Here I’m on Todd Miller’s Construction Disruption. He is the manufacturer of metal roof tiles and a commenter here on WOLF STREET.
We discuss AI’s feared impact on CRE, the financialization of everything, including CRE, factory construction, supply chains, pricing pressures for automakers… and finally, what keeps me awake at night.
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Many people would pay $$$ to have a dinner with an instagram celebrity. I would pay to have a beer with Wolf.
Howdy Lone Wolf Am only 16 minutes in and am returning for the rest. Great to see you, on video, get the wonderful Japanese Woman in a video some time too.
THANKS. Going back now
Great stuff. Especially liked the explanation of financialization. Curious as to how Chips Act and manufacturing will go in the longer term. Is that money provided expected to be returned (public sector investment) or is this just tax payer gift with the expectation the return comes through economic growth, job creation, etc.). If the latter it seems as if that is a subsidy of sorts.
I also was intrigued by the “financialization” comment, and for you honest “beats me” type answer to how we ever get out of the debt hole we’ve dug ourselves into.
That I-don’t-know statement reminded me of a Will Durant quote:
“The most interesting thing in the world is another human being who wonders, suffers, and raises the questions that have bothered him to the last day of his life, knowing he will never get the answers.”
Thanks for your tireless efforts and for this great interview.
It is a direct subsidy. No doubt about it.
Here is the thing though, every country that manufacturers high end silicon chips does so through large subsidies. South Korea gives Samsung large subsidies, Taiwan gives TSMC big subsidies as well. The next best manufacturers are probably American, but they are falling behind (partly due to poor choices, but also partly due to being unable to compete against subsidized competitors).
Cutting edge silicon manufacturing has gotten too big, expensive, and risky for companies to take on by themselves. They pretty much require the resources of a nation state.
To manufacture cutting edge silicon requires a company to invest billions of dollars with at least a decade lead time before they will ever see a return. Furthermore, they are investing those multiple billions on unproven technology that has only been done in a lab and never at mass production. Furthermore, the microprocessors they will be producing are literally the most complex things ever produced. So even if a new technology node works in the lab and looks like it could be produced at mass quantities, all of a sudden certain microprocessor designs won’t work or overheat. The risks are crazy.
One of the ways Intel fell behind in manufacturing is because they tried to minimize the risks involved and didn’t adapt a new cutting edge manufacturing technique (using EV light to manufacturer their chips). Part of the reason they didn’t adapt was arrogance, they were industry leaders so why should they bet the company on a risky unproven technology, part of it was prudence, not betting the company on an unproven technology. TSMC and Samsung were subsidized by their governments, so they could afford to take those risks. If it backfired, the government would insure those companies survived.
Also, before complaining about subsidies in chip manufacturing, we have to consider the alternative: do we as a country want to completely lose the ability to manufacture cutting edge chips?
These chips are used in the latest computers. If war (shooting or just economic) with China starts and the U.S. loses access to TSMC chips, that means losing access to the chips needed for cutting edge AI. Eventually it goes further, it means losing access to chips that go into the latest radar systems, missile guidance systems, as well as anti-missile defensive systems. One of the reasons the F-35 is the best fighter plane on the planet is due to the amount of computing power in the cockpit.
Having guaranteed access to near cutting edge silicon manufacturing definitely has national security implications.
One of the reasons Russia is going to be in trouble is due to sanctions, they have lost easy access to cutting edge chips. It will take a while to play out, but this will have bigger and bigger implications for their economy as time goes on. Right now it is just a nuisance, in a decade it will be painful.
Intel spent all of their money on stock buy backs instead of investing in new fabs. See Boeing for another example of this.
They also ignored new and expanding markets ( e.g. famously turning down Steve Jobs request to provide CPUs for his new iPhone ).
Giving money to Intel is as useful as throwing it out your car window, but not nearly as satisfying.
Intel didn’t need more fab space. They have plenty of fab space. Investing in more fabs would have been like pouring more water into an already full bucket. Useless.
