Stone, do you still recommend Canadians buying decently priced SFRs, especially with the rate cuts?
Tim
Do the numbers make sense?
I normally don’t recommend SFR investing unless the numbers make sense. In this case, I look to calculate capitalization rates, which is essentially your net rental income as a percent of the purchase price, as well as other back of the envelope measures. I then compare them to what they have been over the past decade or so and look to see if prices seem stretched. A rough ball park price gauge is the house price as a multiple of local household income. Of course, the lower this multiple, the more likely the values can be maintained and grow over time, while holding them for income.
When I take these numbers into consideration, Canadian residential real estate in its aggregate is much more expensive than here in the states. With that said, there are a number of areas in Canada that do make sense.
For instance, if I were relying on cash flow to maintain a portfolio of properties, I would never invest in the popular Canadian cities. They are outrageously expensive in just about every measure and are essentially dumping grounds for the wealthy and offshore money. We can’t compete with that type of investor.
However there are other areas, including the rural areas and the cities out in the plains that do have a modicum of rational value. I recall seeing house prices in Calgary and Edmonton, for instance, that seem reasonably priced when compared to potential rental cash flows.
If you live in Toronto I would not recommend it. That’s like suggesting someone who lives in New York City to begin buying rental properties in the local jurisdictions. That’s out.
If you live in more remote areas, including some of the larger cities in the Great plains areas, I’d make a go of it and perhaps buy one property to start. See how the cash flow works for you and try to duplicate if successful.
Does a Canadian have access to the US market?
If a Canadian resident has access to the US market or has family down here, I would look to see about buying properties stateside. Despite all of the noise to the contrary, house prices down here are actually some of the cheapest in the world when compared to local household income and rents. For instance, I bought a number of houses in nice areas in the exurbs of Northern Virginia and I get a solid 6% cap rate. This cap rate is based on current market value and not on my purchase prices. Based on my purchase prices I have cap rates as high as 7.5%. there is nowhere else in the western world, nor in just about any other country, that can match this.
This is just another reason why the United States still makes sense as house prices for the local residents are the cheapest in the world.
Do mortgage rates matter?
You do ask this in context of the aggressive rate cuts in Canada. I don’t try to time the mortgage market per se, but if rate cuts do affect mortgage rates and mortgage rates come down, it would affect my investment activities on the margin.
For instance, since my SFR decisions are based on cash flow, as long as prevailing mortgage rates allow me to yield a decent rental yield, I will use the mortgage market at the time. My big concern for those who are looking to buy once mortgage rates drop is that the competition will be the most fierce as the typical home buyer and casual investor will become interested when rates drop. As for me, I don’t wait for rates to drop. However, if rates do drop enough I will refinance old mortgages and may engage in some tax swaps.
In some regards, I like buying real estate when rates are high as there is a lot less competition. I figure rates will eventually fall back and I should see some price upside on my existing portfolio.
When it comes to timing real estate investing, there’s no right or wrong, but I take the contrarian view on this. Smart underlevered investors have been accumulating while rates were high and stand to benefit as rates fall.
House Price Index (YoY) (Oct)
Act: 4.5% Cons: Prev: 4.5%
House Price Index (MoM) (Oct)
Act: 0.4% Cons: 0.5% Prev: 0.7%
House Price Index (Oct)
Act: 432.3 Cons: Prev: 430.6
S&P/CS HPI Composite – 20 s.a. (MoM) (Oct)
Act: 0.3% Cons: 0.2% Prev: 0.2%
S&P/CS HPI Composite – 20 n.s.a. (MoM) (Oct)
Act: -0.2% Cons: Prev: -0.3%
S&P/CS HPI Composite – 20 n.s.a. (YoY) (Oct)
Act: 4.2% Cons: 4.1% Prev: 4.6%
Russian ruble collapsing. Talk of Putin being thrown out of power is increasing. The man has become delusional with visions of grandeur. He is on a one-way path to destroying Russia.
The only solution will be Ezekiel 38 and 39.
Just think if Trump can stop the war in Ukraine, and the Russians have to bring back their army which will end up unemployed. More economic pain to back Russia into the corner. On to Jacobs Trouble!
Stone,
I wish you a Merry Christmas and a happy 2025. This has been another great year on your blog with great articles and great discussion. This is the only place where those opposed to big heavy handed government and opposed to political correctness can freely discuss our opinions.
We bloggers here may not agree 100% with each other but the important thing is to allow for disagreement and tolerate opposing viewpoints. The key is not to impose on other’s viewpoints which is what the leftists love to do. The leftists ruin it for everybody as they want to force all of us into a mold that is not right for everybody. They are all about controlling us without considering our needs.
Here here! Happy new year.
Remember “the Wolf sheds his coat once a year; his disposition never.” Poor Richard’s Alminac.
It’s time Warren Buffett retired to the old folks home. Recall all of the hyperbole surrounding Berkshire Hathaway’s massive cash raise. What a red herring of garbage….
By selling the wrong stock, Apple, Warren Buffett’s Berkshire Hathaway has left over $35 billion on the table this year
https://www.google.com/amp/s/macdailynews.com/2024/12/18/by-selling-the-wrong-stock-apple-warren-buffetts-berkshire-hathaway-has-left-over-35-billion-on-the-table-this-year/amp/
Amen. Warren Buffet mostly stayed out of technology stocks and missed out on a lot of gains. I don’t see any Nvidia stock in Berkshire Hathaway’s portfolio unless I am mistaken. He is investing for yesterday and not today.
The one thing I’ve noticed with buffett’s Apple sales is that he sold off a huge chunk, approximately half his original state, at prices below $180, and he did it with such determination as to make a statement. I understand his Bank of America sales as he wanted to get below 10%. But both large-scale transactions had a profound adverse impact on the short and intermediate term price charts. Buffett didn’t just whittle the positions down over time, he sold them with the termination and an exclamation point.
Regardless of how someone feels about Buffett and his stock decisions, he completely lost out here and there is no other way to put it. If I were Buffett, I would have been selling gradually over an extended period of time, rather than unloading the way he did.
Eighteen Percent of US Households Are Millionaires. Here is Why You Aren’t One of Them.
