"It was the zero-percent era that made a 5%-plus rate dangerous"

"Hope is a wonderful thing to be addicted to."

The 5% quote in the title is from GrantsPub.

A related quote from a WSJ subscriber:

All the uproar about "high" rates is only because interest rates have been abnormally low (even dangerously low) since the recession of 2008. They should have been raised to "normal" levels starting around 2012 but, since they weren't, the government was encouraged to spend and borrow enormous amounts. Now, we're all going to have to pay.

The Hope quote in the title is from Norm Macdonald.

I think a lot of people got addicted to ZIRP and QE.

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America’s Construction Boom: 1 Million Units Built in 3 Years, Another Million to Be Added Until 2025

Let’s hope for tenants’ sake that the cure for high prices is high prices.

Then again…

(As an aside, follow people like Melody Wright and Amy Nixon, who talk about this sort of thing and are doing more ground up along with top down real estate research.)

SINGLE-FAMILY (remember them?) Under Construction

5-Units or more under construction.

For the first time in decades, U.S. apartment rents are rapidly flattening (and could soon go negative) at the same time demand remains healthy and the economy continues to produce jobs. Why? Apartment construction is at 40+ year highs – shifting the balance of power to renters.

This TERRIFIES our inbred academic economists.

“Behind all the complexities of modern political economy lies the simple fact that human beings are, speaking generally, of two persuasions: the first would spend tomorrow what they earn today; the second would spend today what they hope to earn tomorrow. From this rudimentary biological fact arise all conflicts that lead to economic crises: to panics, depressions, violent and revolutionary transfers of wealth, and perhaps most wars.”

Freeman Tilden, A World In Debt (1935)

Japan has finally beaten stable prices!

The dollar has been rising against the yen lately, but…

Looniest Central Bank around, and that’s saying something. STILL negative.

My early MS-Paint days.

"If the invention of interest was the greatest invention in finance back five millennia ago, then negative rates are probably the dumbest idea in the entire history of finance and we’ve just been living through it."

Edward Chancellor with Grant Williams

German short-rates were below 0% for 8 years.

"Negative interest rates was the dumbest idea in the history of economics."

Peter Boockvar

Since 2001, Cisco’s top management has chosen to allocate corporate cash to open-market share repurchases—aka stock buybacks—for the purpose of giving manipulative boosts to the company’s stock price rather than make the investments in organizational learning required to become a world leader in communication-infrastructure equipment for the era of 5G and IoT.

From October 2001 through October 2022, Cisco spent $152.3 billion—95 percent of its net income over the period—on stock buybacks for the purpose of propping up its stock price.

These funds wasted in pursuit of “maximizing shareholder value” were on top of the $55.5 billion that Cisco paid out to shareholders in dividends, representing an additional 35 percent of net income. Besides absorbing all its profits over the 21 years, Cisco took on debt and dipped into the corporate treasury to fund these two types of distributions to shareholders.

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“How do you lose 47% on 30-year Treasuries? Buy at auction in Aug 2020. Or you can carry them at purchase price and hide the “unrealized loss” in the footnotes.”

Bank yields on savings are still pathetic: