Maybe Texas will be the exception to a downturn? I worry about the drought and heat that is forecasted for Texas and the implications that might have on immigration and land values. Do those issues concern you? I have read, that due to weather, the future is in the mid-west. Thank you for the thought-provoking article.
Ahh the stock market. Better than fiction. We read a lot of the same people, and I think we’d agree this is a bull trap. I am always ready to be wrong (I am very much NOT a stock expert) but in my mind the fundamentals of our economy certainly don’t warrant a bull market. I think that thing goes sideways for a long time with lots of ups and downs in between. That is also why I like real estate with its lack of volatility (when the Fed isn’t playing with the economy like a toy). I also don’t care much because I don’t have much invested in that market. I am not a stocks person. I am a real estate person.
I do worry a lot about drought. Mainly because my cow herd is already cut down to a skeleton crew and if next year is like this year then I will sell them all until we get some rain. Which sucks because I am down to my absolute favorite cows. Oh well. Thems the breaks. Trying to feed through a drought is a sure way to go broke ranching. Here in central Texas, there was a 10-year stretch back in the late 1940s and mid-1950’s where every other year was a 3-sigma (less than 22 inches in my area) drought like this year. One of those years (1954 I think) saw only 13 inches of rain. That stretch broke a lot of ranchers and farmers. I take that time as instructive of the range of possible futures. Like a good Stoic, I try to prepare my mind and soul for the worst, but hope for the best. On that note, we only need another inch or so of rain to NOT be the worst year since 1956. It’s a low bar to hurdle but we hold on to whatever light we can in the darkness.
I am not a full-breed pessimist. I do have some optimist-hopeless dreamer from my father’s side of the family. And that little part knows that fortunes are made when there is blood in the streets. Between drought, immigration, and the continued cartel action around the border, I think that area’s land might be attractive if you, like me, believe that Peter Zeihan is right. And he certainly makes a very compelling case. Because Texas has a whole lot to offer (did you know that there is Uranium in Texas? I just learned that yesterday). I also like irrigated ag parcels in the Panhandle. I imagine a possible future where water is more important than oil or gas. Hard to imagine as a Texan until you live through a year like this one.
I will start looking at land price action for October this week for the monthly Deep Dive. Land likely won’t come down 30% like housing but I think there will be some opportunities in some great areas. So on the bright side, there will be deals for the patient and those with plenty of dry powder. These are the times when it pays to be a Cassandra mind with a Pollyanna heart.
I just do not know about the stock market. I seem to have lost the plot somewhere along the line. One thing I do know is that I do not trust the Fed or our Gov't. and I do not know to what degree they can manipulate the economy and markets. I sincerely wanted Powell to be successful at raising rates. Abnormally low interest rates have caused all the problems we now face. Low rates have created a fake market. Did you hear any of the recent interviews with Edward Chancellor, who wrote The Price of Time? Here is one: https://www.youtube.com/watch?v=cIp7KH2YFBg I like George Noble's twitter spaces.
At the end of the day, it appears that we cannot normalize rates and as Russell Napier suggested, Gov'ts are going to replace the Central Banks in controlling the money. So game back on and we will never have a real market anytime soon. Soaring stock market? Back to low rates forever? Fake forever? Real estate continues the march upward in price?
The 40's drought. My grandparents had a real farm - 500 acres in Hamilton County, near the tiny town of Ireland. Closest Big city was Hamilton. It was a real treat to go to Gatesville! Due to that drought, my grandfather was forced to sell all his livestock and start driving the school bus in Ireland. Several of the boys went off to the Navy, travelled around the world, came back to Texas and the drought was still raging. You are right, it ended, as this one will. So, it looks like we will not have to sell our favorite cows!
I have listened to Peter Zeihan's podcast where he talks about Texas. He and you are right about Texas' position in our changing world. Being a Cassandra or at least a worrier, I am concerned about the politics in Texas. 5 years ago, I moved back to Texas - aging mother. I moved from the Santa Monica / Venice area of LA. Many years ago my father decided to stay in CA. I have gone back and forth all my life. During my youth, CA was a magical place. What has happened to that state is difficult to put into words. I will just say for anyone who is not extremely wealthy - it is miserable and dangerous and governed by wackos. Will the vast numbers of people moving to Texas change Texas into another CA? All this is probably years away, if ever, so I will keep looking for a little land.
I agree with you on water and I did see your map - there is Uranium in Texas!