Every three years the US Federal Reserve conducts a survey of American’s finances. This study, called the US Survey of Consumer Finances (SCR), is a representative picture of the wealth of America. It details the assets and liabilities of participants in the studies, and also shows their income, demographic characteristics, and changes in American wealth every three years. So you may be wondering, if there are so many millionaires, why aren’t you a millionaire?
What Is The Average Millionaire Profile in the United States?
According to the SCR, American millionaires typically have a number of characteristics.
About 18% of US Households were millionaires
Millionaire households were usually older – most were over 55 years of age
Most millionaires were couples, or couples with children.
Millionaires were usually better educated, with college degree holders having an average net worth of $1.9 million dollars, nearly four time more than those who never graduated college
Millionaires were typically self employed ($3 million net worth) or retired ($1 million net worth)
Millionaires were more likely to own their homes ($1.5 million net worth), rather than be renters ($150,000 thousand net worth)
Millionaires were more likely to own businesses and business owners had higher incomes and wealth that non-owners.
The Survey of Consumer Finances also found that the majority of millionaires owned stocks, had retirement accounts and many owned pooled investments such as mutual funds or index funds (Source: Survey of Consumer Finances).
Is The Survey of Consumer Finances Accurate?
Since the Survey of Consumer Finances only interviews about 4,000 people, you may be wondering if the data is accurate.
It is.
The survey uses something called multi-stage area probability sampling which is a statistical term that means the Federal Reserve selected study participants in a way to make them representative of the country at large, per the survey’s annual report. The study deliberately excludes members of the Forbes 400, which is a list of billionaires. So, the study is reflective of what wealth basically looks like in the United States. It is as accurate as large economic studies can be.
So, Why Aren’t You A Millionaire?
If you find that you’re not one of the millionaires included in this report, there could be a number of reasons for this. Below is a list of common reasons many people fail to become millionaires:
You spend more than you make each year
You fail to pay yourself first
You have a lot of kids, and you have them too young
You don’t own a home
You don’t save or invest
You continually replace things before you need to
You have a low income
You don’t live a healthy life
You don’t read
You get a divorce
You have at least one bad habit that’s a money drain, such as smoking or gambling
You’re young.
If you currently aren’t a millionaire, or aren’t on course to becoming one, it’s likely due to the consequences of choices you’ve made in the past. The good news is you can make different choices from this point forward to create the wealth you want. It won’t necessarily be easy and you’ll need to avoid making the mistakes which limited you in the past.
Want To Be A Millionaire – Here Are Some Things You Can Do
Becoming a millionaire is straightforward, but it requires sustained effort over time. Here are some immediate steps you can take that will help get you on track.
Start saving and investing as soon as possible. The Survey of Consumer Finances data is very clear – it takes time to become a millionaire.
Contribute the maximum to your retirement accounts. Nearly all the millionaires in the Federal Reserve’s study had retirement accounts. In contrast, very few of the poorest in the study had these. So, if you don’t have an IRA or you haven’t signed up for your 401(k) through your employer, do it and contribute the maximum.
Buy A Home. Millionaires are far more likely to be home owners. Homeownership results in forced savings, tax benefits and homes often appreciate in value. Renters have none of these advantages, leaving homeowners with more wealth in the long run. If you don’t have one, buy home you can afford.
So, by taking a few steps, you may be able to count yourself as one of the newly crowned millionaires in these reports in the not-too-distant future.
One of the best take a ways from this article is, sustained effort! That is a key to any accomplishment in life!
Great article. Those who spend for today on frivolous things that don’t last will never get wealthy. Those who are poor tend to spend what they have on vacations or useless consumer items that don’t last. The key is to buy and own income producing assets. I really agree with the other suggestion that raising too many children is a huge drain on wealth. Children today are a huge drain on wealth. I do not feel sorry for those able bodied people who are poor because they do not save and invest and have too many children. A lot of poorer people also tend to make bad health choices like eating junk food, smoking, and drinking too much. I do feel sorry for those born with physical health issues that hold them back but even for those they can overcome those health problems and still become wealthy.
I see time and time again that those who are poor have a habit of making bad financial decisions and having too many kids. Those who do not plan for tomorrow lose.
Human psychology is a rather unique animal and for those who are looking for stability, there is no alternative to the home ownership to provide that foundation.
When it comes to owning an owner-occupied house, I will rarely analyze price differences between mortgages and imputed rents. The intangible value of owning one’s domicile is incalculable and this is easily verifiable when one looks at the net worth of those who own their own home versus those who rent.
When we own our own homes, it’s a psychological straitjacket that forces us to work through problems and to remain stable, even if we want to get up and run. Homeownership is the necessary requirement for a much better life.
It is also tied to property rights, which goes back to people like John Locke. The founders new the benefits of private property. As you said, it leads to a much better, stable life.
I agree. Homeownership for those who enjoy their house where they live encourages financial responsibility because the number one priority is to have money to keep your house where you live. Since I bought my house I had a strengthened determination to save and invest money and not spend it on useless things that expire quickly. The SoS wants to discourage homeownership so the masses will spend more and incur debt on useless things that don’t last. Lack of homeownership by the masses means greater control by the SoS.
10 year Treasury continues to loose ground.
When I get some alone time at the house, I’ll put out a podcast enumerating the timeline to the force majeure and the time to Ezekiel 38 and 39. I will lay it all out, so that the most wicked and obtuse will understand.
It’s all centered on the nation states and their abilities to continue financing themselves. As we can tell, the so-called temperature gauge will be based upon the yield of the 10-year Treasury. The higher it goes, the closer we are to war. It’s that simple.
It’s all manufactured and by the time War comes and the US is taken out, according to the lines of Ezekiel 38 and 39, it will seem as natural as the sun coming up in the morning. The libtards will rejoice as the evil white man’s Nations are taken down. Of course, the West was built on the sweat of the lost sheep of the House of Israel.
Sounds good!
Trump vows to rename Denali, North America’s tallest mountain, as Mt McKinley
Democratic former President Barack Obama in 2015 officially renamed the mountain as Denali, siding with the state of Alaska and ending a decades-long naming battle. The peak had been officially called Mount McKinley since 1917.
