Good episode on trading the order book and scalping treasuries with John Grady.
If you’re like me sometimes you’ll have a PDF file that you want to listen to passively while you’re doing something else. Here’s some Python code I put together to convert a PDF file to MP3 using Google Colab and Python.
This script can either process one PDF file that you select or process an entire directory that you can mount with Google Drive.
If your PDF does not contain text but instead is images you might try first converting it using OCR.
I’m working on creating some 3d models of properties that I’m interested in purchasing. In order to do this I need a bunch of JPG files to import them into Open Drone Map. This will create 3d renderings as well as topographic maps. The issue is I only have videos from my DJI. I didn’t actually take pictures. If you google MP4 to JPG there are a bunch of free online tools but there are two issues. The first is there is a maximum file size limit. The second is some will watermark the JPG files.
So here is a small Python script I created that runs on Google Colab. It mounts to your Google Drive so you can easily import and export the videos and images.
If you’re unsure how to mount Google Drive in Colab follow the steps on this other article I wrote on exporting your Audible books to MP3
The real estate market hasn’t only cooled but it appears to be pretty frozen. What I’m looking at is the contract ratio. This essentially is the number of houses under contract divided by the number of active listings on the market. First, let’s look at October compared to previous Octobers going back to 2017. Houses under contract represent 36.5% of the entire inventory. It hasn’t been this low in at least 5 years.
To put this in perspective, relative to the last couple of years, the peak was 332.4% of houses under contract relative to the number of active listings. Meaning, for every 3 houses under contract there was only 1 actively listed. This is a huge shift. But not only is this a huge shift it went from peak to trough at an alarmingly fast rate. This velocity is also relevant.
The average monthly sales price has seen a huge decline from $305.96 at its peak to $279.06 this is a 9% drop. Which doesn’t sound that bad. Except it happened in only 5 months. Again, the velocity is alarming.
Even more interesting is the average person who is selling a house is still listing their house at $326 per square foot. This means the average person who is listing a house for sale right now is overpricing it by 14.4%. This is leading the market to stagnate. Which will eventually cause a build-up in supply and then a huge drop in prices as people who “need to sell” their houses start drastically lowering prices. This will create a massive psychological problem for anyone who is actively trying to sell their house. Not to mention the buyers will see the accumulation of price cuts and know the price isn’t as advertised. There will be room to send out lowball offers. Which some will take, causing comps to adjust and spiral downward.
Let’s talk about the listing success rate. These are houses that actually sold rather than expired or cancel. In October of 2022, this number dropped to 64%. We haven’t seen these numbers since 2011. Grant it, there is one day left in the month…
This brings me to my final chart for Arizona, price cuts per week. This chart is how you know the market in Arizona is getting annihilated. 3,645 people cut prices on their listings last week alone. There are only 19,587 active listings. This means 18.6% of all houses active in Arizona cut their prices last week and it’s not only last week. This is what it has been averaging almost every single week since the end of June. Again, it’s the psychological impact that is by far the most concerning thing here. Buyers are not going to pay “retail” prices when they see price cuts across the board. No market functions this way.
Let’s talk about the root cause of this. We all know because it’s been in the news. The Fed has had to raise rates to combat inflation. Which is 100% legitimate and far more dangerous threat to our economy. But I digress, mortgage rates haven’t been this high since 2001/2002. And let’s be clear the average buyer doesn’t care what they pay for a house. They care about their monthly payment.
So, let’s take a look at the median sales price of a house vs. income per capita. This oscillator in my opinion is by far the best predictor of if houses are too high or too low. This is the chart to watch if you’re investing in real estate.
The new CPI report came out today. at a .43% monthly increase. This means I-bonds starting November first will only yield 6.472%
October 28th is the last day to purchase I-bonds at a 9.62% APY. Here are some things you need to know.
The 9.62% yield is only for the next 6-months. I-bonds get reassessed every 6-months. Therefore, to establish what your annual yield will be here is the simple math:
Yield until the end of October – 9.62%
Plus the yield starting in November – 6.472%
equals 8.05% for the next year.
There are a couple of things to know about I-bonds.
You lose 3-months of interest if you cash out before 5 years. So your effective yield will be 8.05% minus 3.236% divided by 2 (only half the year) then divided by 2 again to get the 3-month yield equals 1.618%. Making your effective yield if you cashed out in 1-year 6.432%
I-bonds actually compound semi-annually. So your first 6-month yield will be 9.62%. Let’s say you invest $10,000 (the maximum). After 6-months you will have $10,481. So the second half of the year you’re actually earning 6.472% on $10,481 not your original base of $10,000. So the second 6-moths you would net $339.17 + $10,481 ( your initial investment plus the first 6-months interest) This gives you an effective return of 8.2%, not the initially calculated 8.05% from our first formula.
There is something else to keep in mind about I-bonds. They don’t actually need to be purchased until the second to last business day of the month. This means you essentially get a free month of earned interest! Even if you buy an I-bond on October 28th it is technically just an October I-bond. The date is not relevant. So it will actually mature on October 1st of the following year. Not the original date of purchase.
So the math for calculating this is just our original 8.2% divided by 12 to get our monthly yield of .68%. You can then multiply this by 12 and divide by 11 to determine the actual yield after 12 months given that you only invested for 11 months. This works out to be 8.95%
Yes, but no. Most people believe that you can only purchase $10,000 in I Bonds per year. This is in fact true. However, most people also do not realize or take advantage of the fact that LLCs can own and purchase $10,000 of I bonds per year. There are multiple references to I-Bonds being owned by LLCs on their website. In Arizona, it takes 5 minutes and $50 to set up an LLC.
Questions and Answers about Series I Savings Bonds
Treasury Direct entity accounts
