Space Summary
The Twitter Space من لم يزُرنا والديارُ #مُخيفةً لا مرحبًا بهِ والديارُ #أمانُ ..‼️ hosted by L___A11. Explore the profound impact of love in selflessness, sacrifice, and discovering life's true purpose. Love, as a transcendent force, offers strength, comfort, and meaning, shaping relationships and personal growth. Embrace the beauty of kindness and empathy as fundamental to the human experience. Join a heartfelt discussion on the essence of existence through acts of love and care. Navigate life's challenges with love's resilience and transformative power. Experience the depth and interconnectedness of humanity through the lens of compassion and selfless deeds.
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Questions
Q: How does love inspire selflessness and sacrifice?
A: Love motivates individuals to prioritize others' well-being over personal desires, fostering acts of selflessness and sacrifice.
Q: What role does love play in revealing life's true purpose?
A: Caring for others through love unveils the essence and meaning of one's existence, emphasizing the importance of compassion and empathy.
Q: How does love transcend boundaries and offer strength?
A: Love has the extraordinary ability to surpass physical and emotional barriers, providing comfort, understanding, and resilience.
Q: In what ways can love impact relationships and personal development?
A: Expressing love nurtures deep connections, promotes personal growth, and enriches the dynamics of relationships.
Q: Why is compassion and empathy fundamental to the human experience?
A: Acts of love, kindness, and empathy showcase the inherent beauty and compassionate nature of humanity, shaping meaningful interactions and shared experiences.
Q: How does love help in facing life's challenges and adversities?
A: Love acts as a formidable force that empowers individuals to navigate life's obstacles with resilience, hope, and courage.
Q: What defines the essence of existence through acts of love?
A: The essence of existence is magnified and enriched through selfless acts of love and care for others, shaping a profound understanding of human interconnectedness and purpose.
Highlights
Time: 00:15:42
The Power of Love in Selflessness Exploring how love motivates acts of selflessness and personal sacrifice for the well-being of others.
Time: 00:25:18
Love's Role in Discovering Life's Purpose Delving into how love reveals the true essence and meaning of existence, offering clarity and fulfillment.
Time: 00:35:56
Transcending Boundaries with Love Understanding how love surpasses borders, providing strength, comfort, and unity.
Time: 00:45:33
Impact of Love on Relationships Examining the profound effects of love on personal growth, relationships, and emotional well-being.
Time: 00:55:10
Humanity's Intrinsic Compassion Reflecting on the natural beauty of compassion and empathy inherent in human interactions and experiences.
Time: 01:05:47
Love as a Resilient Force Discovering how love empowers individuals to face challenges and adversities with resilience and hope.
Time: 01:15:29
Essence of Existence Through Love Exploring the profound connection between acts of love, care for others, and the fundamental essence of human existence.
Key Takeaways
- Love motivates selflessness and personal sacrifice for others' well-being.
- Caring for others reveals the true purpose and essence of life.
- The power of love transcends boundaries, offering comfort and strength.
- Love plays a significant role in providing meaning and direction in life.
- Sacrifices made out of love bring deep fulfillment and understanding.
- Expressing love can profoundly impact relationships and personal growth.
- Acts of love and kindness define humanity's intrinsic nature and beauty.
- Love serves as a powerful force in overcoming life's challenges and adversities.
- Selfless acts of love showcase the best of human compassion and empathy.
- The essence of existence is illuminated through acts of love and care for others.
Behind the Mic
Introduction and Current Location
There we go. Now we have something. Good afternoon, everyone. Welcome to Macroedge radio number 23 with technical difficulties to be expected considering where this program is originating from. In the eye of the storm, so to speak. Sarasota, Florida. This is John Galt speaking. What a week this has been. I'm sure that a lot of you are wondering where I've been. I didn't have Internet for about a day and a half. Going on two days, intermittent. Yesterday at best. The eye did pass over my location. It was a very long I. Almost an hour, believe it or not, when the back half hit, that's when the trees really started flying.
Surveying the Damage
I've had a chance to go and survey the destruction. We've got power back at our location. We've got Internet back. The situation on the keys is much more dramatic and different. Manuscript. Everything from Manasso to key to Ann Maria has pretty much been wiped out again after Hurricane Helene. Hurricane Helene introduced us to the first storm surge. The second storm surge pretty much wiped out any hope of a tourist season on the west coast of Florida, especially on the Sun coast gang, that was one hell of a storm. And to everybody who wrote it out, this beer is for you. This has been unbelievable. What we saw and what we've heard from the government, from everyone else, we are going to see billions in dollars in damage.
The Impact of Hurricane Helene
When I say billions, I mean billions, not your typical billions, but we're also going to see some flight. I could see this storm and Hurricane Helene being the ones that caused people to change their mind about living in the great state of Florida. If you're not used to hurricanes, it's something you don't understand why people do that, how you endure it. You just plan for it. That's all. It's all you can do is plan for it. And you can hope and prepare that everything will be okay and that we won't have major damage or injury. What I've seen is the most impacted people are going to be the retirees, especially those above the age of 65 to 70, who had just enough money to get that little mobile home near the water.
Destruction Observations
And as I was driving by Costco today, there's a mobile home park down in the Siesta key area on the south side of Sarasota. And sadly, all I could see were roofs peeled up and destruction everywhere. It was one of those pictures that I wish I could share with you online. I'm trying to sit there and get it downloaded and edited and then a picture I'm going to post in just a minute on the Macroedge timeline is that of our friends at Costco. Costco was one of the first locations to get gas trucks this morning. To say that it was an unholy mess is an understatement. This is at Sarasota Square mall. I would say the line was anywhere from three quarters of a mile to a mile long.
