Wall Street: New to the Neighborhood

Published on
December 16th, 2019
Duration
26 minutes


Wall Street: New to the Neighborhood

The Expert View ·
Featuring Ryan Dezember

Published on: December 16th, 2019 • Duration: 26 minutes

Ryan Dezember of the Wall Street Journal has nearly a decade of experience covering financial markets. Recently, he has focused on Wall Street’s foray into the housing market — specifically their bet on single family rentals. Since 2012, Wall Street firms and big corporations have bought an increasing number of homes for the purpose of renting them directly to consumers – sending shock-waves through the market and affecting prices for renters and homebuyers alike. Dezember examines that phenomena and introduces viewers to rent backed securities. Filmed on December 10, 2019 in New York.

Comments

Transcript

  • WM
    Will M.
    29 December 2019 @ 15:34
    Yes, all we have know for a few generations now, Property is Wealth. An interesting thought, has the wealth thats been created since the 60s been truly real or illusory? I'll wager only the release of financial constraints by breaking of the $ gold peg in 1971, coupled with the huge inflation pulse in the 70s and early 80s (wiping out debt levels for those who were able to hang on and trade up in property) coupled with the soaring government borrowings to fund big government and dramatically expand social programs, are largely responsible for much the wealth today.
  • NR
    Nelson R.
    21 December 2019 @ 20:02
    This type of dynamics is what eventually ushers in socialism. Be very afraid of when all those people priced out of the housing market decide they wont take it anymore.
    • DR
      David R.
      22 December 2019 @ 08:05
      Prices stablized and were slowly dropping in 2018 when the Fed raised rates to a sky-high (lol) 2%. Now true inflation is 10-13% per SO many private statisticians and the Fed sits at 1.5% committed to negative real rates because the US government is bankrupt twenty times over. Under these conditions, housing will NEVER be affordable except to the rich and those who already own a house. Time to upend the system by either hiking rates to 13% a la Volcker or assessing a 10% annual wealth tax on everyone who owns a home priced above the median based on the amount by which the assessed value exceeds the median.
    • WM
      Will M.
      29 December 2019 @ 15:28
      David what you are proposing is just government theft to distribute wealth and destroy society. The crony capitalism or more accurately "creditisim" is what is going to destroy us. The rate rise is indeed coming but an annual wealth tax is a terrible idea. The problem is big government and public (and many private) pensions that are simply not funded. Pensions don't work if there is no capital growth. Retirement doesn't work unless you pay off your life debts and save money. Saving morning doesn't work if you change your vehicle every 3 or 4 years and spend money to fill your wardrobe and have a flat screen in every room. Ok I am generalizing excessively, but an annual wealth tax will simply cause the wealthy to leave a country. Unless you are proposing they be stripped of their wealth before allowing them out of the country. We have been there before.......
  • JA
    John A.
    18 December 2019 @ 15:08
    Amazing to see. I have been documenting this for clients. Anyone interested should go to the Federal Reserve website, FRED, and chart 3 things since the year 2000. Include the Shiller Home Price Index (any one you want), vs take-home income, vs the homeownership rate. You will easily see that these rapidly rising real estate prices are not being driven by people who are getting great jobs, making more money, and buying bigger and better houses. This recipe makes the distortion that we are watching right now worse than the Great Financial Crisis. Add to that the overvaluation of the stock markets, as measured by Shiller CAPE, or Tobin’s Q Ratio, and bond prices at their highest in human history, and you have a recipe for disaster, of Central Banks’ making. All of these are distortions created by ZIRP and NIRP. I’ll be ready when the pitchforks and torches come out. I’m just hoping that since I’m in the financial industry, it’s not MY head their coming for! Remember, they called WWI the Great War, and the war to end all wars - until they encountered WWII. Now we barely remember WWI...
    • WM
      Will M.
      29 December 2019 @ 15:20
      Yes, remember they called the 2008 event the Great Financial Crisis. This was until we encountered the GFC 2, coming soonish to a place near us all.
  • JD
    John D.
    18 December 2019 @ 15:01
    "You can sell them as quick as you can bundle them." Where have I heard this before?
    • DR
      David R.
      22 December 2019 @ 08:12
      That was paper instead of real assets being sold. In the emerging hyper-inflationary environment of the US and the rest of the bankrupt West, real assets continue to rise in nominal terms. Refer to Weimar Germany. Today right now, the US is full Weimar, with the Fed directly monetizing the US debt and last week's defense bill. Buying almost all the UST's as even the primary dealers "forced" to buy that garbage cannot absorb the massive amounts of treasuries being spewn out. Fed printing nearly $180-billion daily and lying about it as nobody sane will touch US treasuries issued by the bankrupt US which has zero intent or ability to repay except via the printing press issuing out more of those falling Weak Dollars.
