Alex, If an MBS is backed by 30 year mortgages, the MBS won't have a maturity of 30 years. It'll tend to (effectively) mature around 10 years or so as the underlying mortgages get paid off (house is sold, or mortgage refinanced). So, yes, as big MBS buys of the early 2010s come up on their 10th anniversaries, they are rapidly maturing. See my previous answer for MBS interest and the balance sheet. Short summary: the interest revenue doesn't find it's way onto the balance sheet--it gets paid out in expenses or to the Treasury.
Hello David. i have a question that not unrelated to this is video but maybe can you help me. retail sales are not adjusted for price so that mean that also not adjusted for inflation
Hello David I will start by thanking you for your videos, I have said before and I say again .. I think you are not getting enough appreciation about your page and you must market it more professionally because your content is very interesting and you simplify it so that everyone understands it. You have two questions: 1. Is job opening high a positive figure or not, unable to understand. 2. How do you know that GDP has increased but mostly by inventory, by what do you determine it? Thanks in advance
EL, Thank you for your very kind words. We did the videos for one of the classes we teach and used TH-cam because it was the easiest way for students to watch them. It never even occurred to us that anyone else would want to watch. We are happy that we are wrong and that people like you watch. I'll investigate ways to market them a bit more. On to your questions. The ratio of unemployed to job openings is a good way to access the overall tightness of the labor market: www.bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm It's reached a record low. The level of job openings has also reached record highs. As far as 4th quarter GDP growth being inventory driven, see here: www.bea.gov/sites/default/files/2022-02/gdp4q21_2nd.pdf Most reports focus on Table 1 as that gives the overall growth figures. However, Table 2 provides interesting insights, too. It shows the percentage point contribution to GDP growth from each of the rows. Row 40 shows that for the 3rd and 4th quarters in 2021, inventory growth had a big impact on the overall rise in GDP. This isn't a bad thing, and inventories of goods had been pulled down (high demand combined with supply chain problems). However, increasing inventories can't consistently drive growth.
@@bentleyuniversityec391mone6 First of all thank you very much for the quick response. Secondly I can tell you that I spend a lot of hours on TH-cam and the material you upload is very fascinating. I will go over the links you sent me, thank you very much. Indeed I saw in line 40 that inventory is high as you said, my question is is inventory considered GDP? A finished product that has not yet been sold is considered within GDP?
@@Erez.Levi.Stocks You're quite welcome and am glad you're enjoying our vids. Inventory does indeed count in GDP. Suppose Ford builds a car in the first quarter of 2022 but doesn't sell it until the second quarter. When should the car be counted as part of GDP? A case could be made for either quarter, but in most countries, it's counted when produced. So, inventory rises in the first quarter by the estimated value of the car, say $50,000. When the car is sold in the second quarter, inventory falls by $50,000, and consumption rises by $50,000. These two line items cancel each other out so that the car is only counted in the quarter it's produced. There are technical adjustments if the car sells for something more or less than $50,000, but these generally don't amount to very much.
Were there so many expiring MBSs because they were made 10 to 14 years ago? Also where does interest on the MBSs get into the fed balance?
Alex,
If an MBS is backed by 30 year mortgages, the MBS won't have a maturity of 30 years. It'll tend to (effectively) mature around 10 years or so as the underlying mortgages get paid off (house is sold, or mortgage refinanced). So, yes, as big MBS buys of the early 2010s come up on their 10th anniversaries, they are rapidly maturing.
See my previous answer for MBS interest and the balance sheet. Short summary: the interest revenue doesn't find it's way onto the balance sheet--it gets paid out in expenses or to the Treasury.
Hello David.
i have a question that not unrelated to this is video but maybe can you help me.
retail sales are not adjusted for price so that mean that also not adjusted for inflation
EL,
That's right. The news media tends to use "adjusted for inflation" and "adjusted for price [level]" interchangably.
Hello David
I will start by thanking you for your videos, I have said before and I say again ..
I think you are not getting enough appreciation about your page and you must market it more professionally because your content is very interesting and you simplify it so that everyone understands it.
You have two questions:
1. Is job opening high a positive figure or not, unable to understand.
2. How do you know that GDP has increased but mostly by inventory, by what do you determine it?
Thanks in advance
EL,
Thank you for your very kind words. We did the videos for one of the classes we teach and used TH-cam because it was the easiest way for students to watch them. It never even occurred to us that anyone else would want to watch. We are happy that we are wrong and that people like you watch. I'll investigate ways to market them a bit more.
On to your questions. The ratio of unemployed to job openings is a good way to access the overall tightness of the labor market:
www.bls.gov/charts/job-openings-and-labor-turnover/unemp-per-job-opening.htm
It's reached a record low. The level of job openings has also reached record highs.
As far as 4th quarter GDP growth being inventory driven, see here:
www.bea.gov/sites/default/files/2022-02/gdp4q21_2nd.pdf
Most reports focus on Table 1 as that gives the overall growth figures. However, Table 2 provides interesting insights, too. It shows the percentage point contribution to GDP growth from each of the rows. Row 40 shows that for the 3rd and 4th quarters in 2021, inventory growth had a big impact on the overall rise in GDP. This isn't a bad thing, and inventories of goods had been pulled down (high demand combined with supply chain problems). However, increasing inventories can't consistently drive growth.
@@bentleyuniversityec391mone6 First of all thank you very much for the quick response.
Secondly I can tell you that I spend a lot of hours on TH-cam and the material you upload is very fascinating.
I will go over the links you sent me, thank you very much.
Indeed I saw in line 40 that inventory is high as you said, my question is is inventory considered GDP?
A finished product that has not yet been sold is considered within GDP?
@@Erez.Levi.Stocks You're quite welcome and am glad you're enjoying our vids. Inventory does indeed count in GDP. Suppose Ford builds a car in the first quarter of 2022 but doesn't sell it until the second quarter. When should the car be counted as part of GDP? A case could be made for either quarter, but in most countries, it's counted when produced. So, inventory rises in the first quarter by the estimated value of the car, say $50,000. When the car is sold in the second quarter, inventory falls by $50,000, and consumption rises by $50,000. These two line items cancel each other out so that the car is only counted in the quarter it's produced. There are technical adjustments if the car sells for something more or less than $50,000, but these generally don't amount to very much.