“They took his name off Mount McKinley,” Trump said in a speech to supporters in Phoenix. “He was a great president,” Trump, a Republican, said, adding that his administration will “bring back the name of Mount McKinley because I think he deserves it.”
The mountain, which has an elevation of more than 20,000 feet (6,100 meters), was named Mount McKinley in 1896 after a gold prospector exploring the region heard that McKinley, a champion of the gold standard, had won the Republican nomination for president.
The U.S. Department of the Interior, in the 2015 order that was signed by Obama changing the name to Denali, noted that McKinley had never visited the mountain and had no “significant historical connection to the mountain or to Alaska.”
Denali, the local Athabascan name, meaning “the High One,” was officially designated as the peak’s name in 1975 by the state of Alaska, which then pressed the federal government to also adopt the name.
McKinley, who served two terms as governor of Ohio before becoming president in 1897, led the country to victory in the Spanish-American War and raised protective tariffs to promote U.S. industry, according to the White House website on presidents.
He should! Manifest Destiny all the way!!
He should. Homosexual Obama changed it.
Ha! Him and his boyfriend.
So, is Egypt going to be the next state to fall to the fake state of Israel?
I purchased 500 12mg. Ivermectin tablets on Indiamart.com for $110. Shipping included. No prescription.
That could come in handy for the next scamdemic such as the bird flu, monkey pox, or Marburg. I would not be surprised that they make Ivermectin a controlled substance in the blue states.
Bond bulls should rejoice this morning. Spending and price data come in lower than consensus.
Core PCE Price Index (MoM) (Nov)
Act: 0.1% Cons: 0.2% Prev: 0.3%
Core PCE Price Index (YoY) (Nov)
Act: 2.8% Cons: 2.9% Prev: 2.8%
PCE price index (MoM) (Nov)
Act: 0.1% Cons: 0.2% Prev: 0.2%
PCE Price index (YoY) (Nov)
Act: 2.4% Cons: 2.5% Prev: 2.3%
Personal Income (MoM) (Nov)
Act: 0.3% Cons: 0.4% Prev: 0.7%
Personal Spending (MoM) (Nov)
Act: 0.4% Cons: 0.5% Prev: 0.3%
Real Personal Consumption (MoM) (Nov)
Act: 0.3% Cons: Prev: 0.1%
“I told the European Union that they must make up their tremendous deficit with the United States by the large-scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” President-elect Donald Trump warned early Friday morning on Truth Social.
Well, this will put another crimp in the Russian economy!
One of your old stock picks had a great day today, not sure why it went back up on no news….perhaps a tute pump to reduce losses… DRCT.
Taking a look at Treasury yields from 30 days out to 30 years, we can see that the yield curve is largely upward sloping now with just a few outliers on the shortest end.
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
The bond bulls over the past couple years who swore longer dated yields would fall with a slashing of the short-term overnight rates have been somewhat correct with respect to the upward slope of the yield curve, but not profitably so.
The positively sloped yield curve has been at the expense of longer dated treasury investors who have watched longer term yields continue to push higher, while short-term rates have been cut.
There is a shitstorm developing in the treasury markets and that feeds the rest of the beast. Our saving grace is that inflation continues to remain elevated and places a floor underneath the income streams that income generating assets derive.
https://www.bloomberg.com/markets/rates-bonds/government-bonds/us
And the hits just keep on coming!
California Gov. Gavin Newsom declared a public health emergency on Wednesday as bird flu continues to spread among the state’s dairy cattle.
“This proclamation is a targeted action to ensure government agencies have the resources and flexibility they need to respond quickly to this outbreak,” Newsom explained in a news release announcing the move. “While the risk to the public remains low, we will continue to take all necessary steps to prevent the spread of this virus.”
Putin sounds like a second world dictator. He doesn’t accept blame for his country’s economic problems either.
Putin says Russia’s economy is overheating, inflation is worrying
MOSCOW (Reuters) – The Russian economy is showing signs of overheating which is stoking worryingly high inflation, President Vladimir Putin said on Thursday.
Addressing Russians in his annual phone-in, Putin backed the central bank’s tight monetary policy but also suggested it could have acted in more timely fashion.
The regulator is expected to hike its key interest rate aggressively by 200 basis points to 23%, the highest level in over 20 years, at its next meeting on Friday. Its tight monetary policy has prompted strong criticism from businesses.
“There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank are already tasked with bringing the tempo down,” said Putin.
Putin said he had a conversation with the central bank’s governor Elvira Nabiullina before the phone-in, who had warned him that inflation will be 9.2%-9.3% in 2024, well above the central bank’s estimate of 8.5%.
Putin said that as a result of the tight monetary policy and government measures to cool the economy down, economic growth rates will come down in 2025 from this year’s 4%.
“I think the (growth rate) next year should be somewhere around 2-2.5%, a sort of soft landing in order to maintain macroeconomic indicators,” Putin added.
INFLATION IS A BAD THING
Putin said that the central bank could have used instruments other than the key rate earlier to cool down the economy, while the government could have worked with different sectors of the economy to boost supply.
“It would have been necessary to make these timely decisions. This is an unpleasant and bad thing, in fact, the rise in prices. But I hope that in general, while maintaining macroeconomic indicators, we will cope with this too,” he said.
Putin said that Western sanctions, as well as this year’s bad harvest due to extreme weather in many agricultural regions across Russia, were also to blame for high prices.
Stubbornly high inflation, driven in recent months by soaring food prices, has hit Russians’ pockets. Latest inflation data showed prices for tomatoes rising by 4.1% and prices for cucumbers by 10% during one week in December.
This time last year, Putin was forced to issue a rare apology over rising prices for eggs. A year on, the spiralling cost of butter has prompted thefts at some supermarkets.
Households’ inflationary expectations, a key gauge for the central bank, hit this year’s highest level this month. Grigory Zakuraev, a factory worker, told Reuters that 1,000 roubles at the supermarket goes far less than it did three years ago.
“Everything has gone up in price,” he said. “Of course, you feel it on the wallet, the change in prices, inflation.”