Gas Shortages and Observations
It was beyond any description I could ever say. I could not believe that many people needed gas two days after the storm. I'm trying to figure out why they didn't get gas before the storm. It's almost as if everybody waits until the very last minute because they're not sure if it's going to hit. They're going to try and play their luck and gamble. If you don't know what to do, listen to the vets who've been through this. Prepare and trust me, folks, when they say there's a bad storm coming, they're not just doing that for the hell of it. They're not just saying this stuff for people to sit there and think, well, you know, it might hit us, it might go north.
Reflection on the Hurricane Experience
They were wrong last time, et cetera. They had a pretty good idea and they did a decent job on the forecasting, although I thought it was going to go a bit north. Indeed, it actually came over my location for the first time in my lifetime. This is very rare for Siesta Key in Sarasota to get a hit. Those of us who are natives are going to blame a developer because usually the developers are the ones digging up our Indian burial grounds. It's inside joke, by the way, guys. It's one of those stories where you don't really understand the economic implications until a year later.
Continuing Effects of the Storm
And I hate to go to this route with all the people having suffering at this time, losing their homes and having damage and destruction to it. But the videos and drone videos I saw, because we can't go out on the keys. You have to depend on other people, helicopters, et cetera, storm chasers. When you see it and you know, these are places you spent your entire childhood, young adulthood, hanging out, partying, everything. You begin to understand the impact on why people are so emotionally devastated from such a storm. The people who live here on limited incomes were doing it by the skin of their teeth.
Hurricane's Impact on Residents
They'll be bugging out. They used to go to Tennessee and North Carolina. Well, Helene took care of that idea. Who wants to live in the mountains when the side of the mountain will take your house out? Also, even though it's a once in a thousand year or 500 year storm, these things happen. So a lot of people might, we might see a remigration back into the dead states of the northeast and the Midwest, where, while things are more affordable from a retiree perspective, it's a lot more miserable, because what's affordable for housing is not affordable for cost of living. And they'll find that out really quick with the tax levels, et cetera.
Personal Account of Damage
That being said and everything I've come through this unscathed. We'll be back on here. My office didn't get to it unscathed. Part of the roof was peeled up. I've lost a laptop. I'll be going in on Monday to clean up the mess. They really try. They're trying to restrict it, make sure that the building is structurally safe. I just lease a corner office from some people there. I was hoping that it would go unscathed, but it's really close to the airport. The Sarasota airport lost its roof. Concourse B. The roof ended up on the runway.
Current Airport Status
They finally got it cleaned up. They finally got aviation fuel deliveries back in there so they can begin functioning as a general aviation airport. At this time, Anna Marie island is a lost cause. It's still closed to the public. Even some of the stilt homes, if you've seen the videos, were lifted off of their stilts and knocked over. Very rare for that to occur, but that does happen. Downtown St. Petersburg, we had the Tropicana field, the so-called Teflon fabric roof that was supposed to be the super strong hurricane proof roof turned into shreds, and now it is now an outdoor stadium for all practical purposes.
Post-Storm Evaluation
Also, there was a construction crane on top of an office tower, one of the millions of construction projects we have going on around Florida, it seems, and it was knocked over, did severe damage to a neighboring building, downtown St. Petersburg. When one takes all this into consideration, so far, there's only been 17 reported deaths as of this time. Hopefully, it stays at a low level. The destruction is also on the east coast is massive. A Publix was obliterated down in Palm beach gardens by one of the tornadoes that were spun off. And that was a bit of a shocker. You don't really expect to see that.
Continuing Updates and Visuals
But, yes, it did happen that way. And see if I can put that picture up into the. I took that picture off of one of the drone videos that I saw. I'll see if I could post that up into the thread so you can see it. It's the level of damage and the spread of the damage is what was amazing. And most people like myself, have trouble wrapping their heads around it. But it happens and it's part of life in Florida, and I will deal with it. Yeah, I got that picture in the micro age radio thread.
Economic Outlook
For those who are following along, we're going to see an economy change here very sharply this week that I noticed some of the data that I did receive. The CPI number came out. As you know, I'm more of an advocate for the Atlanta Sticky CPI. And core sticky CPI is still 4%. There's also indications that the core CPI that everyone follows maintained its higher level of 2.8%, which is above target. And it's staying sticky above the desired levels of the Fed, which is beginning to make it look like they made a huge mistake with their rate cut. I say they made a huge mistake by not making the rate cut earlier in the summer.
Potential Economic Consequences
This will all wash out. Right now, everything is setting up for the stagflation area outcome, and let's hope to God that is not what the outcome is, because this nation, regardless of who wins the presidency, is poorly equipped for dealing with a stagflationary environment. In the markets today. Dow up 409, another record. Nasdaq up 60 to close out at 1834. Two s and P up 34 98 to 50 815. Russell 2000 up 2% 45 99 to 22 34. Volatility hung above 20, though. The VIX is hanging in there.
Market Trends and Indications
And that should make the market gurus on cnbs nervous as they tout their various pump and dump stocks to sit there and lure everybody into the trap. It's a bull trap, and you're not going to convince me otherwise. Otherwise, why would people be buying the two year and selling the ten year? No one wants to take on long term debt obligations from the US because there is a growing fear that we will go into a full blown level period of stagflation for a year or two or longer, possibly.