Intel’s problem was on the technology that fills those fabs. They were risk adverse on EV and got their clock cleaned by TSMC. TSMC could afford to take those risks because they had the backing of the government of Taiwan.
The thing about semiconductor manufacturing is the it requires insane upfront costs in research and development and then fab building. However, the marginal costs are literally almost next to nothing. This means when a semiconductor manufacturer gets it wrong, they bleed money like crazy. The fixed costs are too much and the company can go bankrupt. When they get it right, the can make money hand over fist because manufacturing extra chips is cheap and they sell for lots of money. Owning a high end fab that can produce the latest high end chips might be better than owning a U.S. Mint. High end chips sell for more than $100 bills.
So for decades, Intel got it right (or at least close enough to “right” that it didnt matter). During that time they made stupid money. They overpaid their employees, they overpaid their executives. They gave out stock options like they were candy on Halloween. They returned a shit-ton of money to their shareholders through buybacks and dividends. They were basically printing money. What did you think would happen? Of course it would be wasted and given away.
Semiconductor manufacturing is feast or famine. Undoubtedly Intel should have stuffed some of that feast under their mattress, bur that is not how companies work in modern capitalism. Especially ones that have gotten it right for so long.
All of that is in the past though. We cannot change that short of a time machine.
The question is, going forward, what can be done to insure modern, high end chips are manufactured in America for national security reasons?
For better or worse, Intel is the last significant American manufacturer of high end chips. Do you have a better solution than giving them money the help them get back on track? Or do we just give up on a very important technology?
Nice interview Wolf. Thanks for the great summary on current events you discuss in the articles.
Well, I’m looking forward to the text version of this discussion.
You’ll be looking forward to it for the rest of your life, if you want, not coming from me.
Alternatively, you could ask Todd Miller, whose podcast this is, to furnish you a text version.
Next time you want to watch a ball game or a movie, just ask for the text version, it’ll save you a lot of time and drama 🤣
I love text versions of movies! I call them books.
Thanks all. The full transcript is available (probably down the right side) on the original Youtube capture of this recording.
https://www.youtube.com/watch?v=HIl740WZiRQ&list=PLMw9xVe_yEaU927JaM-q8-iwdPl4wsZzf&index=1
YouTube, which is hosting this video, does have a passable computer generated transcript with time stamps you can skim or search. There are also topic timestamps in the video description if it’s too long.
I have uploaded a text version of this discussion to Google Drive: https://docs.google.com/document/d/1W1Rql_2jLcNzWHJ3AKSSKfJUP8m7PAJt/edit?usp=sharing&ouid=100893897030147802836&rtpof=true&sd=true
GREAT interview Wolf,
Thank you for your work!
Watched the whole movie, very entertaining, Looks like you were having fun. Your host had a pleasing manner as well.
Healthy living…
What I liked most is when you turned into a neanderthal a carried away the Japanese gal.
Enjoyed the interview. I wish the host would have asked Wolf about how he translates all his daily reading and writing into some long term investment themes or advice.
Please allow Youtubetranscripts.com to transcribe your videos. I can read it in about 10 minutes.
Not my podcast. It’s Todd Miller’s podcast.
Next time you want to watch a ball game or a movie, just ask for the transcript, it’ll save you a lot of time and drama 🤣
When a hot dog vendor in Federal Plaza right on Penn Ave in the heart of DC said his business was off 85% because of all the office workers working from home, I knew this was the beginning of the end for the commercial real estate market. This was the leading indicator.
These street vendors are the canaries in the coal mines.
What it J D Rockefeller who said when he got his shoes shined in Grand Central Station in 1929 just before the crash:
” When the shoeshine boy starts to buy stocks on margin you know the crash is just right around the corner”
You can read at 6X speed?
Click the gear Icon on youtube and listen at 2X speed
I rarely watch an online video longer than twenty minutes but I watched all of this one.
