One of our kids is 3-1/2 years into a 30 year house loan. The mortgage company occasionally contacts them to offer a refinance into a lower monthly payment. The interest rate might go down a little bit, but the major payment lowering will be from restarting the 30 year clock. And I don't think they disclose that the refinance costs will eat up a few years of savings from the lowered monthly payment. I tell them to not do it, that it's not even worth looking at if the loan rate doesn't go down at least a full percent, plus to not extend the length of the loan. Surely the mortgage company knows it's a bad deal for the borrower, but since it's a good deal for the company, why should they care? Not a whole lot of big-picture difference between rent and an eternal mortgage payment.
Money & Economics
- Thread starter bigredfish
- Start date
Oceanslider
Known around here
Freight is definitely weak, no doubt. 36 straight months down and -7% YoY isn’t nothing.
But I think people are skipping over the Covid distortion here.
2020–2022 was not normal. Stimulus checks, everyone stuck at home buying goods instead of services, companies panic-ordering inventory, supply chains backed up. Freight volumes were pulled way forward and pushed way above trend.
What we’re seeing now looks a lot like the unwind of that Covid surge. If you spike demand artificially, you usually get a long hangover after.
Also freight mostly reflects the goods side of the economy. The US economy is mostly services. Weak trucking doesn’t automatically equal a full-blown economic collapse.
In 2008 you had banks failing, housing imploding, credit markets freezing, unemployment exploding. That’s not the setup today.
So yeah, industrial/goods side has clearly been in a recession. But a lot of this looks Covid-related and inventory-cycle driven, not systemic crisis stuff.
The real question is whether it spreads to jobs and services. If it doesn’t, this stays a freight recession, not a 2008 repeat.
But I think people are skipping over the Covid distortion here.
2020–2022 was not normal. Stimulus checks, everyone stuck at home buying goods instead of services, companies panic-ordering inventory, supply chains backed up. Freight volumes were pulled way forward and pushed way above trend.
What we’re seeing now looks a lot like the unwind of that Covid surge. If you spike demand artificially, you usually get a long hangover after.
Also freight mostly reflects the goods side of the economy. The US economy is mostly services. Weak trucking doesn’t automatically equal a full-blown economic collapse.
In 2008 you had banks failing, housing imploding, credit markets freezing, unemployment exploding. That’s not the setup today.
So yeah, industrial/goods side has clearly been in a recession. But a lot of this looks Covid-related and inventory-cycle driven, not systemic crisis stuff.
The real question is whether it spreads to jobs and services. If it doesn’t, this stays a freight recession, not a 2008 repeat.
A while back a person here could not understand that his success was the exact the things he rails here about.
Private Equities Funds and Wall Street are the ones raping EVERYONE! The destruction of the "Middle Class" is
the makings of all of the Billionaires that our nation brags about.
You experience it every day with shrinkflation etc. but, you made %20 on your paltry retirement funds.
A shining example is fast food with a " I don't remember it tasting like that or, "Where's the beef" (if you are old enough).
Here is a shining example...
Private Equities Funds and Wall Street are the ones raping EVERYONE! The destruction of the "Middle Class" is
the makings of all of the Billionaires that our nation brags about.
You experience it every day with shrinkflation etc. but, you made %20 on your paltry retirement funds.
A shining example is fast food with a " I don't remember it tasting like that or, "Where's the beef" (if you are old enough).
Here is a shining example...
Haven't read their whole analysis but the theory seems to be spreading among many. And thats assuming that AI CapEx vs revenues doesn't crater first.
I dont think it takes into account geopolitical events and we see even today that money is flooding into Emerging economies ex-US. That has been the hot ticket for a month.
Add to that the erratic start/stop policies of theEpstein er Trump Administration, and its easy to see how volatility could increase greatly.
I dunno? I don't think it will be one One Thing, it usually isnt. But we are already by many measures entering a Recession, some segments of the population are feeling it others not so much.
Regardless, I still think we see a 20%-30% correction that will take years to recover at best. Thats why I keep most of my money in fixed 4-5% solid investments and only play with a small pile in thecasino market, more as a hobby.
It all just reminds me of 2000 or 2008
www.marketwatch.com
What if artificial intelligence actually meets or exceeds the hype around it, but that turns out to be very bearish for stocks? That’s the scenario posed by a new piece of commentary doing the rounds over the weekend, which has caused quite a flutter online.
The piece, co-authored by Citrini Research and guest Alap Shah, managing partner at Lotus Technology Management, is written as a lookback from June 2028, when the unemployment rate has just risen to 10.2% and the S&P 500 is down 38% from its Oct. 2026 highs around 8,000.
The first step on this dystopian journey will be familiar to us in 2026: the dislocation caused by agentic AI. Software-as-a -service companies will lose sales as client demand falls. “The company that sold workflow automation was being disrupted by better workflow automation, and its response was to cut headcount and use the savings to fund the very technology disrupting it,” projects the report.
