tomorrow is my birthday. arguably one of my least favorite days of the year.

birthdays are fundamentally about celebration. Believe me when I say that I tried hard — really and truly — to be in a celebratory mood for the day. I couldn’t muster the feelings.

frankly, I don’t know how some people, notably women, get so excited about birthdays, but that’s neither here nor there, so I digress.

birthdays are about celebration, and I have nothing to celebrate.

I have produced nothing. I have achieved nothing. My value is of approximately the same: nothing.

these are thoughts I feel and think near-daily.

and yet, I persist.

Anyway, I was talking about economics with a friend earlier. Here are some loose thoughts…

I spend a lot of time thinking about money. I spend time watching money. I spend time acquiring money. I like money.

One of my hottest money takes right now is that none of this stock market mania and crypto madness really matters until housing starts to correct. Until then, all we’re going to really see is short term cycles. Like, green lines will keep going up for many things, yes, but there’s a looming void growing in the background. that void has a lot to do with how money flows through the Economic Machine.

Me thinks it’s going to look something like this:

>lots of housing is currently being built. it might not seem like it, but everywhere I’ve been in the past 5 years has had a lot of construction going on.

>unfortunately, this supply will largely be for naught, because nobody will be able to afford to buy anything. what does this mean? we’ll have a lot of things that got built just sitting around waiting to be sold.

>because people want their ROIs, and they want them fast, prices will be reduced so that the product (houses/housing) can be made more affordable.

>the thing is, it’s not simply about the price of the house. interest rates on loans are also through the roof (lol, pun intended). so, that means even if houses are cheap, people will be hesitant to buy because of the interest on the loans

>finally, we have rates that get decreased in an effort to help propel the sale of houses/housing. at this part of the process, we have ideal conditions for people to buy houses: abundant supply, cheap prices, good rates for financing purchases.

once this cycle reaches the phase outlined in the final bullet point, the next Bull Market will truly begin. until then, growth will be enjoyable, mostly fine, but ultimately capped by consumer hesitancy.

(the other thing to watch out for here: large real estate companies buying cheap house regardless of rates, because they have the capital to deploy and more wiggle room when it comes to rates; wouldn’t be surprised to see this happening, increasing the number of people who rent. things are probably going to get even weirder)