Dec 13 Financial News: Real Estate Plunges as Expected, Hawaii Sets Records, Fed Worst Call Ever

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18th monday december 13th and this is

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7 30 a.m daily financial news live

then we start doing interviews on monday

entire list of interviewees is listed

below so when i look at the daily

financial news for this monday

kind of an interesting uh day because we

got a lot of stuff going on

um

now let’s start at the top so yesterday

evening i did something i haven’t done

in three years i created a live sunday

evening

normally if you normally i take most of

sunday off right we do an interview with

laura morby at 8 a.m i do my goals

and

community videos usually i’m done

recording by 9 30 and then that’s kind

of my day to relax but yesterday evening

i had to do it i had to do the math i

had to calculate actual cpi if you know

already we’ve talked for weeks now about

cpi being a

under reported number mainly because of

rent or rent equivalent so i went out

did some research figured out what part

of rent is in cpi it’s about 28

so i did the math i took the reported

6.8 backed out that calculation and then

added back in what the real

uh rent is and

cpi is 10 folks

can you imagine what would happen to the

market to the fed if they actually

reported the truth

now let’s be clear i’m not calling them

liars i’m just calling them they have a

bad approach they are using a legacy um

mechanism to count rent that they’ve

done for years because

10 10 years ago folks it was hard to

collect single family rent data because

there wasn’t invitation homes with 80

some odd thousand homes now it’s much

easier so if we do the math now

yes folks good and bad news cpi is 10

cpi is 10 and you know what i think the

fed knows that so on wednesday afternoon

we are going to look for jerome powell

to hopefully

turn into

uh paul volcker because he needs to get

ahead of this or as ed ellerian is

saying transitory was the worst fed call

ever

and they’ve had some doozies so again uh

ed ellerian is not letting powell off

the hook basically saying pow gets in

front of this now or we are all in

trouble so kind of very interesting so

again this wednesday

it is very clear that jerome powell

needs to turn hawkish

right they’re either doveish or hawkish

the question i have is he just going to

talk

or is he actually going to do something

i think he’s going to double maybe

surprise us and triple the taper we

shall see

my big thing is will powell get off his

butt and talk about interest rate rises

next year so far he has said no 2023.

