Economic Armageddon...or..brother can I borrow a trillion
Apr 6, 2023 0:49:14 GMT -5
Post by Cranky on Apr 6, 2023 0:49:14 GMT -5
Primer...About 8% of our economy is driven by construction. About 150 billion dollars annually.
I have a tiny "interest" in a massive several billion real estate project that landed on my head. Details are not important. What is important is my exit depends on a certain percentage of sales reached.
The project started selling early last summer and it looked like it would sell out by THIS fall...GREAT...except the sales went from a few hundred units to one or two a week. Why? Interest rates. On a several billion project one or two sales a week is equivilant to giving a cup of water to a thirsty elephant. It just dies slower.
Which got me busting phones to find that this is happening to other projects.
Which led me to start praying for that extinction meteor.
What is propping up our economy now are OLD projects finishing up. That is why the economy is very strong. What is being built now is from one to three year old sales.
What happens when they finish these projects and nothing new is shovel ready? You want to guess?
So three things are are on the table...
1...Force the rates down, people stiil buy but watch inflation bleed us.
2...Leave the rates high and watch the bubble burst. Hello heavy recession.
3...Our beloved borrow'spend loving government...borrows and spends multi hundreds of billions on new housing. Wait, do you think this "huge concern" about "affordable housing" just happened? Really? I got a bridge to sell you...
I don't know which will happen, but you were warned.
I have a tiny "interest" in a massive several billion real estate project that landed on my head. Details are not important. What is important is my exit depends on a certain percentage of sales reached.
The project started selling early last summer and it looked like it would sell out by THIS fall...GREAT...except the sales went from a few hundred units to one or two a week. Why? Interest rates. On a several billion project one or two sales a week is equivilant to giving a cup of water to a thirsty elephant. It just dies slower.
Which got me busting phones to find that this is happening to other projects.
Which led me to start praying for that extinction meteor.
What is propping up our economy now are OLD projects finishing up. That is why the economy is very strong. What is being built now is from one to three year old sales.
What happens when they finish these projects and nothing new is shovel ready? You want to guess?
So three things are are on the table...
1...Force the rates down, people stiil buy but watch inflation bleed us.
2...Leave the rates high and watch the bubble burst. Hello heavy recession.
3...Our beloved borrow'spend loving government...borrows and spends multi hundreds of billions on new housing. Wait, do you think this "huge concern" about "affordable housing" just happened? Really? I got a bridge to sell you...
I don't know which will happen, but you were warned.