When everyone was out doing premature victory laps, I was wondering what happens when they figure out that we were in recession the whole time and the only reason it didn't seem like it was because we were printing soooooo much money. Nothing new was created. But everyone was just spending their stimmies like it was the roaring 20's. Because that pesky pandemic was just on the cusp of being over. Said in the most sarcastic way.
Even worse.....the government put in place all sorts of eviction moratoriums that put a floor on prices going down. The rental moratorium doesn't even end (at least here) until June 30. And it's hard to tell exactly where the foreclosure moratorium stands because of the way it written.
Then the Fed comes in and drops a nuke on the housing market. I mean, mortgage company layoffs started like 3 weeks ago. Now the Fed just blew the everything bubble completely out of the water for inflation they can not fix. It is primarily driven by labor shortages. Literally everyone it out sick.
Now layoffs have accelerated sharply. Tesla is laying off 10,000. Construction will be next. And we get to find out what fun exciting creative financing caused Palm Springs houses to go up 40% in one year. Everywhere else at least 20%. Because that happens in the middle of a Pandemic when nothing new happened except creating money out of thin air.
Also... lots of finance guys seem to be confused why the economy isn't responding like the 20's. Maybe it's because the way the media talked about the lockdowns. Gyms and nail salons got all of the attention, but pretty much every place else was open.
I don't really know what the plan is now because we were never NOT in recession. The government just basically backstopped everyone with FORGIVEN PPP loans and when the spigot stops.........? People will find out the true nature of the economy. I'd say the last two years were completely lost. We haven't made a single bit of progress.
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