Putin needs an international war to deflect his economic problems at home. Expect something to happen soon.
Check out the UST 10 year yield. Breaking out! Inflation to stay and grow as the world builds out to the force majeure and World War iii! Long live inflation and asset price growth. People will be dying, up to 2 billion according to biblical prophecies and the economy will be rocking!
6% here we come! When the Fed starts looking impotent, the **** will hit the fan! All by design.
Here’s a interesting tid bit:
Sen. Rand Paul (R-Ky.) suggested Elon Musk serve as Speaker in a Thursday morning post on X following contentious debates over the continuing resolution (CR).
“The Speaker of the House need not be a member of Congress . . . ,” Paul wrote.
“Nothing would disrupt the swamp more than electing Elon Musk . . . think about it . . . nothing’s impossible. (not to mention the joy at seeing the collective establishment, aka ‘uniparty,’ lose their ever-lovin’ minds).”
Later Thursday, Rep. Marjorie Taylor Greene (R-Ga.) said she would be open to supporting Musk to replace Speaker Mike Johnson (R-La.) in a post quoting Paul.
“I’d be open to supporting @elonmusk for Speaker of the House. DOGE can only truly be accomplished by reigning in Congress to enact real government efficiency,” Greene wrote on X.
“The establishment needs to be shattered just like it was yesterday. This could be the way,” she added.
Oh God, please no. I see the quick change in the Fed rhetoric after Trump’s election. The Federal Reserve seems to be doing everything it can to make certain long dated treasury yields continue rising. That’s all I can conclude right now. Everything else will fall into place from there. Whatever that is, time will tell.
I see the yield curve steepening unlike last year where it was inverted. This is a sign of one or both things:
1) Economy picking up steam.
2) Inflation on the horizon.
I see a lot of inflation and the economy picking up for those asset owners up top.
The economy will be in the pits for those working schmucks who own very little assets.
Musk seems to be emerging as a potential Antichrist figure.
I think Musk is controlling Trump behind the scenes. I see Trump consulting Musk a lot and Elon has a very powerful position in the administration.
You think? That’s rather obvious. Trump is merely a puppet. Musk is carrying out his orders. The Democrats had Biden, the alt-media and Republicans have theirs.
At the very least, some variation on the “Doge of Venice”.
Given that the FED has finally admitted that inflation has become an ongoing issue, look for house prices to remain elevated, especially in light of the terrible housing start data that came out this morning. Rents will continue moving up and house prices will continue moving higher along with mortgage rates. It’s going to be a total shitstorm and renters will continue to get taken out to the woodshed and beat to crap.
Stone,
I get the gut feeling there may be a stock market crash soon and the markets are behaving as such today. I am wondering if the higher ups are trying to crash the markets to make Trump look bad and to stick it to the Trump voters. I also think there might be an economic slowdown as Trump and company are talking about cutting government spending.
I remember the days of Reaganomics the first two years of Reagan (1981-1983) when Reagan cut spending and there was a serious economic slowdown which killed the industrial rustbelt. The Republicans suffered a drubbing at the 1982 midterm elections as a result and stocks dropped from early 1981 to late 1982. Seems like Trump plans are mimicking Reagan the first two years and the Democrats will take control of the legislature in 2026.
What are your thoughts on holding stocks at this point?
Inflation and quantitative easing are toxic mix. There’s a reason why asset prices continue moving higher. Just take a look at how Venezuelan stocks have done over the past few years, especially given its high rate of inflation.
The FED is finally admitting what this blog has been saying for a while now. Neutral fed funds rate is 4.25% and the FED is already at that level. They should not have cut today, nor should they be cutting next year.
That is, of course, the if FED maintains its 2% inflation level. At some point, given the federal deficits spending generation, the Fed will have to change course or it will just collapse the market’s entirely trying to be right.
But as long as the federal government continues to generate the current level of us treasuries from its deficit spending, there’s just no way that asset prices can drop nor price inflation.
Given the constraints that the FED has painted itself into, there’s no answer. There’s no way that it can achieve its objectives.
If they are going to have a stock market collapse or a crash, now’s the Time to do it. This way it can set up the Fed with an excuse to begin adding treasuries to its balance sheet once again.
Other than this, I’m not making predictions in which I have no basis to do so.
If the Fed needs more excuses to intervene in the markets, you can hardly beat a stock collapse. Why not take it down while Trump is standing stage left about to take his place on the stage!
So, if the 10 year Treasury continues to run, will that hamstring the Fed?
Yes. It will need a crisis like in 2H of 2019 to be able to reverse its QT and add assets to its balance sheet to drive down yields as well as using a crash to help suppress price inflation.
I am surprised a wilfully ignorant Powell is politicizing his decision tree behind supposed Trump tariffs to make up for the obvious that he has done nothing but make one mistake after another. Powell has been getting everything wrong since early 2020.
Maybe he is not getting it wrong. Maybe this is the plan; make one mistake after another and set up the world for a huge collapse. Hmmm. How stupid can the Fed be? Maybe that’s the plan all along.
Maybe we’re stupid for thinking the Fed’s stupid.
When someone steps out of line, they get taken behind the woodshed pretty quickly. Just look at that South Korean guy, he heard shift to the right and thought “got it! Martial law!”. SOS intervenes quickly “take it easy buddy, we don’t want to make it too obvious”.
You have said it many times before, there are no mistakes at that level.
The Fed is facing reality; inflation will rage. Instead of 100 bps. of cuts next year, the FED now revises it to only as little as 25 to 50 basis points. The Fed’s estimate of 2025 PCE moves up from 2.1% to 2.5%. the Fed is tacitly admitting that its inflation battle is going to last another two more years than expected from just several months ago.
Fed Slashes Interest Rates By 0.25% As Predicted: December Dot Plot Flags Only 2 Potential Cuts In 2025
The Federal Reserve closed out the year with a widely anticipated 25 basis-point interest rate cut Wednesday, lowering the federal funds rate to a range of 4.25%-4.5%.
This marks the lowest level since January 2023 and is the third consecutive reduction in borrowing costs, following a 50-basis-point cut in September and a 25 basis-point move in November.
