Investing General Discussion

Tide27 said:

I dont understand this line of thinking.

From the way it looks, you are suggesting that those in apartments cant get homes because of credit scores. However, the price of homes have shot up so much that people wont qualify for home loans, yet are stuck paying just as much, if not more, for apartments.

About 5 years ago my wife and I were looking into a home around 200k. At the time in our life, I was only making $50kish and she was making $30kish. Despite both having over 700 credit scores, we did not qualify for the $200k home and the monthly payments were anticipated to be around $900 a month. Yet somehow we were paying $1,200 a month in rent.

Now we make a combined $140k....housing has skyrocketed in price and interest rate, and despite almost doubling our income, we cant afford a $300k home ( not a damn thing cheaper these days outside of the ghetto ), as the expected payments are $2300 per month...yet the home we rented when we moved at the end of '19 was $1300...now its been raised to $2175 now too.

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Not to get into the weeds of mortgages, but it isnt just a single factor. You have conforming and non-conforming loans. The lowest rates generally go to conforming loans. These same rates go into determining the DTI ratios. Your credit score also impacts the rates (again affecting the DTI ratios). This system is designed to weed out the weak borrowers and keep mortgages a safe investment. When the gubmint steps in and increases the number of borrowers under FHA by adjusting the criteria (for "diversity) this is bad for the housing market and economy "in the long term". In the short term it increases buyers which drives up house prices.

House building industry wants as many people as possible buying houses. They dont give a shit if they default on the mortgages, they just build and sell houses. They dont hold the notes (and the risk). If we cut the pool of buyers by lowering/eliminating the high risk non-conforming mortgages we slow home price inflation while at the same time slow the rate of defaults.

I am not speaking to your individual situation (I dont know anything about it). Generally, people who are renting are limited to buying by 2 or 3 factors. Income isnt one of the biggies generally. Its lack of a non-borrowed down payment, too much debt (as a ratio of income) and credit score. This becomes doubly so for first-time buyers since they lack the equity proceeds from their first house to use as the down payment for house #2.

DTI tends to be the real killer. People just dont realize that two car payments, student loans, credit card debt etc just torch your ability to buy a house unless you have a big chunk of cash sitting around. This is the #1 reason parents co-sign for their kids on house #1. That first house is fucking hard to swing under normal circumstances. Pre-2000, you would scrimp and save every dime, cut every luxury you could to build up the cash for a down payment (5% at an absolute bare minimum) plus all the pre-pays and closing costs. $200k house? You wanted to have between $30k - $40k in cash. FHA changes this calculus of course, but FHA isnt a conforming loan.

Everything involving a mortgaged home purchase is related. Rates impact projected monthly cost, Down payment lowers the principal which lowers the projected monthly cost, DTI determines the max projected monthly cost, income and debt determines the DTI, conforming loans lowers the rate, down payment determines the needs for PMI, which if you need it increases the projected monthly cost.

Jysin said:

Cruise Lines still struggling.

09:15 [CCL] Reports Q2 -$1.61 v -$1.13e, Rev $2.40B v $2.84Be; Booking volumes for second half sailings, since the beginning of April, have been higher than 2019 levels
- Cuts Q3 Net 'loss' (prior: 'profit'), Guides Adj EBITDA 'positive'
- Affirms FY22 Net 'loss' (prior: 'loss'), adj EBITDA to improve with ongoing resumption of guest cruise ops
- Cuts FY22 Capex $5.6B, Raises FY23 $4.3B, Cuts FY24 $3.6B, FY25 $2.9B (prior: FY22 Capex $6.0B; FY23 $4.2B; FY24 $3.7B; FY25 $3.0B)


I don't exactly trust the "bookings" metrics, as many people who paid as early as 2019-2020 are still rebooking cruises that were cancelled due to covid.
I guess I am simply skeptical of their reports.
Lets also not forget they all took on piles of debt over the last couple years to stay afloat. (pun intended)

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I aint touching travel industry. If for no other reasons than there are better things on sale.

Arden said:

You could argue all of those things are tied to income. The first one directly and the second two indirectly.

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My point was in relation to people who can afford rent but not a mortgage.

The oversolds are getting some love as rebalancing commences. META/PYPL +5%

Jysin said:

This is typically one of the more hawkish Feds:

Fed’s Bullard Says US Recession Unlikely and Expansion Is in Early Stage

Federal Reserve Bank of St. Louis President James Bullard said fears of a US recession are overblown, as consumers are flush with cash built up during the Covid-19 pandemic and the expansion is in an early stage.

www.bloomberg.com

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So, we're gonna start listening to the Fed after two years of them being more than wrong?

All 17 of my positions are in the green. Been a while since I had that on my screen.

PLTR cracked $10. I am back in the green.

Not shitty news.

PLTR up almost 60% in the last 5 weeks since bottoming out.