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How This Ends

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671–680 of 698 posts

Re: How This Ends

#671

Post by PaulDavisThe1st »

kelnos wrote: post #571
PaulDavisThe1st wrote: post #522

Earlier quoted context omitted.

> "an excess of jobs and money in that place" Nope. For one thing, there's the largest generation of the 20th century at peak retirement, cashing out of family houses that have gained huge amounts of value, and looking to move to amenity-rich locations. For another thing, the investment industry, short of other options, has started buying houses to rent them (short or long term), squeezing supply and driving up price…

> cashing out of family houses that have gained huge amounts of value, and looking to move to amenity-rich locations. They can only cash out if people are willing to buy. And fewer people will be willing to buy (at least at the prices the retirees want) with interest rates going up. So the retirees will either put off their plans for a while in the hopes that things will recover, or will accept lower prices for their…

> Why are we all upset about short-term rentals when so many real estate speculators are sitting on more than 4x as many vacant properties?

I would guess partly because almost all of the short-term rentals represent either (a) previously long term rentals that are no longer available to people who live and work in that location or (b) new construction that doesn't address housing shortages.

Re: How This Ends

#672

Post by bullen »

bjornsing wrote: post #285
yung_steezy wrote: post #271

Earlier quoted context omitted.

Inflation is the most destablising thing in an economy. It would be wise to keep raising interest rates until inflation gets back to 2/3% even if that causes a recession.

I agree. But many Swedes are heavily indebted (with mortgages), and their parents made a fortune from negative real interest rates in the 70-ties + the asset bubble of the 2000s. Now they want the same. Understandable. The Swedish Riksbank (actually the oldest central bank in the world) is formally independent, but everything is politics in Sweden. I would not be surprised if the indebted middle class come out on top…

That's a simplification, they didn't make a fortune from the inflation on things being higher than the interest rate, they made it from salary increases.

I looked at my SBAB account and indeed I have 0.50% on that now. So maybe we'll see another salary inflation event, but as long as food/electricity and fuel is rising faster than your salary there is still a BIG problem (right now you got 2% vs. 6%)!

How can they raise salaries while debt is becoming more expensive? Well you need to increase productivity, how do you do that; you consume more energy.

The inflation we have now isn't really monetary at all, it's scarcity inflation. And that never ends, because energy is finite!

Any way you turn this thing; it's the end of the financial system, because no matter what they do they cannot print energy.

Re: How This Ends

#673

Post by PaulDavisThe1st »

lazide wrote: post #665
PaulDavisThe1st wrote: post #561

Earlier quoted context omitted.

Sorry, I find this ridiculous. The boomers heading into retirement situation is a reflection of 40-50 years of economic policy and has no connection with recent "cheap money". Actual investment in single family and apartment housing is almost entirely tied to its low risk/return ratio compared with (the perception of a lack of) other options for investment at this time. The money sloshing around for investment is as…

The ‘cheap money’ issue isn’t a short term one. It’s been steadily dropping with only minor hiccups since the mid 80’s - about 40 years ago. The last time the US had a inflation hit, at that time due to the Oil crisis. Mostly to keep juicing the economy, which has steadily been needing it more and more to grow/less responsive to stimulus. Folks I know who have done the AirBnB route were often getting mortgages and bu…

Fair points, all.

Re: How This Ends

#674

Post by PaulDavisThe1st »

rcpt wrote: post #619
PaulDavisThe1st wrote: post #485

Earlier quoted context omitted.

> If you invested near the dot com peak or the japan peak, you still haven't made your money back. What does this even mean? That you invested the only money you ever invested entirely in the relatively brief period of the dot com peak? Who does that? (Obviously not nobody, but ...) To all effects and purposes, nobody does that. So what it really means is "the money you invested during that one period (perhaps a year…

> you invested the only money you ever invested entirely in the relatively brief period That's pretty common for a mortgage

The dot com crash was not associated with a particularly noticeable "underwater" period for real estate, so if you bought a house during that time, you're not likely to "still be underwater", which was the GP's claim.

Re: How This Ends

#675

Post by PaulDavisThe1st »

lazide wrote: post #666
deanmoriarty wrote: post #645

Earlier quoted context omitted.

I would so much welcome a 50% crash but I’m afraid we’ll never ever see it in the Bay Area. There are just too many people, job or not, in a very strong financial position. I’m sitting on $600k+ cash for a down payment and if I see townhouses correcting I’ll snatch one up immediately. And I am a very small fish compared to the wealth that’s around. My personal bet is that the Bay Area will just stay at 0% growth unti…

Possible, we’ll see. A lot of speculators also bought assuming increasing property values, so if it’s flat for 5 years or whatever, then that’s going to nuke their gains. Meanwhile they’re paying out real cash every month.

The return from a mortgage-free rental is not bad in most places. Property value increases in nice, but not critical for such "speculation".

Re: How This Ends

#676

Post by lazide »

PaulDavisThe1st wrote: post #675
lazide wrote: post #666

Earlier quoted context omitted.

Possible, we’ll see. A lot of speculators also bought assuming increasing property values, so if it’s flat for 5 years or whatever, then that’s going to nuke their gains. Meanwhile they’re paying out real cash every month.

The return from a mortgage-free rental is not bad in most places. Property value increases in nice, but not critical for such "speculation".

Yup, good point!