A few thoughts: Commercial real estate is not coming back. Even before Covid, I saw the handwriting on the wall. In my job, I could see that many employers were reducing hours from 40/week to 32/week, and I had a strong feeling that a 4 day work week was just a matter of time for many occupations. Then when Covid hit, it pretty much cemented the fate and habits of working America. I will note that I am not tuned in to the situation in other countries, but here at least, this is how it is now. I don’t know what the economic ramifications will be, but as Mr. Richter pointed out, CRE is already in a depression.
Residential housing is also a mess, and I don’t see how lower interest rates would help. Lower rates might drive home prices even higher. Let’s remember that in 1985, a 10% mortgage was considered to be a good deal. I place a lot of blame for the current housing bubble and supply shortage on the countless new multi-millionaires that have been created by the resurgence of other asset bubbles, notably stocks–which have averaged almost 13%/year since 2009–and also Bitcoin, which having gone from $2 to almost $70,000 in ten years is irrefutably the biggest bubble (and possibly pyramid scheme) in the history of mankind. To this day, nobody knows the true identity of the person who started it, and the jury is still out regarding why it is worth anything at all.
Artificial Intelligence– it remains a huge “unknown” at this point. The hype has gone way over the top relative to what it has actually given society thus far. Personally, I have no desire to have a conversation with a machine.
I would definitely NOT put any new money into the stock market here.
AI = Artificial Idiocy
AI is nothing but preposterously idiotic BS and nothing more.
That is a comment the requires a person to bury their head in the sand.
AI can already crush every human on this planet at chess. Pretty much to doing so in GO as well (if you are from that part of the world). Those are games with perfect information, so they are fairly easy for AI, but even games with imperfect information like poker, AI is making huge strides and pretty much dominate human opponents.
AI is better at diagnosing certain injuries/illnesses than even the most well trained and experienced doctors. AI can already drive better than most humans, especially on well trained areas. I am sure that there are well trained AI stock trading algorithms that are making their owners tons of money.
Soon there will be very few fields that a well trained AI system would not do better than even the best humans.
To call that idiocy and BS is having toys head buried in the sand. AI is happing no matter how deep you bury your head. Computing power is advancing far faster than humans are evolving. Furthermore, computers are not burdened by the illogical fallacies that so many human minds are burdened with.
That said, please do not think this means I recommend any AI stock investments, especially at these prices. I own a couple dozen stocks and none of them would be categorized as primarily AI investments.
AI has been around for decades, but the past few years it has really taken off. It is coming no matter how deep you dig that hole.
@JimL,
“AI has been around for decades, but the past few years it has really taken off. It is coming no matter how deep you dig that hole.”
So, true, and it’s not just for big computers anymore. Now it is being included in software development tools for micro-controllers.
I plan on evaluating some AI capabilities that “renesas electronics” is offering in their development tools. I don’t know much about this stuff yet, but I can see where it will become an important part of the future.
I’ve been in the electronics industry since 1984. The changes that have occurred since then are pretty amazing. Nothing much ever stays the same.
AI will never bet me on the golf course! I’ll bet I can paint my house better than AI, too!
Anthony: I imagine we won’t have to wait too long for a decent house painting robot. My predictions (mostly hopes), in order of likelihood:
Painting
Roofing
Siding
Flooring (including tile)
Things that I don’t see happening any time soon:
Framing
Foundation
Window and door installation
Trimming
Mitry:
The most basic of maintenance and construction tasks are still a bit of a leap for the robots IMO.
We have robot vacuums that are mediocre or better. I live in a place with a lot of hills, so I can imagine the setup of an exterior painting robot to be at least as involved as a human painter, probably more complex.
Framing and foundation seems more likely than some of the others you list. I picture the 3D printed buildings and that’s essentially already been done (not exactly framing but same as foundation).
The rules based complexities are “simple” for machines. Building is an applied science. The applied part is the art of it all.
What do I know, I am just a maintenance guy. (Also doubt there will be a lightbulb changing robot here soon/ it couldn’t easily navigate my property).
Agree. Well stated.
My observations:
AI will bankrupt all adapters. The apps are getting worse, not better.
CRE will only survive in the rich enclaves.
All govt data is propaganda, adjusted to fit the narrative.