    • WM
      Will M.
      29 December 2019 @ 15:18
      You just have to be from the UK David? Don't disagree with you at all, but we might all be shocked to see the US$ soar due to its status as the primary load currency for the world. However, ultimately that monetization you talk about will signal the demise of the West.
  • BT
    Brian T.
    23 December 2019 @ 21:19
    Great job and great insight! Loved it!
  • PG
    Philippe G.
    23 December 2019 @ 16:13
    Interesting story!
  • dp
    david p.
    22 December 2019 @ 23:45
    Now we know why Warren Buffet is stockpiling his Cash...
  • us
    ujjwal s.
    21 December 2019 @ 15:23
    commenting after watching first few minutes, I tried to know who are all these cash buy investors, now I am last to know finally after all stuff is over. Thank you!
  • PP
    Patrick P.
    19 December 2019 @ 12:01
    What is most interesting about this video is what the contributor had to say about "MOST" Americans. "Most americans don't save enough".... that is the real problem across the American financial landscape. If you want to create real wealth you need to live below your means.... "Wealth Creation 101"
    • NB
      Nikola B.
      19 December 2019 @ 16:26
      Problem with that notion is that many people are not in position to save, to begin with, because of really high living costs.
    • RV
      Ryan V.
      19 December 2019 @ 22:27
      And save with what? Yields are at all time lows. You’ll be lucky to get a consistent 5%. Meanwhile the chapwood index has true inflation at 8-10%. Savers can’t win in this environment. What are you buying or investing in to create wealth under these conditions?
    • BK
      Boris K.
      20 December 2019 @ 18:55
      i disagree with you nikola.... "really high living cost" is relative... if you cant afford to save 20% of your income then you shouldnt have 180 comcast channels and send your kid to private soccer team.. Americans simply were never taught to save( i am an immigrant and learned from my parents about frugality)
  • RV
    Ryan V.
    18 December 2019 @ 16:07
    This all sounds like 21st century Feudalism to me.
  • KB
    Kirk B.
    16 December 2019 @ 21:01
    Outstanding video! Thank you RV TV. It provided valuable, well thought out insights into the US single family housing market. It is refreshing to have a video series about housing--one of the largest classes of Alternative Assets. I hope that RV TV will continue to provide regular videos regarding the real estate investment markets, and single family housing markets in particular.
    • CB
      Clifford B.
      18 December 2019 @ 05:55
      This.
  • YR
    Yaron R.
    17 December 2019 @ 21:58
    Very good. In Germany it is most unusual to buy your primary residence, the government is supposed to provide the security through the obligatory pension scheme everyone has to buy into (something Bismarck invented to get the uprising socialist party of his back). So only after I moved to the anglosaxon world I found that almost everyone I knew owned their apartment/house. Especially in today's world of monetary expansion, these (affluent middle class) friends of mine are more and more priced out of their own real estate by the market forces. https://www.theatlantic.com/business/archive/2014/10/how-retirement-was-invented/381802/
  • GS
    Gaston S.
    17 December 2019 @ 20:50
    What was the mechanism through which the middle class accumulated wealth before the world war? Or there wasn't and there really wasn't much of a middle class?
  • JH
    Jesse H.
    16 December 2019 @ 23:22
    Found this excellent but also pretty infuriating. Wall St. never changes.
  • RM
    Richard M.
    16 December 2019 @ 16:41
    Really interesting conversation, enjoyed it a lot! Looking forward to reading his book when it is finally available.
  • FB
    Frank B.
    16 December 2019 @ 15:40
    Ryan talks mostly about middle and upper middle class families. He failed to mention Wall Street buying up lower income properties including mobile homes and financing them in droves. John Oliver did a story in April 2019 in which he discussed mobile homes and high interest rate borrowing. Some of the top buyers of mobile homes: Carlyle Group, TPG Capital, Clayton Homes (owned by Berkshire), and Blackstone. John Oliver on mobile homes link: https://youtu.be/jCC8fPQOaxU Additional FT analysis on mobile homes: https://www.ft.com/content/7addf0c8-77d6-11e9-be7d-6d846537acab I don’t think this is just effecting middle and upper middle class families. Institutions are buying up properties across the income spectrum in the US. One of the effects of low interest rates and the search for yield. Thanks RV for putting this together!
  • KA
    Kenny A.
    16 December 2019 @ 11:08
    Great Interview, a lot info on housing development since the 2008. You missed a big question the Price of houses in the mid to long term ?
    • NS
      Nir S.
      16 December 2019 @ 14:46
      They will become yield driven like commercial properties, depending on other investing sectors and their risks, yields will go up or down and therefore prices.
  • GF
    George F.
    16 December 2019 @ 13:49
    Very thoughtful. Well done.