The decision to lower interest rates was not unanimous, as Cleveland Fed President Beth M. Hammack voted to maintain the target range unchanged at 4.5%-4.75%.
The Fed’s statement showed a meaningful language change, with the addition of the words “extent” and “timing” in reference to future policy adjustments. This shift signals a more cautious approach to further rate cuts in 2025.
“In considering the extent and timing of additional adjustments, to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the December Federal Open Market Committee statement said.
Economic Projections Signal Fewer Rate Cuts, Higher Inflation
The Fed’s December dot plot, which illustrates each policymaker’s projected path for interest rates, indicates a median expectation for the federal funds rate to decrease to a midpoint of 3.9% by the end of 2025.
This projection suggests the potential of only two additional 0.25% rate cuts during next year, a meaningful revision from the full percentage point of cuts expected in September.
For 2026, the Fed projects the fed funds rate to fall to a midpoint of 3.4%, up from 2.9% in September.
The Fed materially raised its inflation expectations for 2025, projecting headline Personal Consumption Expenditure inflation at 2.5% compared to 2.1% in September. Core PCE inflation, which excludes volatile food and energy prices, is now forecast to reach 2.5% in 2025, up from the prior estimate of 2.2%.
The Fed reaffirmed that economic activity remains “solid” and said that, despite some easing in labor market conditions, the unemployment rate continues to be low.
Economic growth for 2025 was upwardly revised by 0.1 percentage points from September.
Leading into the December Fed meeting, money markets priced in an 80% probability of a rate pause in January, followed by a 60% likelihood of a rate cut in March.
Overall, CME FedWatch data reflected a 70% probability of at least three rate cuts by the end of 2025.
In contrast, the CFTC-regulated betting platform Kalshi showed a more aggressive outlook, with a 98% chance of four rate reductions next year.
Fed’s December Summary of Economic Projections
Variable 2024 2025 2026 2027 Longer Run
Change in real GDP 2.4 2.1 2.0 1.9 1.8
Sept. projection 2.0 2.0 2.0 2.0 1.8
Unemployment rate 4.2 4.3 4.3 4.3 4.2
Sept. projection 4.4 4.4 4.3 4.2 4.2
PCE inflation 2.4 2.5 2.1 2.0 2.0
Sept. projection 2.3 2.1 2.0 2.0 2.0
Core PCE inflation 2.8 2.5 2.1 2.0
Sept. projection 2.6 2.2 2.0 2.0
Federal funds rate 4.4 3.9 3.4 3.1 3.0
Sept. projection 4.4 3.4 2.9 2.9 2.9
Source: Federal Reserve
Markets Tumble After Fed
The S&P 500 – as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY) – tumbled by 0.6% minutes following the decision, and the tech-heavy Nasdaq 100 – tracked by the Invesco QQQ Trust, Series 1 – suffered heavier losses, down by 0.7%.
The U.S. dollar index – as closely tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP) – jumped 0.7%, eyeing the highest close since November 2022.
Treasury yields rallied with the 10-year benchmark yield rising to 4.44%.
Gold prices tanked 0.9%, and silver fell even more, down 1.7%.
Bitcoin (CRYPTO: BTC) was 2% lower to $104,000.
US Treasury prices are collapsing as we speak as yields are taking out their intermediate term resistance levels. Large Capital losses for treasury holders. 10-year note futures are collapsing as we speak.
If Powell refuses to settle for inflation above 2%, he shouldn’t be cutting rates.
These drones were released offshore by the US Navy from their naval carriers. There is a whole slew of legislation being quietly pushed by DHS in Congress in the short-term funding legislation that will give DHS broad sweeping powers that will regulate drones. That’s why all of these drones have all of these crazy looking lights and weird shapes. It’s all designed to get people to react and allow the federal government to enact more Patriot act legislation. That’s it. That’s all. It’s being carried out by the Pentagon. It’s very simple.
UNPRECEDENTED: Pope to Open Five Sacred Portals on Christmas in Manner Described by Talmud
https://israel365news.com/398695/unprecedented-pope-to-open-five-sacred-portals-on-christmas-in-manner-described-by-talmud/
What’s he up to now? Releasing demons, perhaps?
The truth of the mystery drones.
The department of Homeland security and DOD are both trying to pass legislation in the House and Senate federalizing all drone laws. It is currently being worked on now in Congress and in order to get it passed and to get the people fearful, our own department of Defense has been sending out hundreds of drones across the Eastern seaboard to scare the people.
All of the drones in question are coming from our own military. The DHS is looking to federalize all drone legislation and regulations. They will easily get what they want.
Jeff Rense is ranting about alien invasions, while the alt media joke about how the federal government is telling people to relax. The federal government is telling us to relax, while simultaneously creating the double-minded fear, because they’re the ones carrying out the operation.
The DHS and Pentagon need to federalize drone regulations and desperately need this legislation to pass.
Surprise, surprise. Bury it in short-term funding legislation. How neat and tidy….
Lawmakers want counter-drone measure in short-term funding legislation
by Lauren Irwin – 12/16/24 1:52 PM ET
https://thehill.com/homenews/house/5042367-counter-drone-measure-in-short-term-funding/
Janet is still there to lend a helping hand. She is buried up to her neck in Treasury Debt. “So sorry”. Decapitation is implied, how to say something without saying it I suppose.
Her equivalent in Canada resigned today. The real reason was that she was supposed to deliver the fall economic update in that awful red stretch-fabric dress and I think it finally ripped. Like trying to pack 10 lbs of saussage into a 5lb casing.
Haha. I have used almost the exact same phrase elsewhere. Sausage casing. I call that cow the Red Square. I refers to both her shape and political leanings. The thread holding that sausage casing together must be the strongest material in the universe.
Looks like the cabal of Blackface del Castro is teetering on it’s last legs. Their replacements can do their best but it still will not be enough to reverse the long term damage that these WEF aye wholes did.
Part of me – the one with my nihilistic streak, wants things to get really really bad and then we can have a purge like the Mongolian Ghenghis Khan would have done.
More fraud, lies, deception and lawlessness. Throw in a side of murder and sacrifice every once in a while.