Market Strategy Adjustments
And that means that we're going to start selling more of the long term debt to put off the day of reckoning in the next couple of years and get out of this short term debt cycle. Well, I'm not going to sit there and buy a ten year instrument for 4%. I'm going to have 5% plus. And that's where the government's going to get into a lot of trouble. Oil today was basically flat, finishing at 75, 71, brent at 70, 914. Gold up thirty three dollars to twenty six cents silver up forty nine cents to thirty one point seven three.
Precious Metals Forecast
Silver is looking really good technically and also has the potential for its breakout. We still have to get above that $35 level and this hosts opinion. Once we break above $35 I truly believe we will see a breakout to new all time highs and that will make a huge difference in the markets, especially for precious metals. It will give it additional booster support that other people are looking forward to seeing, especially as old timers.
Closing Remarks and Discussions
We really have to see some more convincing action out of copper in my opinion. I would like to see it stay above 475, get back over the five dollar level. That would be another supporting argument for the stagflation and for precious metals to jump substantially higher in the weeks ahead. And I had to send a quick message here. Bear with me, folks. We're also going to bring some of our team on to talk about what I missed during the week because there was a lot going on while I was out and about, while I was out of service and out of action.
Economic Indicators and Layoffs
The American economy is still showing some signs of strength, but a lot of it, there's a lot of weakness coming out with amount of layoffs announced. I just have to see a ton of them today thanks to the micro edge team. And apparently last night the demolition man electric vehicle was introduced to the public. I don't know what to make of that. I'm sorry. It looks just like the robo taxi and demolition man, Mister awesome and six here on the team are correct. It does look like something out of a science fiction movie.
Vehicle Design Concerns
And it does not look like a functional vehicle. A two door vehicle. Why would anybody make a two door sedan in these days and times you need four door vehicles if you're going to have a taxi.
Concerns Over Future Mobility Solutions
So I'm having a hard time with this. You're going to actually let somebody sit behind the steering wheel? It makes no sense. And the demonstration didn't do anything to sit there and inspire me to say, okay, I'm going to hop in one of those when it pulls up to me at an airport. I'll take a hard pass on that. That's for sure. Next up, we're going to hit what happened before the storm and what's happened after in another side tank was this does have an economic impact.
Disney’s Employee Management During Crisis
According to Business Insider, Disney World refused to let workers go home early to prepare for Hurricane Milton. Now this is some employees they talked to. Four people who work at various parks at Disney World told Business Insider their bosses refused to cancel work even as weather conditions deteriorated on Wednesday. They were told that. They were told they're expected to remain on hand and help park shut down to batten down the hatches, leaving many employees feeling unsafe, according to Business Insider. Remember, that's not all of the employees, so you don't know how much of that is true, but we have to take that into account. When you hear stories like that, you go, whoa. And they've had enough bad pr in the last two years. Disney might want to rethink their public relations people and their approach to managing individuals.
Aftermath of the Hurricane
The new problem that we're seeing, besides the mobile home parks being shredded and torn to pieces, is, in fact, sinkholes are starting to appear. Lakeland, Florida. Tampa, Florida. And this is part of the massive amount of rain that we've witnessed. As if real estate values in Florida can't take another hit. This is something that's going to be of great concern. I'm not going to tell you what to do when you buy a home in Florida, but I wouldn't buy one without doing a sonar technology readout of the property, verifying that there's no hidden seacoles. You don't want to find out after the fact, trust me. Because you want a good building inspector. You want someone that can actually sit there and check this out and verify that you're on, pardon the corny expression, stable ground.
Real Estate Concerns in Florida
Before sinking that kind of money into an investment. The problem with the home industry now is were oversaturated with Airbnb starting to hit the market, and this storm is going to do nothing because people to panic, sell and get the hell out of Florida. And the people who invested in it forgot about something, and we've have it. We have a history with hurricanes creating real estate crashes. For those of you who don't know about the city of Miami was a speculator's haven back in the 1920s, and the real estate boom was very much like it was in the west coast of Florida right now, except people just really were all, we want to live here, we want to build it up, blah, blah.
Historical Context of Miami Real Estate
Miami beach exploded. They didn't understand hurricanes at that time. And the great Miami hurricane of 1926, it was a Cape Verde storm, tore through there as a cat. Four over 400 people were killed. It wiped out with much of the Miami beach and barrier islands with a ten foot storm surge. If any of this sounds familiar to what we've endured this past week, let me know. And made a second landfall up in the panhandle near Pensacola. But the more important part was the Miami hit there was a lot of speculative real estate investment in that time period, and the people who invested in that region were generally wealthy Wall street types and northeastern who said, hey, get into the real estate game.
Speculative Investment History
You can get property dirt cheap in Florida and look at what Miami is about to become. Sure enough, Miami became this booming town, and after the hurricane hit, I'm sorry, 372 people officially died there. There probably were more, but they couldn't really get a good count at that time. Yeah, it was a disastrous storm that. The pancaking of Miami back then was terrible. And the investing public being what it was then is just like it is now. Instead of just licking their wounds and accepting that they made a bad investment in Florida real estate, they turned around and poured their money into equities in 1927 and 1928.