The recession started last year, October to be exact.
@Petunia
What do you mean by “AI will bankrupt all adapters”?
Even in poor areas someone will want “Commerial Real Estate” (but I agree that there will be pain in the office and retail segments of commercial real estate and it will be woese in boor areas).
All govt. date is not full on “propaganda” (some of it is) but “all” is spun to better “fit the narative”.
I don’t know why anyone tries (or cares) to pick the date a “recession” started (it never startes for everyone in all states on the same date)…
There is no recession for individuals unless they lose their jobs, and then it’s a depression.
What passes for AI now is automated scripts in chat form with little to no human intervention. If the script doesn’t address the your issue, it doom loops or gives up. This will lose most businesses customers and money. Most businesses will go negative before they understand AI is not working for them. Hiring back staff will not be possible by then, not enough cashflow. Getting pissed off customers back will also not be possible.
I have seen this already in some very large businesses I use. They will be able to withstand the loss of business for some time but eventually competitors will offer better service and pricing and then it’s over for the AI adapter.
AI covers a broad spectrum of automated services, some of which are not AI at all, such as bill paying, etc. Real AI is still too far in the future to replace real customer service. All the current cost cutters adapting AI will be mostly negative in a year or two.
This is nutty. Full blown crazy.
AI is already making lots and lots of money for people. I am sure there will be some people in AI who will end up too far over their skis and go bankrupt, no doubt, but that will be rounding errors in the amount of money people will make (and are already making) using AI.
CRE will always be around. It may take different forms rather than offices and stores, and it may be at different valuations, but it will be around. Real estate will always have some value. People (humans) need space to live and do things.
How is all government data propaganda? You saying this shows that you really do not understand how it works and how it is collected and disseminated. People are taking advantage of you by playing on your fears of things you do not understand.
Take off the tin foil hat and educate yourself. You will do better in the rat race.
I’m still waiting for someone to give a case study of AI from top to bottom of the chain where everyone makes a sustainable gain and can do once the market is saturated with AI adoption.
If there is net gain money there, it means, somehow products will have to cost more to justify the AI cost, plus people still employed at higher salaries to buy the higher priced products, so AI won’t displace/replace employees.
I just don’t get where the confidence with AI being a net gain is coming from at this point.
Ok in 25 years a load of new jobs might pop up to fill the gap AI leaves, and it all ‘makes sense’, but we don’t know what that looks like yet.
Show me the case studies, and the logic scenarios and assumptions over the next 25 years that make it play out as something valuable to be in today.
Out of the whole IT/web industry in 1999, only a handful were “worth” investing in.
Many of the biggest took 25 years to round trip to price equity (sans inflation).
Some still haven’t, like Intel.
Even the EV makers are suffering the same, they all boomed in value but who knows who the winners will be.
So yes, AI probably great. But who will be the winning team?
I think the AI companies to invest in hasn’t been started yet.
Jiml,
A math major with a wall st background is hardly a tin foil hat wearing, uneducated scary cat. Give me the data and I will give you any outcome you desire. If the data you are getting was honestly presented, it would not be revised month after month in never ending repetition, to the downside. Just saying…
JimL:
I agree with Petunia that as far as the user experience: much of the software has passed the zenith.
We have animated dropdown menus and automatic surveillance… err “data collection.” Basically a host of “features” to entertain, and distract but potentially benefit the host company.
The people are now just as financialized as everything else. For the most part they want food and shelter, but are hooked on entertainment and a poisoned food supply. The conditioning does work!
The question is the end game. What is the actual useful product and application? Replacing humanity with robots results in death (see the Terminator or Matrix series).
Processing more information faster is asymptotic: the usefulness runs out eventually.
Having the best diagnosis medically is only useful for people who can pay in a broken system.
I see SF as a microcosm of the US: A relatively small population with WAY too much “money” sloshing around. When we value the green paper more than the people, it becomes unsustainable.
Petunia,
The tin foil hat comes from your statement that all government data is propaganda. You then double down on the nuttiness by pointing to the fact that there are revisions to the data.
