I admit to not opening the link yet…but still wanna ask…are any particular sector especially over leveraged here? From my vantage point, I have seen some municipalities up their leverage anticipating a certain growth curve. I call this the new south bubble. It’s been puffing itself up slowly but surely. The NC treasurers office reviews this and keeps a lid on it to some degree but they take the growth curves as submitted from what I can tell, which is more or less based on historical growth. If corporate bonds and municipal bonds ever got shaky at the same time that would nosedive most places in the country I think. But I am just a hack and welcome people who know better to chime in.
So underwriting and appraisals had nothing to do with it? Government cracks the door open and the private sector exploits the hell out of it and only a GSE is to blame? There is precious little altruism when there is money to made.
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Point made. You distrust capitalism. I distrust big government.
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There’s more than enough distrust to go around. IMO, the sweet spot is balance.
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I’m just saying lots of players were involved. That 70% goal and Freddy/Fannie being willing/told to buy bunches of the poorly underwritten mortgages didn’t stop the banks from bundling them up into securities and misrepresenting their risk status. Everyone should have exercised better judgement.
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why does everyone think there is going to be another recession right now, the economy is booming?
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That is too deep of a question for this forum. But at a very high level:
- We live in a global economy and not everyone is doing as good as we are;
- The inversion curve. Read here: https://www.thebalance.com/inverted-yield-curve-3305856
- The media wants us to have one so they talk about it a lot. I’ll leave it there.
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History tells us that expansion can’t continue unabated. That said, I don’t think that anyone is talking about a 2008 meltdown sort of thing, rather a typical type of correction.
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NC State Economist Mike Walden presents the facts and lets You Decide: Recession - Yes or No?
He presents reasons why both sides think the way they do.
In the end, another recession is going to happen (it’s the natural order of things), but no one really knows when.
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I agree with history outlook, if look back this is about to break record for longest growth period of growth in last 100 years or maybe more.
IMO, One thing I think the talking air heads missed on last months job growth. One reason for the low numbers is there just are not any qualified people to hire. If looking at other numbers, such as open jobs which are twice the number of unemployed people and was a record number of people quitting and going to work in another position. This points out that growth is hitting limits. Either slow down or the fed will get it’s wish and there will be a big uptick in inflation.
I agree will not be like 08-09 but more a pause to catch breath. At least I hope so.
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Yes because a small correction is nothing major and may not affect the Raleigh area much at all, but if it goes so far as to be a major bust…
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You pretty much answered your own question.
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Isn’t it really the same thing though? Big companies pay (donate to) big government to pass laws to keep them making big money so their stock stays up, so they don’t harm shareholder trust and become part of the 'recession" narrative, so the politicians can stay in office and keep collecting that pay out.
It’s just a cycle made necessary by a flawed system that hasn’t progressed with the times. So I guess you’re both right…
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Thought you guys might find this interesting. I wasn’t sure which thread was best for it.
https://product.costar.com/home/news/shared/32693318?utm_source=costar&utm_medium=email&utm_campaign=2&utm_content=p0
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@Speck that’s pretty interesting. 2019 is crushing it for new construction.
However it’s notable how they say ‘Raleigh’ which includes areas outside downtown, but even farther out (they mention growth from Epic Games and Xerox, which are Cary expansions). But we get their point… the market’s pretty hot.
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Where did this graphic come from? I assume Raleigh (+ outlying areas) are in blue. What is shown in gray?
It’s from the link above which gives the full chart. Grey is buildings under construction with occupants already signed. Blue is that being built on spec. Sounds like lots of building on spec because the demand is high and expected to stay hot.
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Give this a couple of weeks or months it will pass. The economy will be swimming with money looking for a place to go. When it looks like the world will end, start buying. There was ample demand before this happened and with rates at zero, it’s going to get crazy. Especially for real estate.
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agreed. while everyone is hunkered down, it’s creating a lot of pent-up demand that will likely come roaring back, at what velocity we don’t know, and of course we don’t know how long. But the cost to borrow money will be the cheapest it ever has been, so it’s actually a great time to borrow and start working on a multi-year project.
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