Implications for Current Economic Climate
Food for thought as we move forward, folks, because when this ends, all the bubbles eventually pop and the hurricane have a nasty tendency of causing people to make sudden changes in their investment plans. I don't think this is going to be like the 1926 hurricane. It does have some interesting parallels, but it could be an indication of the speculative fervor that we witnessed in that era and we've seen duplicated this time. Now, now, am I going to say that this is a for sure certain thing? No, I'm not. But we really have to consider the problems that this is going to introduce into our economy.
Current Economic Indicators
As we can obviously see the signs of contraction and slowing. And if people start losing their real estate investments and their ability to invest on Airbnbs, etcetera, there's a lot of people, a lot of individual sole proprietorships, small llcs, small type s corporations that are going to get absolutely obliterated because we're going to see prices decline 15, 20% in Florida in a very short time period. And I'm warning you right now, that is not speculation. We've already seen deterioration from five to 10%. I could, I dare say another 20% down would not be a shock at this point in time and would also introduce more instability into the markets.
Historical Context and Current Trends
So if you really want to sit there and see the big picture, go back and read your history. We're not paralleling the 1920s, but we certainly have a lot of coincidental indicators that reflect activities, speculation and equities, real estate and other aspects. Our economy, like the 1920s, being reduplicated at this time. All right, we've had a spike in unemployment claims. I'm going to dismiss this. The markets bought the story that it was a one off due to the hurricane Helene? I don't think so, to be honest. I think this was totally expected.
Unemployment Trends Post-Hurricane
If you've been following the macro age team and all the layoffs being posted on places like layoffs tracker, etcetera, and Warren noticed you're seeing a trend of layoffs that were increasing, but you never saw it reflected in claims. Well, a lot of those layoffs that occurred in June and July are just now beginning to impact the market. They were getting six, eight, sometimes even twelve weeks of separation pay before they could begin to file. As long as you're still getting paid by your company, you cannot file an unemployment claim. Period, end of conversation. Odds are that's what we're going to witness.
Impact on Jobs in Hospitality
And we will see a spike from this storm as people in the west coast will lose their jobs, especially in the hospitality and the real estate industry. There's going to be a lot of construction jobs being created, but the hospitality industry and restaurants are going to see total devastation because thousands of people are going to be laid off, especially those working at coastal locations. There will be no season to speak of. St. Army Circle, for all practical purposes, doesn't exist anymore. It's been underwater twice in two weeks.
Infrastructure Damage and its Financial Toll
And the internal damage to the infrastructure damage is off the charts. So we're looking at six months just to get it clean, functional and ready to rock and roll again. That doesn't even include making Lido key and the other beaches usable as viable locations for everyone. Let's face it, you don't want your little kids running around in the sand and suddenly getting hitting pieces of broken glass or chunks of metal or nails or whatever from all of the destroyed buildings. That is definitely going to create a problem for our tourism industry.
Consequences for the Tourism Industry
And that's the same thing that's happening in Asheville now that we see the consequences of that. The North Carolina leaf changing season is right now the teeth of it. This is the heart of it. And I just heard a report today that 80, 75 or 80%, I'm trying to remember it off the top of my head of their water infrastructure is damaged or destroyed. They have, they've got 1800 miles of pipe to inspect and or replace in the city of Asheville. That's a mind boggling number.
Asheville’s Water Crisis
When you start to recall what that means, you're not going to go watch the leaves change because there's no water in your hotel room. If your hotel room still exists, people are going to sit there and feel this. And this is going to be a very middle class recession. The lower class is going to take an extreme beating, but the middle class is going to hurt severely because they believed the voodoo that was being promoted, that you can sit at home and with no money down by an Airbnb cabin, North Carolina or on the beach in Florida and make money.
The Airbnb Investment Illusion
Well, that always works. Until it doesn't. And we've reached that point of until it doesn't. And that should scare the hell out of everyone. I got to take this real quick. Sorry about that, folks. Trying to change the screen here at the same time on the fly and doing everything that I can to keep it moving. This is the kind of tour, this is the kind of shot to the economy that people didn't expect.
Unexpected Economic Challenges
Nobody could have forecast. And believe me, I would never have been able to forecast this a month ago. I would never have said that we'd have a once in a 500 year flood and two hurricanes in two weeks in Florida. That's something you just don't foresee. So when you start to add it up, these problems are beginning to become much more long term for the economy. And I, whoever gets elected president is going to be welcomed with a recession.
Political Ramifications of Economic Downturn
That's exactly where we're going to go and that's what's going to happen. All right, let's get to the next story here, folks. Bear with me while I try and pull everything up on the fly. It has been one hell of a week, as you could imagine. Oh, somebody just texted me there, sorry about that. And I just grabbed the wrong one. In other news, as we like to say, sorry about that, San Francisco is shutting down 9% of its public schools.
Broader Societal Effects
Chicago is canceling its police academy for the foreseeable future. When you start chug, adding it all up, you see a real issue here, folks, and that is sort of terrifying when you think about this. Something is beeping and it's not working. Bear with me, folks. These stupid things are, sometimes these x spaces get a little bit quirky and they're not bearing with us. These are the times where I wish I could do this, like the old time radio show where I'd simply put a pause on and fire off the intermission song.
Concerns for Public Services
But for some reason, it's acting a little quirky this afternoon. Maybe it'll change again. We're seeing the layoffs starting to hit in the schools and into the police departments and northern and western cities. That should be deeply concerning for everybody who's paying attention. It means that the possibility of what I called municide many years ago, that if they don't start cutting spending, they're going to have municipal bond failures.