This shows that you have absolutely no clue how the data is collected and disseminated. Zero.
There are thousands, if not tens of thousands of people behind that data. Almost all of them non-partisan who do not care who is in office. All of them do their jobs regardless of the party in charge. Any attempt by those in charge to change the data would result in at least a few of them going to an Inspector General and being paid for life for being a whistleblower.
The reason for revisions in government data is the same reason for revisions in any thing else in life: More time and more data lead to better information.
Educate yourself about government data such as employment. Educate yourself about who collects it and how.
Calling it propaganda is just dumb ignorance.
I started my career as a Realtor in 1986 in Avon, CT. Most mortgages were around 12%. Home construction and sales were booming. Interest rates alone are not as important as people think. Back then there was a real demand for housing. Tidal waves of first time buyers who had jobs, credit, and savings were driving the market. However, like it always does, it turned into a bubble and crashed.
“I started my career as a Realtor in 1986 in Avon, CT. Most mortgages were around 12%. Home construction and sales were booming. Interest rates alone are not as important as people think.”
How much did a house cost in 1986? Interest rates and asset prices are like a see saw, boomers have been on the asset price side and refuse to let anyone else ride. What can not be sustained, will not be sustained.
What were incomes in 1986? I can tell you: they were a LOT Lower than today.
Of course you comment, its your site by god. What was the ratio of income to price wolf? I know you’re good at gaslighting with charts ;)
Mr. House,
The point was that you just took one element, price, and not the other big element, wages, which is manipulative BS. And I called you out on your manipulative BS. If you want to use affordability stats, be my guest, there are plenty of them out there, and they include in the equation: household incomes, interest rates, prices, and often also property taxes and insurance.
And then you could have made your point without deploying manipulative BS.
Is this acceptable? Though it doesn’t seem to agree with you……
https://listwithclever.com/research/home-price-v-income-historical-study/
I love to know how i’m proposing manipulative bs, and who i’m attempting to manipulate.
It’s better, but it’s outdated. The article you linked is from 2017; back then, I gave you the exact same thing, same data, from the same outfit (Clever). The charts show percentage increases since 1960 in median household incomes, median rents, and median home prices, three different percentage lines per chart (red, blue, gold). And I covered this here:
https://wolfstreet.com/2019/07/12/changes-in-house-prices-rents-and-household-incomes-since-1960-in-the-us-by-region-and-major-metro/
These “% increases since 1960” charts are better than ignoring median household incomes. But they’re not ideal. And for Clever, which did this, it was a way to get into the news to promote itself. It was a one-time thingy.
There are much better metrics out there, including the Atlanta Fed’s Homeownership Affordability Monitor. It’s current, but it doesn’t go back that far. Its formula includes home prices, interest rates, household incomes, etc.
https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership-affordability-monitor
Your Atlanta fed chart says its much worse now. So what was i lying about and manipulating with again?
You idiot. re-read my second comment to you on this. The second paragraph says: “And then you could have made your point without deploying manipulative BS.”
Interest rate work both ways. They price risk but also pay you for the risk. Remember, one man’s debt is another man’s asset. That’s how it works. Good behavior is rewarded, bad behavior goes bankrupt, well that’s how it use to be anyway…
Excellent comment/observations.
DM: Hedge fund boss issues dire warning over the US stock market: ‘This is a stark red flag’
Mark Spitznagel, president and chief investment officer of Universa Investments, made the prediction in an interview with Fortune, almost two weeks after the worldwide fiasco.
I enjoyed the thoughtful answers to the rapid fire questions.
That was a well spent hour of Macroeconomics, thank you!
Interesting comment in the interview about Wolf living in the airport flight pattern in Rosslyn , VA. I had the same issue on the Maryland side of the Potomac River. We moved 3 miles from river several decades ago because of this. Also, more flights and bigger planes making more noise. We believe some of the planes were over loaded, and to avoid fines sometimes illegally dumped fuel in mid air over the airspace above our residence. You could smell gasoline in the air right in our front yard.
