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The Sahm rule is based on history and works 100%… until it doesn’t.

By Pucklore | August 3, 2024 | Comments Off on The Sahm rule is based on history and works 100%… until it doesn’t.

The yield curve was basically infallible as well, so declaring we are headed imminently towards recession could be wrong. While a bit lonely today, I shall stay in the higher for longer camp. For example, on July 5, 2022, when…

If the dual mandate is stable prices and unemployment, seems like unemployment at 4.3% isn’t terrible, and the Fed should focus on the inflation rate (3%). 

By Pucklore | August 2, 2024 | Comments Off on If the dual mandate is stable prices and unemployment, seems like unemployment at 4.3% isn’t terrible, and the Fed should focus on the inflation rate (3%). 

So the stock market is just off its historic high around 5,500 on the S&P.  Unemployment at 4.3% is hovering well below its long term average of 5.7%.  GDP growth is doing well at 2.8% YoY.  We’ve had a 15…

The Fed should not lower interest rates at the September meeting.  Based on my local markets, we are operating at the Neutral Rate.  I’d even argue for a 25 bps increase.

By Pucklore | July 11, 2024 | Comments Off on The Fed should not lower interest rates at the September meeting.  Based on my local markets, we are operating at the Neutral Rate.  I’d even argue for a 25 bps increase.

Why are we at the Neutral Rate?  Because some of the profligate easy money home buyers that bought late-and-large on debt are selling now.  Many of these homes have been completely gutted, too but are now for sale indicating their…

So sellers are waiting to list their homes, because (as always) rate cuts are just around the corner. And buyers are waiting to buy, because (as always), rate cuts are imminent. 

By Pucklore | June 24, 2024 | Comments Off on So sellers are waiting to list their homes, because (as always) rate cuts are just around the corner. And buyers are waiting to buy, because (as always), rate cuts are imminent. 

But what about this scenario? The runaway national debt forces higher rates.  Will buyers retreat and sellers sell to make a market then? In my local markets, I’m seeing sellers already selling and buyers cherry picking the right properties.

Do higher rates really hurt Main Street more than Wall Street?  I’d argue we need to raise rates to loosen up the finish on profligate single-family home and multifamily “investors” who bought at ridiculous cap rates – like sub 4%. 

By Pucklore | June 18, 2024 | Comments Off on Do higher rates really hurt Main Street more than Wall Street?  I’d argue we need to raise rates to loosen up the finish on profligate single-family home and multifamily “investors” who bought at ridiculous cap rates – like sub 4%. 

Lower rates, by definition, raise asset prices.  Also, in lower rate environments, non-recourse type private equity firms and individuals with more unlimited capital means and relationships are able to acquire assets more easily than the normal home buyers.  And many…

With High Debt and Deficits, a Gangbusters Economy and Impending AI Job Displacement, the Fed should consider Hiking Rates another 25 bps

By Pucklore | June 12, 2024 | Comments Off on With High Debt and Deficits, a Gangbusters Economy and Impending AI Job Displacement, the Fed should consider Hiking Rates another 25 bps

In a couple years, the United States should experience a complex and rapidly changing economic landscape.  Looming on the horizon are potent threats that could converge to trigger an economic collapse by 2027: unsustainable budget deficits and widespread job losses…

So a 100 bp “overage” in the T-Bill rate is the culprit of higher inflation? I think businesses are just raising prices, because they can now.

By Pucklore | May 27, 2024 | Comments Off on So a 100 bp “overage” in the T-Bill rate is the culprit of higher inflation? I think businesses are just raising prices, because they can now.

If T-Bill revenue is about $300B per year based on $6T outstanding at 5%, and foreigners own 30%, that’s about $200B of income here in the U.S.  Berkshire Hathaway alone takes about $9B of that with other major corps like…

If the U.S. economy is falling off the edge of the cliff, I don’t see it this year or even early next year. 

By Pucklore | May 10, 2024 | Comments Off on If the U.S. economy is falling off the edge of the cliff, I don’t see it this year or even early next year. 

My small business tells me that people are just consolidating.  Those that work are working harder and maneuvering to make ends meet.  And the ones that don’t work are still hunky dory.  I’m more of a “Silver Tsunami” subscriber.  And…

I got another old lady hoarder house flip – as-is.  These homes are always the most disgusting… but always become my favorite. 

By Pucklore | April 28, 2024 | Comments Off on I got another old lady hoarder house flip – as-is.  These homes are always the most disgusting… but always become my favorite. 

And yes, flips are getting much harder in this market.  In my underwriting, I’ll try to double the value, and get a 13 cap.  But sentimentally, beneath the old lady diapers, mice turds and filth, this particularly splendid home in…

So after transitory inflation, a massive Fed pivot and the start of 7 rate cuts with the 10-year down to 3.5%… oh, wait.   What just happened?

By Pucklore | April 11, 2024 | Comments Off on So after transitory inflation, a massive Fed pivot and the start of 7 rate cuts with the 10-year down to 3.5%… oh, wait.   What just happened?

The general trajectory has continued to be this: a solid economy, sticky inflation from services, massive deficits and government spending, AI enthusiasm.  The job cuts from AI shouldn’t happen for years.  And my Econ 101 text book said technology improvements…

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