This is going to be a long couple of years.
All these drones are coming US carriers parked in international waters. They are meant to scare people with bright flashing lights and weird shapes and movements. 🤣🤣🤣🤣🤣🤣🤣🤣🤣🤣
Oh boy! Get ready for the alien invasion! HA!
And, there it is!
Crisis, reaction, solution. More Orwellian government control over our lives….
The FBI and Homeland Security say they want more authority to deal with drones amid strange East Coast sightings
•Drone sightings have been reported up and down the eastern US in recent weeks.
•Officials say they’re investigating the mysterious aircraft — many of which have actually been crewed aircraft.
•But federal agencies stress that they need more authority to deal with the drone threat.
Federal agencies are arguing they need more authority so they can better deal with drones amid the surge in unexplained drone sightings that have caused confusion throughout the eastern US in recent weeks.
Department of Homeland Security and FBI officials said on Saturday that they are limited right now in how they can respond to the reported drone sightings that have stretched from Maryland to Massachusetts since mid-November.
https://www.businessinsider.com/federal-agencies-want-more-authority-deal-drones-east-coast-sightings-2024-12
Very astute observation. If drones are the next big thing in warfare, the average citizen surely can not have access to them! See if legislation doesn’t come to deal with this, so called problem.
I once spoke to a woman who had been living in the US for a while.
She said living there really opened her mind, and she got a real education into race relations and how we need more understanding.
I said “Yeah I know, I don’t think black people really understand what it’s like being white these days.”
I could see that computation look on her face, neurons scrambling to reconcile the received data. All she could do was agree out of politeness, even if she wasn’t quite sure what she was agreeing with.
I’m tired of black this and black that – and where i live I only see one in real life about once a week, max.
The Jew synagogue’s media and takeover of the college campuses have worked to destroy America and its strength. There is absolutely no strength in diversity, only rancor and division. The less able (blacks and other non congruent immigrants) blame white privilege.
The Asians come here and end up beating whitey at his own game. The schvartzes should resent the Asians who prosper at the expanse of everyone else, especially the blacks.
The Asians and Hispanics flood the black jurisdictions like PG County and buy the housing stock and the Asians cater to the blacks and take their money. Niggers spend money like it was burning a hole in their pockets. White people are nowhere to be found where the blacks around here live.
Another tactic of the SOS is to spread and glorify black culture! Hip hop, rap, slang, etc. and many younger Whites fall right in line. Plenty of commercials show case these black low life’s. Its repulsive!
The blacks also resent the asians and hispanics as they move into the black neighborhoods and take over. Multiculturalism definitely breeds animosity and antagonism between the different ethnic and racial groups.
Haha that is a brilliant reply, and so true. I had to explain to my early 20s son that he had better plan to be the absolute bloody best at whatever he decides to do and preferably he should run his own show and own his own business. I told him that I have NEVER found the “white English male” box on any job application. He will have to be twice as good as them because of the DEI insanity infecting all aspects of public life. Hopefully the Trump train runs these woke retards off the rails into the ditch. No guarantees but there is a faint hope as he supposedly will let Musk and RFK start to clean house. Up here in socialist idiotic Canada, there are still plenty of morons who embrace this rubbish and as much or more cleaning to be done. Not sure that the woke retards can be cleansed since the propaganda is perhaps even worse than in the US.That Soviet defector (Bezmenov IIRC??) sure got it right about how the propaganda process is laid out.
All I see these days are these “aye wholes” spouting off about reconciliation this and white privilege that. And yet how many decades of so called affirmative action has is been? Is it four or five decades? I ran out fingers and toes to count so I had to use an abacus. You know the abacus – invented in Africa no? (sarc).
The good news? I joke to the retards “Hard times are over.” The bad news? “Harder times coming”. They fail to comprehend the full effects of allowing the incompetent lesser DEI people into the positions of influence and decision making. I personally will laugh as the bridges and walls (literally) come tumbling down due to lack of competent (generally white men) making the world work. I’m (I hope) parked in a good spot for the coming really hard times. I feel bad for my kids who will live a lesser life than I have so far due to the cultural infection of woke Marxists. Let them – Marxists -burn. I mean that. Take the worst offenders out and get medieval on them. Look to history to see how real revolutions and house cleanings work. Not pretty but effective.
Time to get fitter since when the tribulations begin the fat and lazy (and they are legion here in North America) will be some of the first to succumb to what I suspect is next.
In that vein: Question for Stone and indeed everyone.
Will the controllers who operate in the background (think of Bidens handlers) work to reduce food supplies since their clot shots were clearly not as effective as they might have hoped? They tried plague (Wuhan flu). Is famine next? If so, how will they make this happen?
The clot shot could have been designed to take 20 years to kill everyone, although 5-10 would be about right. It only has to lay low until the next round or it’s time to remotely trigger it. If it’s not externally triggered even Fauci said vaccines often take 12-15 years to show the side effects. He stated that it takes 12-15 years before you can declare a vaccine safe. He said the truth a few times. He even said PCR tests above 27 cycles are all false positives and explained why. Strange that he knows and says such things and still drives the hoax.
They will wreck the food supply, cause diseases, fire off nukes, etc. Millions of drones will hunt and destroy survivors. Soon the capacity to automatically make billions of drones will exist. These things will be everywhere.
The tech exists now to wipe everyone out, so why not use it? Have you seen the video of the drones that fly up to people’s heads and explode? They just open a box of them in an auditorium and 20 seconds later the entire audience is dead. It was a hypothetical scenario, but definitely possible. Just use mini drones with face recognition and pager charges. Easy.
Here’s an interesting video on the topic of evil AI and drone takeover. It’s total doom, but interesting to watch.
https://old.bitchute.com/video/qP4CbplVxrwX/
Hot hot hot 🔥 🔥 🔥
A strong dollar is not helping the import price side of the equation.