Potential Municipal Financial Crises
We haven't even faced that prospect. We haven't seen that prospect. But in a dramatic slowdown, we had a problem in Sarasota county. We were down to, duh, double b minus for a rating and that was in 2008. We start seeing that kind of cutting of our ratings to this kind of levels. We're going to see a dramatic race for the, for insolvency among some of these large towns, especially the ones up north who are unable to meet their payments on their municipal bonds.
Warning Signs for Future Financial Stability
Food for thought. It hasn't started yet, but keep an eye on it. It's something to put on the back burner. Look at. In about six months, as we get into the teeth of the recession, we're starting to see the slowdown in car sales. Stellantis is having major problems. Look like they're going to be shutting down more and laying down, laying off more people.
Consumer Spending Dynamics
Boy, wrong. Push hit the wrong button there. And if you say, if you think about that, people are going to have to buy cars in Florida so they might get that little bit of recovery that they're looking for. Us consumer spending. A Bloomberg article, us consumer spending increasingly driven by richer households. Well, duh. But that's for the problem.
Understanding the Economy
Retail sales is driven by dollars spent, not inflation adjusted dollars, not in volume, dollar spent. So if John Galt goes out and buys a new pickup truck, for example, it's not the same dollar value as Joe Koblonski, the one time bitcoin billionaire going out and buying three lamborghinis. Let's face it, dollar for dollar, he's spending more money. And that's what people miss. They missed that in the big picture of the data that's being reported.
Rising Bankruptcies and Economic Predictions
Last but not least, we're seeing the bankruptcies tick up, folks. Pay attention to that. I'm going to warn you now, we need to pay sharp attention to all of that. The us economy is going to get a shakedown not because of the storms, but because of the persistently higher levels of prices that has created embedded inflation over the long term. And that is where we're going to see a scare, folks.
Supply Chain Concerns
People don't understand how bad it's going to cause the supply chain to deteriorate, but we're seeing it with the routing around Africa of the container ships. We're seeing the Chinese getting ready to take some rather aggressive action towards the United States as far as the trade wars is concerned. And I don't foresee anything to change that in the near future, I think that we're going to see a hardening of positions with the Middle east getting all inflamed. We know. I noticed today that the middle eastern nations in the Gulf, Saudi Arabia, Bahrain, Qatar, Etcetera, UAE, have all denied Israel overflight rights for any attack or participation in an attack on Iran. That was an interesting change in policy, and we'll see how this turns out. They were, Jordan was warned by Iran, as were those nations, that should they allow the Israelis to use their countries as a base for attacking Iran, as they would retaliate, not just against Israel, but also those countries itself. It's got them a little bit nervous because they already have a very upset domestic population.
Economic Reactions
I'll take a quick break here. I'm going to bring Mister awesome on to fill in the economic data that I didn't and that I missed. Mister awesome. How you doing this afternoon, sir? I doing pretty good. Yourself? I've got power again, so I can't complain. I've got air conditioning and cold beer. What else do you need in the world? That's right. You made it through, so I made it through. Exactly. Yes. And I didn't have anything sticking in the windshield of my truck, so I felt pretty good about that. Not. Not too bad, all in all. No, not bad at all, sir. So what did I miss? Tuesday and Wednesday, as far as the economic data is concerned? I'm not sure that you missed a whole lot. You. You covered a lot of ground there. Well, I was wondering if there's any fiction that I missed. I mean, I sure would like to have had six on today to talk about the demolition man car, because that thing, that was a fiasco last night.
Market Responses
Yeah, that's. That was kind of disconcerting watching little tidbits of that. I'm not sure that I see much of a demand for what was presented, but, you know, who am I? Well, the market didn't see it either, with Tesla down $20.97 or 8.78% today on pretty decent volume. So that probably has something to do with it. Yeah, I think it does, too, especially when the irobot presentation went down and you could tell there are basically puppeteers. So what's new in the world of commercial real estate this week? Oh, I guess we're kind of, you know, in the same pattern we've been. Not much has changed. I did see this week that there was basically a default on a property in Florida that was due to the borrower refusing to put a rate cap in place or an adjustment of the rate cap, and without knowing too many of the details, that kind of signals to me maybe one of the first contentious foreclosures or delinquencies, if you will, where somebody might have just said, you know what, you just take it back, because having to cash in refinance is not something they wanted to do.
Impact of Storm Damage
The consequences of that, especially considering what's going on in Florida this week, that's pretty steep, because if a lot of people just say, here's the keys back, I mean, we've got shopping centers all over the place that were damaged from this storm, all the way from Fort Myers to Perry, Florida, and across the state to the east coast. If there was somebody who was a marginal investor in a commercial project and they just decided to walk away from it, that has some major implications down the road, doesn't it? Yeah, it definitely can. Obviously, the more that do that, the bigger problem that becomes. But I think there's definitely a lot of assessment to be made after this latest damage in Florida. And then, of course, throughout North Carolina and, you know, even Tennessee and Georgia got some damage as well. That was the big thing we're seeing at this point in time. Unless there's some sort of. I can't see an economic surge that's going to offset the ability of some investors to just walk away and say, the heck with it.
