“The economy is fine”
The economy: Luxury home prices around the world dropped for the first time in a decade. pic.twitter.com/X07aJuHHHx
— Genevieve Roch-Decter, CFA (@GRDecter) May 11, 2023
Currently no rent being paid on 20% of US office space.
Getting worse? Think of how many companies are riding out expensive leases with no intention of renewing, plans to downsize sq ft.
Regional banks have much of the exposure to this market.
Ht @JoeConsorti pic.twitter.com/OhHkyEDJPd
— Wall Street Silver (@WallStreetSilv) May 11, 2023
John Rubino: Time To Short The Homebuilders
This morning’s consumer price index (CPI) print was a slightly better than expected 4.9%, raising hopes that the Fed will be able to stop tightening pretty soon.
But this speculation completely misses the point, which is that when the Fed finally does stop raising rates, monetary conditions will continue to tighten for a long time. And not just in the US, but everywhere. The world is awash in short-term debt that has to be rolled over. With interest rates now at the highest level in a decade, everything that rolls over going forward will do so at a higher rate. Which means rising interest costs — which is the general definition of monetary tightening. Governments will see their deficits rise in line with their higher interest costs and corporations will see their profits shrink, just as if the Fed was still raising rates.
Consumers, meanwhile, will keep putting their day-to-day lives on plastic. In the past year, US credit card debt has soared to a record high of nearly $1 trillion. This isn’t because an exuberant public is buying exotic vacations and hot cars. It’s because strapped families are working multiple jobs and still not covering basic expenses, and resorting to the modern equivalent of loan sharks to feed their kids. And barring a massive increase in wages, it will continue, which means monthly credit card balances charging 20%+ interest will keep rising. This is another example of monetary tightening.
A recession will unfold this summer and last through the middle of 2024, Evercore chairman, Ed Hyman, has said.
— unusual_whales (@unusual_whales) May 12, 2023