16 Comments
Apr 15, 2022Liked by Handwaving Freakoutery

I can't argue with such an analysis based on history. OTOH, we are entering some very odd times created by free money. Because free money all savings had to go to stock shares and we saw impossible P/E ratios. When Tesla is 'worth' more that all auto makers combined, we clearly are nuts. The hedges know that bubble must burst and started buying whatever real property they could, tangible assets. So the price escalation in that property accelerated along with rents. We get classic inflation too much money chasing too few goods amplified by people who hadn't needed to work. That too created a pendulum that now is beginning to swing. If wage-price stuff takes hold, Katie bar the door.

Now clearly servicing the debt is touted as essential to dollar stability. As the Fed increases rates that service will eat up a lot of outlays which require actual money. Who knows what Congress will do? We may discover that we really can't print forever.

Meanwhile what are we to do with a world awash in cash? Maybe land trading among greater fools is about to take off. A lot of sunk money possible after the next crash. Building has been an important part of the economy as well as jobs. I can see a lot of angry people.

Sometimes I wish I were smarter.

Expand full comment
Apr 14, 2022Liked by Handwaving Freakoutery

There's a subdivision named Rivendell here, which was bad enough, but now we're working on King's Landing. I wish I was making that up.

Expand full comment
Apr 14, 2022Liked by Handwaving Freakoutery

PLEASE tell me you're the guy that did the intersection of Morningwood and Softwood. bonus - You work in Montana, too? This has to be a CE meme. Wiping my eyes in Florida, where we're in that BOOM part of the cycle.

Expand full comment
Apr 17, 2022Liked by Handwaving Freakoutery

Thanks for the heads up. Your observations are mirrored in hundreds of other industries and markets.

Expand full comment
Apr 16, 2022Liked by Handwaving Freakoutery

Great article. Really enjoy learning about things far out of my personal experience.

If a friend of mine wanted information about this kind of thing’s impact on the insurance industry, where might they look?

Thanks in advance.

Expand full comment
Apr 26, 2022Liked by Handwaving Freakoutery

I’m in the telecommunications industry in the south east and I’m also seeing this crazy prolonged expansion of the bubble. We have a work flow at the moment that’s unheard of. The next 1-3 years are going to be super busy and I have a strong feeling of getting a ark together for me and mines.

Expand full comment
Apr 14, 2022Liked by Handwaving Freakoutery

I understand construction cycles, but you shelved Covid. You and I both work in lockdown refugee boom towns. Where does that demand fit into the cycle? Our national home builder clients are building in third-tier markets now, where there's affordable land, and regulators haven't had a chance to figure out all of the angles yet.

Expand full comment

Hi Beej, hope you and your kids are well. You predicted a similar situation to happen in 2016, instead the opposite happened. I agree it was looking like it was coming, but Trump loosening the reins revived the economy and it didn’t happen. (May have been something else, but I think largely that was it.) Having engaged a developer to buy my 6 acres in Hog Mountain, your description of the process is accurate except this developer has been in business for decades. The deal fell through because in the last election he lost his contact in the planning commission and couldn’t get the zoning he needed for 22 lots on the property. In Gwinnett all the large tracts of land are gone and developers are looking for smaller tracts like mine.

However, something new is affecting this market and potential crash due to demand and a housing shortage. We sold our house and property and simply couldn’t find a place to move to that wasn’t run down or way, way overpriced; we looked for 16 months until we had to move to close and ended up in my mil’s house. Demand is slacking up now that interest rates are rising, but there’s still a significant shortage of available houses. I’m thinking that may ease the crash. I think there’s a lot of people like us sitting on a wad of cash waiting to scoop up some deals. But then there’s this damn inflation eroding my cash value.

Best regards, Lee

Expand full comment