Forecast on Future Investments
Now, there'll be some that will gamble and try to rebuild, but I just can't see investing in a lot of hotel properties near the coast at this point in time, much less in the mountain regions, until there's some sort of stability as far as a future economy. There's no future for their economies at this time, not in the short term. So that's one of the things that you need to get a big storm like this. It changes certain locales, and maybe it's just going to be different for a while before people certainly more in the mountain ranges. You know, that's going to be a different situation. Once everything is stabilized, they've got roads back. So it's going to be a long lead time there for everybody in that region between North Carolina and Tennessee, which is unfortunate, but that's not a quick fix. Florida is no stranger to storms and cleanup damage, but obviously, you know, judging by the scale of what I've seen so far, it's gonna be a while.
Insurance Concerns and Economic Impact
It's, you know, people are gonna have to deal with their insurance. Insurance is probably gonna go up again next year because of this, which is you know, a potential negative impact on the economy there. But yeah, it's gonna be a little bit different for a while, for sure. Yeah. This, this isn't our first rodeo. I remember I was here for 2004, of course, and we had four storms hit in two months, I believe it was. And it really changed the insurance landscape because there wasn't a huge migration to Florida and there wasn't a lot of commercial, major convert, commercial projects or desire to build in Florida. Whereas now everybody wants to build in Florida. Everybody wants to have a big project in Florida. I got to wonder if we start having a net migration out in the months ahead because people are just scared to death and tired of it.
Demographics and Population Trends
The psychology is the bigger issue in my opinion. Yeah, I could see that. I don't know that I would necessarily concur that Florida is going to see that out migration over the storms, but I think that is probably something that is definitely being discussed online and, but Florida's got a pretty good track record of growing over the years. So I guess if it is something that would surprise me to see Florida lose population over this season of storms even though they are, they have been, have caused a lot of damage. Well, I think what we, what I was talking about earlier, I think the biggest part of the net by out migration would be the elderly who have just, who just taken, that's it. They can't afford it anymore. They can't deal with it. That's where I think we would see the net out migration, to be honest.
Market Recovery Expectations
Sure. That might definitely be the case depending on, you know, where the, what areas got hit hardest. You know, some of the, maybe the condos that are 55 plus, definitely going to see impacts there, no doubt as a lot of those projects, you know, people, they're just not going to be able to afford upgrades and maintenance on condos. And then certainly in some of the smaller retirement communities where, you know, maybe they're, you know, some of your, you call them starter homes, but Florida, a lot of the retirement homes are basically just, you know, single level ramblers. So a lot of damage to that. You might see some migration or at least change some of the areas where people are retiring, too. Or maybe you get fewer snowbirds coming down from, you know, my neck of the woods in the wintertime. They might choose to go somewhere else.
Florida's Real Estate Market
What do you make of the prices are at a 30 month low down here and I'm just, I'm talking Florida because that seems to be the subject for the country right now, but they're still way above their historical norms. And the institutional investors they've been liquidating, that's the only word you can use, is an outright liquidation where they're willing to take 20, 30% losses just to get out of the properties before the hurricane. Now, institutional investors have an advantage, and everyone likes to beat up on Blackrock down here, but it's more than just Blackrock, folks. But they can sit there and walk away with a 30% loss and make up for it in other places with better investments. Whereas the mom and pop investors and speculators, they can't afford to have a Blackrock taking 30% price cuts.
Investor Challenges
And you're correct. And that's, you see that in every type of business, the larger a business it is, or the bigger footprint they have, they can handle margin compressor better than a smaller business can because you've got business elsewhere to make up for it. Yeah, I definitely see that there's going to be more pressure on certainly some areas of Florida real estate, given the storms, when already there was a, you know, an abundant supply and sales were basically cratering. This is going to probably be, probably add to that, you probably see even fewer sales, and it definitely has the ability to add more price impairment pressure on the overall housing market there as well.
Overbuilding Concerns
Yeah, that's where I was going with it, because I think not just the housing market itself, but I think that we're going to start seeing this overbuilding of multifamily come home to roost. Yeah, I think Florida definitely stands to see that. Yeah, I think Florida, Nashville is another place that, from what I'm seeing, a lot of the supply that's coming online in the multifamily is affecting red markets. You know, Tampa, no different. A lot of multifamily coming online down there and a lot in the pipeline still. And that's the scary part about this. We have the capacity to sit there and add to it at an even greater level, and there's still a lot of inventory to hit that's being built by the big builders. And I fear that these projects that they've invested a lot of money in, they're going to just absolutely crush any of the mom and pops or seniors that have to sell because they can't afford to recoup from the insurance, et cetera.
Investment Opportunities Ahead
Now that on the positive side, and I don't mean to sound morbid from an investing point of view, within the next two years, it's going to turn around and there are going to be some tremendous bargains in this market. I mean, off the charts bargains. And it's just a matter of picking and choosing your location. Yeah. There's always the flip side of the coin, right? Yeah. I feel I'm bullish on Asheville, to be honest. I love Asheville and I think it's going to come back strong, but it's going to take a couple of years. Yeah. It's always about where, how far out you're looking at in a cycle, because whatever. Correction, every time there's been a correction anywhere in real estate markets, there's always the backside of that, where it comes back maybe not to the same levels or not as quickly, but it's about time horizon and where you're looking at.
