Red Lion

Then Brookfield and Apollo can buy the whole mess out of bankruptcy for a song!

FICA tax really only taxes the w2. If you’re talking about placing it with no limit then high earners will simply incorporate. There’s already a whole class of CPA’s that survive off of doing k1s for smallish s corps for exactly this reason. I could only imagine how huge this would get if there were serious stakes.

I like the VAT idea but a wealth tax and fica are both extremely easy to work around and will be rife with issues. Also what about a sin tax? Seems like states like Nevada seem to do well with this. Maybe Congress should legalize drugs but then impose a huge tax on users, mandate that they be sold in pharmacies, and impose life prison sentences for selling impure quality. This way every time I pass a junkie nodded out on the street, at least I can be thankful that my taxes are being subsidized and they got what they paid for.

I’m assuming this advice is using tax advantaged accounts? Fixed income seems attractive to me, but after tax not nearly as much other than trading a distressed debt or maybe gambling on a very long duration bond for the price swings.

I totally agree with you, but I think the housing crisis, at least in the USA is about so much more than nimby now. There’s a critical labor shortage of skilled construction trades and until we have robots, none of the youth are getting into the trades.

This rings so true to me. I’m in the middle of three residential value add projects if you include my primary. I don’t even know how to do it (yet) but I know a lot more than I did this time last year, and all indications are that could flip these projects for nice returns even in this market backdrop, even as a beginner. On this point there’s a huge shadow inventory of old homes that need to be updated and not much work force skilled in providing this service. As a father of teenagers, I’m not seeing any desire in the younger generation to get into construction trades (even though the numbers look great for the lack of necessary education).

This is the exact sort of rationale that makes me want to hide in real assets. In the short run, higher rates act like a lid on the price, but in the long run they should still do ok in real terms in an inflationary debt spiral as long as they're financed appropriately. A lot of other people think I'm stupid, and these higher rates and low affordability are going to cause a huge correction in housing and stock prices. They might be right I really have no idea, and plan to hold on through the market cycles. I think this inflationary debt spiral is going to happen, whether it's right now or maybe a decade from now. Not sure what I want to be holding when that happens, but real estate seems OK especially if it coincides with a lot of on-shoring and wages rising faster than GDP.

Trimmed GOOGL and exited BUR now that both were long term gains.

Trimmed ARES and sold out of pcyo.

Sold off all of the preferred shares that I bought a few months back. These are short term gains but I have places I’m more excited to invest. Sold a big chunk of Vno preferred for a 40% gain in about half a year. Also sold agnc and Ritm preferreds for around 15-20% gains. This puts me back to 3% cash and off margin for the moment.

What do you think we are doing wrong? Is it the weather? The problem seems to be getting worse in California even as our population shrinks, seems like it can’t just be a housing issue. It definitely got worse when we decriminalized drug possession and theft but it was already a crisis before any of that.

It’s because they have learned if they spend 750 hours a year they can take farming losses against their regular income. Said losses consisting of accelerated depreciation on pickup trucks, atv’s, barns, etc.

I’ve always felt like the end game is yet more QE, but trying to position myself where I’ll survive either way. I just don’t see how we get out of this debt problem without inflating our way out, and it seems like QE is going to be needed to thread that needle. Or money printing, but QE seems much preferable. Everyone seems worried about reserve status, but are other major currencies any better? Is this all just a game of chicken where the fed just has to be higher for longer (than the ecb? China? Japan?) and then go back to QE and zirp after all the other banks do the same?

The absolute worst kind. Agreed.

I'm not sure either. Here in my town in sunny California we still have homeless people dying due to exposure, especially around this time of year, so I'm sure it's terrible in Canada. In my city, we always put up a homeless shelter at taxpayer expense, then the homeless advocates file a lawsuit in federal court alleging some shortcoming (too hot, too cold, not enough clean needles, etc.) which results in a new injunction, a new plan, a new lawsuit. Meanwhile the homeless are ruining the city, and the state, and flocking here from all over the country. It's disgraceful, but I don't know what the solution is.

Maybe your Canadian homeless are different than the ones here, but apartments don’t fix the problem. Homelessness in California, and this is the epicenter in the USA, is not a housing shortage issue. It’s a drug and theft free for all, and all the losers in the entire country are gravitating towards the states with a combination of lax laws and warm climate.

Very interesting perspective SD. I see a continued demand for suburbia in American young people they’re just moving to more affordable sun belt states. But maybe they will shift to mass apartment living.

I agree. NIMBY is seared onto the human psyche. At least the ones that already own homes. Plus the price of finishes is just ridiculous, and honestly there’s a lot of potential for those prices to continue going up in an onshoring world. Can you imagine buying solid hardwood flooring or stone slabs from the United States? Then literally unless we use robots, the labor costs are guaranteed to keep going up because we don’t have the skilled work force, we aren’t bringing in skilled construction immigrants (at least not on purpose), and the current generation has even less interest in construction than joining the military. 10x more kids that want to be lawyers than plumbers, and the plumbers can easily earn more money on average.

Just reading this again, I agree this is totally obvious and it should happen. If we were playing a game of civilization where I controlled everything that’s exactly what I would do. Probably use 3d printed concrete houses or something next gen like that. I’ll be shocked if it actually happens though in the next decade. If it looks like it’s starting en mass and at affordable price points of around 200-400k per unit after finishings I would really reconsider my housing investments.

