Federal Reserve in Celina
The Federal Reserve, they came to Celina last night, yeah, Christopher came out and we got to have a great discussion with them. He got to give a whole presentation. We have the whole thing right here. We’re going to show it real quick. Yeah, that’s Shana. She’s a luxury real estate broker. Huge. Thank you to Dr. Blake Bennett for putting this all together with public title. Was there?
Set it up with that for us, and it got super nerdy after the meeting and it was crazy. I was like, What is happening?
And guess who got to participate in all the super nerdiness?
My Federal Reserve race after Bennett and our new friend, we’ve met a new friend last night.
So without further ado, let’s talk about some of the things that the Federal Reserve kind of brought up. Now this is his personal opinion. It’s not anything related to the exact policy that they are going through.
But if we take a look at this. Yes, it did get super nerdy. I’m going to take control of the whole presentation on it.
Yeah, the whole super nerdy presentation. And as I scroll through, what you’re going to see is there’s twenty seven pages here and we can just, yeah, and we’ll share it and let you see. But essentially, he was sharing the difference in this recession and previous ones, right, related to demand in supply for different issues where we are.
Is Texas as it relates to other states or the rest of the country how we’re recovering, we’re home prices are where they’re likely to go, where supply is out for materials and inputs and all these different items.
Yeah, there were a lot of good stats. And one thing that it kind of came to light is, you know, historically every 10 years you have a recession right there like that happens. And it’s like, Well, no, that’s not necessarily true, and we shouldn’t expect that to be the case, right?
He said Australia just went 25 years without a recession. Yeah. So it doesn’t have to happen. So the largest takeaways that I would say from the whole thing overall is, you know, the bigger question is, did we have a recession and everybody missed it? And didn’t really think about it. And I was mentioning that when it was happening and after our recovery, right? Right. That we’re on a new expansion.
So it depends how you look at things. But my personal opinion is I do believe that we had a recession. And everybody missed it. And we’re on the beginning. Of an expansion, not the extension of where we were before, and it’s also a moot point as well because you don’t have to have a recession every 10 years. No, like Sean, to kind of let
You know and that kind of opened my mind, you know, to to start thinking in that direction that, OK, well, you know what is affordable? That was another thing that came up what is really affordable?
And is this a bubble and all of these things? No, I think this is just, you know, we had something happen in our world that I mean to any of us have has never happened before. And it was a pandemic, right?
So I think this comes down to classifying what it really was. It was a great reshuffling. Right. It was like hit the restart button on a lot of different things for reasons like like, Whoa, whoa, why are we doing that right? Let’s do this. Here’s our new world. We just kept doing things this way. And so it restarted things, and I think it’s going to, like, really trigger a lot, a lot of things, totally different.
And this slide that I happen to pull up here, slide number 15 as we take a look, what this is showing is where people moved from and where they came from and the intensity at which they are moving. They’re from different areas. So what you’ll see over here on the right is we had a lot of people moved from California
And everybody last night. If we met anybody, that actually the it was really funny. This guy was from California, and he apologized. So it’s funny that everybody, when they state that they’re from California, they feel the need to apologize for that.
No, they really do. But as a New York that’s immigrating here, I never once apologize for moving here. It’s really weird, like the how people look at things. All the Californians apologize for coming.
And then where you like, you’re welcome.
No. I didn’t quite act like that, but I did run into another New Yorker yesterday and transplant. And really, honestly, most of us came from somewhere else, right?
So and that’s kind of, you know, I grew up in the same town, right where I was born. I grew up and and went through all of my schooling there. And that’s not typically the case here. I mean, most people are from another area.
All right. So as we dig into this, what we’re going to see is where are the places that people had moved to? What’s the intensity in which they were coming? So on the inbound migration? Dallas was definitely a huge game. The Metroplex in general, Austin Round Rock gained a lot as well.
San Antonio, Houston, Houston had a huge gain over where they were as far as growth from outside the area recently compared to what it was before. So they definitely picked up the pace on what they’re doing. Austin is completely ridiculous.
So if you look at that, it shows the pre-pandemic and after, right? So that’s what the two two graphs are.
I’m going through these a little quick. You’re going to have to dive into.
There’s a lot of very valuable information in here that you guys should take some time and it’s really interesting, you know, just to kind of put it in perspective and see how things have changed. And it kind of made made me aware of that where we live. I don’t think it’s going to change you guys. I just know, I don’t know.
Definitely not going to change. We’re we’re kind of here to stay.
And, you know, they talked about interest rates. That’s that was a big one that you know. We don’t want interest rates to go to a point that it’s going to like cause harm, right, that it’s going to cripple our economy, but you want it to to actually balance things out.
And they did say that the interest rates will look for in the next six to eight weeks for it to go up a quarter point. So it wasn’t like now with that.
Also talking about interest rates, right? People talk about the fact that the Federal Reserve has to get the tool back in its toolbox to have interest rates to be able to lower them if something else happens. Right, OK. And that is a concept for sure that you always want to have that tool in your toolbox. But I would say and I talked to him off record afterwards about this and what Dr Bennett, that I think it’s arbitrary that we think that this tool went away because he referred to something.
