Gregmal

It’s all the equivalent of having a hang nail and being told the right thing to do is to cut your hand off. Only to find out the doctor advising you makes a shit ton of money when that happens, and that other guy found a way to take out an insurance policy on your hand, and the third guy you got an opinion from is just an idiot who listens to the first two. Higher prices suck but they happen for many reasons. Not all bad and some because of government stupidity. I’m not sure how the solution to squeezing someone at the pump or at the grocery store is to take their retirement money, home equity and their job security….seems sketchy. I am not aware of any middle class folks who bought vacation homes in 2010.

The specific aspects are that workers have tremendous leverage because of all the help wanted signs. This is bad for big corporations and bad for shareholders. The solution many are proposing is to eliminate the need for all those jobs. Who benefits from that? Energy and housing issues are not solvable in a constructive way through rate hikes. Most else is simply supply chain related. So again, not really much rates are gonna do. Yet people keep lobbying for rate hikes? Why? Again who benefits? Is bringing rates to 10% gonna produce more oil or wheat? Some things just have need to play out on their own. The more you mess with them, the more problems get created.

Exactly. This notion that we need to stop everything for the lower dung rung that can’t get it right no matter what, is ludicrous. Same as how teachers in school need to teach to the middle core of the class that’s interested, hard working, and capable. Don’t worry about the ends of the bell curve. Especially not the dopes sitting in the back refusing to pay attention or incapable of showing up to class. As someone who fell into the later category, there was nothing anyone could do to force me to be interested in stuff I just didn’t want to do. Same goes for much of the population when it comes to providing for themselves. The focus should be on those who want it, and are willing to put in the work. And for these folks, the economic situation is about as good as it can get. Would be awfully shameful if the Fed attempted to solve a problem it doesn’t have the tools to handle, because a bunch of loud mouths with more resources than they need want higher interest or better investment returns…. And FWIW I still don’t see a scenario where the US housing market falters. From day one of COVID the path forward was going to be rents and housing prices taking turns supporting each other and buoying the residential real estate space. If the answer right now is to price normal people out of the housing market, rents have to go higher. To the degree housing continues to be productized the way it is, there’s going to be a ridiculous supply and demand imbalance on the institutional side…as there has been. Everyone worries that the public market reacts first and then the private….and maybe that’s true. But it’s not really that relevant because it always reacts hastily first. Like some investors, if you panic and sell shit down at the first sign of trouble, you may look good in that one instance, but if you do that all the time who cares because for everyone one time the public market leads, there were 19 other times where it “lead” and was wrong, so why give it credit for 1/20? Private market for residential real estate is still white hot.

To be fair, the Fed hasn’t really done anything yet. But again, it’s COVID hysteria playbook all over again. Folks take their positions, start screaming and yelling, the media makes the stories unavoidable and makes terrifying people it’s objective, and before you know it some guy will be crying on TV about how his father couldn’t afford Manischewitz Grape juice this Passover while his minions are liquidating the rate swaps. The big question IMO is does the Fed buy the bs and overreact, or does common sense prevail and some acknowledgement that their tools don’t solve the problems occur?

You have no better look through as to what the issue and what the solution is than how COVID was handled. The government thought(or wanted) to try to control something it has no control over. And just messed things up even more, especially in certain states/areas. The current inflation is a byproduct of that. The answer isn’t to take more measures that just create other, bigger problems and don’t have any bearing on the inflation problem…it’s to back off and let it play it’s course. If people can’t afford things, prices will come down on their own. Purposely making them unaffordable? Eh that’s pretty diabolical. Now imagine doing all this knowing the end beneficiaries are big corporations and people with excess capital to deploy?

Japan has had zero rates for decades. The issue is that you think the Fed can solve the inflation problem and they can’t. Rates have nothing to do with it. The issue larger scale, is that others know they can’t but are pitching it as a solution, for their own benefit. Cough, Bill Ackman.

I recall hearing how savvy some of you guys were holding all that cash to go and buy SHOP at $700 or those GOOG shares I made 6x my money on and sold to you guys at 2600. Don’t confuse all this with simply not investing wisely. There’s COVID fad stocks which I guess are the only thing to fit your description of “2 year wealth event”….but those were a clear bubble, not the rest of the country, economy, and world. I mean even simply enough, you seem to know oil is going to $150…you rather own cash than oil futures? Rates rising pushes people to rent, private market for MF has barely budged, and rents are soaring, rather own cash? None of this stuff logically, makes very much sense outside of the short term narrative.

Two years? Did you miss the entire decade?

