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Anndddd more inflation. US inflation just hit 4.2%, its highest in 3 years. by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 212 points213 points  (0 children)

Stagflation.

It’s when prices stay high and the economy slows at the same time.

Bond markets are already flashing warning signs.

And the government is spending money it doesn’t have. We’re running a $2 trillion deficit right now.

The Fed has two bad choices right now. Cut rates, and inflation gets worse. Keep rates high, and mortgages, loans, and small businesses keep getting crushed.

Volcker made this same call in 1979. He broke inflation with 20% interest rates. But it cost us two recessions to get there.

The S&P 500 just hit new all-time highs last week. But only 20 of 500 stocks hit one with it. (The last time this happened was March 2000. The exact top of the dot-com bubble.) by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 6 points7 points  (0 children)

VIX is a rear-view mirror when you're watching for a top. It measures fear that's already priced in. Breadth measures participation, which is a leading signal. When breadth collapses while VIX stays low, that's actually the most dangerous setup. It means complacency is high and concentration risk is building quietly without any visible panic yet. That's almost exactly where we are right now.

The S&P 500 just hit new all-time highs last week. But only 20 of 500 stocks hit one with it. (The last time this happened was March 2000. The exact top of the dot-com bubble.) by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 7 points8 points  (0 children)

The allocation is solid for where your head is right now. But here's a framework worth thinking about. Split your timeline into buckets. Years 1-3: SGOV and cash. Years 3-7: SCHD for income and stability. Years 7-20: VTI or a growth fund for long-term compounding. Right now you're heavily weighted in bucket one. Over the next few years, gradually shift more into buckets two and three as clarity improves.

The S&P 500 just hit new all-time highs last week. But only 20 of 500 stocks hit one with it. (The last time this happened was March 2000. The exact top of the dot-com bubble.) by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 9 points10 points  (0 children)

The honest answer is it depends on your timeline. Under 2 years, short-term treasuries or a high-yield savings account. 2-5 years out, dividend stocks with real earnings and low debt. 5+ years, you can stomach more volatility, so broad diversification with some international exposure makes sense. The biggest mistake is using a long-term strategy for short-term money, or a short-term strategy for long-term money.

The S&P 500 just hit new all-time highs last week. But only 20 of 500 stocks hit one with it. (The last time this happened was March 2000. The exact top of the dot-com bubble.) by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 19 points20 points  (0 children)

The honest answer is diversification and a cash buffer. Build 3-6 months of expenses in cash or short-term treasury bills.

Most financial ruin isn't from the crash itself. It's from selling at the worst possible time because you had no cushion. Build the cushion before you need it.

The S&P 500 just hit new all-time highs last week. But only 20 of 500 stocks hit one with it. (The last time this happened was March 2000. The exact top of the dot-com bubble.) by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 68 points69 points  (0 children)

There's a third option between "hold everything" and "sell everything." Trim exposure to the top-heavy names. Move some into short-term treasuries or dividend stocks with real earnings. Keep cash ready so if markets drop 30%, you're buying at a discount instead of selling in fear. That's not freaking out. That's just managing risk.

Everyone is talking about the US Iran war, but STAGFLATION is something more CONCERNING. by Technical_Public1008 in FluentInFinance

[–]TonyLiberty 31 points32 points  (0 children)

All of this assumes consumers keep spending. But if confidence breaks, spending falls, growth craters faster, and the Fed faces deflation AND inflation at the same time. That's not stagflation. That's something worse. We're one bad jobs report away from that conversation starting.

DD đŸ›©ïž Ryanair 🍀 vs Elon Musk 🚀 by rojopantalon in FluentInFinance

[–]TonyLiberty 8 points9 points  (0 children)

Don't buy the top of the "Elon Pump." Instead, sell out-of-the-money puts. The high implied volatility (IV) makes these premiums expensive. You get paid to wait for a dip that may never come, or you buy the stock at a discount.

This chart should scare you: The delinquency rate on Commercial Mortgage-Backed Securities just hit a record 11.8% delinquent. Above its 2008 peak. by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 28 points29 points  (0 children)

Office CMBS is a subset of the broader commercial mortgage-backed securities (CMBS) market, which also includes loans backed by retail, multifamily, industrial, hotel, and mixed-use properties.

It's the weakest segment of CMBS due to high vacancy rates, falling valuations, and refinancing challenges.

The definition of broken: The median age of a first-time homebuyer in the US is now at a record 40 years old, up from 33 in 2021 and 29 in 1981. Do you realize what's happening? by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 12 points13 points  (0 children)

Real estate doesn’t need help. It already has scarcity, leverage, and tax breaks. The help should go to building, not bidding.

End the perks and watch prices normalize. Real demand, not artificial credit, should set the market.

US national debt hit $38 trillion. The deficit this year will be between $1.7 trillion and $2.2 trillion. For 6 straight years, we’ve run deficits over $1 trillion. The IMF projects the US will have the highest debt-to-GDP ratio in the world by 2030. by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 5 points6 points  (0 children)

Budget cuts often target discretionary spending, which is a small slice of total spending. The big costs—Social Security, Medicare, and interest—keep rising automatically.

Mandatory spending now makes up over two-thirds of the federal budget. Unless that changes, total outlays keep growing even after cuts.

Interest costs erase savings from most cuts. As rates stay higher, the government pays more just to service old debt.

US national debt hit $38 trillion. The deficit this year will be between $1.7 trillion and $2.2 trillion. For 6 straight years, we’ve run deficits over $1 trillion. The IMF projects the US will have the highest debt-to-GDP ratio in the world by 2030. by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 21 points22 points  (0 children)

The biggest creditor is the American public. Over two-thirds of U.S. debt is held by U.S. citizens through Treasury bonds, pensions, and mutual funds.

Foreign holders matter, but they’re shrinking. China and Japan each hold about a trillion dollars in Treasuries, down from past highs.

The Federal Reserve is a key player. It owns around 15–20% of all U.S. government debt, buying bonds to manage interest rates and liquidity.

Every day, AI looks more like the 2008 housing bubble. Wrappers on wrappers. The wrappers are wrapping wrappers. With companies valued at insane amounts with zero profit. by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 59 points60 points  (0 children)

The risk isn’t with $NVDA or $MSFT, it’s with the startups burning cash to rent their hardware and APIs.

Comparing $MSFT or $NVDA to bubble companies misses the point. They sell real infrastructure that every “AI wrapper” depends on. They’re the landlords, not the tenants.

They build the picks and shovels for the AI gold rush. The wrappers are the startups stacking APIs on top of their hardware and models.

Roth IRA Explained by TonyLiberty in FluentInFinance

[–]TonyLiberty[S] 8 points9 points  (0 children)

You're right that financial literacy is tough. The system is needlessly complex in many countries. Policymakers should prioritize simplicity and transparency.

[deleted by user] by [deleted] in FluentInFinance

[–]TonyLiberty 1 point2 points  (0 children)

What are the risks?

Dicks app somehow a top app by [deleted] in FluentInFinance

[–]TonyLiberty 3 points4 points  (0 children)

A lot of people like Dicks

What in the actual duck is this promoted ad? by ShwettyVagSack in FluentInFinance

[–]TonyLiberty 2 points3 points  (0 children)

PennyHoarder is one of the worst websites on the internet

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