By early 2027, AI usage will become the default among consumers and businesses. AI agents will be on smartphones, and they won’t wait to be asked, working with the users preferences to deliver a continuous optimization process. This removes friction in consumption, stripping out inertia in subscriptions, constantly finding the cheapest and best option, reducing companies margins and thus profits.
For example: “Habitual app loyalty, the entire basis of the [delivery] business model, simply didn’t exist for a machine,” says Citrini.
This disruption will extend to payments, done over stabelcoins instead of a provider like Mastercard
This is all sector risk. But then the argument morphs into systemic risk as AI proves different to previous technological advances. “AI is now a general intelligence that improves at the very tasks humans would redeploy to. Displaced coders cannot simply move to ‘AI management’ because AI is already capable of that,” says the Citrini report.
White collar job hiring will begin to collapse, they say. In their scenario, the bond market will notice this — white-collar workers represented 50% of employment and drove roughly 75% of discretionary consumer spending — and yields will start to fall.
In a normal recession, the cause eventually self-corrects. But this downturn’s cause will not be cyclical. As companies lay off workers, they’ll use the savings to buy more AI, and therefore cut even more workers. With fewer workers, there’ll be less consumption. It is a feedback loop with no natural brake, they add.
And so the AI economy will continue to improve while the broader economy deteriorates. India’s services exports will be particularly vulnerable to the agentic revolution, Citrini suggests.
In this scenario, things get bad in February 2027 — initial jobless claims spike to 487,000, the S&P 500 drops over 6%, and by the second quarter of 2027 there’s a recession.
And then “the daisy chain of correlated bets” will start to fracture. Private credit companies will have to sharply mark down their software investments. Moody’s will downgrade billions of dollars those debts in April 2027. Software backed loans start defaulting in the third quarter of 2027. Insurers with links to private credit are forced by regulators to raise capital or sell assets.
Citrini goes into great detail about these linkages, which are worth reading here. For example, they see house prices in San Francisco tumbling 11%. The government will be ideologically hamstrung in its response, reluctant to levy taxes on the AI economy to support displaced workers. “While the politicians bicker, the social fabric is fraying faster than the legislative process can move,” says Citrini.
Citrini is at pains to point out at the start of their note that this scenario is not a prediction. “This isn’t bear porn or AI doomer fan-fiction. The sole intent of this piece is modeling a scenario that’s been relatively underexplored,” they say.
The piece generated a wave of reaction. One founder, John Loeber, penned his own essay in opposition, arguing that as AI challenges white-collar labor, governments will fund large-scale physical re-industrialization.
I dont think it takes into account geopolitical events and we see even today that money is flooding into Emerging economies ex-US. That has been the hot ticket for a month.
Add to that the erratic start/stop policies of the
I dunno? I don't think it will be one One Thing, it usually isnt. But we are already by many measures entering a Recession, some segments of the population are feeling it others not so much.
Regardless, I still think we see a 20%-30% correction that will take years to recover at best. Thats why I keep most of my money in fixed 4-5% solid investments and only play with a small pile in the
It all just reminds me of 2000 or 2008
There’s another AI-doom post doing the rounds. This time, the S&P 500 dives nearly 40%.
There’s another AI-doom post doing the rounds. This time, the S&P 500 dives nearly 40%.
A booming AI economy may be very bad for the broader economy, according to Citrini Research
What if artificial intelligence actually meets or exceeds the hype around it, but that turns out to be very bearish for stocks? That’s the scenario posed by a new piece of commentary doing the rounds over the weekend, which has caused quite a flutter online.
The piece, co-authored by Citrini Research and guest Alap Shah, managing partner at Lotus Technology Management, is written as a lookback from June 2028, when the unemployment rate has just risen to 10.2% and the S&P 500 is down 38% from its Oct. 2026 highs around 8,000.
The first step on this dystopian journey will be familiar to us in 2026: the dislocation caused by agentic AI. Software-as-a -service companies will lose sales as client demand falls. “The company that sold workflow automation was being disrupted by better workflow automation, and its response was to cut headcount and use the savings to fund the very technology disrupting it,” projects the report.
By early 2027, AI usage will become the default among consumers and businesses. AI agents will be on smartphones, and they won’t wait to be asked, working with the users preferences to deliver a continuous optimization process. This removes friction in consumption, stripping out inertia in subscriptions, constantly finding the cheapest and best option, reducing companies margins and thus profits.
For example: “Habitual app loyalty, the entire basis of the [delivery] business model, simply didn’t exist for a machine,” says Citrini.
This disruption will extend to payments, done over stabelcoins instead of a provider like Mastercard
This is all sector risk. But then the argument morphs into systemic risk as AI proves different to previous technological advances. “AI is now a general intelligence that improves at the very tasks humans would redeploy to. Displaced coders cannot simply move to ‘AI management’ because AI is already capable of that,” says the Citrini report.
White collar job hiring will begin to collapse, they say. In their scenario, the bond market will notice this — white-collar workers represented 50% of employment and drove roughly 75% of discretionary consumer spending — and yields will start to fall.
