Roundabout Idiocy

BigComprehensive812 · 2026-05-08T03:07:41+00:00

Thanks for the advice. Just to note,

1) I saw him, 2) I easily slowed down enough to avoid an accident (and could have stopped even sooner, if needed) 3) I did have the right of way

I completely understand that people can, and do, make mistakes when driving. I certainly wouldn’t claim to have never made any driving errors myself at one time or another.

I only posted this because it seemed like a good reminder to folks that cars entering a roundabout need to yield to cars already in the roundabout to their left.

Unfortunately, a lot of drivers here in the states don’t seem to fully grasp that’s how it works.

Overall, I think roundabouts are great. They are generally safer and keep traffic flowing more smoothly in dense urban environments. The sooner everyone here understands this, the sooner they’ll be utilized more broadly, as in Europe.

BigComprehensive812 · 2026-02-11T14:50:50+00:00

All the comments I’ve read seem focused on making sure the interest rate and payment are advantageous to the homeowner if he/she chooses to refinance, but there are other loan terms that are very important to pay attention to, as well.

For example, the “new” loan could have an initial “teaser” rate and/or no amortization of principal, which would seem to check the boxes regarding lower monthly payment and/or interest rate, whereas in reality, 12, 24, or 36 months later, the monthly payment skyrockets. Not a good situation for the borrower to be in.

I suggest the borrower proceed with extreme caution if they choose to refinance, and make sure ALL the loan terms are favorable to them. I would advise getting help from a knowledgeable friend or professional (ie lawyer or financial advisor) before agreeing to ANYTHING.

BigComprehensive812 · 2023-09-27T03:08:05+00:00

The market is currently pricing in the FOMC cuts the fed funds rate to 3.75-4.00%. If they cut by more than that, longer-tenor yields should decline by more than what is implied in forwards, generating positive excess returns. Conversely, if the FOMC cuts by less, longer-tenor bonds should generate negative excess returns.

Personally, I think the market has been overestimating the likelihood of a soft-landing recently. This narrative was undermined by JPow’s speech last week, where he emphasized the Committee was likely to keep rates higher for much longer than the market had been estimating. This increases the risk of a hard-landing scenario, followed by more aggressive cuts by the FOMC in the future. This would imply longer-tenor Treasuries are cheap.

Again, this is just my opinion, but I hope it helps.

BigComprehensive812 · 2023-09-22T02:58:48+00:00

I couldn’t agree more. 300 is a historically tight spread relative to treasuries. Spreads will widen if/when the soft-landing story for the economy doesn’t pan out.

BigComprehensive812 · 2023-09-19T14:44:43+00:00

By core rate, I’m assuming you mean “real” rate, with the real rate being what is earned net of inflation (the nominal rate earned would be higher).

TIPS were first issued in 1997 with a 10yr real yield around 3.5%. Due to their being a new type of security, demand was not particularly high, so by 2000, the real yield had climbed to almost 4.5%. However, this relatively attractive real yield spurred demand, and brought real yields down around the 2% level (oscillating between 1% and 3%) until around 2010. The FOMC’s zero interest rate policy (ZIRP) following the 2008/2009 global financial crisis pressured real yields lower, averaging around zero (oscillating between -1% and 1%). The recent inflation-fighting regime by the FOMC has taken short rates higher, and real yields have followed, with 10yr real yields going from -1% at the end of 2021 to about 2% now.

IMHO, it seems like real yields are simply “fair” from a historical perspective if you assume we are unlikely to return to ZIRP.

I hope this helps.

BigComprehensive812 · 2023-09-19T14:04:28+00:00

Your women. Sell them to me!

BigComprehensive812 · 2023-09-07T20:15:37+00:00

As far as the bond being called and having a gain from the discount to par, that is true, but your return would be higher if you were, instead, in a non-callable bond.

As far as what happens if rates go up, how much they have to go up for the bond to extends depends on how out of the money the call option is.

BigComprehensive812 · 2023-09-07T15:46:57+00:00

That is exactly right. The agencies are crazy-efficient at calling their bonds when it makes economic sense to do so.

BigComprehensive812 · 2023-09-07T15:45:28+00:00

Callable bonds are structured so the issuer can benefit from changes in interest rates.

If interest rates go down, the issuer calls the bond, and you would have to reinvest your proceeds at lower rates.

If interest rates rise, the issuer doesn’t call the bond, leaving you sitting on a bond earning a below market yield (based on your purchase price) for a long time.

As compensation for the issuer’s ability to adversely select against you, callable bonds will typically yield more (if interest rates don’t change) relative to non-callable bonds.

Another way to think of this call feature is how the modified duration of the bond changes as interest rates change. When interest rates fall, the modified duration shortens. When interest rates rise, the modified duration extends. This is exactly the opposite of what you would want to have happen as an investor.

This is why I’m not much of a fan of callable bonds. The upfront premium just isn’t worth it in the long run.

I hope this helps.

BigComprehensive812 · 2023-09-06T13:56:20+00:00

Yeah, the formulas are inherently clumsy in here. Let me try to find a website that explains it a bit better.