The rental market in many previously hot areas (SF, South Bay) has taken a hit, but not sure where it will land long term.

Medium term there is a LOT less pressure with a lot of techies having relocated and remote work being accepted.

Don’t forget though that anyone who is a ‘bigger fish’ (looking to invest many millions or half a billion or so) in a high inflation environment is going to be looking for as sure a bet they can with as high a return they can.

And since money isn’t as cheap anymore, those are easier to find and get.

So while it may not be bad returns, it may be bad returns compared to something else (a new business, for instance).

Re: How This Ends

#677

Post by bornfreddy »

zarzavat wrote: post #532
BigBubbleButt wrote: post #500

Earlier quoted context omitted.

Honestly, that's really not that important for what I was saying, because we're talking about the Fed. The Federal Reserve can choose to fight inflation or it can choose to inflate assets, and that lies on a spectrum. The "why" of inflation isn't nearly as important as the severity of it. If inflation is at 10% you're not going to debate it before doing something about it - that just allows the situation to fester in…

Inflation is still going up because there’s a war between Ukraine and Russia. This has caused food and energy prices to skyrocket. The Fed can raise rates to 69% but it’s still not going to cause (say) the grain in Odessa to make its way to people’s stomachs. Is a certain amount of rate increase justified? Yes, you don’t want an inflation spiral to develop. Beyond that, we are going to have to live with a certain amo…

> ...until the situation in Eastern Europe normalizes and the supply chains normalize after COVID.

They won't "normalize" though (imho), as the reason is not really COVID anymore, it is China gaining ground and trying to do as much damage to the western economy as possible.

Re: How This Ends

#678

Post by bjornsing »

bullen wrote: post #672
bjornsing wrote: post #285

Earlier quoted context omitted.

I agree. But many Swedes are heavily indebted (with mortgages), and their parents made a fortune from negative real interest rates in the 70-ties + the asset bubble of the 2000s. Now they want the same. Understandable. The Swedish Riksbank (actually the oldest central bank in the world) is formally independent, but everything is politics in Sweden. I would not be surprised if the indebted middle class come out on top…

That's a simplification, they didn't make a fortune from the inflation on things being higher than the interest rate, they made it from salary increases. I looked at my SBAB account and indeed I have 0.50% on that now. So maybe we'll see another salary inflation event, but as long as food/electricity and fuel is rising faster than your salary there is still a BIG problem (right now you got 2% vs. 6%)! How can they ra…

> That's a simplification, they didn't make a fortune from the inflation on things being higher than the interest rate, they made it from salary increases.

I don’t really see the distinction. There was an energy angle to it in the 70ties too (the oil crisis). Whenever there is significant price inflation there will be salary inflation too, sooner or later.

Re: How This Ends

#679

Post by at-fates-hands »

boppo1 wrote: post #669
at-fates-hands wrote: post #610

Earlier quoted context omitted.

>> But it really seems like there's a glut of tech companies with investment capital paying people 300k to make apps for stuff that's trivial. I work for one of the largest health care companies in the world. In the US, there are only three or four major health care companies and they're all massive. My company has repeatedly said its too big to move as fast as smaller startups who are coming in and disrupting one ni…

If I have no involvement or experience in Health Care, how do I identify a niche where such a product will be helpful?

I'd take one of these issues and start doing some research.

https://www.medifind.com/news/post/problems-us-healthcare-sy...

Then start researching that particular topic. Take something like Healthcare Billing, and all the issues with it:

https://www.collaboratemd.com/blog/the-top-10-challenges-ass...

Then you take one of those issues and see if you can find a problem worth fixing. Develop a program or application around solving that particular problem. I'd also start looking at attending healthcare conferences and focusing on that issue and going to see what industry people are complaining about and see if you can get more insight from them. Start networking with people at the conferences.

It wouldn't take long to get an inside track through networking and research to find a niche where you can build something that will really get a companies attention.

Re: How This Ends

#680

Post by bullen »

bjornsing wrote: post #678
bullen wrote: post #672

Earlier quoted context omitted.

That's a simplification, they didn't make a fortune from the inflation on things being higher than the interest rate, they made it from salary increases. I looked at my SBAB account and indeed I have 0.50% on that now. So maybe we'll see another salary inflation event, but as long as food/electricity and fuel is rising faster than your salary there is still a BIG problem (right now you got 2% vs. 6%)! How can they ra…

> That's a simplification, they didn't make a fortune from the inflation on things being higher than the interest rate, they made it from salary increases. I don’t really see the distinction. There was an energy angle to it in the 70ties too (the oil crisis). Whenever there is significant price inflation there will be salary inflation too, sooner or later.

No, in the 70s Nixon had just removed the gold standard, the real reason for the salary inflation WAS to convince people that the newly invented petrodollar had value by increasing the interest rate AND the salary to compete with the gold price; by extracting more energy from the Saudis to do the work.

Without the petrodollar and expedient Saudi oil, raising interest rates to fight a "permanent for the rest of eternity" physical lack of energy is going to go terribly wrong.

I suspect they will stop at 1% in Sweden when all households/businesses start to fail (because we have more debt than in the 70s) and then we'll get cashless UBI, which will lead to monetary inflation on top of the scarcity inflation.

> Whenever there is significant price inflation there will be salary inflation too, sooner or later.

You better be damn sure about that, because othervise when the music stops you got nowhere to sit!

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