May 10Liked by Lau Vegys

You know, I do remember from the "Great Financial Crisis" that there would be a tsunami of private home foreclosures as far as the eye could see, along with a massive cratering of house values for a generation. But just a few years later, the residential mortgage market took off on its long march to the moon and never looked back.

I also remember in March 2020, when the stock market bottomed out barely a month into the "pandemic". But at that moment, when it looked as if the world would literally transform into a new Dark Ages, the market rose once again started a march to spectacular heights (with hiccups, for sure) ever since.

Who TF knows what the Three-Card Monte-ists in the drivers' seats have up their sleeves this time around? Accordingly, my financial strategy no longer makes predictions on anything and trusts no one. It is completely independent of the crystal ball.

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It's important to keep this stuff in context. A 20% vacancy rate is very high. But, what's "normal." Well, it's never 0%. In 2019 pre-pandemic, it was 8.9%. https://www.commercialsearch.com/news/2019-national-office-occupancy/#:~:text=On%20a%20national%20level%2C%20vacancy,by%20only%2010%20basis%20points.

So, it's slightly more than double. Yes, bad, but relativity is important.

The real issue, in my opinion, is that the vacancy rate does not account for ongoing leases where the tenants have abandoned the premises but continue to pay rent through the lease term. Those tenants will not be renewing, and they'll make that 20% national vacancy rate a floor, not a ceiling. So, the problem likely will get worse before it gets better.

Anyone smell a federal bailout here? Congress probably wouldn't budge for commercial landlords. But for banks . . . .

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Credit card debt is also at an all time high.

The spillover of debt will be extraordinary.

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Governments’ response to covid, which precipitated and perpetrated this calamity, is among the greatest (and most predictable) self-inflicted wounds in recent memory.

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Great point, JD.

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