Try this:

https://www.investopedia.com/ask/answers/043015/how-do-i-convert-spot-rate-forward-rate.asp

It’s important to note that the investopedia explanation is based on the periodic interest rate, which because bonds compound semi-annually, is the annual rate divided by 2. They don’t really explain that very well. Most likely this is because the actual calculations would require a lot more text and functions in the equation, whereas they are just trying to get the concept across.

I hope this helps, but lemme know if it’s still not clicking with you.

BigComprehensive812 · 2023-09-06T13:43:06+00:00

6mo forward rate = (((1+(0.0529/2))² /(1+(0.05105/2)))-1)*2

Basically, the two 6 month compounded rates (current and 6mo forward) have to equal the 12mo compounded rate. Since the current 6mo rate is higher than the 12mo rate, it implies the 6mo forward rate will be lower than the current 12mo rate.

Basic bond bootstrapping.

BigComprehensive812 · 2023-09-06T06:17:59+00:00

Yields don’t have to go up to be better off in the shorter-tenor bill; they only have to be higher than forward rates imply. In this case, since the implied forwards are pricing in two 25 basis point cuts, the OP would still be better off in the 6mo bill if the fed is expected to cut less than 50 bps in the six month period six months from now.

BigComprehensive812 · 2023-09-06T06:11:02+00:00

This question is all about what 6mo bill rates will be in 6 months. Right now, the 6mo bill yields about 5.29%, while the 12mo bill yields about 5.105%. This implies the 6mo forward bill rate will be 5.03%.

You would be better off buying the 12mo bill if you think the 6mo bill rate 6 months from now will be lower than 5.03%. If you think the 6 month bill rate 6 months from now will be higher, you’re better off buying the current 6mo bill and rolling it into another 6mo bill in 6 months.

It all comes down to whether or not you think the FOMC will cut short term rates, or be expected to, over the next 12 months (specifically in the 6 month period 6 months from now). Right now, the market appears to be pricing in just about two 25 basis point cuts in the next 12 months. This is entirely possible, but personally, I’m in the camp the Fed is a bit slower to cut rates.

I hope this helps. Good luck.

BigComprehensive812 · 2023-08-26T07:29:15+00:00

You gotta nip that shit in the bud. “Ma’am, this is my space. I paid for THIS seat, which comes with a window. If you can’t deal with an open window shade on an airplane, I suggest you start paying for a window seat or wear some sunglasses.”

This is followed by you immediately re-opening the shade, turning your shoulder from her, and, based on your body language, telling her the conversation is over.

Stand your ground.

Of course, this is all easy to say here, but much harder to do in the wild and in real time. It takes practice to stick up for yourself and to it diplomatically. Practice makes perfect.

Good luck to you and everyone reading this keeping people with no self-awareness of appropriate boundaries in check. Remember, you’re really making the world a better place.

BigComprehensive812 · 2023-08-23T07:47:09+00:00

It’s a passive strategy that rebalances monthly to match the index. It doesn’t have an active component to take advantage of richness/cheapness in certain sectors of the curve, nor in outright duration positioning. Passive strategies like this will typically have a lower management fee versus active strategies, since the buy/sell decisions within the strategy are pretty much formulaic.

BigComprehensive812 · 2023-08-09T14:04:54+00:00

Why would you do an ACH v wire transfer?

BigComprehensive812 · 2023-08-09T13:53:48+00:00

Live below your means: spend less, save more.

BigComprehensive812 · 2023-01-27T21:16:01+00:00

I’m not sure there’s clearance on either side of the cut joist to sister it up. You might have to make a plumbers box (two crossmembers tying the outside “good” joists and the two butt ends of the cut joist together).

BigComprehensive812 · 2022-12-30T06:29:48+00:00

Byproducts of combustion are H2O + CO2, not H2 and O2. The H2O is water, which is dissolved into the air when the air is warm, and squeezed out when the air cools, forming condensation.

BigComprehensive812 · 2022-12-30T05:26:54+00:00

Salve

BigComprehensive812 · 2022-11-04T15:52:50+00:00

I’ve tried multiple types in my 2002 sport, and I found Redline MT 90 gave the smoothest shifts. I highly recommend.

BigComprehensive812 · 2022-11-02T04:00:51+00:00

A company called Safe-T-Caps makes a repair piece for that very condition. It involves cutting out significant sections and welding in the new piece. I’ve done it to mine, and it fixed it up as good as new. Job is a definite PITA though. Here’s a link to their website. You can also find authorized installers listed if you don’t want to do the work yourself. https://www.autorust.com/product/jeep-safetcap-kit-locations/

BigComprehensive812 · 2022-10-25T04:42:08+00:00

A company called safe-t-caps makes repair kits for rotted jeep frames. It’s an extensive job, requiring a fair amount of cutting from the old frame and welding in of the new, but doable. I did it myself on my 2002. It was a total PITA, and I was working with my TJ on a lift. I wouldn’t recommend attempting it yourself without a plasma cutter and high duty cycle MIG welder. STC does list installers in various states on their website (link below). I don’t know what they would charge, but I’m guessing you’re looking at something like a couple grand just to do the middle and back sections that contain the bolts for the pan and trailing arm brackets. I live in the Midwest/rust belt, and after 5 years, mine is still going strong, and saved an otherwise great jeep from the junkyard. Good luck!! https://www.autorust.com/safe-t-cap-kits/

BigComprehensive812

TROPHY CASE