Quote from @Michael Wooldridge:
Quote from @Bruce Woodruff:
@James Hamling My man, that was so well said. I especially took note of the following comments:
"The Fed VERY CLEARLY said from the start exactly what they were going to do with rates. They said what there target was, that they would keep fighting inflation via rate hikes until they hit that goal"
"I will give a F about SVB AFTER every small business lost during moratorium get's a bail-out for the exact $ there business was worth the day before moratoriums"
Well said but weren’t you calling for housing market values resetting 7-8 month ago? his whole post argues against the idea of housing values dropping.
Me? Housing prices 'resetting", as in back to pre-covid? No, never have said anything of the sort.
Fall '22' I forecasted a market Consolidation Event over winter '22'/'23', with median home prices stepping back 7-14% on national average, with localized market specific deviations ranging as high as +/- 30%, market specific dependent.
And with that i detailed how winter markets have a normalized "step-back" action so in many markets it would be a "more normal" market cycle. But most on BP called me nutz, argued the sky was falling, no way prices would hold, that everything would collapse and crumble and we were on verge of a huge discount buying spree. Well, here we are, what are the #'s. Turn's out what people called me nutz for was actually a bit pessimistic because results were even stronger than I forecasted. I did accurately forecast the volume collapse, which was a primary driver to people arguing with me saying I made no sense forecasting such a big volume drop but prices holding so strong at same time, people said not possible. Well, obviously was because that's exactly how it happened.
Bit a "reset", lol, no, 2019 is long gone and never coming back. That's always been the reality.
Now going forward, Oh-Man this is "the" most epic of uncertainty. I would coin this chapter "Zeus's Decision" because we will experience massive differences all decided upon what comes down from "Mount Olympus" and the "God's Of $".
They could choose to abandon inflation focus, press on economic strength, even actions that act as liquidity injection, feed wage inflation, and let things run "hot" justifying it as facilitating maximum velocity of the market to allow the market find it's equilibrium. I doubt this direction but, there is lot's of political pressure for it.
Or, it could be "damn the warning bells, FULL SPEED AHEAD" and as inflation readings come out which by all forecast measure is considerably higher than J-Pow's desire, jest keep drawing the noose tighter and tighter, strangling the life out of the middle-class, until inflation falls into his "happy-zone" at the expense that things could be in cardiac arrest to do so, and than it's a tail-spin, so than they start injecting liquidity rapidly, and "shizam" we have a bi-polar on-off, hot-cold, economic cycle of big swings.
I think the later is more probable.
But we also have major election cycle, and telegraphing already of major political meddling, so what new x-factors will that bring.
This is going to be a very interesting ride for sure. I am not willing to make any forecast as of yet, and I and those around me say "oh wow, you the "Oz" who predicts the un-predictable, will dare a call on the most wild of call, not willing to even say anything, holly-cow that's not good", yeah, exactly. When it's too big a jump for Evil Knievel to even dare, that's saying something.
I do know this, I would NOT want to be dollar heavy, NO WAY! And, NOT in margin on a brokerage account, uh-uh. Follow what the big $ is doing, and they are racing into ASSETS. I have NEVER, in all my decades in Real Estate and investing, ever seen or heard of the kind of capital deployment into assets I am seeing now. TODAY.
Investing alone does not justify these kind of levels, especially not at these returns. This is a "life-boat" action, this is about securitization more than returns.
All this talk about SVB and $ leaving it for last while, has anyone asked where that $ has gone? Where it was going? Here's a fun fact, look up the Real Estate holdings by some of big names of silicon valley, yeah that may shock some. And that's just what you can find. Anyone curious how many millions meta dumped in R.E.? Anyone interested why Bezos is a R.E. billionaire now? Doesn't it seem odd that tech is moving capital into R.E.? Why oil is moving $ into R.E.? Why every sector/investor of big $ is moving capital into R.E.?
