Rates were going up prior to that meeting, ie, it was built in.

I am knee deep in a charlie foxtrox of a home remodeling project and wish I could dig into Zeihan's post a bit.

However, either he is baiting people or ignoring his own assertions a bit.  

A demographic shift and the mass retirement in the past 2 years has completely screwed the unemployment rate compared to the labor participation rate.  I wonder how many warm bodies are working compared to 3-5 years ago?

A lot less. Lines everywhere and signs staff shortages left and right. My own company, which is moderately skilled, has over 100 open positions right now. Nearly all replacement roles.

Zeihan reminds me of George Friedmann from stratfor, just a bunch of propaganda/wishcasting coming out of the CIA/mossad.  Selling snake oil with the utmost confidence.  

No doubt many boomers have left the workforce, some xers too and the younger generations are ill equipped to replace them and maintain anything but an idiocracy style of living.  There is a skills gap as well as a work ethic gap.  Much of that can be laid at the feet of their parents and teachers who foolishly tried to shield them from reality - that just makes reality that much more painful when encountered.

One of the things I enjoy about this thread is the number of well thought out and reasoned posts like this - and recognizing the amount of time and thought it takes to come up with them.  I completely agree with you except for one point - I'm definitely not a doomer, in fact far from it and I'm certainly not trying predict doom and gloom or bankrupt anyone - actually I'm trying to provide some tools to help prevent exactly that.

Since I'm up tonight babysitting a pork butt I have on my BGE I'll try and elaborate on the posts I've made.

I abstractly look at our economy (real estate market, stock market, etc.) as a giant river that ebbs and flows over time.  I also believe this river is subject to certain cycles just like everything else in nature is.  One of the most ridiculous statements made a few years ago by the Democrat's was how they "defeated the business cycle".  No they didn't defeat anything; they did exactly exactly what you said - they kicked the can down the road.  The problem is these cycles are subject to distortions, again just like any other cycle found in nature.  Over time these distortions compound and cause unexpected and explosive reactions - no matter how hard one might try the reversion to the mean isn't going anywhere.  Again not implying any doom, but over the years we have all seen the results of these market distortions.  Unfortunately the Keynesian economic pundits are experts at creating these distortions - heck they seem to thrive on it.

But this river also provides countless opportunities if one is prepared to take them advantage of them.  Opportunities exist everywhere along these cycles, regardless if the market direction is up or down or if there is calm or panic.  For example, am I currently watching for capitulation in the stock market?  Absolutely - but as a phenomenal buying opportunity (provided I'm prepared for it) while I'm certainly not expecting the fulfillment of every doomers dream.

Now the question is if I believe the "economy" is subject to cycles, that these cycles can be distorted in ways which will impact me, and there are countless opportunities (both buying and selling) then how do I prepare?  How do I spot the warning signs of distortions or how can I identify financial opportunities?  For me the answer is using technical analysis (TA) along with data analysis.  TA gives one the ability to look back in time and see exactly what happened (the charts I post are based on "look back" periods).  It can also give insight into why certain events may have occurred.  It let's me find out what happened for myself instead of relying on the interpretations of others (which are always filtered through a bias lens).

Data analysis is exactly that - for example looking at how hard the Fed jumped into the residential mortgage market.  You stated the Fed $3T MBS nut was a small part of the overall Fed debt (and it is) but it represents 30% of all US residential mortgages and that's a major distortion.  And this distortion directly effects every homeowner whether they are aware of it or not (I prefer to know as much as I can about anything impacting my financial wellbeing so I put in the time doing my data analysis - some of which I have shared here).  Again no gloom and doom simply stating facts.

What has all this done for me.  Well for one as I posted earlier it triggered a sell signal on my house.  As a seller I want to try and hit the market peak so I based my sell entry on my analysis confirmation.  Best case is I made a substantial profit and I buy my next house at a discount.  Worst case - I made a substantial profit but house prices continue to rise (then I'll have to adjust my house buying plans).  Either way I won't have to worry about interest rates since I'll be a cash buyer.

Last year the signals I got were to move out of bonds (I was in about 37%) and do a sector rotation in my long term portfolio (nothing like rotating into gas & oil at the right time).  The YTD return on my stock investment portfolio using this analysis:
Fight the Fed - hell no I just want to position myself to be able to grab enough table scraps that keep me happy.

tl;dr: The more you know then the more you know.  Information is power - power is wealth.  
                   

Some of that is a skills gap that only experience can fill.  You can't take an under 30 Millenial and toss then into a management role and expect it to work out well.  Simply put there is no substitute for experience.

With half of boomers retired there is going to be a shortage of workers in many fields that are not tolerant of a lack of experience.  It's good for genX.  

