Marks describes personal borrowing rates falling from 22.25% in 1980 to 2.25% in 2020.
“And forty years later in 2020, I was able to borrow at two and a quarter fixed for fifteen years.”
Marks describes Fed funds rate declining from 20% in 1980 to zero forty years later as dominant financial factor.
“Forty years later, the Fed funds rate was zero, and I had a loan outstanding from bank at two and a quarter.”
Marks says interest rates fell 20 percentage points from 1980 to 2020, the most important financial event in fifty years.
“So the decline of interest rates by 20 percentage points over that period was a dominant factor in the financial world.”
Marks forecasts Fed funds rate will settle between two and four percent, not zero to two.
“what I said in the memo is that rates are likely to be between two and four, not between zero and two, the Fed funds rate.”
Marks illustrates how refinancing environment shifted from 800 million at 5% to 500 million at 8%.
“You went to the bank. They said we'll lend you 800,000,000 at 5%. Now the loan is up for renewal. You go in. They say, fine. We'll lend you 500,000,000 at 8%.”