Identifying Growing Markets
So there's definitely, probably going to be opportunity there if that's something that you're looking at. This is the Florida real estate market identifying the markets where the population is going to keep growing or people are going to want to keep being. And you might be able to find some good bargains out there for sure. Absolutely. Well, this breaking news from our friend six just broke it into our newsroom from the Wall Street Journal. Boeing to cut 10% of workers globally, delay new plane at 17,000 layoffs. That's a lot of people. That's a lot of people from one company. And I had the funny feeling that's going to start trickling down to the banks, because beyond JP Morgan, if you start reading some of the bank earnings you guys were looking through this morning, there were some not so shining examples of margin compression, shall we say.
Banking Sector Concerns
They're not taking advantage of the higher interest rates and the spreads. And this is not looking good. There are some small banks that are going to be a lot of trouble this winter. It's definitely pressure there. I just want to add on to that 17,000. Macroedge had just published a tracker, job cuts tracker at 37,000 for the month. And that 17,000 is going to be in addition to. Wow. And folks, you can track all of this exclusive stuff over@macroedge.net. get a two week trial of ozone. You won't regret it. Macro age.net. get the data you need to invest in your future. Ulysses, I appreciate your time this afternoon. It has been a crazy week, as you could tell from my location, and hopefully I can get back into the swing of things.
Personal Experiences and Reflections
Well, the worst part about it was that hour long, I. Yeah, what was that like? Having to wait out knowing that you're only halfway through, actually. It was a chance to go outside, assess the damage and of course take my camera out and see if I can get a picture because I've been through 30 plus storms, never had an eye pass over me. And of course it was occluded. There was no. I couldn't see the stars. Oh sure, I was on the south side of the eye so I was at a bit of a disadvantage. from what I understand, the people in the north side of the eye got to see it. It's been a bit of a bummer we had to cancel my vacation, didn't get to see the Aurora borealis last night, which was visible in the keys for all, for Pete's sakes. Without power for two.
Wrap-Up and Challenges
It has been a weird week. So pardon your host if he's ready to just hit happy hour and call it a week, if you know what I mean. Well, if anybody's earned one, it's certainly been you, John. Yeah, we've taken a. It's one of those weeks where you take a major financial hit too because all of your customers and clients shut down. So yeah, it does make things a little bit more dicey.
Market Observations and Concerns
And we'll see how this turns out next week after I have some meetings on the east coast. I have a weird feeling that the news is going to get more interesting if we keep seeing this creep up in the ten year bond. I don't think people are paying much attention to that spread resteepening. We've gone from invert, re inverting briefly to a 14 point spread in less than five days. That is excessive amount of movement for a government bond. It is. And I just wrote last weekend for Macroech Ozone, not just about the ten year but also about the spread between 30 year mortgages and the ten year. And I don't think that we've necessarily seen the cycle turn around yet, but I think spread might go back up again.
Impact on the Real Estate Industry
That would be a disaster for the real estate industry right now. They can't afford that. There's that we cannot have. If we see, if we see what I think we're going to see a four and a half percent tenure by the end of the year. And if we go back to closer to 280 to 300 basis point spread then you're talking about mortgage rates back up in the 7.58 range. Yeah, I wouldn't be surprised to see that. I wouldn't be surprised to see a 730 to a 790 handle on the 30 year. Not at all. It's, it's perfectly logical to see that because no one wants to take on risk and on, especially on non conforming loans. The non conforming loans is a dangerous game right now.
Normalization and Economic Conditions
The 50 year average of the 30 year mortgages is about seven and a half. Seven three quarter percent too. So we're still below historic average and. Yet we're still calling this normalization. But there's an implication that people are missing. We also haven't had persistent inflation with this normalization since the 1970s. This is almost a replay of the. Stagflationary seventies, certainly from the level of, or the rate of inflation. Yeah, absolutely. Well, that's enjoyable. That ought to set a bit off. In a good mood this weekend. Mister Awesome, I thank you for your time. I'm going to call on Kalani to join us here in just a minute. You take care too, sir. What a weird week of market action.
Market Challenges Ahead
And when you start looking at the steepener coming back in, a bull steepener creeping back in right before an election is usually not a very good sign. And I don't think that's going to play well to the markets. That's all I got to say. And everyone keeps saying we're going to have a slope, going to have a soft landing. And I'm wondering if that's true. I'm beginning to have my doubts about quote unquote soft landing or the no landing people. I'm thinking we may indeed see the usual suspects take over and that is trucking right along and then boom. Hard landing. Shocking. Kalani, what's your take on all this going on this week?
Market Analysis and Valuation Metrics
How you doing, John? It's good to hear your voice. It's good to be back on the normal side of the radio. It's been a, a little bit stressful the last two weeks, if you get my drift, man. Well, I'm glad you got through it okay. We made it through it unscathed. Minor damage to the roof and that's about it. We really have begun to see Florida is a weird place, as you know. I mean, only in Florida can you post videos of alligators trying to buy bite the tires on cop cars during a hurricane. So if you missed that, yes, that happened in north Fort Myers. It's one of those situations where we just sort of take it in stride.
General Market Sentiment
We stress out a little bit, then we come back, have a cocktail and say, okay, let's get some nails and rebuild it. That's basically our attitude. Well, you deserve a hug or something. I'll take a cold one, sir. So what do you make of this market action this week? We've been all over the charts. It's another low volume close to the end of the week. We've got a holiday on Monday. So what are people thinking? What's the mood out there for what you're seeing? It seemed like, or it felt like a quiet week in equity markets, because what I typically do the first full week after of a new month is just the look back, you know, the month over month data.