My doubts about the stock market started not long after I left active duty service in 2010 and began a very short tour as a financial advisor for Merril Lynch. Lessons learned: the system is set up such that retail investors are the gazelles and anyone with a Series 7 is a predator. There are certainly good financial pros out there but there are more than a few sharks too. And there are also just a lot of normal humans incentivized to get as much of your money as they can and not always for your benefit. I also began to understand that the entire equities space is so much pushing around of (digital) paper without much productive end. As stated by Jeremy Irons’s character in the fabulous movie, Margin Call: “(money is) not even real; it’s made up.” When money and paper become the end instead of the means to an end (as it should be), you know our economy is badly skewed. It was at the end of that year that I realized that I was a real estate person. I also realized that while I am absolutely fascinated by financial markets as a human institution, I have zero faith in them to actually benefit me.
I listened to the Edward Chancellor episode on Grant Williams podcast. I haven’t read the book yet but have it downloaded and ready for a long trip (or time on the skid steer clearing cedar). I don’t consider myself as a strict adherent to any one economic dogma, but I do like Hayek’s (and the Austrian) understanding of the economy as being far too complex a thing for any group of people to fully grasp and therefore control. I’ve been reading a lot lately about systems theory (started with weather researcher Edward Lorenz a few decades ago). I find that this is absolutely the correct framework to consider the economy (which I identify as our “Culture of Exchange” because it is far more culture and sociology than hard numbers and mathematics). Which basically means that almost any attempt to control an economy will be met with counteracting forces and tertiary, inverse, and unintended reactions that doom such attempted control to failure. But I am pretty sure it will take us decades to come back around to this fact. In the mean time, the eggheads at the Fed and the nincompoops in government will try desperately to bail water from the Titanic. And while I have no clue precisely what will happen, I am pretty certain that any consequence that they lay out as intended will not come to fruition.
I hear you about the politics of Texas. Having spent quite a bit of time in Cali, it is an incredibly beautiful state being squandered by nonsense. I also know more than a few people (two of whom I directly encourage and assisted) who were Cali refugees and now hardcore Texans. And when I say hardcore Texans, I mean Hard-Core. We also have the intentionally planned inefficiency of our legislative system in our favor. There is only so much an activist can get done when the Leg is in session.
I love the Cross Timbers region of Hamilton-Stephenville-Brownsville. Beautiful country. My g-g-g-great grandfather and mother (and the original Texas emigres on my father’s side) are buried in a little farm cemetery outside Dublin.
Dustin, like you I fall into the Cassandra camp. After the last few days in the stock market - maybe I, too, am missing something! I read this on your twitter feed by Levi: https://twitter.com/Levijameshere/status/1585267272507019264?s=20&t=d21OGuDQZGaZhU1C2ejeHg
Maybe Texas will be the exception to a downturn? I worry about the drought and heat that is forecasted for Texas and the implications that might have on immigration and land values. Do those issues concern you? I have read, that due to weather, the future is in the mid-west. Thank you for the thought-provoking article.
Ahh the stock market. Better than fiction. We read a lot of the same people, and I think we’d agree this is a bull trap. I am always ready to be wrong (I am very much NOT a stock expert) but in my mind the fundamentals of our economy certainly don’t warrant a bull market. I think that thing goes sideways for a long time with lots of ups and downs in between. That is also why I like real estate with its lack of volatility (when the Fed isn’t playing with the economy like a toy). I also don’t care much because I don’t have much invested in that market. I am not a stocks person. I am a real estate person.
I do worry a lot about drought. Mainly because my cow herd is already cut down to a skeleton crew and if next year is like this year then I will sell them all until we get some rain. Which sucks because I am down to my absolute favorite cows. Oh well. Thems the breaks. Trying to feed through a drought is a sure way to go broke ranching. Here in central Texas, there was a 10-year stretch back in the late 1940s and mid-1950’s where every other year was a 3-sigma (less than 22 inches in my area) drought like this year. One of those years (1954 I think) saw only 13 inches of rain. That stretch broke a lot of ranchers and farmers. I take that time as instructive of the range of possible futures. Like a good Stoic, I try to prepare my mind and soul for the worst, but hope for the best. On that note, we only need another inch or so of rain to NOT be the worst year since 1956. It’s a low bar to hurdle but we hold on to whatever light we can in the darkness.
I am not a full-breed pessimist. I do have some optimist-hopeless dreamer from my father’s side of the family. And that little part knows that fortunes are made when there is blood in the streets. Between drought, immigration, and the continued cartel action around the border, I think that area’s land might be attractive if you, like me, believe that Peter Zeihan is right. And he certainly makes a very compelling case. Because Texas has a whole lot to offer (did you know that there is Uranium in Texas? I just learned that yesterday). I also like irrigated ag parcels in the Panhandle. I imagine a possible future where water is more important than oil or gas. Hard to imagine as a Texan until you live through a year like this one.
