The Fed printed enough specie that Arizona real estate was bought wholesale decided by an AI bot with presumably human lenders and sellers. Entire zip codes were taken down that could only inspire awe at the creativity thirteen years after Lehman.
The model assumed that interest rates were low and would remain so long enough for money to be available to the next buyer in a flip for the machine thinking ages.
The model cast zero probability that the Fed would stop buying bonds at 120 billion a month despite the Fed saying so.
Other central banks challenged by real inflation and housing prices at 400 year highs demurred. The banks of Australia and Canada stopped making promises they could not keep. The buyers of short term credit sold first and relocated.
Mortgage rates spiked and the AI bot decided that Arizona real estate should be sold at 10% less than it was bought which makes perfect sense somewhere but funds stuffed with specie will be the next gated community keeping residents in and intelligent life forms out.
The good news is that markets are supposed to act this way. Veto the last bad
idea in hopes of the next one.
From Lehman to Zillow. To rates and gates.
Six months later the Fed is keeping its oath to raise rates faster than expected while the Bank of Japan clings to the zero bound falling on its currency, the ECB pledging to locate any Bank in Verona willing to receive continued largesse, mortgage rates crest 6%, and the market is in the denial that the faster the Fed can raise rates to force a recession the faster it will have to print money, again, as the specie of last resort.
So. Buy em from the insiders willing to sell em?
mc 5.87, ps .7
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