I'm not saying millenials can't do the job many can but they need 10-15 years of experience despite thier beliefs they're ready to run the world on thier 1st day.  

Go outside and touch grass dude. Few things are the conspiracy theory you think they are.

I am a millennial.  I have 15+ years industry experience and have been managing for years.  Not all of us are worthless.  

100% agree.
Certainly didn’t mean to imply you were a doomer or trying to bankrupt anyone.  I just didn’t want the analysis to lead any lurking /wallstreetbets guys to conclude the end is inevitable and yolo their life savings into spy puts or something.  

People can't help themselves from thinking that millennials are 22 year old losers

I think the youngest millennials now are 24.

These days the usual use of millennial just seems to mean young and/or unestablished. It is what it is - just like boomer seems to be thrown around to mean old and/or out of touch.

 Which is really sad.  Many of my friends are experienced doctors, accountants, and lawyers.  A fair number of us have kids too.
And many of us at the other end are knocking on the door to 40 or just crossed it.

There  are always exceptions hell I'm gexX and not every genx is cut out for leadership.   But fresh out of college none of us were.  But 15+ years is pushing 40 may be a millenial but is cerainly not inexperienced welcome to the club old man

I’m gen x. Just turned 50. Fortunately by now I’ve learned opportunity and lived the cycles.

Opportunity is opportunity.

Wednesday we closed on our re-fi. We went from 16 years left on our 4% 30-year to a 2.375% 10-year. We also got some cash out for a new roof, we bought our house new. The payments are only about $75 more a month.

He's been popping up on a lot of different channels lately. Some make me start to wonder a bit, but I guess that goes for a lot of people on youtube. Sometimes have to wonder if the community is just that small or if it is something else. Don't have anything against him and have thought the couple videos of his that I've seen were decent enough.

And thus both really just mean the user of said term is most likely a fucking idiot.

I find it ironic when older generations complain about the younger lol. They're the ones who raised them and also created the disaster we are in right now.

Ok, boomer.

Now that’s a smart re-fi.

Well had my offer accepted today. Can't lock in my rate until Tues

May the interest rate gods find favor with you.

This is the way

@taliv - damn man you hit me right where it hurts.

Another story that hopefully will be helpful to others.  Many years ago when I first started trading options I just knew I could tell the future and make a killing.  I had worked up my investment account to about $15k - which was a lot of money for me back then.  Well thinking I was the genius investor I went $12k heavy into weekly SPY puts on a single trade.  And this was where I was rudely introduced to Mr. Theta.  Options expired worthless and I blew my account up.

I have a list of rules now I follow every day. Rule #1 - Manage Risk and don't be a dumb ass!  

Which basically means, gamble.... but just gamble smarter.

If you can truly beat the market over long term without any power to manipulate it, you'd be a billionaire.

Back then I was a gambler.  And like most gamblers I lost - a lot.  What made the biggest difference in my life was learning the difference between gambling and investing.  Once I learned there is a world of difference between the two I started to build wealth.

You can't beat the market (that would mean I have to know what every single participant in the market is going to do - which is impossible).  It's understanding that every entry and exit point is unique to that point in time, taking advantage of it and mitigating risk if things go against you.

Guys I'm not complaining about them.  Its just millenials are  the youngest and most predominant  Gen entering the workforce these days.  There is also a fairly large age / experience gap because the boomers stayed in the work force so long and genx is relatively small.   It's also seems like the older millennials are a smaller group as opposed to the under 30.  


 It's just a numbers observation not a comment about one Gen or the other.

IMHO, the millennial generation is really two separate generations in a cultural sense  There's the older millennial that still remembers a world before everything went digital. This group shares a lot more with generation X than they do with the younger millennial subset. The younger millennials share more with gen Z as they both grew up in the digital world.

If the youngest millennials haven't entered the workforce yet, they are either on the way to becoming doctors or not anyone you'd want to hire.

I’m usually pretty good at learning from other peoples mistakes.  My playing with options in the 90s is one of the things that convinced me to stop trying to make all my own mistakes.  

3 rules (not original)
—————————-
1 don’t be greedy
2 don’t be stupid
3 everything’s for sale

It really is. My brothers and I are all Millennials. I'm going to be 40 in a couple months. They're 33 and 34 respectively. I routinely find myself with a lot more in common with Gen X folks older than me than people my brothers' ages.

Attached File

What are the rules?

Number 9 and 10 seem to be stating the obvious but these are 2 of the hardest to master especially in day trading.  Our brains are wired to do exactly the opposite.  For example, we see an option start to take off with all green candles so we get excited and jump in with a heavy call buy - without looking at the next level of resistance.  It hits that resistance and drops like a rock for the rest of the day.