Export Price Index (YoY) (Nov)
Act: 0.8% Cons: Prev: -0.1%
Export Price Index (MoM) (Nov)
Act: 0.0% Cons: -0.2% Prev: 1.0%
Import Price Index (MoM) (Nov)
Act: 0.1% Cons: -0.2% Prev: 0.1%
Import Price Index (YoY) (Nov)
Act: 1.3% Cons: Prev: 0.8%
Thanks for this observation of the Canadian market. It matches what I have been observing with an amateur eye. It’s good to have unbiased confirmation. Vancouver is retarded and a place for the Chinese to park money outside China and has been since Expo 86 kicked off the housing boom. Governments have been complicit in this and were happy to collect property transfer taxes. Now no one earning the average Canadian wage can afford to own much less rent. It is also as woke as Moronto (Toronto) which is also overly expensive and the core of Toronto is a multi culti sh*&thole with weekly or more shooting by the diversity crowd. Mostly it’s BoB shootings (black on black) but sometimes others get caught in the crossfire. I digress.
Taxes are very high on the east coast but it’s more homogenous than the woke major urban centres. Would you recommend there also or just stick to the prairie provinces? Once our current near commie dictator gets punted in 10 months or less, things will hopefully brighten up but the replacement will have a massive task to begin to reverse the damage caused by this literal son of a Castro.
Anyhow Stone, please keep posting. I recommend your site to a very select few. They are not woke ‘masktards’ (I still see fearful morons wearing these things) at all. We are few in number but the numbers are slowly growing. Your blog isn’t dead yet. Keep it up.
Cheers.
ps It is hilarious to watch the prancing fool Trudeau standing on the tracks staring at the bright white light with a dumber than usual look on his face as the Trump train rolls into Blackfaceville. I think that this dimmest of bulbs is perhaps realizing that his days are numbered.
Is Trump the answer? He’s better than the DEI alternative and will not be good for us north of the 49th parallel, at least temporarily. I am surprised that he won. America voted with conviction.In the end, I have little trust in any of them when it gets right down to it, since they are all eventually compromised. Such is the corrosive effect of money.
Merry Christmas in the full meaning of that term.
Here’s the bottom line when it comes to determining whether a property is a good investment. First, I look at what the property would generate for a monthly rent. Then I analyze it with respect to the proposed purchase price. Of course, we need to consider property taxes and insurance as two top line deductions.
With all of this considered, I look to see what type of capitalization rate this property will generate for me. Taxes and insurance are already involved in this and are deducted from gross rental income. So, if the rent is high enough, property taxes shouldn’t be much of a major deal.
I was corresponding back and forth with a few investors over the years about Texas real estate. The recurring theme with Texas housing is that the property taxes are very high as a percent of market value and that these investors were concerned about the high property taxes. I told them to not be so concerned about those taxes when the purchase prices seem to be very low. For instance, house prices to household income multiples in places like Houston and Dallas were about 2.5x.
Thus, the high property tax rate manifested in a lower capitalized value of the property. I looked at what the proposed rents were going to be and calculated it all based on fixed costs of ownership and the properties were still dirt cheap. Yet, several of these investors I interacted with could not get past the high tax bill.
With regards to this Texas phenomenon, if property taxes were low like they are in Virginia, house prices would be a lot higher.
So, when figuring out where to invest look at what the house will generate for rent and just run the formula. Don’t get sidetracked on issues that probably don’t mean much.
Stick to homogeneous areas and make sure the tenants are a direct reflection of you. If you’re Caucasian then rent out to Caucasians. In my 25 years of property management experience, I can tell you that the various races think differently from one another and caucasians think entirely differently than any other race of people I have dealt with. By being careful in this manner you will make your life much easier in case any problems arise.
An acquaintance started some importing businesses and dealt with all sorts of people.
He ranked them according to trustworthiness, honesty, and ease of dealing with, best to worst as (his comments in brackets):
– Muslims (honest, generous, eager to be liked, determined to build a good business relationship)
– Chinese (honest for the most part, hard bargainers sometimes, keen to make business)
– Whites (mostly OK but too much hussling sometimes, a mixed bag)
– Indians (very shifty, incomprehensible answers, don’t do what they say)
– Blacks (really bad; always trying tricks but lack the brain power to pull it off – like a kid covered in crumbs denying he raided the cookie jar)
– Jews (by far the worst, manipulators, liars, try to turn you into their personal assistant, constantly asking for favors as if an old friend, pay late, constant gaslighting)
He’s a pretty liberal guy, vaxed to the max, doesn’t read any hate – so this would be a totally unbiased and natural set of observations.
Certainly not the Muslims I know in real estate. I include the Sikhs. They are eager with their own kinds. They conceal defects from whitey and their contractors charge me extra than their brethren.
I don’t doubt that.
I noticed in Europe Muslim woman were the worst. They always evaded train fares and leave turds on the ground after standing for a couple of minutes in their burkas.
They love shoplifting too – no worries about losing a hand on Oxford St.
I am surprised your friend thinks the Chinese are honest. My experience in business is that the Chinese (especially those from Communist mainland China) are some of the most dishonest people. The mainland Chinese are the worst. They always try to lowball your price when you sell to them. When you buy from them they sell you defective products and then when you point out the defects they always deflect the problem by saying it’s your fault as the buyer. and never return your money. You should see all the shoddy products that mainland China produces and how they add artificial ingredients to their food to extend the weight and make it look better. They will sacrifice quality and integrity for higher profits. Chinese also cut corners in their quality of work.
Just an interesting story. Years ago I went to get take out at a Chinese restaurant. While waiting, one if the young men Chinese guys was playing video games and it was about war, and the Chinese navy was attacking the U. S. Navy and sinking U S ships! Never have been back.
Unless there’s some sort of corporate or specific contract safety net, NEVER engage in any commerce of substance with Asians. At some point I have to conclude the anti-Caucasian crap on this site has an agenda and there’s an ax to grind. Especially when complaining about those who made the West, not those who moved in and exploited it. The first and second generation mongrels hate white Europeans. Asians and Muslims are those I avoid in commerce as well as Hindus, blacks, and Japheth remnants.
Why? They all secretly hate European Caucasians. If given the chance and could get away with it, these various races will knife the Caucasian in the back. Caucasians are to avoid these people when engaging in substantial and opened-ended business. That is unless, of course, the contract specifications are well enumerated or there is a corporate safety net.