I will start looking at land price action for October this week for the monthly Deep Dive. Land likely won’t come down 30% like housing but I think there will be some opportunities in some great areas. So on the bright side, there will be deals for the patient and those with plenty of dry powder. These are the times when it pays to be a Cassandra mind with a Pollyanna heart.
I just do not know about the stock market. I seem to have lost the plot somewhere along the line. One thing I do know is that I do not trust the Fed or our Gov't. and I do not know to what degree they can manipulate the economy and markets. I sincerely wanted Powell to be successful at raising rates. Abnormally low interest rates have caused all the problems we now face. Low rates have created a fake market. Did you hear any of the recent interviews with Edward Chancellor, who wrote The Price of Time? Here is one: https://www.youtube.com/watch?v=cIp7KH2YFBg I like George Noble's twitter spaces.
At the end of the day, it appears that we cannot normalize rates and as Russell Napier suggested, Gov'ts are going to replace the Central Banks in controlling the money. So game back on and we will never have a real market anytime soon. Soaring stock market? Back to low rates forever? Fake forever? Real estate continues the march upward in price?
The 40's drought. My grandparents had a real farm - 500 acres in Hamilton County, near the tiny town of Ireland. Closest Big city was Hamilton. It was a real treat to go to Gatesville! Due to that drought, my grandfather was forced to sell all his livestock and start driving the school bus in Ireland. Several of the boys went off to the Navy, travelled around the world, came back to Texas and the drought was still raging. You are right, it ended, as this one will. So, it looks like we will not have to sell our favorite cows!
I have listened to Peter Zeihan's podcast where he talks about Texas. He and you are right about Texas' position in our changing world. Being a Cassandra or at least a worrier, I am concerned about the politics in Texas. 5 years ago, I moved back to Texas - aging mother. I moved from the Santa Monica / Venice area of LA. Many years ago my father decided to stay in CA. I have gone back and forth all my life. During my youth, CA was a magical place. What has happened to that state is difficult to put into words. I will just say for anyone who is not extremely wealthy - it is miserable and dangerous and governed by wackos. Will the vast numbers of people moving to Texas change Texas into another CA? All this is probably years away, if ever, so I will keep looking for a little land.
I agree with you on water and I did see your map - there is Uranium in Texas!
My doubts about the stock market started not long after I left active duty service in 2010 and began a very short tour as a financial advisor for Merril Lynch. Lessons learned: the system is set up such that retail investors are the gazelles and anyone with a Series 7 is a predator. There are certainly good financial pros out there but there are more than a few sharks too. And there are also just a lot of normal humans incentivized to get as much of your money as they can and not always for your benefit. I also began to understand that the entire equities space is so much pushing around of (digital) paper without much productive end. As stated by Jeremy Irons’s character in the fabulous movie, Margin Call: “(money is) not even real; it’s made up.” When money and paper become the end instead of the means to an end (as it should be), you know our economy is badly skewed. It was at the end of that year that I realized that I was a real estate person. I also realized that while I am absolutely fascinated by financial markets as a human institution, I have zero faith in them to actually benefit me.
I listened to the Edward Chancellor episode on Grant Williams podcast. I haven’t read the book yet but have it downloaded and ready for a long trip (or time on the skid steer clearing cedar). I don’t consider myself as a strict adherent to any one economic dogma, but I do like Hayek’s (and the Austrian) understanding of the economy as being far too complex a thing for any group of people to fully grasp and therefore control. I’ve been reading a lot lately about systems theory (started with weather researcher Edward Lorenz a few decades ago). I find that this is absolutely the correct framework to consider the economy (which I identify as our “Culture of Exchange” because it is far more culture and sociology than hard numbers and mathematics). Which basically means that almost any attempt to control an economy will be met with counteracting forces and tertiary, inverse, and unintended reactions that doom such attempted control to failure. But I am pretty sure it will take us decades to come back around to this fact. In the mean time, the eggheads at the Fed and the nincompoops in government will try desperately to bail water from the Titanic. And while I have no clue precisely what will happen, I am pretty certain that any consequence that they lay out as intended will not come to fruition.
I hear you about the politics of Texas. Having spent quite a bit of time in Cali, it is an incredibly beautiful state being squandered by nonsense. I also know more than a few people (two of whom I directly encourage and assisted) who were Cali refugees and now hardcore Texans. And when I say hardcore Texans, I mean Hard-Core. We also have the intentionally planned inefficiency of our legislative system in our favor. There is only so much an activist can get done when the Leg is in session.
I love the Cross Timbers region of Hamilton-Stephenville-Brownsville. Beautiful country. My g-g-g-great grandfather and mother (and the original Texas emigres on my father’s side) are buried in a little farm cemetery outside Dublin.