It so just getting started. RE is very slow process. First homes sales drop, then inventory rises, then prices come down BUT wait…historical low inventory and demand is anemic! Let’s see how it unfolds as economy tightens and enter recession. (Job losses, credit defaults, debt
We’re in a new monetary regime. 💸 On one side, a debt system that has to inflate, because the obligations are nominal and a shrinking denominator makes them heavier. On the other, AI technology that has to deflate, because every improvement pushes the cost of making things toward zero. The fiat unit can’t let prices…
The hike as a transfer, in one chart. 🔂 Treasury borrows short and got repriced in full. Large caps termed out at 2021 coupons (2-3%) and earn 5% on cash. The Fed tightened and the $SPX got paid. ✅ The tightening tax went to whoever borrows off prime. The contractor, the landlord, the small business,…
Making policy mistakes IS the Fed policy. Two weeks ago they hiked to stop “second and third order effects.” This morning: wages 3.0%, lowest since May 2021. Payrolls 29K. July revised to a loss. Three-month average 51K. 🤯 The second-order effect they hiked to prevent is wages. Wages were already rolling over. They hiked into…
AI agents aren’t a productivity story. They’re a fraction story. $META $SPCX Productivity is output over input. Every prior technology moved one side. The steam engine raised output. The assembly line cut input. Agents do both in the same quarter: more output per worker, fewer inputs per unit of output. Numerator up, denominator down. That’s…
They will do whatever is possible to bring the long end down. First the yield curve twist, now full yield curve control. Buybacks are coming in strong. Treasury and the Fed will take turns printing money. Debasement is structural. Inflation is embedded in the fiat, credit-based system. It has a bias toward nominal growth and…
🤔Some economic thoughts: I see many debating whether we are RESTRICTIVE vs LOOSE. The Fed's own long-run dot says 3.3. They hiked to 3.875 and called it removing accommodation. One of those is wrong. Either way it's the wrong tool. This inflation came from public spending. Rates work on private credit. A hike doesn't produce…