You aren’t addressing any of the points. You’re just stating in a roundabout way: -everything is a bubble and the Fed accidentally crafted a recovery from GFC and those that sat in cash poo pooing the restoration of the economy and missing the lions share of the gains now deserve to get interest? I won’t even touch on the insanity of screaming inflation but holding cash either. Unless of course again the goal is to simply worry about what the market will do tomorrow. Didn’t someone say speculators vs investors earlier?

Essentially the argument I’m hearing over and over again is that in order to solve the problem that some things, mainly little daily life things, like grocery prices, many of which are supply chain related, being more expensive, we need to whack everyone’s jobs and net worth? If oil goes to $150(I think that’s actually conservative) you’ll pay another $25 a week for gas. Solution? Let’s whack $50k off your net worth! Makes sense. Got it. I mean if $150 oil is a problem, won’t that naturally slow things down on its own? How is the answer to high housing prices to make housing more unaffordable. If folks have too much debt(this is thrown around a lot but not true at all) make debt more expensive? Folks like my wife, and @Spekulatius might pass up higher paying jobs because they don’t need them, but is the solution to take that option off the table for folks who do?

Well if certain folks have their way I’m sure those folks will feel even better down the line when their retirement plans that are invested in index funds get walloped. Or when they lose their jobs cuz we have room again to boost profit margins…but hey, it ain’t that bad, an institutional investor will be happy to pay you a 10% premium to 2021 prices for your home… So again, maybe stuff isn’t perfect, but screaming and scaring everyone about how bad it is when the proposed solution is miles worse….it’s not like we haven’t seen this game before. Hasn’t even been 2 years since the last one.

Little more EPSN as well. Added to Tesla short.

What are the number of millionaires over the past 1/3/5/10 years? I’d say that’s more so normal hardworking people benefitting than just a “rich” benefit. At some point everyone needs to get “rich” or they spend the rest of their lives a servant in the hamster wheel. So despite all the popular banter and Fed bash…you could say they did their job. Now folks think it’s beneficial(to whom lol?) to undo it…why? So as @widenthemoat mentioned earlier…people with more than they need get better investment opportunities? Blackstone can buy more residential space in cash?

Exactly. You’re comfortable and don’t need it. If you did, you would.

I can live with getting a 7th home, hopefully in Florida or South Carolina when all the people looking for their first get cleared out of the market due to higher rates….what’s the point of that though? Who needs it more?

I’m not bothered by it. I’m wealthy. It’s all good. It’s just a little fucked up the games that get played though and I’d never really understood or believed the whole “game is rigged” and the “average guy always gets fucked” stuff until the last couple years.

The number of job openings indicates people are not bothered and they are comfortable. Gig economy is also a huge lever for people to make more money. I’d challenge anyone to find a job that’s only increased pay 6% since December 2020….it’s academic crap the same way the CPI last year said inflation was only 8%. It was probably closer to 20%.

This argument legit sounds like some of the old people at one of the HOAs I’m on the board of. OMG our dues when up $70 a month! This is ridiculous. Well, your home values increased $150k….. additionally you’re all getting new roofs. But hey, I’ll pay your $70 a month if you give me the home appreciation? Oh, no? didn’t think so.

I mean in another thread Viking you listed the home equity appreciation and what it equates to. That’s just one angle. Then there’s job market leverage at the workers hands. Now here you’re saying gas and grocery bills negates all that….seriously? I’ll take it ones home and primary income are bigger components of value to than their discretionary grocery bills and gas costs..but hey, just say inflation, inflation, inflation. It’s the new bogeyman now that people stopped falling for COVID.

BATRA

Only if you purposely ignore wage growth as beneficial to the worker.

Bingo.

Well, if it wasn’t clear, the gist insinuates that there currently seems to be a coordinated effort to “knock people down”. Do they succeed? That could have some market implications. The folks running the media and the establishment have managed to spin a healthy consumer and tremendous household prosperity plus the best jobs market we will likely ever see, into something that’s bad and must be stopped. Is it just a coincidence that this favors the wealthy and big corporations?

Paul Pelosi is tired of having to pay 35x for Microsoft shares! It’s driving him to drink! We must get the pee ons out of the market.

In another thread there’s info stating that household wealth is up, liquid assets are up, and folks in general, are in really good shape. First thought is….wow that’s good. Nope! we need to put an end to this widespread prosperity. Some system eh? All those folks are comfortable…we need to make them uncomfortable again. Make them work more hours. Maybe force their employers to fire them. Can we find an excuse? Oh, look, the lowest 10% who is utterly useless and helpless and regardless of the environment, incapable of succeeding…is really feeling the pinch! We must slow things down for them.