It’s almost like we are supposed to stay separate from them. If only we had been warned. /s
I fully agree, avoid these people in substantial and open ended business. We have dealings with asian suppliers but it is limited to spot transactions, so far no issue but we are cautious.
We have been stiffed through customer bankruptcies, mostly by white Godless vegans – those types are now COD.
Agreed. The Chinese are rip off assholes. The Japanese build quality products but Chinese manufacturing is terrible. Culturally they are not to be trusted in general. An acquaintance from long ago did business with some of them. He went out of his way to rip them off one time. Once they discovered it, they respected him more. “Good one” they said. It’s part of their mental makeup. Not to be trusted at all. There is a reason it’s called a Chinese Junk – it is.
LOL, everything (and I mean EVERYTHING) here in NZ is from China, so you’ll be buying Chinese products off whoever you deal with.
I sometimes wonder if we’ll be instantly back in the stone age if trade with China stops.
Yes he did say you have to be careful with the Chinese but if they want to keep you as a customer long term they will do better.
I guess it depends what business you are in. Computer parts are all the same, for example. If it’s a reputable brand and they are genuine, then you might be ok.
A builder told me he saw a Chinese house construction crew building a row of units. They would tie the reinforcing steel for a firewall between units, call in the council inspector before pouring the concrete, dismantle the steel, pour the wall, put the steel up for the next wall, and repeat the process. Sneaky. Concrete is pretty strong if all it has to do it stand there, so no one will probably ever know.
Right on Peter! My nice little hometown in Northern Ontario has been invaded by Pakis, Syrians, Philipinos and Chinese. Most are getting a Trudeau handout or their hourly wages are subsidezed up to $19/hour. Subway sandwich restaurants, locally here fired ALL the white employees and hired Indians. Trudeau pays the franchise owners their hourly wage. Imagine if you owned a Subway franchise and the Government said, ” hire 6 Pakis and we will pay ALL their hourly wages.” Wow, free labour….Canada under Trudope is doomed.
Most whites you tell would not believe that.
They are so naive.
OTOH, we sometimes believe things that are fake too, but it’s hard to tell the difference – the truth is so outrageous these days, isn’t it?
People would agree with the statement “we pay taxes so they can have more kids than us” – not realising that this is what literally happens, by design.
It’s not like the taxes all go into a pie and darkies get a bigger slice of said pie – no, money goes directly from us to them.
Politicians all belong in hell. They are creating hell on earth so they’ll get what they deserve pretty soon anyway. I’ve spoken to politicians (in the days I thought “getting involved” might help) and they are all retards and don’t care what we think.
John Adams in Australia had access to the parliament offices and would try to talk to politicians. Every Friday they would be all drunk, having parties in their offices. Completely useless.
At one electorate we were told our job was to make $400 from cake stalls and car boot sales, and that’s it. I said, how about I just pay the $400 now and we talk about what this party is going to do. The answer was: “determining policy is the MPs’ job, not yours.”
I replied, “So when the leader said he wants people to get involved and stop being so apathetic, what did he mean?”
She said “Turn up to meetings and pay your membership.”
It was totally pathetic. That’s the level of goy organisation. I bet in the synagogues they plot and scheme 24/7 and we aren’t even allowed to discuss anything.
Just another motivation not to eat out. Home cooking is healthier and cheaper.
Poojeets are taking over Canada by design. (Kalergi Plan via Cloward-Piven strategy)
I seek to keep my money and business with only like kind.
I would stay out of Manitoba and stick to Alberta if you are going to invest. Saskatchewan, maybe.
Stay away from the big city’s in Alberta too. Trudeau has brought in 100’s of thousands of “new canadians” to Alberta in the past few years. They now outnumber us in the younger democratic in the major city’s I figure. Many of them seem decent but many others have evil intent in their fake smiles.
Check this out Stone.
https://youtu.be/73VwKe3ullg?si=Abh-88P5PMlP2yMI
Another big piece of advice to my fellow Caucasian sfr investors, do not invest anywhere where the schvartzes live. The blacks will make your life a living hell as a landlord. They are by far my worst tenants, and what makes it worse, is that they seem to feel they are the most entitled. Over the past four years, since Obama 2.0 got back into power, I have not come across a more resentful bunch of people than the schvartze tenant pool, and I have been a landlord in predominantly black areas since 2001.
It seems most of the “minorities” have severe entitlement issues against whites!
Resentment is part of the problem. Like good humor, its not funny unless there is underlying truth in the punch line.
I once had eight different black tenants at once living at my properties. I only have three black tenants left and two of them are trying to use the laws in Maryland to buy the properties from me on the cheap. They destroyed them and now they want to buy them from me. The sad part is that they don’t qualify, yet they drag me through the mud like I was their former slave owner.
One of the tenants rents their house from me for at least 50% of the full market rent. It’s a 4/2.5 house and they rent it for $1,540 a month. Full market according to Zillow is $3,100. The other tenant rents their condo for almost $500 below full market. I told both of them I need to sell the properties, yet they don’t want to give up the gravy train. I’m tired of tripping over myself and charging much less to my black tenants for rent, lest I get called racist.
Some hot PPI headline numbers. Much higher jobless claims than expected.
Continuing Jobless Claims
Act: 1,886K Cons: 1,880K Prev: 1,871K
Core PPI (MoM) (Nov)
Act: 0.2% Cons: 0.2% Prev: 0.3%
Core PPI (YoY) (Nov)
Act: 3.4% Cons: 3.2% Prev: 3.4%
Initial Jobless Claims
Act: 242K Cons: 221K Prev: 225K
Jobless Claims 4-Week Avg.
Act: 224.25K Cons: Prev: 218.50K
PPI (MoM) (Nov)
Act: 0.4% Cons: 0.2% Prev: 0.3%
PPI (YoY) (Nov)
Act: 3.0% Cons: 2.6% Prev: 2.6%
PPI ex. Food/Energy/Transport (YoY) (Nov)
Act: 3.5% Cons: Prev: 3.5%
PPI ex. Food/Energy/Transport (MoM) (Nov)
Act: 0.1% Cons: 0.2% Prev: 0.3%