The Inevitable New The Inevitable Trump Mocking Thread

Rents are still up in >50% of US cities y/y, but the softening is increasing... By itself, not a concern, but something to keep an eye on.

Happy New Year, friends and Nazis.
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Friesland said:
Great... as it has been for the last 4-6 years.

But if you look closely, you'll note a few warning signs.

Check private sector jobs in August.

Check job growth over last 4 years. Has actually decreased. We are closing in on "full employment" which causes some things in an economy.

Check trade deficit.

Check China off-book loan numbers.

Check emerging markets, esp Turkey, Argentina, Venezuela.

Check tariffs.

Check rents in Portland, Seattle, NYC and a few other metros.

As I've mentioned before, the juice from the tax cuts will keep things amped for a bit longer - who knows exactly how long - but when the drop comes it will be worse.

Things that cannot simultaneously be true: We cannot raise interests rates/have strong dollar and cut imports/raise exports, especially with increased tariffs. Cannot happen.

We also can't get near full employment, see creeping up of wages and keep low interest rates, unless we like inflation.

So... reap while you can, would be my suggestion. We're 6 - 12 months off, but at some point, the buzz ends.
Click to expand...

Rents on the west coast have been high for years, nothing new.
Perhaps the local governments should do something besides raising minimum wage for part time workers.
Stream lining building permits would make a huge difference in the communities you've mentioned
While we didn't have "full employment" under Obama , we did have "creeping up of wages" along with low interest rates and little inflation.
Reap while I can?
You're not reaping while you can?
Sounds like you're hoping for inflation, rising unemployment and higher interest rates... why?
 
Lion Eyes said:
Rents on the west coast have been high for years, nothing new.
Perhaps the local governments should do something besides raising minimum wage for part time workers.
Stream lining building permits would make a huge difference in the communities you've mentioned
While we didn't have "full employment" under Obama , we did have "creeping up of wages" along with low interest rates and little inflation.
Reap while I can?
You're not reaping while you can?
Sounds like you're hoping for inflation, rising unemployment and higher interest rates... why?
Click to expand...

Huh? None of what you say is what I posted. Nothing at all.

Rents in the cities above are falling: Seattle's is falling in large part because they drastically streamlined the process to allow a building boom. Rents are down there due to supply and demand - they have increased supply a ton. Do you not know how that works? You think rents will go up if we build more? Uh... no.
The point is falling rents "can" be an early indicator of slowdown. Taken by themselves they are not a big deal, but something to watch as a trend is building (started in NYC about a year ago.)
Q3 growth is likely very strong. (see link)
I am not at all hoping for inflation, rising unemployment and higher interest rates.

This is the reality, however: We are in a very long recovery at this point. The tax break was designed to continue it, but it's an artificial bump (as were much of the bumps under Obama to get us out of the recession.) The question will be: how much have the bumps (and added debt) distorted the normal cycle. We'll see. But folks who think this goes on forever might be surprised. (Import taxes - tariffs - could take some of the air out, however, as they are taxes on consumers that to an extent offset the tax cuts, but hit a different segment of the demo.

We shall see, but I doubt growth continues past 2020 in almost any scenario. Big question is how big the slowdown is.

https://alfred.stlouisfed.org/graph...m=output&utm_content=data&utm_campaign=9426_1
 
Friesland said:
Huh? None of what you say is what I posted. Nothing at all.

Rents in the cities above are falling: Seattle's is falling in large part because they drastically streamlined the process to allow a building boom. Rents are down there due to supply and demand - they have increased supply a ton. Do you not know how that works? You think rents will go up if we build more? Uh... no.
The point is falling rents "can" be an early indicator of slowdown. Taken by themselves they are not a big deal, but something to watch as a trend is building (started in NYC about a year ago.)
Q3 growth is likely very strong. (see link)
I am not at all hoping for inflation, rising unemployment and higher interest rates.

This is the reality, however: We are in a very long recovery at this point. The tax break was designed to continue it, but it's an artificial bump (as were much of the bumps under Obama to get us out of the recession.) The question will be: how much have the bumps (and added debt) distorted the normal cycle. We'll see. But folks who think this goes on forever might be surprised. (Import taxes - tariffs - could take some of the air out, however, as they are taxes on consumers that to an extent offset the tax cuts, but hit a different segment of the demo.

We shall see, but I doubt growth continues past 2020 in almost any scenario. Big question is how big the slowdown is.

https://alfred.stlouisfed.org/graph...m=output&utm_content=data&utm_campaign=9426_1
Click to expand...
My bad ... I was thinking rents in California have been climbing for years...build more and the rents will come down, exactly what I was referring to when I mentioned stream lining building permits. That would be supply and demand. Falling rents could also be the inability or the refusal to pay obscene monthly rents. Seattle instituted a $15.00 an hour minimum wage and that back fired miserably....
The economy, much like the weather is cyclical. We don't have a calamity like Freddie and Fannie looming in the shadows.
You are right, we shall see.
Some folks see what they want...I don't see the sky falling anytime soon.
 
Lion Eyes said:
My bad ... I was thinking rents in California have been climbing for years...build more and the rents will come down, exactly what I was referring to when I mentioned stream lining building permits. That would be supply and demand. Falling rents could also be the inability or the refusal to pay obscene monthly rents. Seattle instituted a $15.00 an hour minimum wage and that back fired miserably....
The economy, much like the weather is cyclical. We don't have a calamity like Freddie and Fannie looming in the shadows.
You are right, we shall see.
Some folks see what they want...I don't see the sky falling anytime soon.
Click to expand...

You may want to deep dive into Freddie and Fannie, fwiw.

BTW, here is the story on Seattle. Tech companies drove surge in building to avoid doing a Silicon Valley. Seattle is booming.

Falling rents can't be "refusal" to pay obscene monthly rents unless there are alternatives - (for instance Manhattan rent increases fell before Brooklyn's did recently because so many folks had gone to Brooklyn that new arrivals weren't even considering Manhattan.) Construction is a relatively long-window activity. The crash in construction of 2008-10 hit a few years later and only in the last few years has the construction from the recovery come on line. SFH still lag, and some NIMB cities (like SF, and to a lesser extent LA) lag. But even LA is about to see some softening at the top as the downtown luxury apt boom brings too many $$$ units on-line. (Chinese capital outflow limits also affecting some markets. Chinese nationals are not able to buy and hold rental properties as easily as a way to park offshore money.)

It's certainly possible the "sky doesn't fall" any time soon. No one really knows how this particular cocktail of "trickle down stimulus" (and stock buybacks) mixed with increased consumption tax (tariffs) mixed with near-full employment mixed with extra-strong dollar and rising interest rates will play out... But I would start looking carefully at things over the next 6 months if I were someone with significant investments they might need to draw on in the 2-5 years.

Some BG on the Seattle construction boom. I happen to think the falling rents is a good thing for Seattle. Kid worked there this summer and had a great apt. for very reasonable $$, but if it is being repeated across the US (46% of cities had falling y/y rents as of August) it's something to be aware of... Especially given lack of SFH coming on line.

https://www.constructiondive.com/news/is-seattles-building-boom-over/518536/
 
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The top official on the White House economic advisory council said on Monday that President Trump’s claim that the quarterly change in the country’s gross domestic product has eclipsed the U.S. unemployment rate for “the first time in over 100 years” is false.

“I can tell you what is true,” Kevin Hassett, chairman of the council, told reporters during a press briefing. “What is true is that it is the highest in 10 years.”

https://www.yahoo.com/news/trumps-t...-9efb-d522bf6b8dfa&.tsrc=notification-brknews
 
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