Over the last two years, I’ve written 11 articles about the housing bubble. These articles have covered everything from valuation trends to credit cycles.

I have unpaywalled them and made them all available to you here: (1/6) • Part 1 (valuabl.substack.com/p/housing-mark…) (Jul 13, 2020) Is British housing in a bubble?
• Part 2 (valuabl.substack.com/p/housing-mark…) (Jul 16, 2020) How large is Britain’s housing bubble?
• Part 3 (valuabl.substack.com/p/housing-mark…) (Jul 20, 2020) The Ponzi-esque features of housing (2/6)

The central bank's balance sheet and interest rates are two sides of the same coin. To translate monetary policy, you must understand how the modern banking system works.

Here's an explanation in plain English. (1/13) When you send money to a friend, your bank sends it from your account to hers. The numbers in your account go down by the same amount hers goes up. (2/13)

The Federal Reserve buys and sells securities and sets interest rates to influence: borrowing costs, lending activity, price stability, and productivity, with varying effects.

Here's what happened to the monetary policy this week... (1/10) Last week, the Fed trimmed $18bn net from its Treasury security holdings and added $3m net to its mortgage-backed security (MBS) holdings. The total amount of Reserve Bank credit shrank by $19bn net. (2/10)

1. Fed watch • Credit creation, cause & effect • May 11, 2022

The Federal Reserve buys and sells securities and sets interest rates to influence: borrowing costs, lending activity, inflation and employment; to varying effects.

Here's what happened last week... (1/15) 2. Last week, the Fed added $1.5bn net to its Treasury security holdings and $5m net to its MBS holdings. The total amount of Reserve Bank credit increased by $869m net.
•The 10-year Treasury yield dropped by 2bp to 2.91%.
•The 30-year fixed-rate mortgage rose by 3bp to 5.30%.

1. Extra! Extra! Read all about it. A new issue of Valuabl is coming in hot off the presses this Friday at 5pm.

Amongst the usual titillations, subscribers will get:
... 2.
• Updated capital costs and my valuation of the S&P500 (FREE)
• Which regions have the cheapest or most expensive stocks?
• Are stocks finally cheap, or was 2021 a mirage?
• My latest research, commentary, and activity
• What deals are percolating in corporate pipelines?

(1/8) Credit creation, cause & effect • April 6, 2022

The Federal Reserve buys and sells securities and sets interest rates to influence: borrowing costs, lending activity, inflation and employment; to varying effects.

Here's what's happening 👇 (2/8) The Federal Reserve buys & sells securities

🧵1/13 It's a risky world out there.

I've updated my country risk premiums for the beginning of 2022 and have found something remarkable in the bond market.

This is a thread about what I found. 👇 2/13 As part of my process, I update my country and equity risk premiums across the world twice a year. In the following geo-chart, I have colour coded the equity risk premium for each of the 156 countries I analyse. These premiums range from 4.77% to 22.01%.

🧵1/7 Much has been made of how quickly the economy bounced back, inflation, and why unemployment is so low.

In this thread I will attempted to explain these by looking at the most misunderstood and overlooked driver of the economy: private credit expansion. 2/7 The number of job openings was rising steadily before falling off a cliff in 2020. Closing the economy is bad for jobs, right? Right!? If so, why are there more job openings than at any time on record? Shouldn't companies be laying people off?

1/ For the last 12 months or so, I've been banging on about the housing market being in a bubble.

I believe that there is a substantial dislocation between the price and the intrinsic value of housing.

In this thread I will outline my case.

#housing #RealEstate #investing 2/ My valuation assumes:

A) Intrinsic value of housing comes from rent you could charge (or don't charge yourself)
B) Rents cannot grow faster than economy forever
C) Economy will grow at risk-free rate
D) No growth reinvest required

How has this model performed historically?