tag:blogger.com,1999:blog-1110014885778996459.post9014163555408289842..comments2024-03-28T11:48:09.419-07:00Comments on Idiosyncratic Whisk: JOLTS, Sept. 2016Kevin Erdmannhttp://www.blogger.com/profile/07431566729667544886noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-1110014885778996459.post-26282313155064920782016-11-15T01:00:02.033-07:002016-11-15T01:00:02.033-07:00I think you have it right. Amazing.I think you have it right. Amazing.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-66630945093135068992016-11-15T00:59:52.719-07:002016-11-15T00:59:52.719-07:00I think you have it right. Amazing.I think you have it right. Amazing.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-22588277994027372582016-11-12T21:09:59.883-07:002016-11-12T21:09:59.883-07:00Banks pulled back on real estate lending growth qu...Banks pulled back on real estate lending growth quite predictably in 2006 when the Fed inverted the yield curve. Then private securitization investors filled in the gap for a while. Currency growth fell far below trend in 2006 and 2007. The drop in total lending growth lagged the drop in currency growth.<br /><br />I think it's the central banks that pull back, not the commercial banks. And, I think the reason is that the Closed Access cities create this weird unstable equilibrium. Functional housing expansion in those cities will lead to massive dislocation and capital losses. I think this may be a reason central banks have been so tight. If they accommodate investment growth that is healthy enough to relieve pressure on Closed Access housing, it will be nominally disruptive. I doubt they think of it this way. They just think of it as avoiding overinvestment, and they tighten before the economy can grow at a healthy rate.<br /><br />This is why it is so frustrating that even the market monetarists have been drawn into this hypnosis that 6% NGDP growth was part of some massive over-accommodation. Everyone is upside down.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-591748460837750992016-11-12T19:16:08.979-07:002016-11-12T19:16:08.979-07:00Lately I have been pondering property zoning, arti...Lately I have been pondering property zoning, artificial scarcity, bank lending, "bubbles" and recessions.<br /><br />Nothing profound, as I tend not to be profound. <br /><br />But…70% to 80% of bank lending is now on property, and existing property at that...<br /><br />…there is artificial scarcity (ossified property zoning), making property lending "collateral" that banks are comfortable with….<br /><br />...bank lending is the so-called exogenous creation of money….<br /><br />Okay, we get very land high prices in London, Sydney, L.A-O.C., SF, suburban Connecticut etc wherever there is general rule of law, and some prosperity, and tight zoning. Banks then become very exposed to artificially high property prices. <br /><br />Okay, something happens to make banks pull back. This, of course, deflates property values, especially those in artificial markets. This leads to less lending, and then lower property prices, and less exogenous creation of money. <br /><br />Then you get global recession, particularly as central banks are not aggressive enough in counter-acting the recession. Helicopter drops are verboten, and QE is used gingerly. <br />Zero bound means interest-rate cuts weakling tools…. <br /><br />Okay, that is my surmising for the day…. <br /><br />Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-50976419139559411752016-11-09T23:01:59.184-07:002016-11-09T23:01:59.184-07:00Yeah. There is a lot of uncertainty here. I have...Yeah. There is a lot of uncertainty here. I have become pretty focused on the impending rate hike. I think there is a pretty good chance it would have led to enough pullback to create an economic contraction. It's the 25 bp jump in long term interest rates that surprises me. If the Fed also decides to hold short term rates down, and if they do their reasoning from a price change thing where they interpret the higher long term rates as contractionary, this could lead to a significant monetary loosening. If that combines with mortgage expansion, a lot of good could come of it. Obviously Trump has promised to do a lot of terrible things too. But, oddly, the surprise election result has turned what I thought was a highly likely contraction into a context with potential upside.Kevin Erdmannhttps://www.blogger.com/profile/07431566729667544886noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-41024666191333381852016-11-09T17:21:45.537-07:002016-11-09T17:21:45.537-07:00For now, I will be hopeful. As Ben said, he had so...For now, I will be hopeful. As Ben said, he had so many positions, only time will tell which ones survive. But the one you point out - reduction in Dodd-Frank seems very likely to happen. At least cutting it back if not outright repeal. billnoreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-38983597828466613462016-11-09T17:09:22.865-07:002016-11-09T17:09:22.865-07:00Trump staked out so many positions on every topic ...Trump staked out so many positions on every topic that....oh well.<br /><br />On the plus side, Trump has a GOP Congress that might be "pro business."<br /><br />The last time we had a GOP President and Congress was 2000....a great time (to short Wall Street).Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-1110014885778996459.post-59009806251446318272016-11-09T17:07:08.217-07:002016-11-09T17:07:08.217-07:00Trump staked out so many positions on every topic ...Trump staked out so many positions on every topic that....oh well.<br /><br />On the plus side, Trump has a GOP Congress that might be "pro business."<br /><br />The last time we had a GOP President and Congress was 2000....a great time (to short Wall Street).Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.com