He made this reference that to be the the best looking horse at the glue factory. Right. And so it seems like they’re all bad, right? But this one is the best of the bad ones, right? So if you look at where where you would possibly put your money or where the safe haven for money is right or what interest rates are the U.S.,
I believe actually in enlarged its lead during this as a stability place across the world, there might have been a lot of shuffling around, but we’re still considered a super safe place to have this OK.
And in doing so, I think that no matter where the interest rates are, whatever that number is, they can always lower them because our balance sheet, no matter what it looks like as United States, is still the prettiest horse at the glue factory. And so whatever that means, right, so whatever that number is, somewhere else is going to be worse or more risky. And I think we’re totally fine and we came out of it pretty well.
No, we truly did. Did change a lot of things. It changed how businesses have to, you know, I mean, their their their pay, their expectations. But that chart was interesting that we always hear, when are things going to go back to normal? Where are we, you know, on that scale and this was this was interesting. So it looks like we’re more than a year out.
Well, so the weird thing, yeah, he totally dove into this. Yeah, right? And just since I have the mouse here so I can show us in in twenty one, 18 percent of the people expected. So one year ago, right, 18 percent of the people expected that we would it would take one year or more to catch up on supply issues that have related from this and the rest, right?
Eighty two percent felt that we would be past all of those issues in that short period of time, right? That time would have already passed. However, now that one year has passed, so the chart should look totally, totally different. But rather what it says now is one year later that nearly seventy five percent of the respondents think that the recovery that to get back to normal supply issues.
So it should have been like 82 percent say where we’re covered now, we still have after that point, more people saying this can take way more than a year. Some saying it’s going to take like just under a year, but most of them still saying it’s going to take at least three quarters of a year from now to get back to where we kind of should be supply side. But thinking back one year ago, they were totally wrong and optimistic about nobody.
The thing is, nobody knows. None of us can predict the future. But something interesting also came about last night is he was instructed. Chris was instructed not to talk about the Ukraine war and and all of that. But. He did let us know. I did that, of course, my ask the question. And in a different way we did learn, which I didn’t know maybe others did, but that the chip, you know, is made in.
Yeah. So here was that where that came up from is my question. So the question I asked is, he says he can’t comment on Ukraine. And I said, That’s fine. So super simple question. My question is not about Ukraine or Russia at all, but rather when that finalizes in, the resolution is complete and Shana decides to take Taiwan. Ok, then, do we erase all of China’s investment that we have here and say their debts? No good, recover our whole economy and go back to where we have zero liabilities to China?
Ok, and now all of a sudden we get rid of all of our debt in one fell swoop by them doing something right. And so we talked through that just a little bit. But the point that he made is the reason. An additional reason that they’ll grab it is he quoted a number and I can’t remember exactly what it was, but it was a staggering percentage of all of the semiconductor. Raw materials are produced, are produced and no are not the raw materials.
The production takes place in Taiwan, but the raw materials are in Ukraine. So it’s about semiconductors.
It is. It’s crazy. And that makes me wonder. This is why at all? I don’t know. But yeah, that’s a whole other, whole other thing. But the point is. And I think they’re going to get a new car. That’s what I that was my takeaway last night.
Yeah, it’s it’s really going to go up car prices. They have gone up, what, 40 percent
And that’s due to in this. Ok, so that’s do this as cars, you guys, it’s like, you have to think about all these, these mechanicals that I mean, we’re it’s going to be.
Yeah. So what they were talking about is it was mostly supply side problems for cars that was forcing pressure up. Ok, so now if that happens and you’re restricted on the amount of cars because there’s not enough cars out there, OK, that’s fine.
That issue gets resolved over a period of time. Personally thought it would have been resolved already, but it hasn’t been. So now if we start getting cars back in supply, OK, I think we’re going to now have a demand problem with huge demand because imagine all the people that couldn’t get cars for all these years and you start to have now an older car and you’re used to trading a car or buying a car, every pick your interval.
Yeah, and now you haven’t. And now all of a sudden, I think there’s a huge demand that’s going to rush in as well. And so as soon as the supply catches up and they get back to normal, whatever normal is, how are they going to produce enough to keep up with the demand that’s been pent up over all these time frames and that stays the same for houses as well? Mm hmm. It does all.
Ladies and gentlemen, this is going to be a great, great time. Yeah. Oh, I will talk about this any time and specifically a great time to talk about this is over poker. So if you’d like to join us on Saturday, review this at your leisure. Yeah, and get back to me on Saturday that sent out to you guys. It’s good information makes you think and it makes you made me realize that, you know?
You have to look at the the pros and cons of everything, but I took away some positives that actually came from this pandemic and how catastrophic it really could have been. And it it, it wasn’t. Now I say that lightly because I know just death aside, yeah. Like it was just like basically died.
But you know, it could have been. Totally catastrophic.