Federal Housing Finance Agency (FHFA) house price index will be released today at 9:00am EDT

     


This one is too hard to call so I'll wait to see what numbers are released.  Let's see if MoM pulls back a bit from consensus.

#9 and #10 together describe swing trading.

You're right, it's counterintuitive, until you start to see your account grow in value from it, then it seems very natural.

But it's definitely day trading - you can't walk away from your computer during trading hours lol.

This. Ill be 40 next year. I have nothing in common with my BIL who is very early 30's.

The huge confounder we have, unfortunately-
Is that as each year goes buy we have a larger and larger percentage of our economy comprised of entertainment, re-selling foreign made products, information, re-selling mortgages, home equity loans, other financial services, etc. and a larger and larger delta between income tax revenue and government spending.  And a larger and larger percentage of the population requiring support instead of becoming net positive income tax revenue generators.  And then add on a larger and larger percentage of employees people work for federal, state, and local governments.

Each year this progresses makes for a longer and more diffuse recovery.  And less chance of their ever being one.

The post Obama rebound mentioned occurred because there were still plenty of jobs in financial services, information and entertainment, etc.
But these are self limited fields.
You can’t have an economy where everyone makes a living doing mortgages, rental properties, etc.

We live in a world where many can only picture millennials as 20 somethings.

Definitely some tech/cultural related components.  
The oldest millennials likely hopped in a car for a road trip when they were teenagers with a map.  Unsure when and where they would find a 24/7 gas station, without a cell phone, or at least an era when likely to randomly encounter huge areas without cell phone coverage that might require finding a pay phone, no idea what motel they would find to stay in, what surprise detours would pop up.  With no idea who the artist was they caught part of on the radio.  They might even go to a music/record store and meet someone trying to find out.  And if they wanted to talk about the awesome book they just read they would have to ask people until they found one.  Not look up a forum.

In addition to that, consider all the additional television, film, academic, educational, media, etc. propaganda they have spent their entire lives being saturated with if you were born in 1985 vs 1995.

Because no one wants to picture a world with Millennials in charge.  

There is most certainly a split in that generation.  They are mostly Boomers kids raised with Boomer values.  Then there are the ones that were lucky enough to be born to GenX.  Big differences.

My sister is a Millennial that is almost old enough to be GenX.  She hates Millennial and being lumped with them.  Pretty amusing, actually.

There definitely is a big difference. I have some early 30 folks on my team. They are millennials but definitely see the world differently. I remember the analog days and that is foreign to them.

When you look at those generation charts, up thru boomers they use 20 year cohorts, then for some reason they cut Gen X off at 15 years, and likewise for millennial. I really think they jumped the gun there, and should have continued X thu 1984/85 birth year. I'm 82 birth year, and when reading the descriptions have much, much more in common with GenX than millennial.

Some academic just got excited and wanted to make a name for themselves with a fancy new generation name in time for the year 2000.

Looks like it jumped?

Millennials comprised the brunt of the GWOT fighting force.  

The aVoCaDo ToAsT crowd can fuck right off about their sTaRbUcKs memes based on that alone.  

That said, the only people who make hay off of generational infighting and division are the elite - who seek to displace blame from themselves to more visible targets.

U.S. House Prices Rise 18.7 Percent over the Last Year; Up 4.6 Percent from the Fourth Quarter
5/31/2022

Washington, D.C.  U.S. house prices rose 18.7 percent from the first quarter of 2021 to the first quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI).  House prices were up 4.6 percent compared to the fourth quarter of 2021.  FHFA's seasonally adjusted monthly index for March was up 1.5 percent from February.
"High appreciation rates continued across housing markets during the first quarter of 2022," said William Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. "Strong demand coupled with tight supply have kept prices climbing.  Through the end of March, higher mortgage rates have not yet translated into slower price gains, but new home sales have dropped during the last few months, with a significant falloff in April."

The FHFA HPI

Looks like we did get a slight pull back from consensus on the MoM (1.5% actual vs. 1.9% consensus).  I would have liked to see actual around 1.0% - 1.1%.

The pricing should be interesting after a few months of higher interest rates. The March market was insane.

Some millennials in the "younger" subset share things in common with Gen Z, heck it might even be most. What I can say, is that it is doesn't seem to be clear cut here at the age of 33. I have friends and clients, older and younger, that you could put in either 'generation' per GD's descriptions.  

The while idea of naming generations really kicked off when the current crop of millennials were starting school. Everything else was retconned.

When the term Generation X first was getting thrown about, its cut-off was the early 1970s. The current taxonomy dogma solidified remarkably recently.