The Kids in America

I get nervous when things "feel better."

Unfortunately, I’m hearing that a lot these days, though only in terms of the market rally. 

Everything else seems to stink (if you watch any media).

The coronavirus, the first case in America arrived last week. 

It reminded me of the "breaking news" that interrupted our lives about few years ago when a nurse was evacuated off a medical helicopter with the one case of bird flu that ended up in the US.

The Point?

Maybe this is the thing that gives us a correction.  

Maybe, just maybe, if we’re lucky this will be the event that triggers all-out fear and concerns about the coming plague.  

But maybe we don't get it, and this economy keeps rumbling along at such a steady strong pace that corrections are just going to be fewer and farther between.

And that lack of corrections becomes the monster.

You couldn’t make it up.

The Boring Stuff

We’re running out of houses.  

Yeah, I know. I keep saying the same thing, and I have done since long before we were anywhere near running out of houses.

But that sector that was deemed to play a major role in destroying our entire future and plummeting us all into a world of pain from which we would never escape (about a decade ago) is now setting the stage for powerful trends ahead.

This stunning revelation to the rest of the planet (not our clients) is just beginning to impact all sorts of activity in the general structure of the economy.  

The trickle-down effect is enormous but moves at a glacial pace sometimes and can easily fool you.  

It can also be easily overlooked by the media since it’s not nearly as exciting as saying something like: "Hey guys - stop worrying - start building for the future - it is set to be far brighter than you currently understand...."

That doesn’t pass the, “Let’s terrify the speed-reader traffic with gut-punch headlines.”

Something like this might work though: "Experts state we are out of homes and that we should expect skyrocketing inflationary pressures soon as more people go homeless."

Now that’s a belter of an eyeball generator!

It’s nonsense, of course.

The Good News?

The key points above come on the heels of another announcement from DEC activity:

Now, if you read into the headlines and "key points" of these releases you’ll be able to make out the "elephant size footprints" we have been covering for you in Demogronomics™ for the last three years now. 

The Barbell Economy™ is real.  

This "housing shortage" is the result of traffic flow and the leading edge of the monster Generation Y wave of demand.  

It’s just beginning to impact the US economy in the housing world.  

And what do young people do when they finally decide to leave home?

They go rent an apartment first (usually).

Now scroll back up to that 3rd bullet point in the "Housing Starts Surge" piece highlighted above.

Then, as they enter their early 30s, they start looking for a house.  

In other words, only the very smallest part of Generation Y has started to look for and then buy a house!  

In essence, it has just begun, and we are already 4-5 years behind in supply.  

That is what we call "elephant footprints."  

The Baby Boomers did the same thing back in the 1980s and 1990s, which suggests the 2020s and 2030s ahead are the garden of opportunity years to be planted by the Generation Y kids.  

But this time around, far from the 17% mortgage rates the Boomers were introduced into the housing world with, the kids today get this:

New record low rates.

Not a bad deal for the kids in America.