Month: December 2023

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“They are in very good shape,” says Brian Moynihan on the U.S. consumer.  “They have money in their accounts; they’re employed, and their wages are growing.”

By Pucklore | December 21, 2023 | Comments Off on “They are in very good shape,” says Brian Moynihan on the U.S. consumer.  “They have money in their accounts; they’re employed, and their wages are growing.”

BofA runs the largest consumer banking business in the country.  Between November of 2022 and November of 2023, customer spending was up about 4.5% with December projected to be about the same.  With unemployment at about 3.9%, the consumer is…

A few years of higher for longer could be good for the economies’ soul. If the Fed lowers rates, it’ll recharge the buying frenzy and real estate inflation it should want to cool.

By Pucklore | December 18, 2023 | Comments Off on A few years of higher for longer could be good for the economies’ soul. If the Fed lowers rates, it’ll recharge the buying frenzy and real estate inflation it should want to cool.

In the Midwest, rents are up about 40% just within the last few years.  The job market is strong.  Yes, stimulus money has largely been spent, but jobs are plentiful, so tenants can affordably pay the higher rent.  There aren’t…

The FOMC statement basically says economic activity is good but not great.  They are in wait-and-see mode.  So if the economy is resilient, why lower rates?

By Pucklore | December 15, 2023 | Comments Off on The FOMC statement basically says economic activity is good but not great.  They are in wait-and-see mode.  So if the economy is resilient, why lower rates?

Since the early 1980s, rates have been on a downward path.  However, debt growth has accelerated as well, and in 2020, a new trend upwards may have emerged. Could the fiscal stimulus and $4 trillion debt issuance in 2020 have…

Dan Wang of Hang Seng Bank says that, in China, deflation will intensify in 2024 and residential home prices will continue to go down.

By Pucklore | December 12, 2023 | Comments Off on Dan Wang of Hang Seng Bank says that, in China, deflation will intensify in 2024 and residential home prices will continue to go down.

Income will slow down and people will postpone consumption, as they expect declining prices.  For unskilled labor, it’s relatively easy to get a job.    However, higher skilled jobs are more difficult to find, as these job openings have decreased over…

1970s and 80s apartment buildings in 2021 and early 2022, not ideally located, were selling at 3.5% cap rates, says Lee Everett of Waterton. He says “dark days” lie ahead in multifamily.

By Pucklore | December 7, 2023 | Comments Off on 1970s and 80s apartment buildings in 2021 and early 2022, not ideally located, were selling at 3.5% cap rates, says Lee Everett of Waterton. He says “dark days” lie ahead in multifamily.

In Q4 of 2021, over 150B of capital transacted in apartments.  In all of 2021, almost $400B sold.  The next biggest record was 2019 which was about $190B. Mr. Everett says 700,000 renter households formed in 2021 which was 2.5X…

Recession, no recession, inflation, deflation – interest rates should be the same or higher throughout 2024, because Federal Debt to GDP is 120% now, and Econ 101 graphs should actually be applicable now.  The inexorable rise of interest rates. 

By Pucklore | December 5, 2023 | Comments Off on Recession, no recession, inflation, deflation – interest rates should be the same or higher throughout 2024, because Federal Debt to GDP is 120% now, and Econ 101 graphs should actually be applicable now.  The inexorable rise of interest rates. 

Jim Grant and Jim Bianco discuss the bear market in bonds which began in 2020.  Mr. Bianco’s conviction is a 5.5% 10-Year in 2024.  Could a Lis Truss moment hit the U.S. whereby bond markets enforce fiscal discipline that government themselves will not?

By Pucklore | December 5, 2023 | Comments Off on Jim Grant and Jim Bianco discuss the bear market in bonds which began in 2020.  Mr. Bianco’s conviction is a 5.5% 10-Year in 2024.  Could a Lis Truss moment hit the U.S. whereby bond markets enforce fiscal discipline that government themselves will not?

Mr. Bianco reiterates the prior 13 years of interest rates were anomalous to which Mr. Grant adds that 5-6% is about the nation’s long run average.  Interest rates still haven’t gone high enough to “murder” anything – they will, just…

Former Dallas Fed Pres. Richard Fisher: “The real question for me is not the Fed here; it’s the auction schedule of how much and who is gonna digest over $800B in offerings of the Treasury… in the first quarter (of 2024).”

By Pucklore | December 2, 2023 | Comments Off on Former Dallas Fed Pres. Richard Fisher: “The real question for me is not the Fed here; it’s the auction schedule of how much and who is gonna digest over $800B in offerings of the Treasury… in the first quarter (of 2024).”

The U.S. is refinancing over half the Treasury debt over the next 3 years which has a current cost of carry between 2-3%.  The new debt, at the current rates, will double the cost of carry.  “We’ll have to see…

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