[Rich Toscano]

[quote=sdrealtor]So says the guy who has never participated in it.

Betting window remains open[/quote]

This is a deadzone-quality reply.

(PS What is the bet exactly?)

[Rich Toscano]

Those are all reasonable thoughts on your part xboxboy. In fact I think I probably agree with your feeling that the Fed matters less than the consensus thinks it matters. But that’s a low-confidence view on my part.

[Rich Toscano]

Well, I guess I was wrong… some people do “disagree with that”! So thanks for chiming in.

I get your perspective, but fwiw (and I am not an expert here), I do think they matter. More than you seem to think they matter anyway.

Some quick/simplified thoughts:

– Supply chains and the war — the whole world is dealing with these issues, yet core inflation is running a lot higher in the US than in other developed countries (and most emerging countries for that matter). So those cannot be used to excuse high inflation here… a big chunk of the high inflation in the US is demand-driven, not supply driven.

– I do agree that this is the result of the federal govt stimulus (no coincidence that the US had the biggest stimulus by far, and now it has the highest underlying inflation).

– The above two thoughts don’t actually really address the question of whether the Fed matters, though. Which is to say — it doesn’t really matter what caused the inflation… the Fed’s job is to make the inflation go away. Or put another way (and Jpow said this himself) – supply is what it is, and the Fed has to calibrate demand to that supply in order to get inflation to target.

– So, if you think the Fed doesn’t matter, that’s the same as saying that they can’t – or won’t – reign in demand. I disagree on the “can’t” — they can jack up rates until they cause a recession, if need be. The “won’t” is more arguable but my view is that they really are committed to fighting inflation. And even if they blink before it’s really reigned in – they can still make a difference, and if they blink it’s probably because they HAVE made a difference and have blown up some market or something.

– Also, I would argue that they’ve already proven they can make a difference. My view is that we’ve had a raging equity bubble going, and it’s probably in the middle of bursting, and you can more or less trace the beginning of that bursting exactly to a big pivot in Fed policy.

– More directly you can see the impact on bond markets. So far this is the worst year EVER for bonds… I think that can be traced directly back to the Fed pivoting to a much more aggressive policy.

– And then there’s housing… you can bet that the housing market of this summer will look very, very different from that of last summer — due entirely to the change in the bond market, which is due in turn to the Fed-driven rise in rates.

– You might think – maybe rates are up because inflation is up, not because of the Fed. But if you look at rates and inflation, you will see that inflation was running quite high while rates stayed low for a while… the main inciting incident for higher rates was a pivot in Fed policy.

A lot left out here but in brief, that’s why it’s my view that “the Fed matters a lot”.

(NB: This is not an endorsement of the obsessive, singular focus on the Fed as exhibited by some of our forum members.)

[Rich Toscano]

[quote=deadzone][quote=Rich Toscano]
But the main thing I remember from back then was that 90% of the bulls went straight to ad hominem. I could write some long article with data, charts, analysis, etc, and the entirety of the response would be, “You’re just a bitter renter.”[/quote]

So clearly you don’t read much on this site. Nearly every single response to my posts from SDR and FLU are the same ad hominem attacks you mention. “You have an axe to grind”, “You are bitter because you missed the opportunity of a lifetime”, etc. etc. Same tired, irrelevant attacks. Exactly what you described experiencing yourself. Strange to me how you support them today, quite ironic.[/quote]

Well I agree with you there, and I’ve said the same thing to them (or to sdr anyway) — that I think once someone goes ad hominem, they lose all credibility.

I don’t “support” anyone, btw. I’m singling you out for your unique combination of pugnaciousness, constant ad-hominems, and low-quality arguments that often involve just making stuff up. That doesn’t equate to support of anyone else.

[Rich Toscano]

[quote=deadzone]If you don’t equate the word “Bet” to gambling, I can’t help you. Sorry. That was a risk and realistically there is a fine line between investing and gambling. But perhaps that is a sensitive topic for you since you work in the financial services industry.[/quote]

Hahaha…. you just can’t help yourself with the ad hominem attacks. It’s really something. Do you not understand how obnoxious that is? Never mind… forget I asked.

[quote=deadzone]And calling me out for picking fights is absurd when you consider the mean spirited and bullying posts from your other members. The only difference is I don’t back down from the bully. I get attacked whenever I post something relevant to a RE downturn but don’t back down so I’m the one picking fights? [/quote]

To be fair, I called you out for the combination of picking fights AND your terrible arguments.

