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If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

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Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#81

Post by friend_and_foe »

zeroCalories wrote: post #53
zelon88 wrote: post #41

Earlier quoted context omitted.

This is because the American home buyer isn't competing with other American home buyers anymore. They're competing with VCs trying to build developments and companies trying to turn a profit. Gone are the days of the "Fixer Upper" that Tim Taylor would buy, drop a reasonable amount in repairs, preform the repairs themselves, and then turn a modest profit. Everyone who buys a house today wants the value to go up. Nobo…

This fundamentally misses the problem. Investors are only able to speculate because there is a shortage of housing. They are betting that in the future even more people will want that housing, and they are probably right. The only real solution is to crash the housing market by building more houses in places that people want them. Banning speculation won't solve the problem, and it might actually make the problem wor…

Well it's two problems: the monetization of non money assets and the artificial housing shortage to encourage housing as an investment vehicle. A significant percentage of property investment is simply hedging against inflation. Even someone speculating is doing so to a large degree.

So the other fundamental problem is that it is impossible to save money because it is constantly being debased.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#82

Post by friend_and_foe »

onlyrealcuzzo wrote: post #24
EstesPark wrote: post #18

Earlier quoted context omitted.

Does anyone have an actual breakdown of how much the younger generations are placing away in a 401k - if that's even possible?

401ks are like ~10% of the stock market: https://theirrelevantinvestor.com/2020/10/25/who-owns-the-st... Boomer 401ks are probably The idea that boomer 401k withdrawals is going to crash the stock market or tamp out future growth is pretty strange. Defined benefit & defined contribution pension plans are both larger chunks of the stock market than 401ks. And all of those together are a smaller chunk than foreigner ho…

You're looking at market cap when you should be looking at volume. 5% of the stock market going liquid at a higher than ambient rate can reduce valuations by significantly more than 5%, possibly multiples more. And as we saw with interest rate hikes and bonds the past couple of years, something like that is a systemic risk and the fallout can easily cascade.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#83

Post by friend_and_foe »

Izkata wrote: post #78
lame-robot-hoax wrote: post #9

Earlier quoted context omitted.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

We're only officially in a recession when NBER declares it. And they only do so by looking backwards, months after the fact at least. The "two quarters of negative growth" was only ever a rule of thumb that mostly fit, never the official definition.

Appeal to authority is a weak argument. We are trying to use reason to figure out what's going on, not close the discussion by saying that we are not the entity that gets to decide such things.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#84

Post by Grum9 »

pphysch wrote: post #69
cma wrote: post #19

Earlier quoted context omitted.

>with less built than is necessary for multiple decades of time. I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.

It is quite common to have 1-2 retirees living part-time on a quarter acre of urban land in a premium location. Not saying we should evict random people, but it is objectively a terribly inefficient allocation of societal resources. There's no easy answer.

[dead]

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#85

Post by Izkata »

friend_and_foe wrote: post #83
Izkata wrote: post #78

Earlier quoted context omitted.

We're only officially in a recession when NBER declares it. And they only do so by looking backwards, months after the fact at least. The "two quarters of negative growth" was only ever a rule of thumb that mostly fit, never the official definition.

Appeal to authority is a weak argument. We are trying to use reason to figure out what's going on, not close the discussion by saying that we are not the entity that gets to decide such things.

They asked for the definition. That is the definition in the US. Everything else is speculation.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#86

Post by zeroCalories »

Supermancho wrote: post #80
zeroCalories wrote: post #68

Earlier quoted context omitted.

Rentals make up a small percentage of single family homes. Around 5% depending on where you are. Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash. We know flooding supply works because we've seen it play out. Tokyo is the biggest metro area in the world, with a growing population, and reasonable rents because the…

> Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash. What data do you have to support this? > As of 2022, investment companies own about one-fourth of all single-family homes in the US, accounting for 22% of American homes sold, down from 80% in 2020-2021 Naturally, the homes bought are all in the most densely popu…

https://www.yardimatrix.com/publications/download/file/2530-...

Large institutions own 5%. Most of these "investors" are house flippers and small landlords trying to "make it big in real estate". It's not the 1% strangling the working class, it's the 10%. Any solution that doesn't hit them the hardest won't be a solution. Infact, we want more density, we need more gentrification, so I don't want to discourage large institutions from investing in a new apartment. But at the very least, if you claim to care about housing prices, don't prevent the government from building more housing.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#87

Post by Tommstein »

Izkata wrote: post #78
lame-robot-hoax wrote: post #9

Earlier quoted context omitted.

Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.

We're only officially in a recession when NBER declares it. And they only do so by looking backwards, months after the fact at least. The "two quarters of negative growth" was only ever a rule of thumb that mostly fit, never the official definition.

Everyone knows no country besides the US has ever experienced a recession, since the NBER didn't declare it. And even for the US, they've only happened since the establishment of the NBER, since they weren't around to declare recessions before they existed and thus there were by definition no recessions. We should just abolish the NBER and thus ensure there will never be another recession.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#88

Post by DrReachAround »

mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

This is absolutely false. Since 1968, 77 million housing units have been been built in the US. Assuming 2.5 people per household, today's average, that's enough for 190 million people. US population has increase 133 million since 1968. We have plenty of housing. It may just not be where you want to live and the type of housing want at the price you want. But no one is guaranteed any of those and shouldn't be.

https://fred.stlouisfed.org/graph/?g=1aeIa

If you want to understand the housing price problem, look no further than the irresponsible monetary policies of the last 20 years.

Simply looking at median house prices to median household income we can clearly see the impacts to housing prices from the stimulus following the dotcom bust, the stimulus following the housing bust, and the stimulus from the pandemic. Hint, they're the big upward slopes.

https://fred.stlouisfed.org/graph/?g=1adYW

Take away the irresponsible and unnecessary stimulus and you have a reasonable housing market at 4x income, not 6x.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#89

Post by DrReachAround »

zeroCalories wrote: post #68
zelon88 wrote: post #58

Earlier quoted context omitted.

I would argue we need to put limitations on what entities can purchase residential property. There is no reason a corp needs to own a 2 bedroom house. It is manipulating a critical market and destabilizing everything. Push them out of the market. They should have have no skin in this game. You want to increase the supply. I want to tank the demand. Your method won't work because if regular people could afford to comp…

Rentals make up a small percentage of single family homes. Around 5% depending on where you are. Not letting black rock buy a home won't save you from the overpaid tech worker or nurse-account power couple from dropping 1.5x the listing price in cash. We know flooding supply works because we've seen it play out. Tokyo is the biggest metro area in the world, with a growing population, and reasonable rents because the…

The average home size in Tokyo is 60 square meters, that's 645 square feet. That's called a one room studio apartment in the US. I don't personally know anyone that wants to live in a box like that, except maybe single people just out of college with little income.

Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?

#90

Post by DrReachAround »

pauldenton wrote: post #17
mjevans wrote: post #8

This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…

https://ourworldindata.org/grapher/population The massive growth of the global population is hard for people to grasp, but is a big part of the cost of housing. Even if we've built billions of new homes in the last century that isn't enough to compensate the bigger still population increase.

Since 1968, 77 million housing units have been completed in the US. At 2.5 people per household, that's enough for 190 million people. The US population has increased 133 million over that time. We have plenty of housing.
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