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Old 06-14-2020, 07:09 AM
 
9,610 posts, read 10,231,140 times
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Quote:
Originally Posted by heart84 View Post
The Fed has had a terrible forecasting record over the years. And if they do see and understand everything then their results do not match up with their rhetoric.
The last really bad miss by The Fed. was allowing the effective money supply to shrink in '07 and '08. Anyway, I'm way more interested in the idea that you see things they don't.
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Old 06-14-2020, 07:20 AM
 
2,600 posts, read 990,345 times
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Quote:
Originally Posted by mathlete View Post
It’s a myth that QE didn’t cause inflation. While QE didn’t cause inflation in the U.S. hot QE money flows into Asia, Australia and New Zealand caused enormous run ups in asset prices in those areas. Now those asset bubbles are poised to burst because buyers have dried up along with the torrent of Ben dollars.
The same happened with real estate in CA and Hongcouver — Chinese looking for places to park excess money ramped up prices to bubble levels.
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Old 06-14-2020, 07:22 AM
 
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Quote:
Originally Posted by mathlete View Post
Major cities in Asia and Australia as well as Europe are filled with empty, million dollar homes and apartments bought as investments with the flood of hot money from the U.S. starting in 2009. Buyers can’t afford these over-priced dwellings though and wouldn’t buy them even if they could because they instinctively know their prices are vastly overinflated so they sit empty. The question is how bad the economic implosions of these regions are going to be when investors finally accept the fact that they’re never going to sell these units for anything near what they bought them for, much less at a profit.
Your analysis is way off. I just poked around for a bit. Unoccupied housing numbers in Australia have been just over 10% for 35 years and the areas with the highest percentages of unoccupied homes are not the several most expensive cities.

__________

It is true that TGR's US QE did put downward pressure on interest rates in many countries. That's a far cry from claiming that US QE money flowed into these countries causing important real estate distortions.

Last edited by EDS_; 06-14-2020 at 08:10 AM..
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Old 06-14-2020, 07:23 AM
 
9,610 posts, read 10,231,140 times
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Quote:
Originally Posted by TimAZ View Post
The same happened with real estate in CA and Hongcouver — Chinese looking for places to park excess money ramped up prices to bubble levels.
What the other guy is claiming simply didn't happen as he describes.
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Old 06-14-2020, 07:34 AM
 
2,600 posts, read 990,345 times
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Quote:
Originally Posted by EDS_ View Post
The last really bad miss by The Fed. was allowing the effective money supply to shrink in '07 and '08. Anyway, I'm way more interested in the idea that you see things they don't.
I remember in 2007 a Fed Chairman named Bernanke stating:

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited”

Some much for your notion that the Fed is omniscient and “knows” what’s happening. They can and do get it wrong, often tragically wrong.
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Old 06-14-2020, 07:39 AM
 
10,547 posts, read 4,580,802 times
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Quote:
Originally Posted by TimAZ View Post
I remember in 2007 a Fed Chairman named Bernanke stating:

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited”

Some much for your notion that the Fed is omniscient and “knows” what’s happening. They can and do get it wrong, often tragically wrong.
Good point!

Luckily for me and mine, I and my investment advisors were on the opposite end of the stick on that one!
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Old 06-14-2020, 08:08 AM
 
9,610 posts, read 10,231,140 times
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Quote:
Originally Posted by TimAZ View Post
I remember in 2007 a Fed Chairman named Bernanke stating:

“Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited”

Some much for your notion that the Fed is omniscient and “knows” what’s happening. They can and do get it wrong, often tragically wrong.
Listen you and several others here bend historical facts to fit the narratives that bounce around in your heads. The guy who made the silly point above not long ago decided significant general price inflation was at hand because the oddball assortment of food items he buys went up over the last year.

Your Ben quote above is directly tied to my point about '06 and '07 money supply being too low. Can you name a big miss by The Fed. since then?

Guys like you were SCREAMING, some still are, that QEs and very low implied rates would lead to terrible general price inflation. Of course that didn't happen.


__________________


The other guy's point/claim that The Fed. does not see current deflationary pressures is just dumb.

A. The Fed. has more or less declared war on deflation starting February and March 2020. What do you/does he think near 0% rates, debt purchases, generous reserve ratio requirements, new overnight funds market liquidity facilities etc. are all about?

B. It takes 1 second to pull up dozens of bits like this.

https://www.housingwire.com/articles...arn-deflation/


https://fred.stlouisfed.org/series/STLPPMDEF


Note the April 20 numbers. If you think the people who generated the methodology and pull the numbers together monthly don't understand their owns reports/conclusions you are in dream state.

https://www.dallasfed.org/research/pce
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Old 06-14-2020, 08:29 AM
Status: "Mi amigo es mi fan." (set 3 days ago)
 
2,831 posts, read 799,272 times
Reputation: 4071
ED, yes last year I reported that I was seeing significant food price inflation on the items I was purchasing. This was a fact and many of those items have continued to increase in price. This is another fact. You can argue that it didn't happen but it is weird considering I am the one actually purchasing those items lol. I bet you do not even shop for your own groceries. I said this before during that debate and you never responded.......

As for the Fed "officials" they are mainly academics from ivory towers completely out of touch with the real world. I am not sure if others are aware or not, but ED is also an academic in economics. These types protect "their own" and will always defend the Fed. It is a moot point to argue with them. In their economic Ivory Towers, the Fed is the greatest thing ever created.

The fact is that Fed officials have horrible forecasting records. Here are a few major recent examples, BB in 2006-2007 - subprime is nothing to worry about. JY in 2017 - no new economic crises in our lifetimes (inferring the Fed could prevent any crisis situation), JP in 2019 - nothing to worry about on the horizon.

They are consistently wrong, but admitting their models are flawed challenges everything taught in those bubblelicious Ivory Towers they are often hand-selected from, and the same goes with the "academics" who will defend them religiously. It is basically like any other cult, except you are dealing with arrogant, elitist academic types who have very little real-world experience outside of academia.

Last edited by heart84; 06-14-2020 at 08:38 AM..
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Old 06-14-2020, 09:24 AM
 
1,659 posts, read 384,594 times
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Quote:
Originally Posted by EDS_ View Post
Your analysis is way off. I just poked around for a bit. Unoccupied housing numbers in Australia have been just over 10% for 35 years and the areas with the highest percentages of unoccupied homes are not the several most expensive cities.
From the linked article: https://www.abc.net.au/news/2017-07-...roblem/8709184

Quote:
Vacant housing rates are rising in our major cities. Across Australia on census night, 11.2 per cent of housing was recorded as unoccupied — a total of 1,089,165 dwellings.

With housing affordability stress also intensifying, the moment for a push on empty property taxes looks to have arrived.

The 2016 census showed empty property numbers up by 19 per cent in Melbourne and 15 per cent in Sydney over the past five years alone.
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Old 06-14-2020, 09:35 AM
 
9,610 posts, read 10,231,140 times
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Quote:
Originally Posted by mathlete View Post
That's the same piece you linked above. I read the entire thing............it does not say or imply, in fact it countervails much your key claim.
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