[Rich Toscano]

Emphasis mine here:

[quote=deadzone][quote=flyer]And, not just “rich people,” dz. We also know a lot of people who, although they were not really in an optimum position to do so during The Great Recession, bet there would be a rebound, so they gathered all of the resources they had, and also invested. Of course, things could have gone either way, but, in retrospect, they are very glad they did.[/quote]

I called this gambling because if one were to read this, it literally said they “Bet” there would be a rebound, with all their resources. That is by definition gambling and risky. I am not criticizing the decision, just pointing out that it is/was a risky decision and only looks good in hindsight.[/quote]

No, you said it’s “literally gambling.”

If you can’t tell the difference between:

1. Buying a financial asset (ie a stream of future cash flows) at a distressed price during a time of economic uncertainty, vs.
2. Keno

…then I can’t help you.

[quote=deadzone]Meanwhile, Rich of all people calling me out for this? Seriously, I am the only active participant on this forum that is expecting a RE crash, of course it looks like I’m picking fights because there is nobody else here with that view apparently. Everyone else is so heavily invested in RE that they can’t bear (no pun intended) to hear it.[/quote]

Ah, there’s the ad hominem again.

It’s funny, you go on about how much better this site was back during the mid-00s bubble. (At least the design looked somewhat modern then; I’ll grant you that).

But the main thing I remember from back then was that 90% of the bulls went straight to ad hominem. I could write some long article with data, charts, analysis, etc, and the entirety of the response would be, “You’re just a bitter renter.”

In addition to being insulting, it was pathetic and just showed the weakness of their arguments. Just like when you do it now.

BTW you look like you’re picking fights because you’re picking fights. But I suspect you knew that.

[Rich Toscano]

[quote=deadzone]That way your small of cadre of remaining members can continue their circle jerk in peace.[/quote]

Now that’s the kind of intellectually rigorous commentary I’m looking for.

[Rich Toscano]

[quote=deadzone][quote=Rich Toscano][quote=deadzone]That’s literally gambling.[/quote]

You are “literally” indistinguishable from a parody account.[/quote]

Whatever you say. Apparently I’m the only one left on this worthless blog who believes were are in an epic bubble. Although all you have to do is check the Fed balance sheet to see the source of the bubble, pretty clear cause and effect.

Back in the last RE bubble, there was a lot more interesting debate here. Now the site is very one sided, clearly because most on here are heavily invested in RE so they all get extremely butt hurt by those mentioning a possible crash. Sorry, don’t like the message? Just blame the messenger. “DZ just has an axe to grind” so we can ignore the oncoming crash. LOL

Sorry, your feelings about me aren’t going to change anything. If the Fed does in fact follow through with the QT, things are going to crash HARD. The market was artificially stimulated with trillions of Pandemic printed money, you think things are going to go well when that is pulled away?[/quote]

I have stated here my view that housing is perilously expensive, and that if rates don’t drop, housing valuations probably will. Outside of housing, I have repeatedly stated my belief that US growth stocks have been in a major speculative bubble that will probably end in a manner typical of bubbles.

The issue isn’t with whether you are bullish or bearish. The issue is with the quality of the commentary, or in your case, the complete absence of quality.

Just in this thread, you’ve said:

“Most cash deals are either investor, or to launder money.”
-> No they aren’t.

(Re. enduring uncertainty while investing in an asset that offers a long-term stream of cash flows) “That’s literally gambling.”
-> No it isn’t.

“Now the site is very one sided, clearly because most on here are heavily invested in RE so they all get extremely butt hurt by those mentioning a possible crash.”
-> Insulting and self-defeating. Going ad-hominem just shows that you’re not capable of making a real argument.

“[various gibbering] the Fed balance sheet”
-> Ah yes, there it is, right on cue. Yes, the Fed matters a lot; nobody disagrees with that. Incessantly mentioning the Fed doesn’t make you more right or add anything to the conversation.

“this worthless blog”
-> Tough but fair.

“The market was artificially stimulated with trillions of Pandemic printed money, you think things are going to go well when that is pulled away?”
-> In fact, I do not think that. Interesting topic to be sure.

I actually wish there were more people representing a reasonable, well-informed bearish viewpoint on this site. So you’re not being singled out (by me anyway) because of your bearish views, but for the complete lack of anything resembling “reasonable” or “well-informed.”

Just about a year ago I wrote this (the context was you, deadzone, using comically bad analysis to “call BS” on something I had written):

[quote=Rich Toscano]Deadzone, your posts are garbage. They are just an endless stream of ill-informed, monomaniacal, combative, and incredibly repetitive rants. I’m tired of seeing them and I’m tired of you dragging every thread into the same endless, pointless, unbelievably tedious debate.

