat, oil, liquor, seeds, fertilizer, animals and farm equipment.
If you look at today's dow chart you can see the precise time the announcement was made.
Is Bitcoin still a steal @ $28k?
Still waiting on that massive real estate crash all the retards keep calling for.
I wonder how many banks will go under in the coming days.
Probably none, but It won’t be because of this if they do
Which bank is next?