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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…

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…

I think someone forgot to tell my local contractors and insurance that All items CPI is cooling at 3.2%, and the Fed will be cutting rates in June, so they can stop raising their rates significantly.  Insurance rates (especially on Illinois properties) are bumping up about 45% on each renewal. 

By Pucklore | March 13, 2024 | Comments Off on I think someone forgot to tell my local contractors and insurance that All items CPI is cooling at 3.2%, and the Fed will be cutting rates in June, so they can stop raising their rates significantly.  Insurance rates (especially on Illinois properties) are bumping up about 45% on each renewal. 

HVAC and plumbers are up 50% and 30% respectively on their trades just these last couple months.  And this is after their prior year increases of about 25%.  Not all users know about these latest contractor and insurance hikes yet. …

A boring dump into one’s account of T-Bill stimulus every few weeks seems like a decent shelter in a tumultuous world. 

By Pucklore | March 6, 2024 | Comments Off on A boring dump into one’s account of T-Bill stimulus every few weeks seems like a decent shelter in a tumultuous world. 

So Strauss and Howe wrote (in the late 80s/early 90s) that we should regard the years of 1924, 1855, 1766 and 1673 as a blue print for our current situation.  One would think the behavior and preparation that was successful…

Is Grandpa Warren implying that he thinks he may have to use his “Not-So-Secret Weapon” soon? 

By Pucklore | February 27, 2024 | Comments Off on Is Grandpa Warren implying that he thinks he may have to use his “Not-So-Secret Weapon” soon? 

He did reference casinos being run out of homes.  And it is true that human nature probably hasn’t changed much over the last 100+ years and panic could actually spread even more instantaneously with a Twittersphere turbocharger.  But he did…

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