If you have something useful to add to the conversation, such as actual facts or really any topic besides your lunatic obsession with the Fed, please do so — without the pugnacious attitude. Otherwise, you’re going to need to take it somewhere else.[/quote]

And now here I am basically writing the same post again. I don’t know man. Are you going to attempt to be a useful member of this forum at some point? Or should I just save everyone time and ban you now?

[Rich Toscano]

[quote=deadzone]That’s literally gambling.[/quote]

You are “literally” indistinguishable from a parody account.

[Rich Toscano]

[quote=sdrealtor]Rich, you really need to get out more.[/quote]

Well, you nailed that one.

[Rich Toscano]

I just sent you a test message.

I don’t get an error when hitting the messages page fwiw.

I have to say, the tech behind this site is very old and creaky (and will be replaced soon). If it’s not working any more there isn’t much I can do… but fwiw it seems to be working for me.

[Rich Toscano]

[quote=moon]Hi Rich, I cannot wait to read your updates on this article. Things have changed a lot since last October when you published this article, such as housing price keeps going up in a crazy way, mortgage rage went to 5% already, and will go even higher in a faster way than we ever expect. What do you think the affordability of housing now? Do you think the Fed will do everything (actually I meant multiple rate hikes in a short term)to control the inflation?[/quote]

Hi – It is up in the main section here: https://www.piggington.com/monthly_housing_data_no_inventory_prices_rates_affordability

I agree things have changed a lot since then. In the original article, my argument was, “prices are really high but it’s possibly sustainable IF rates stay low.” Well… that didn’t happen. So affordability is absolutely terrible — as you can see in that article, the real monthly payment is now at the level it was at the bubble peak. It’s a pretty risky situation.

Yes, I do think the Fed is serious about trying to control inflation. How that actually plays out is unknowable though. It seems likely they will keep tightening until inflation backs off, or something breaks in financial markets. The big question is which of those happen first (and given extreme valuations in so many areas of the markets, unfortunately the latter is a real possibility).

So I guess I think the Fed currently intends to tighten a lot, but if they hit that second possibility (financial market problems with inflation still high) they could change course. And btw, I don’t think that necessarily would mean that they don’t care about inflation. I think the Fed sees financial markets as the main conduit for their policy… if markets sell off, then via the wealth effect that will probably reduce inflation. So, if markets decline enough, there’s a good chance they will pause, to see if the market does the work for them.

But I’m getting ahead of myself here. I do think it’s clear that the Fed very much cares about high inflation, they have acknowledged that they were wrong about the transitory thing, and they are serious about stopping it. But nobody on earth knows how that will play out in real life. I wouldn’t want to be in their shoes right now, that’s for sure.

[Rich Toscano]

[quote=sdrealtor]No problem with the busting of the chops either.[/quote]

Glad to hear it… it’s all meant to be in good fun. 🙂

[Rich Toscano]

sdr — Good color, thank you — I especially like the point about May… I will be very interested to see how May looks.

I’m going to quibble with your forecasts though — not the forecasts themselves, but your confidence levels.

“There is ZERO chance we go back to prepandemic pricing and the betting window remains open”. — Really… zero? First of all that’s not a bet I can take unless you’re willing to offer infinite odds. But more to the point… of course it’s not ZERO chance. Prices in any market can go back to what they were a few years prior — this has happened multiple times in SD housing and it could happen again. I’m not saying it’s probable, but to say it’s IMPOSSIBLE is wildly overconfident.

And also, re your interest rate prediction. Your last rate prediction that I remember, not too long ago, was that mortgage rates wouldn’t reach 5% in your lifetime. That probably wasn’t even a year ago — and here we are at 5% already. (Hence my little joke in the OP). Given that you are a young, virile stud with decades left to go — this was a very bad prediction! But now you are making more rate predictions! I will admit that this latest one was pretty circumspect… but still, would it not make more sense to just consider that you don’t have an edge on predicting where rates will go? (I will admit here that this is the route I’ve chosen to take, but ONLY after making many terrible rate predictions in my past).

BTW I’m busting your chops you here because you have claimed to have the best predictive track record on piggington. That may actually be true, for all I know! But either way — if you are going to brag about that… I’m going to give you a hard time when you whiff one, ha ha. Heavy is the head that wears the crown! >:-)

[Rich Toscano]

I am going to put up an update today(ish) but my thoughts on whether it’s a bubble are in this article: https://pcasd.com/whats-going-on-with-housing/

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