tag:blogger.com,1999:blog-1110014885778996459.post4150191159533742117..comments2024-03-28T11:48:09.419-07:00Comments on Idiosyncratic Whisk: Housing, A Series: Part 63 - More Evidence that Mortgage Repression is creating a bust, and there was no bubble.Kevin Erdmannhttp://www.blogger.com/profile/07431566729667544886noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-1110014885778996459.post-11604778437242540022015-10-11T00:54:23.537-07:002015-10-11T00:54:23.537-07:00thanks for the tip; that's fascinating
workin...thanks for the tip; that's fascinating<br /><br />working in a 'home' during nursing school turned me against minimum wages, taxes on savings and work, stingy immigration controls, contemporary culture (low fertility, 'bowling alone'). even the nice places run by sincere, industrious people often feel like Guantanamo for the residents, for whom all attentions are rationed<br /><br />Mortimer Randolphhttps://www.blogger.com/profile/03461337204738090189noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-34180139945819287102015-10-05T12:32:17.825-07:002015-10-05T12:32:17.825-07:00Did you see the paper that came out a few years ag...Did you see the paper that came out a few years ago about elder care? Apparently there is a mysterious countercyclical behavior in mortality. They found evidence that in recessions, nursing homes are better staffed, because, like you say, low income elder care workers find better opportunities during expansions.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-44163981764374044852015-10-05T12:22:47.826-07:002015-10-05T12:22:47.826-07:00"Overwhelmingly, inflation now is coming from..."Overwhelmingly, inflation now is coming from the national housing crisis due to the mortgage collapse. This actually makes consumption inflation inversely related to monetary and credit expansion."<br /><br />This insight continuously blowing my mind about implications for pre-inflationary Fed headroom explains my reading here. it's like a Sherlock twist<br /><br />"I think inflationary pressures from minimum wage hikes might come more from the damage it does to productivity than from the transfer to wage earners."<br /><br />good point. still, if LFPR is not growing, while entry-level retail wages r growing along with retail productivity, this would seem to tempt workers in sectors with lower productivity growth, like child care and elder care, to sell cars or data plans. I'm not worried about CPI spooking the Fed so much as I'm worried about whether I should ship grandma to Thailand. I want to note that I'm not making a case for tightening, here. Granny's situation would not b much improved in a recessionMortimer Randolphhttps://www.blogger.com/profile/03461337204738090189noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-81007168506070709472015-10-03T09:43:07.898-07:002015-10-03T09:43:07.898-07:00I think the propensity of low income households to...I think the propensity of low income households to consume is an overestimated concept. I don't think it amounts to much. And, I think wage growth is more related to real production growth than it is to inflation.<br /><br />I think inflationary pressures from minimum wage hikes might come more from the damage it does to productivity than from the transfer to wage earners.<br /><br />Overwhelmingly, inflation now is coming from the national housing crisis due to the mortgage collapse. This actually makes consumption inflation inversely related to monetary and credit expansion. That should make the near future interesting....I just hope it doesn't become too interesting.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-63285487539940564222015-10-03T00:12:22.675-07:002015-10-03T00:12:22.675-07:00bloomberg had an article the other day claiming th...bloomberg had an article the other day claiming that security guards, baristas, cashiers, and nursing aides r among the 20 job titles that have enjoyed the best wage gains this year. might the 2% wage growth across the economy b more consequential for consumption than it looks, if ever more of that gain is concentrated at the bottom among workers who consume the marginal dollar of income? what if there's not much slack. minimum wages r going up a lot in several major metros and seem to win everywhere on the ballot. could inflation rise in a step change when the cats who spend it all receive raises? this thought dissuades me from mREITs and p2p lending, for nowMortimer Randolphhttps://www.blogger.com/profile/03461337204738090189noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-20283177067089110912015-09-27T17:22:37.620-07:002015-09-27T17:22:37.620-07:00Thanks Ken. I think he addressed housing in a rec...Thanks Ken. I think he addressed housing in a recent post, but I think he assumes housing is operating in an equilibrium context, which is understandable. I would too, if I hadn't convinced myself otherwise over these last several months. I hope your suggestion to him garners some feedback. It would be really interesting to see what he has to say, though I'm afraid the sheer volume I have created on the topic is a kind of barrier to entry for new readers....Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-81175398553746351982015-09-27T16:53:01.775-07:002015-09-27T16:53:01.775-07:00Yeah, commercial building is an interesting area. ...Yeah, commercial building is an interesting area. I'm not sure I have a solid understanding of the various factors involved. I agree with you that outlets for small scale activity have not been protected very well.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-13830945316390985452015-09-27T07:25:41.469-07:002015-09-27T07:25:41.469-07:00Off topic... well, actually *on topic*... David An...Off topic... well, actually *on topic*... David Andolfatto has a post explaining how in the IS-LM model, present conditions could be explained by caps in the ability of investors to borrow:<br /><br />http://andolfatto.blogspot.com/2015/09/zero-intolerance.html<br /><br />Kevin, this strikes me as an academic-macro slant on what you've been saying for weeks or months in this series, that frozen mortgage credit markets and an unwillingness in the regulatory apparatus to believe that higher home asset prices make sense has led to a capped demand for loanable funds, which brings us to zero interest rates and economic stagnation. The key text in the blog post that made me think of you is here:<br /><br />> The equilibrium interest rate is low--not because of Fed policy, but<br />> because investment is constrained. Savers would love to extend more<br />> credit if investors could be trusted and if regulatory hurdles were<br />> removed. But alas, present circumstances do not permit this saving flow<br />> to be released...<br /><br />David gets all this way without mentioning housing. I will suggest to him that he take a look at your stuff.<br /><br /> -Ken<br />Kenneth Dudahttps://www.blogger.com/profile/10593455504357461005noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-3775099606845140582015-09-27T06:33:55.251-07:002015-09-27T06:33:55.251-07:00Office space we have. Retail space we have but I w...Office space we have. Retail space we have but I wonder if the retail space is where it is needed, close to dense populations. <br />Build more housing. Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-81595586360107584112015-09-25T18:17:13.291-07:002015-09-25T18:17:13.291-07:00You know, it seems like there shouldn't be the...You know, it seems like there shouldn't be the same pressures on commercial rents. Commercial density is allowed to be so much higher in places like Manhattan than residential density. And telecommuting, e-commerce, etc. are reducing demand so that I see a lot of formerly commercial land that is now being in filled with residential. But the price behavior certainly suggests rents are similar, doesn't it? I suppose once a lot of land development decisions, etc. filter through the market, there should be enough substitution between commercial and residential development to cause expected net returns on capital, and therefore growth in rents, to be correlated over time.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-38782034782785000742015-09-25T17:44:40.317-07:002015-09-25T17:44:40.317-07:00Excellent. I have long pointed out the mirror mark...Excellent. I have long pointed out the mirror market in commercial real estate to residential.<br />I wonder if the same building constraints, zoning, apply to commercial in the cities you identify is particularly bad in this regard.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com