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to branch off of what @AlanMCole is saying, I've bumped into a huge number of people who are pattern matching Black Rock etc to other narratives...none of which actually applies.
One is "these billionaires are doing this", but ... the funds are mostly PENSION funds, so >
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2/ the money that's buying up these houses is coming from middle class teachers, cops, fire fighters, bus drivers, etc. Another complaint is "these firms are too big to fail" and therefore will get bailed out by gov, so they can win on the upside, but don't suffer downside
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3/ and that's a real concern, and I hate crony capitalism as much as anyone, and I've spoken out time and again against it (e.g. immunizing the airlines from lawsuits re lax security for 9/11, 2008 bail outs, etc.), BUT ... we don't tend to bail out individual investors
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4/ (for better or worse), so if Fidelity has a $10B inflow from individual investors and creates an S&P500 index fund, and that fund declines in value, USG will not bail out Fidelity (which suffered no losses on its own balance sheet) nor individuals, and likewise >
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5/ if Black Rock has a $10B inflow from individual investors / pension funds, and creates a REIT / real estate investment fund, and that fund declines in value, USG will likely not bail anyone out.
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6/ Many of the same people raise the OPPOSITE objection, at the same time: on the one hand, the value will go down, but on the other hand, the value will go up, and this is bad for individuals who want to buy homes. to quote Tyler Durden: one fight at a time, guys.
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7/ You can't credibly get upset, IMO, that price values are going to go up AND that they're going to go down.
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8/ ...but to addr "prices will go up" alone, on its merits, this doesn't make sense to me either. The steelman of the argument is that by reducing housing supply that is on the market for sale to individuals, the prices will rise HOWEVER...by buying houses and renting them out
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9/ this model ALSO removes housing DEMAND.
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10/ another rebuttal to this point is that most of the articles on this trend talk about new construction. In many cases, developments are being created FROM SCRATCH for these investments ... so there is no reduction in supply
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11/ to double-steelman, maybe the complaint is that carpenters are a scarce resource and the REITs are bidding up the wages of the carpenters? ...which is a strange objection for red tribe "how dare blue collar folks get paid more - that makes it harder for white collar folks!
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12/ Finally, the fact that any time I engage with someone, they switch from topic to topic and often use the word "feel" strongly suggests to me that 99% of the issue is a holiness violation. How DARE these merchants set up shop in the temple? Someone get a whip!
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