Video Closed Captioning:
good morning everyone how are you doing
this afternoon
thought i would do another video about
jerome powell in the fed
i have a sneaky suspicion
that you and i
and specifically the stock and bond
markets
not to mention the dollar and interest
rates
we are about to go on a wild wild
ride
let’s just flash back to monday
48 hours ago
monday
jerome powell
in the morning
is saying things like you know what
this new uh mutation
means we’re gonna have to take in
more data
we’re gonna have to see how it impacts
the consumers
we think that this new
mutation
will have
downside risk
to consumers and thus the market
basically insinuating that rates will
stay
low
longer
24 hours later
jerome powell comes out and says
you know what
at our next meeting
we are going to talk
about tapering
faster
now obviously the essential insinuation
is if you taper faster you also raise
rates
faster
folks i have been listening to
fed speak since alan greenspan
alan greenspan was the master at saying
something without saying anything
jerome powell
is in a tough spot
so what did he say yesterday basically
what he’s saying is wow
this new thing this mutation could cause
consumers to change their behaviors
maybe they will stop traveling maybe
they will stop shopping maybe they will
stop going to events maybe maybe maybe
maybe maybe
24 hours later the mutation is not as
bad it’s maybe got more data
inputs and now he’s like you know what
inflation is a problem
we should at least talk about tapering
sooner
you really have to parse the words
first
let’s just pretend it’s monday right
let’s pretend it’s monday
do you not think
that regardless remember it’s monday
it’s not tuesday when i’m proposing this
don’t you think the fed would have
already been talking about should we
taper faster or slower
i would argue that the fed should be
talking about going faster or slower at
every fed meeting
now you fast forward to tuesday
and jerome powell admits that one of the
topics we are going to talk about is
we’re going to talk about tapering
faster
well no kidding i hope you are inflation
is running at six percent and getting
worse
this fed speak is getting interesting
because again what is happening in the
environment around this
well first off the 10-year bond market
or the 10-year treasury
what a wild ride that has been
so first off the fed comes out on monday
and says we’re going to leave rates
lower longer and rates go up count kind
of counterproductive or counterintuitive
then today the fed says or powell says
you know what we’re going to talk about
tapering and then rates go down
what a wild ride the 10-year treasury
has been on in the last 48 hours
folks at the end of the day
these folks are going to get together in
december
and
consumer behavior is what it is we are
spending records amounts of money on the
holidays wage inflation is going really
well
jobs number friday hello jobs number
friday 600
what was it 600 000 was the over under
or was it 650 i forget we had a
challenge on this channel
but at the end of the day
right now if you are evaluating one
rental at a time
30-year mortgages are cheap
and i’m shocked to say you that based on
the bond market activity today they’re
probably a little cheaper
i would not expect that to hold because
again
the fed tapers faster the fed raises
rates faster at least that’s the logical
thinking
so really what i wanted to do here is
for a lot of you that are watching this
the fed and specifically powell as the
chairman he is going to be talking
or jawboning a lot
he is going to be trying to influence
the environment in wall street he
doesn’t want a taper tantrum he doesn’t
want wall street to freak out
so he is going to be saying things so
wall street
gets ahead of the game a little
so i expect powell to come out with a
lot of
fed speak which again going back to
greenspan is a lot of fancy words that
mean
nothing
so that’s what’s going on with good old
jerome powell i think it’s still fair to
say that rates will stay low and the
rate rates are lower than they should be
i do not like where rates are i think it
is causing inflation i think it is
hurting
too many people but they are where they
are i do not have the power to adjust
them up
so my goal still is to take advantage of
low 30-year rates i wrote offers
yesterday as i shared on the daily
financial news
i will continue to do that
also just so you know what’s coming up
later today at 6 00 pm i interviewed a
cpa yes an accountant who does tax
returns for real estate investors
talking about cost segregation
bonus depreciation
uh loss carry forward all of the things
that we were thinking about with our
cost segregation expert i brought on a
cpa and you will be looking at that
uh that video will be available to you
at 6 00 p.m pacific tonight
i got a question here from angel no well
let’s talk about this angel this is a
good question do i believe interest
rates will go negative
so it’s a it’s a question angel about
how you calculate negative
i would argue that rates are negative
right now
i believe the interest rate is negative
right now and that is why i’m borrowing
money
how can that be well
the 10-year treasury
is at 1.3 percent and inflation is at 6.