@gfp I'm not saying that per se inflation is a big deal. I think a lot of people are worried about the effect of 5% long treasuries and 8% mortgages on asset valuations. So inflation might very well come down, and then so will the 5% treasuries and 8% mortgages, and real estate and bonds will do fine, and probably lots of stocks too. But the only reason for mortgage rates to stay at 8% for several years is if inflation does not come down.

What's funny is that no one is happy about the GDP growth because they all have apoplexy about high rates and inflation. Maybe I'm just talking to the wrong folks. It seems to me like maybe we are entering a new era of higher higher wage inflation, higher GDP growth, and perhaps as a result higher rates. The wage inflation seems almost guaranteed in the USA unless somehow AI keeps it at bay. We have an aging retirement age population that's richer, healthier, and wants to spend; a working population that doesn't want to work and is sick of their low quality of life; an immigrant population that's barely growing and seemingly demanding higher wages than previously; onshoring; (hopefully not) World War III.

You and I must somehow be wired to think alike. All I hear is the sky is falling because affordability is terrible because interest rates are up significantly. But stepping back, the demand situation is huge with most millennials wanting to buy homes and gen z as well. Now thanks to Ozempic all the diabetic boomers are gonna be kicking for another 20 years. Millennials bought over 40% of all housing in 2021 and down to 8% I read currently. On the supply front we have a lot of new multi family hitting the market, not a ton of single family homes, and construction on those is slowing. So lots of pent up demand. Not a lot of supply coming. And guess what, it was far far cheaper to build in the time frame above. As a percentage of family income. My parents built a gorgeous custom home in 82 on one bachelor’s degree level income, and I know a ton of other boomers did the same thing. Only the wealthiest millennials/gen z will have money for custom builds. Most can’t afford new builds in the sunbelt until rates come down and definitely can’t afford building in the previously desired coastal and west coast markets. So why are prices going to fall? There’s not any supply. The marginal buyer pushes the price, and we aren’t building enough sfh and the millenials definitely aren’t going to figure this out anytime soon. As soon as rates drop you have a huge pent up demand that’s going to flood back into the market. But even while rates are high, this is increasing the deficit spending, and as a result of high inflation. Construction is one of those pieces of the market that seems to inflate structurally faster than average (like healthcare but more volatile), so if we stay in a high inflation and high rate period for a matter of years, this should be a tailwind to housing since it continues to hold back supply, increase cost of new construction, and presumably the smart/lucky millenials/Z’s will benefit from this inflating economy and bid ever higher prices for their piece of the American dream. Either way housing seems like a solid bet right now unless your over leveraged. There’s clearly potential for a correction/hiccup as the market works through affordability issues, but I don’t see any reason to think the existing housing stock is overvalued on the whole.

Sorry if my post was worded offensively. Paleo is awesome and like I said, it actually did work without medication at first. I still eat super clean 95% of the time. I think most people don’t develop t2d until they’re in their 50s or 60s after decades of garbage diet, and I think paleo might be sufficient alone for these folks. I’m just so lucky that I have these drugs at a young age. My grandmother and great grandmother both were on insulin younger than me (39) and died young too. Hoping I avoid this fate, and hopefully they come out with something better.

Because paleo quit working years ago? I’ve been diabetic for 20 years. This is after several years of fully controlling diabetes with an A1c below 6.5 with zero medication with paleo plus exercise. Then even flirting with a 25 bmi, I had to add metformin about 8 years ago. Then I had to add victoza, up to the max dose around 5 years ago. Then last year when on the max dose of victoza, still eating a paleo diet, my A1c hit 11 and I caused serious damage to my eyes, now I have prescription glasses. I went on insulin until I could find a supply of the new glp drugs, because everyone in the goddamn country wants them for weight loss. And I literally just explained it in my post if you bothered to read. And now I basically eat paleo plus legumes and whole grains with way more fish than before. Anyway, this type of post demonstrates some extremely typical ignorance from people who don’t understand that paleo doesn’t actually cure fucked up genetics. But it DID help for many years.

I’ve heard a lot of stories like this. I’m personally on mounjaro, and while I was essentially on a low carb paleo type diet for much of the last 15 years, I’ve found that the medication has completely taken away cravings for certain types of food. Personally, this has manifested more as an aversion to greasy foods. I used to eat a ton of grass fed beef, and now I’ve become almost completely pescatarian. I’m actually spending quite a lot more on food, but that’s because I’m privileged to just buy $25/lb fish instead of $10-$15 meat. I’m also eating the most carbs I’ve eaten in the last 15 years. And that’s been amazing. But stuff like legumes, whole grains, fresh fruits (mango’s, pineapples)and starchy vegetables that I couldn’t used to handle without killing my blood glucose numbers. I’d say my cravings for sweet junk food have subsided. I have avoided eating these foods for a long time, but it’s become noticeably less significant, maybe it’s because I’m getting more healthy carbs in my diet. Anyway I’ve actually reduced the fat in my diet, increased carbs, probably kept protein similar on the seafood front (I might need to watch the mercury.) All this to say, I 100% believe junk food companies will be hurt on volumes if there is wide glp adoption. Having experienced the benefits of these drugs I’m a believer that there will eventually be widespread adoption, but it seems very uncertain if that would occur before the patents start expiring on trulicity or Ozempic. With all this said I can still eat a piece of candy, or garbage from Taco Bell, or potato chips but I tend not to eat a ton.