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My Local Economy Appears Strong! Strange :-)

[nukester]

Been raising cash last couple weeks, sold 1/3 of my peyto and a bit more of my Suncor.  I basically sold to the sleeping point.  After watching the evening news, and being told the world is ending and the economy is crashing, I figured I should raise some more cash for the next big opportunity.

Being curious about the actual state of affairs in my neck of the woods, I took  a drive from Los Angeles to SanDiego for the fathers day weekend.

A little background: Freeways have been packed for months during rush hour.

405 freeway (Major north / south freeway) took three + hours driving from Los Angeles to San Diego this weekend.  San Diego is a major tourist destination. Typical drive time approx 1 hour 45 minutes without traffic.  Restaraunts were PACKED everywhere I looked.

I counted six  (2 million dollar) homes being constructed within a half mile radius of my house, and I did not even drive every street.  I could only imagine what would happen if gasoline was cheaper.
Help wanted signs are hanging on numerous business's, more than I have ever noticed.
I know this is all anecdotal, but those housing starts looked like fresh projects.

Tried to get a tire patched on my wifes car this week. Went to four tire shops.  All the stalls were packed with customer cars.Three shops said the same thing, we dont have enough staff to help you today.  Many possible reasons, not alot of profit in patching a tire, but obviously these shops have ample business, and tires are not cheap, nor are they bought by the unemployed (typically) :-)

I know crashes take time, but I can not help but marvel at the dichotomy of what I hear in the financial news and what I am seeing with my own eyes.

Same thing with covid, all over the news, but nobody got seriously ill or died in my neighborhood.

Am I just lucky?
Do I live in paradise?
Is the main stream media being honest and accurate?



The world may never know :-)
Nukester

[cpeczek]

Its a bit of a feedback loop. Someone important predicts a recession, a newspaper writes a story about it, other newspapers write stories about it, people read the news and start to cut back on spending. Public opinion leads to worse outcomes

[BarstoolSage]

So true. There is a real psychological foundation for inflation. People behave LIKE PRICES WILL RISE so it is a self fulfuilling prophecy. In my days I saw plenty of people ask...what will prices be like next year?...then conclude they would raise theirs now

[malx1]

Thank you for taking the time to share the boots on the ground perspective. My concerns are less "on the surface" and more focused on the foundations of household financial health. I worry that households have backed themselves into the corner with debt. Have a look, in Canada houshoulds have increased debt to gross income by 64% since the 2008 credit crisis. We Canadians are

[malx1]

https://tradingeconomics.com/canada/households-debt-to-income Check the 25yr chart on Canadian household debt to disposable income. The longer interest costs stay low, the more money Canadians borrow for purchasing overvalued assets.

[nukester]

Using your link for Household debt / Disposable Income, looks like 25 year plot goes from 100% to 180% over 25 years.  While a tad high for my personal taste, I would of assumed it to be much higher. If I understand correctly, that implies Canadians could buckle down and pay off all household debt in less than two years if they got serious. (I assume this excludes mortgage debt ???). 

[malx1]

While retirees may be in decent shape, I think many still working towards retirement are struggling. Not calling for a depression but prolonged stagflation will set back consumers countrywide. I'm talking with quite a few people who have over a million in mortgage debts and are unable to carry that floating cost when rates climb a other 1.5% to reach 4.5% mortgage cost. As house prices fall in

[cpeczek]

Isn't that 180% of household income? So they would be able to pay it off in 2 years if they have 0 expenses which is unlikely. I doubt most households have even 10% of their income as discretionary income.  The housing bubble in Ontario and BC here is ridiculous. I am willing to bet that any new landlords that got into the game from 2016 onwards are cashflow negative and are banking on