Sunday, February 26, 2017
Contemplations for a Sunday (unless you can't get around to it til Monday) CORRECTED 3/12
Some simple themes today...
1999-07 --> 1 new job per new home, 0.08 net new jobs per new car
2008-16 --> 0.5 new job per new home, 0.02 net new jobs per new car
1971-85 --> 1.5 new jobs per new home...0.18 new car
1986-00 --> 1.5 new jobs per new home, 0.11 per new car
2001-16 --> 0.0 new jobs per new home, 0.0 per new car
1999-07 --> 0.4 new jobs per new home, 0.04 per new car
2008-16 --> <-0> new jobs per new home, <-0> per new carBack to my point that the slowing population growth and slowing employment among the core was the fuse that ignited the NINJA fueled subprime housing crisis...it's pretty plain to see from 2000 onward, the system was still building homes but they'd run out of new people to sell them to...so they collapsed the standards, did away with down payments, did away with credit worthiness, etc. Finally, as you probably know, the subprime affair didn't turn out too well. Luckily, the ever wise Federal Reserve had another plan to avoid a free market collapse in prices...crush the bond market (yields to essentially zero) to flush out all those nearing and in retirement and direct their trillions into rental real estate. So retirees and foreigners (particularly Chinese, looking for a safe haven for all their newly minted trillions outside of China) saved the day for American real estate.