In a normal recession, the cause eventually self-corrects. But this downturn’s cause will not be cyclical. As companies lay off workers, they’ll use the savings to buy more AI, and therefore cut even more workers. With fewer workers, there’ll be less consumption. It is a feedback loop with no natural brake, they add.
And so the AI economy will continue to improve while the broader economy deteriorates. India’s services exports will be particularly vulnerable to the agentic revolution, Citrini suggests.
In this scenario, things get bad in February 2027 — initial jobless claims spike to 487,000, the S&P 500 drops over 6%, and by the second quarter of 2027 there’s a recession.
And then “the daisy chain of correlated bets” will start to fracture. Private credit companies will have to sharply mark down their software investments. Moody’s will downgrade billions of dollars those debts in April 2027. Software backed loans start defaulting in the third quarter of 2027. Insurers with links to private credit are forced by regulators to raise capital or sell assets.
Citrini goes into great detail about these linkages, which are worth reading here. For example, they see house prices in San Francisco tumbling 11%. The government will be ideologically hamstrung in its response, reluctant to levy taxes on the AI economy to support displaced workers. “While the politicians bicker, the social fabric is fraying faster than the legislative process can move,” says Citrini.
Citrini is at pains to point out at the start of their note that this scenario is not a prediction. “This isn’t bear porn or AI doomer fan-fiction. The sole intent of this piece is modeling a scenario that’s been relatively underexplored,” they say.
The piece generated a wave of reaction. One founder, John Loeber, penned his own essay in opposition, arguing that as AI challenges white-collar labor, governments will fund large-scale physical re-industrialization.
With everything going to shit today, I bought back into #GLD.
Gold was about the only thing green. In at $476 and thinking I'll ride it to $500. May take a few months, or a few days
. Who knows with the volatility we're seeing.
Nothing else I feel good about buying other than maybe Oil via the #XLE ETF
IBM worst day in 23 years
Gold was about the only thing green. In at $476 and thinking I'll ride it to $500. May take a few months, or a few days
. Who knows with the volatility we're seeing.Nothing else I feel good about buying other than maybe Oil via the #XLE ETF
IBM worst day in 23 years
Welp, best laid plans...
Gold (#GLD ETF) closed at $481 at the end of after hours trading last night at 8pm. Was looking strong the past 5 days and strong all day during the market meltdown yesterday. Recall I bought at $476
SO naturally, at 8:01, a minute after the markets closed to retail, they crashed it down $10, and are doing it again in Pre-market this morning.
Fortunately I sniffed a rat and dumped in pre-market at $472.50. So lost a few $ but it appears the powers to be want it back to $5000 (about $455 on the #GLD ETF price) ...so fuck.
It always sucks holding overnight. The big boys can manipulate the shit out of the price while you sleep. The market truly is a casino right now.
Gold (#GLD ETF) closed at $481 at the end of after hours trading last night at 8pm. Was looking strong the past 5 days and strong all day during the market meltdown yesterday. Recall I bought at $476
SO naturally, at 8:01, a minute after the markets closed to retail, they crashed it down $10, and are doing it again in Pre-market this morning.
Fortunately I sniffed a rat and dumped in pre-market at $472.50. So lost a few $ but it appears the powers to be want it back to $5000 (about $455 on the #GLD ETF price) ...so fuck.
It always sucks holding overnight. The big boys can manipulate the shit out of the price while you sleep. The market truly is a casino right now.
Just got my medigap price increase letter, up 15% this year, after 12% last year. In the 6 years starting with 2000, the rate has increased by 176% (almost tripled). This is just a wee bit more than the social security COLA increases 
. It looks so obvious that this house of cards we call the economy is destined to fall. I have an issue-age policy, so these increases are not connected to me getting older.
. It looks so obvious that this house of cards we call the economy is destined to fall. I have an issue-age policy, so these increases are not connected to me getting older.
Just got my medigap price increase letter, up 15% this year, after 12% last year. In the 6 years starting with 2000, the rate has increased by 176% (almost tripled). This is just a wee bit more than the social security COLA increases
Yeahbut at least you're not paying any tax on Social Security
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Golden Age
PPI 0.5% MoM, Exp. 0.3%
PPI Core 0.8% MoM, Exp. 0.5%
PPI 2.9% YoY, Exp. 2.6%
PPI Core 3.6% YoY, Exp. 3.0%
PPI 0.5% MoM, Exp. 0.3%
PPI Core 0.8% MoM, Exp. 0.5%
PPI 2.9% YoY, Exp. 2.6%
PPI Core 3.6% YoY, Exp. 3.0%
mat200
IPCT Contributor
- Jan 17, 2017
- 17,900
- 30,095
This:
I don't think they disclose that the refinance costs will eat up a few years of savings
indeed, when the rates hit bottom during the Pandemic I looked for refi for my elderly in-laws remaining mortgage, and the fees would have eaten too much out of it considering how many years they have left - so I did not even get into the term length considerations.
mat200
IPCT Contributor
- Jan 17, 2017
- 17,900
- 30,095
@bigredfish I really wanted to thank you for the numerous posts you share here, they've really help me understand more of the economics and markets.