Airlines do not jettison fuel unless an emergency exists.
They are well aware of the liability and danger of dropping fuel on people and residences.
You believe in chemtrails too, don’t you ?
I am guessing that he cannot tell the difference between the smell of partially burned fuel and dumped fuel. Most people do not realize that when engines (plane or automobile) are reved to high levels during times of quick acceleration, that they are flooded with fuel and some fuel will make it through the engine unburned. When planes (particularly heavily loaded planes) accelerate for take off, there is a small percentage of unburned fuel than makes it through the engine.
Airplanes simply do not jettison fuel unless they absolutely have to. Mostly it is the liability (there would be an obvious record of them doing so), but it also has to do with costs. Jets only take off with the minimum amount of fuel they are required to and would not waste it by dumping it unless they absolutely had to. Airlines are not in the business of wasting fuel.
That said, it would not surprise me if he believed some crazy chemtrail conspiracy given some of the other crazy stuff he believes.
But you just confirmed chemtrails exist in your comment. The unburned fuel and burned fuel residue create chemtrails. And the flight though moisture creates contrails.
I know, I know you mean the conspiracy theory of purposeful dumping chemicals for nefarious reasons.
…reminds me of a time in the Sears Point paddock at an NHRA National when I wasn’t paying close attention to where I was standing. The sound from its suddenly-lit KB aside, the snootful of raw nitromethane that preceded that Top Fueler’s combusted exhaust was unforgettably (and literally) breathtaking…
may we all find a better day.
TxRancher,
Of course chemtrails exist. Anyone with eyes can see them. The point is them being nefarious or naturally made as a byproduct of flying under certain conditions.
When I was doing lots of high end management consulting work, I had a manufacturing customer I was doing some work for. Near the completion of the project, a bunch of the executives of the company took me and my partner out to lunch to celebrate the project going live the next day. Including the CEO of the company.
During that lunch, somehow the conversation turned to flying. The CEO then proceeded to go on a 10 minute rant about the government controlling thr population through chemicals intentionally released from airplanes. It was literally 10 minutes of the craziest conspiracy theories. Everyone who worked for him at the table was silently looking at their plates of food. Everyone was afraid to say something. How does a person get to be a CEO of a mid tier manufacturing company while still believing in nonsense?
Yes, chemtrails exist naturally. No, the government is not behind them. No airplanes are not intentionally dumping fuel over populated areas. Airlines do not waste fuel. If anything they try to skimp on it.
Also, many modern aircraft, specifically most narrow-bodied aircraft, are not built with the ability to dump fuel.
That’s jet fuel, more akin to diesel u were smelling and due to the low rpms as they coast to a landing probably.
I used to watch the Concorde land in Heathrow while I was in London – the window sills had dark soot residue on them constantly. Was cool to watch but flight paths, meh. That stuff is nasty.
I have relatives who live very near Bradley (BDL) in Windsor Locks. All the homes and businesses in the neighborhood have an oily film on the windows from unburned Jet A. This goes into the air when a plane winds up the engines on the blast pad to take off. You can even smell it inside the house. Also, you have to stop talking, in person or on the phone, every few minutes. The noise is overwhelming. Good place for a group home of deaf kids.
I think the airplanes were at least 1 to 2 thousand feet over my house when I smelled the gas. This had nothing to do with takeoff or landing, and had everything to do with the fact that they felt they were above the law. Add to that the numerous curfiew violations. I got sick and tired of this and in spite of numerous complaints to my Congressman, nothing was ever done to mitigate the problems. I moved 3 miles away and got out of the fight pattern of National Airport.
When a plane dumps fuel, there is a series of things that happen that would trigger an investigation. For one, but the pilot and first officers would know about it (plus whatever pilots are on board if the flight is long enough).
These pilots and first officers owe no loyalty to the company they fly for due to their union protections. They owe their loyalty to the FAA and know what would happen to their livelihood if they were caught dumping fuel over populated areas without an emergency. It isn’t even close.