Valuation Metrics Observed
And so typically I take a step back and I look at high level valuation metrics. One of the, some of the metrics I look at are Tobin's Q ratio, which this past month, September numbers included, came in at an all time high, by the way, for listeners. I always try to share data and charts pertaining to what I'm discussing. So I've done that. But, yeah, if you look at Tobin's Q ratio, which is absolutely a really great, historically accurate valuation metric, horrible for market timing. Don't ever try to use it for that. It's not designed for timing markets. But even other things like cyclical PE ratios, the s and P regression, some of these charts I've shared, regardless of the valuation metric, this is in the top three most expensive markets in the history of equity markets in our country, and it's getting worse.
Concerns on Market Trends
And this week saw that. So that's my observation. I continue to think and be concerned that this ends really badly. When you look at other historical data, things like the people are talking about soft landings a lot. I just don't see it. The data actually looks different. And I'll share a couple more charts that show this. It just doesn't look like historical soft landings. It's just the behavior of the data is just very different. So those are some of my observations. Obviously China. Anyone who's been investing in China in the last couple of weeks probably has motion sickness.
The Buffett Indicator Analysis
I'll share some charts from there, too, but I'll pause for a minute and see if you want to dive deeper into any one of those things. I'm going to throw one out to you. What do you make of the buffet ratio or Buffett indicator? It's currently at 200.5%. Yeah, that's another great historically accurate valuation metric. As a valuation metric, do you put a lot of faith in it, or do you put Buffett's actions in the markets as a higher marker of what to pay attention to? And by that, I mean he has sold enough bank of America stock now to be under the reporting threshold, under the 10%, 9% mark, he's liquidated billions of dollars of bank of America stock, and no one's bothered to ask the question why.
Buffett's Actions in the Market
Well, I'm not sure he'd give you a straight answer anyway, but anyone who follows Warren Buffett knows he has. At the end of cycle, he has a history of trimming both winners and losers and building a huge war chest and making billions and billions of more dollars when the cycle turns and the cycle actually ends and it's rinse and repeat. So, from my perspective, he's dead on. He's doing exactly what he's always done, and he's going to profit handsomely for it. Or is he a forward looking indicator that says, there's something rotten in Denmark and we should start paying attention and looking under the hood? Yeah, no one wants touch that one, huh?
Reflections on Market Conditions
Yeah. Well, I'm sorry, I have. I have a long. I have a 20 year grudge against Merrill lynch, and I'm not going to drop it just cause bank of America bought them. That's interesting, because I find that the Buffett indicator, at that level, at historically high level, for that matter, and the Shiller indicators and everything else that shows the same crazy things for trading metrics to be so far off the charts, it's almost. I don't want to say it, but I'll say it. 29 ish territory. Well, you said it. And when you look at historically accurate valuation metrics. Yeah. I mean, the market we're in right now is as overvalued as anything in history, including 1929.
Concerns Over Market Timing
So that's just a fact. Yeah. You're not. You're not feeling very positive about this. In other words, you have the same concerns that I do, that somebody is missing an indicator or something underneath the market, that because the transportation indexes are terrible, the trucking stocks are behaving abominate, just abhorrently, and we're seeing numerous layoffs in logistics right before the Christmas season. So that tells me that maybe Warren's not that stupid. Maybe he knows that the consumer is about to collapse completely. You know, it's a tough thing. You know, the valuation metrics and everybody. I think almost everyone understands this and even accepts it.
General Market Insights
Maybe they don't. I don't know. But, yeah, markets are historically incredibly overvalued. And everyone. The obvious question everyone always asks is, well, when is it going to end? You know, anyone who says definitively that they know the answer to that question, I think is full of it. I mean, you know, irrational behavior can go on a lot longer than people think, and it has already gone on extensively. So I don't have answer to that question. I'm not going to pretend to have answer to that question. All I can do is encourage people to be cautious.
Advice for Investors
And that doesn't mean cautious, doesn't mean you have to sell everything and move to cash or buy t bills, which I think are a great investment. But that's beside the point. I think you can hedge, there are a million different, not a million, but there are many inexpensive ways to hedge your portfolio and to look at where we are historically from a valuation perspective and not even consider the risks, I think is not smart. Yeah. And, and that is a wise bit of advice. We're going to wind the show down.
Closing Remarks
Kalani, thank you for hopping onto the show. Thank you for your concern. Believe me, my family appreciates that. And I appreciate all the well wishes from everybody out there and x and all over social media. It was a, it was an interesting 48 hours, I'll say that. And next week, hopefully we can get back to getting some guests on here and I cranking up the show to level eleven as far as volume goes because there are some key interviews I'd like to get in before the election, not for political purposes. I'll make my one political article coming up in the next week or so.
Political Climate Insights
I really believe that whoever gets the keys, the White House in January is going to inherit a massive amount of problems. And that is where the economy is going to really bite. Whoever wins the job in the rear. I'm not betting on either person at this point in time as who's going to win. The polls are all over the place. But man, I tell you what, don't be surprised if Biden does everything he can to sabotage either individual before he leaves office. And if you don't think he's capable of doing it, please pay attention to what's going on under the surface of the markets and dissect the data.
Future Plans and Closing Thoughts
Now that I'll have some time this weekend and I'll have my system, now that all my systems are back up, I'm going to have some time. I'll be back on the macro edge team on Sunday night. I wanted to worry about boarding up houses or anything like that. For macro Edge radio, this is John Galt speaking.