he’s got to talk about interest rate

rises next year and later on what else

58

people are thinking about

uh interest rate rises as soon as may so

the market is spec expecting it this

channel right here has been talking

about it for a year

so yes we are going to have the first

interest rate rise by the summer i still

believe it will be half a percent

because i think the fed is going to be

late

the fed does not want to cause pain

here’s the deal you cause

short-term pain or more pain later

they don’t have a very good track record

so this uh

yeah i don’t have i don’t have very much

confidence in powell

next up reddit very interesting article

about

people are leaving expensive areas and

doing it for quality of life this

article happened to focus on san

francisco

uh this particular creative uh was

renting a 2 000

studio yes a 500 square foot studio in

san francisco for 2 000 bucks they

called it a hovel

sounds like doesn’t sound like fun

anyways they took their skills and moved

to a small town just north of portland

oregon and now they are living in a

three-bedroom home

for 1500 bucks a month and having a lot

more stuff going on so again

this is something i’ve actually reached

out to her i found her on linkedin i’m

going to try to an interview chrissy was

her name interview chrissy so we can

talk about that as well

getting more and more data on austin

texas austin texas is one of those

markets like boise and again here on

this channel we do the work i

interviewed the economist

for idaho a couple of months ago and now

we’re getting data on austin austin

texas

pretty small footprint right it’s a

pretty small city it’s not sprawling

like dallas if you will

rents are up 25

extra bedrooms which again if you’ve

watched any of my videos about where

rent come from bedrooms is the number

one thing

in austin an extra bedroom gets you the

landlord or you as the tenant pays

275 dollars

why this is interesting is pre-pandemic

it costs about 125. so again 275 what is

that a year

like 3 300 bucks so again normally i

could take a remember i talk about

buying two bedroom homes and creating

threes with a wall and closet

and a door obviously

again it usually cost me 25 to 3 000

bucks you get a payback in your first

year that is a huge winner if you are in

austin so if i was in austin one thing i

would look for is two bedroom one bath

or two bedroom one and a half bath homes

that are over 950 square feet then see

if you can create a third bedroom i

bought dozens of those uh in the last

crisis it is very very cool and the

reason austin is not going to slow down

his population i have yet to verify this

but it looks like population is up 25 in

the city of austin in just over two

years

wow you can simply not build enough

housing to keep up with a population run

like that thank you tesla and other tech

companies for going to austin

tuesday’s ppi comes out right we had cpi

last week producer price index

expectations for a big number 9.2

remember ppi is kind of a leading

indicator for cpi next month

because again you can adjust profit to

you know limit the impact

but again it’s still rising it’s still a

problem it was 8.6 in october and again

expectation in november is 9.2

also wednesday retail sales

retail sales is going to be interesting

because i have a different opinion

versus the

powers that be

the expectation is for only

0.8

uh

last month was a surprise at 1.4 which i

actually called thank you very much the

reason i called it is again

we have money right 1.2 or 1.3 trillion

in excess savings

the media is screaming at us about

shortages

we finally have a holiday season maybe

where we feel a little better

jobs are aplenty so people are spending

so i expect actually november to be

exceed

maybe not as high as october at 1.4 but

i do i am calling for one percent again

ahead of analyst expectations again for

a 0.8

retail sales are important

i follow the consumer

the consumer is

saying they’re nervous

right but it’s what are the consumers

doing

often the consumer said something but

they do something different i believe we

will see that on wednesday

back to

real estate crumbling crashing whatever

you want to call it

the china real estate market is behaving

exactly like i told you it would

first and foremost they have abandoned

projects everywhere nearly everywhere

their sales have plummeted 24

folks the real estate market in china is

in for a crash

price declines so far have been limited

but it’s only because they are doctoring

the numbers

the chinese government is mandating

people don’t cut prices

but instead they are giving other things

away buy this apartment and we’ll give

you a car buy this we’ll give you that

they’re they’re doctoring the numbers so

they don’t

run afoul of the government that will

not hold

when you see sales fall 24 percent it

will get worse

not good crash boom they are going to

have to explode bulldoze collapse

a lot of these projects

did you know this shocked me i’m still

learning about the chinese real estate

market

chinese citizens that live in the city

so this is not

you know suburbia or out in the fields

this is in the city propers

80 percent

80

of their wealth is in real estate

this is why real estate is in trouble

because if just ask yourself if you own

something

and suddenly you can’t get rid of it

it’s a it’s an alligator to steal a word

or image from my first book you are

going to retreat conserve more

importantly the next generation

is not going to buy

china real estate was built on decades

of positivity and wealth generation they

have just crushed that spirit

and it is only going to get worse

not good uh and oh by the way 40 percent

of evergrande projects are

idle folks eva grande is running out of

oxygen or blood or whatever your analogy

is

they’re done

two more things i found right before i

started this video it looks like hawaii

luxury sales are hitting records i mean

like

records

looks like hawaii luxury sales are up

600 percent

yes folks people are looking for those

vacation homes and places they can go it

is nuts nuts nuts and then finally we’ve

talked about the turkish lira a couple

of times they are suffering from massive

inflation and yet their president and

central bank or whatever they call them

are cutting rates

historically speaking that is the

reverse approach that is kind of the

anti-paul voker and lo and behold people

expect another interest rate cut and the

lira is plunging

folks if i lived there i would be doing

everything i could to get whatever i

owned into bitcoin or ethereum or

something when the central government

has no

uh what uh respect

for their currency

get out

get out

um

that is um

it is pretty sad to see what is going on

there people are people are really

getting hurt so again folks remember the

daily financial news is for you if you

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day take care of yourself enjoy monday

bye

 

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