Tuesday, July 11, 2017

Not even close to overheating. Said in the most sarcastic way.

"Minneapolis Federal Reserve Bank President Neel Kashkari said on Tuesday he finds it hard to believe that the U.S. economy is in danger of overheating when wage growth is so low." Source.

I'm going to hit Crazy Eyes Kashkari twice today. Because I'm not sure what his definition of overheating is. Take this true headline:

Crazy Silicon Valley real estate: Homes routinely selling for $200,000 or more over asking.

I actually started noticing this in the burbs a few months ago. The amount over isn't as dramatic as Silicon Valley proper.  But I'd say 80% of houses in my area are now selling for over the asking. Anywhere from 20-60 grand. Hey, it's the burbs - it's not going to be as crazy as The Valley.

Now strangely that other 20% percent is actually selling for under asking, which is kinda confusing. Just last night on the news they did a story on how many houses were being sold sight unseen because inventory is so low. That's crazy.

The whole thing made me laugh because this makes the housing bubble look like childs play.

But, the housing distortion is in full speed now. They haven't built enough to keep up with population, and everyone else is locked into low rates. Why would they move? This is putting immense pressure on the sector.

Again, I think it would only take the tiniest of sparks to make this a wild fire. For instance - what if instead of helicopter money........ they just let us keep more of our own money. Radical know.

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