Wolf Street

Here is an example of the mix-up (from a bit above):

> The greatest values, and change in values comes just before the bubble bursts.

This seems to be talking about the mathematical model. Then you go on:

> In fact, tulips were most valuable, and those values were climbing at the highest rate before the tulip bubble burst.

That seems a jump to the modeled. And you speak of the modeled as if it was the model.

And by the way, if this graph [1] is correct, then what you say is also false. The valuations do not rise exponentially, but slow before the bubble bursts, very visibly. This is also true for the 2008 housing bubble in the local index [2].

I think that shows quite well that there are two layers. And there is the question of the fit between them. Having seen those two graphs I think I'd rather expect reduction in the rate of change of valuation shortly before the bubble bursts. That model appears to fit better what I'd expect in economical bubbles (but not in soap bubbles), namely a growing sense of risk that counteracts the fomo.

[1] image Tulip Price Index 1636-37 here https://www.historydefined.net/how-did-tulips-create-the-worlds-first-economic-bubble/ [2] https://wolfstreet.com/wp-content/uploads/2021/07/US-Housing-Case-Shiller-2021-07-26-Los-Angeles.png

Funny thing about this theory: the luxury housing market in San Francisco is in decline, and yet, it's still a seller's market for middle- and down-market properties. [1][2]

This is not surprising to anyone who follows real estate. There's no such thing as "a market for housing" -- there are several markets, each moving more-or-less independently, based on the net worth of the participants involved. A drop in the prices of units in the Millenium Tower doesn't have much of an impact on the rent of a pre-war hovel in the Mission.

The reason that the author doesn't understand this is because there's a latent correlation at play: the communities with the most high-end construction tend to have the most construction overall. But in a city like SF, where all of the new construction would be high-end (if so allowed), all bets are off.

Observing that properties become cheaper as they age is also silly. There are some properties that become cheaper as they age, but there aren't many of them, say, in Pac Heights.

[1] http://wolfstreet.com/2015/11/08/san-franciscos-luxury-condo-bubble-turns-into-condo-glut/
[2] http://sfist.com/2015/11/09/at_high_end_sfs_housing_market_fina.php

‘Core’ inflation excludes most of this, explicitly.

[https://wolfstreet.com/2021/03/30/the-most-splendid-housing-bubbles-in-america-house-price-inflation-in-all-its-glory-march-update/], [https://www.pgpf.org/article/why-are-americans-paying-more-for-healthcare/]

Average Housing costs as a multiple of average salary are at 10x, and increasing. Roughly where they were in the 80’s during hyper inflation.

Healthcare spend has increasing from 5% of GDP in ‘62 to 17% of GDP in 2022.

Education cost data is similarly insane - [https://educationdata.org/average-cost-of-college#:~:text=The%20average%20cost%20of%20attendance,or%20%24234%2C512%20over%204%20years.]

With an average 4 year degree (living on campus) costing > $100k.

If you need a study to tell you traffic is terrible right now, you might just have no idea what’s happening.

>> The current US debt is over 18.900.000.000.000 Am I getting the author right that the US managed to put on 18 B $ in 20 years?!

Google image search:
https://www.google.com/search?q=US+debt&biw=1217&bih=755&source=lnms&tbm=isch&sa=X&ved=0ahUKEwikuOfIobvKAhXquIMKHeTEBcEQ_AUIBygC#imgrc=_

Check this one:
http://wolfstreet.com/2014/12/02/us-national-debt-jumps-181-billion-in-two-months-hits-18-trillion/

So not quite, but at the end of Clinton there was a small surplus. Bush looked at that surplus and said the following:

1) There's a surplus
2) We're not sure why
3) We don't think it will go away
4) Tax brakes and refunds for everyone!

I'm not sure how 3 can be said in light of 2. But we all got a check instead of reducing the debt.

Unlikely to get cheaper because of US tariffs on Chinese EVs, holding US consumers captive to Tesla and domestic legacy auto (although Kia is making a solid attempt). That said, the Model Y is still doing very well (best selling model in the US).

https://wolfstreet.com/2025/01/03/ugly-charts-of-us-auto-sales-2024-stellantis-spirals-into-catastrophe-gm-toyota-ford-honda-rise-but-far-below-their-peaks-hyundai-kia-sets-record-ev-sales-10-despite-teslas-dip/

https://wolfstreet.com/2024/09/20/tesla-model-y-now-a-hair-from-1-bestselling-model-closing-in-on-toyota-rav4-former-1-ford-f-150-is-3-stellantis-plunges-off-greed-cliff-ev-share-rises-to-9-0/

https://www.axios.com/2024/12/19/cars-prices-inflation-suvs

I would hope Volkswagen would aspire to be something greater than Samsung. Does this mean after 2 years they stop pushing updates to the car and no longer support it?

Tesla spent 20 billion to get where it is. By the time the other manufacturers spend 20 billion to catch up , Tesla will have spent another 20 billion.

An article from Wolf Street

Why the EV Battle Is Brutal for GM, Ford, Other Automakers

https://wolfstreet.com/2021/02/18/why-the-ev-battle-is-brutal-for-gm-ford-other-automakers-tesla-cuts-prices-again-barriers-to-entry-vanish-new-entrants-muck-up-high-profit-pickup-truck-oligopoly/