to me that is a negative
4.7 so angel
i believe interest rates are already
negative
now angel if your question is more about
will the 30-year mortgage ever be
negative and the lowest i’ve seen ever
is 1.99 no i do not believe the 30-year
mortgage will go negative
so it’s a question of nominal or real
[Music]
again angel i would i would argue that
rates are negative and that’s why i’m
borrowing money
if rates are negative
borrow money that’s what i’m doing so
again inflation is six
the ten years call it one four five
sounds negative to me so that’s what i
got for you there any other question
since uh since i’m here we got angel how
you doing thanks for the question ar yep
real verse nominal great point you’re
absolutely right
so again watch jerome powell he’s going
to be doing this a lot on monday he said
this on tuesday he said this it’s like
dr jekyll and mr hyde it depends on what
he wants to do and he is going to be
yanking the stock market and yanking the
bond market
all over the place the next month or so
so take care of yourself have a
wonderful evening
don’t freak out
jerome powell is not really speaking to
you and i he’s talking to wall street he
doesn’t want a taper tantrum which is
something that occurred i believe under
bernanke i think that’s where it was it
might have been yelling actually i don’t
remember if it was yelling or bernanke
but anyways have a wonderful day
everyone have a wonderful evening take
care of yourself and don’t forget that
cost segregation and whatnot
uh here we go ar for your canadian
audience i love my canadian audience
folks if you are in
canada or you invest in canada do me a
favor connect me with other canada
investors or
uh podcasters or whatever you want to
call them i would love to interview them
i have lots of questions i would love to
get on their channels uh the the
environment is different just like ar
highlights you have five year money you
got 25 year ams it’s a different ball
game and they’ve had
impressive appreciation
so ar uh thank you for bringing this up
i gotta get more canada uh i’d love to
get a canada expert that we could talk
to every week wouldn’t that be a blast
so ar or any of my canadian friends out
there watching this please connect me
with others
i would love to get better coverage and
if you’re in the rest of the world
europe asia australia south america
let’s get let’s get something going
let’s let’s uh let’s bring one rental at
a time to the rest of the world
so back to ar’s question for the
canadians how would you feel about
five-year investing time horizons versus
your current philosophy on 30-year money
first and foremost
i’m only doing 30-year debt
five-year arms
freak me out at least in the united
states because i guess i have the option
in fairness
i’ve not studied the canadian market
enough
to realize how much of a true
crash is possible i you know maybe ar
you’ll know did how did canada do during
the great recession
did it actually fall were people on the
hook were property values down or they
stay flat for a long time this is why i
need to get some canadian experts or at
least get one canadian expert
in europe and
you know rest of world so
i would be concerned
frankly
um but i’m not sure how much
but yeah i’d be concerned how much of
interest rates gone up right remember i
did a 50-year journey ar or a 50-year
survey on interest rates in the u.s i’d
probably go do that in canada figure out
how
variable they are
those are things i would be looking up
for sure
hey dia
dion how are you trying to get my wife
to listen to help me out please tell
nero to listen and learn listen and
learn
we try to help ask questions get engaged
uh we are a very friendly channel we try
to help everyone
um
yeah we’re just trying to be positive
folks uh trying to help people and again
i’m trying to help a million people the
next 50 years of my life i’m going to
try to help a million people and the
only way i can do that is if all of you
who i help help others we’re going to do
this via
a network effect so if you think one
rental at a time is helpful please
tell others to join watch the daily
financial news ask questions let’s get
somebody from canada engaged so we can
grow our footprint up there
take care everyone have a wonderful
afternoon don’t freak out but jerome
powell
he’s going to be dr jekyll and mr hyde
if you don’t know that reference google
it
you have a nice guy and then
a not so nice guy he’s going to be all
over the map monday and tuesday as an
example
take care bye