Kirk's Market Thoughts Message Board

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Non-Tech : Kirk's Market Thoughts

COHR 178.36

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Dec 15 3:59 PM EST

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To: isopatch who wrote (9932)	6/8/2020 10:04:30 AM
From: Kirk ©	1 Recommendation Recommended By isopatch of 26770

Those are some great charts! I especially like this one that reminded me when I bought my first home, a 3b/2.5b Sunnyvale CA town home, that I had a 14% VARIABLE rate loan so the bank was protected should rates return to 18% again... at the time, my parents were paying off my father's 4.0% CAL-VET loan plus a second loan to turn half the garage into a family room, laundry room and small home office. A 4.0% loan at such low rates for Veterans seemed like such a deal that we'd never see again.... Today I have a 3.375% fixed loan with taxpayers picking up some of the interest as I can deduct it AND I have enough cash in TIPS and iBonds to pay it off but I'd be foolish to do so as I'm getting a higher return in that "hedged" portfolio than I am paying on the loan before deducting on taxes. Interesting too is back in the 70s and 80s people with 4 to 6% home loans did not want to move into bigger houses or nicer neighborhoods since they had such "low rates" on their home loans... Now that rates have plunged, asset prices have soared because for the same monthly "costs" you can borrow much more money. Now people here in Taxifornia in the nicer neighborhoods are "stuck" in their homes again as we'd have to pay 13.3% capital gain tax to the state PLUS maybe another 30% to the Fed when you add the highest capital gains tax to all the ACA, Medicare, etc adders Obama put on... then Biden might eliminate that too... It is amazing all the unintended consequences from extreme interest rates and high taxes... (why should I have to pay a capital gains tax above the rate of inflation to move, especially since most of the inflation made it more expensive for me to live here with zero added benefit?) Anyway, great charts!

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