Secondly, there is a clear written record of the amount of fuel a plane takes off with, how far it flew (at what speed and altitude), and how much it landed with. These numbers are all recorded by pilots or ground crew grunts who have absolutely zero reason to lie, and every reason to tell the truth. All of these numbers are collected and reported on. At least a dozen people would have to be in on the conspiracy of each instance to secretly dump fuel. Most of them with no reason to lie.
Like most nutty conspiracy theories, it falls apart fairly quickly when one takes a closer look at the circumstances.
Finally, even at a couple thousand feet, airplanes are still accelerating to climb. There is still trace amounts of unburnt fuel passing through the engine and falling onto the houses below. Furthermore, if a modern jet actually dumped fuel into a populated area, it would blatantly obvious and there would be evidence everywhere.
It doesn’t happen except in an emergency.
Good on you Wolf. I’ve been dealing with a health issue for several years, slowly working it through. My Wolf mug is dedicated to the tree bark that is my medicine. I raise a toast daily.
Thank you, Todd, for interviewing Wolf. We all know he’s an interesting dude, so thanks for giving him an opportunity to share.
Great interview Wolf. Super informative and entertaining. It was well worth the time and gives a different insight into your articles.
To the folks who are asking for transcripts, wtgfa, “watch” being the operative word.
Your comments made me realize how so many of our day to day economic issues and challenges are really based on long term structural changes in markets, such that our survival and prosperity depends on quickly recognizing and adapting to those changes.
I have to agree, financialization of anything that can be bought and leveraged to throw off cash flow, from veterinary and dental clinics to car washes to real estate, is a gigantic stressor on our economy that will magnify the effects of economic cycles, debt pricing and every other aspect of our economy.
What keeps me awake is the financialization of our political system. It’s he largest, most important industry in our country. It is in the process of being “taken private” and is now even more beholden to the same folks financializing all the other industries.
They strip profit from those who actually do the work, or offload risk to unwary groups like taxpayers.
Risk, in particular, requires patience and foresight to appreciate. Some financiers take advantage of it.
Ya think? If not, I have a mortgage-backed security I can sell you!
MW: Wall Street is six times the value of Main Street, says Bank of America
The interwebs are teeming with self-proclaimed experts who pass off speculation, prediction and error as fact.
Wolf’s site is a refuge from the nonsense. Everything he writes or says re finance is tied to actual data. He takes dense topics like inflation and quantitative tightening, breaks them down into key parts, and makes these extremely complex processes clear for non-experts.
No small part of the site’s draw is seeing false claims getting knocked down in the comments.
I wish there was the ability to recommend comments because yours deserves many.
Great stuff. Yes, greedy fuckers in banking and finance, loved “capitalism” when their “financial products” were bringing them record profits, despite violating 150+ years of contract law (that’s essentially what MBS did). They loved it when they sold these products to America’s pensions, KNOWING that they would implode AND making money by betting against the same products they were selling… Financialization was, at it’s core, a criminal act.
A functioning market requires rule of law and a mechanism for true price discovery. Remind me, who went to prison? How many of the firms that profited (going up and down) from MBS went bankrupt and had their assets sold?
It’s no surprise gold has a new floor at $2,500. Full FAITH and credit and all that. 1971 was the first opportunity for America to come clean and right the ship. 2008 was the watershed moment that broke the global financial system. My best guess is that the FRN is essentially where the pound sterling was in 1955. Hedge accordingly.
Know a person who’s wife has a corporate marketing job for a large auto company in Detroit, she does Tik Tok reviews on random products and rakes in some good dough. She is in her early thirties, not looking to work for the company all the way through pension time.
I suspect there are a lot of people under 30 something who grew up on social media seeing peers make real money that was virtually out of reach for previous generations. May be why a lot of Americans think working for themselves is the way to go.
So this morning on the Chicago-based Stocks & Jocks show Denninger was trying to nail down groceries price increases from his own spreadsheet records of purchases the last 3 years. The Chief said he saved money by having a toilet with 2 levels of flushing, if you know what I mean, and buying fake mashed potato mix for the guys in his office.