You know, in baseball it's three strikes a year out. Well, if we had three strikes to give the Fed, well, they should be out too. Because first, they were way too slow at responding to inflation. We already know that old news.

They were still printing money in March of this year. Hello, Inflation was over eight percent And you're still printing money. Okay, all right, let's give you a pass on one mistake. But wait a minute.

The Federal Reserve is now over tightening because of jobs and the jobs. Market being super tight because the Bureau of Labor Statistics says the unemployment rate is plummeting and we're creating two and a half million new jobs. Or have created two and a half million new jobs between March and November Even though the household survey shows we've created but maybe twelve thousand jobs since then, wait a minute. That's a huge disparity.

One makes politicians look good, and the other one is oh God Yeah, that's not actually as good yet. The fat is tightening as if the job market really continues to be that disgustingly tight. But then wait a minute. Now the Federal Reserve is coming out going.

wait, wait wait wait okay, wait. We're starting to realize the second potential mistake. This is a report from the Philadelphia Fed that actually complains about exactly this. But rather than going all the way to November where we sit, now, all they're going to do is they're just gonna look at data from March to June and between March and June, it's going to take him another six months to go to get all the way to the November data.

They suggest that in aggregate, only 10 500 new jobs were added During the period rather than the 1.1 million jobs estimated by the Bureau of Labor Statistics. Okay, wait a minute. So the FED is tightening on the basis that the job market is tight, but we're barely creating jobs right after the Fed was still printing money when inflation was at eight percent. Well, to me, that's two strikes.

Three strikes are out, right? Well, the FED is finally finally waking up and realizing their next mistake. and hopefully soon they actually act on it. And the Cleveland Fed just released a working paper this working paper which I will spare you the details of it. but this working paper released here in December 22 is just released indicates that the Federal Reserve through all of their research in this working paper, is finally realizing that wait a minute.

Maybe we should not measure rent inflation through lagging indicators like CPI rent and this thing called BLS Atrr. Maybe we should use a modified measure where we actually use leading indicators and we'll call that this black line. and oh my gosh, rental inflation is plummeting. So now we are at the Third Biggest mistake for the FED in a row and yet they're still not responding.

What's going to be mistake number four? Well, I'll propose mistake number four now. In the meantime, remember I Meet Kevin and the only sponsor on this channel are the programs on building your wealth Link down below. We've got a holidays coupon code down there and I would encourage you to check it out where you get lifetime access to the programs and building your wealth and lifetime access to those live streams for however long. I Do them when the market is open every day.

Oh, I'll propose mistake number four. The Federal Reserve wants the housing market to slow and some people today are cheering that the housing starts month over month. Data actually didn't come in as bad as expected. Housing starts only came in down half of a percent rather than the expectation of minus 1.8 percent.

But folks, let me share a little bit of reality with you about how this stuff works. and then we'll see if the FED is about to walk into a fourth Mistake by continuing their aggressiveness. So when you want to build real estate, the first thing you do is, well, you find land to buy and then you buy the land. We'll call that all Step one of the process.

So that's step one in the process. Step Two of the process. What do you do? You go get permits and you apply for permits and then there's usually a lag time between this. This could be uh, you know, one year over here and then this could be two years over here.

And then guess what? You start, You start construction right and then obviously after you start construction in the future, your goal is to sell those properties or rent them out. Okay, so we just got data on housing permits and housing starts. and some people are jumping up and down that the Housing Starts number was not as bad as feared. It was minus point five percent.

Not as bad as fear, But what are the permits number show? Well, The permits number instead of coming in at minus 2.1 percent on a month-over-month basis, actually came in at a glorious negative 11.2 percent and the prior month was also revised down to negative 3.3 percent. So in other words, last month's data was worse for permits than expected, and this month was a Miss by a factor of five. By a factor of five. building permits missed.

And yet somehow people have the audacity to cheer about this. But let's think logically for a moment, if you're a builder and you have approved permits on land that you already own, you probably are making the wise choice of thinking: oh, Lord Let's build these homes and start them and build them as freaking P so we can sell them and dump them as soon as possible because we bought the land predicated on what we thought we could sell the homes for. Now, let's build the homes quickly and sell them before we get saddled with this land eating up our money like an allocator. Be an alligator because it's not doing anything.

it's just sitting there as land depreciating if we don't build on it and sell it. So if anything, this in my opinion is a sign of build or Panic Builders are finishing out projects faster to get stuff to Market to sell it and build our permits. In other words, new acquisitions that are turning into permit applications are plummeting because Builders laid up. We're good.

We're just gonna sit here and we're going to buy back stock. Well, that's kind of exactly what they're doing. That's what Lennar did in the last quarter. You can't blame them at all.

Their stock fell and so what did they do? They bought back stock because buying back their stock right now is a better financial decision than actually investing in. uh, in in buying new homes or buying new land to build new homes on. In addition to that, their sales prices. This is from the Lennar earnings call.

You can't make this stuff up. Their fourth quarter new sales order prices declined 9.5 in just the third quarter. In one quarter, prices decline 9.5 percent. That's insane.

That's a really, really bad. It's not good at all. So is the Federal Reserve going to continue to make the mistake of Hawking and Hiking Well, judging by the three mistakes they've made so far, Yes, and as a result, we're probably likely to continue to see pain in the real estate sector. now.

Some folks like to have this thesis that will wait a minute. Kevin Maybe real estate won't do that badly because wages are up like five percent and you know if prices are down like 10 percent and mortgage rates fall off their Peak a little bit. Well, you know, wages being up, prices being down a little bit. Maybe that makes homes actually more affordable than they were in April of 2022.

this is the part that makes me want to vomit. Why would you have wanted to buy a home in April of 2022 when home prices in many areas are now already down 10 to 18 from them? You don't want to buy a home at the top of the market at the top of the bubble. You don't want to do that. So instead you want to prepare.

You want to build your knowledge in real estate investing. You want to build your knowledge in property management or rental. Renovations And you want to get ready for the odds that the FED continues to make this nasty mistake of continuing to Hawk damaging the real estate market further and unfortunately, it's also going to require more patience for the stock market. I'd love to be Mr Moon Boy and say everything's going to be fine I Do think that in the long run everything's going to be fine, but in the short run, the Fed Even though they're starting to acknowledge some of their mistakes, they just continue to go dirty.

and this is asinine. It's insane that you're printing money when we have eight percent stimuli or eight percent inflation in March of 2022.. And now you're still raising rates when you realize you were wrong. Then you're wrong about jobs, Now, you're wrong about rental inflation now.

And you're causing massive economic damage to not only companies, but to the housing market. Hey, look, it'll create some opportunities for us to go shopping at Househack. That's for sure, my real estate startup. You want to learn more about that? go to Househack.com But in the meantime, boy oh boy, this is nasty.

Thanks for watching. Check out the programs on building your wealth. Link down below. Use code holidays and we'll see you soon.

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