Eric Basmajian, founder and CEO of EPB Research, joins Julia on episode 201 to discuss the economy, housing market dynamics, outlook on unemployment trends, and the long-term economic factors, including the effects of increasing government size on private sector growth.
✨ This episode is sponsored by Public.com. Lock in your 6.6% yield: https://public.com/julia ✨
Paid endorsement for Public Investing, Inc. Not investment advice. All investing involves the risk of loss, including loss of principal. Brokerage services for US Listed and registered securities, options and Bonds in a self-directed brokerage account are offered by Public Investing. ETFs, options and Bonds are available to US members only. *A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 fractional investment-grade and high-yield bonds. The 6.6% yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of 9/18/2024. A bond’s yield is a function of its market price, which can fluctuate, and a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. While corporate bond yields should fall in reaction to a Federal Reserve rate cut, we cannot know whether that will be true of the bonds in the Bond Account, how quickly bond yields will respond, or how much they will decline. Public Investing charges a markup on each bond trade. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. Fractional Bonds also carry risks including liquidity risk, interest rate risk, credit risk, inflation risk, and potential tax liabilities. Read more about the risks associated with fixed income and fractional bonds and learn more about the Bond Account at https://public.com/disclosures/bond-account.
Links:
Website: https://www.epbresearch.com/
Twitter/X: https://x.com/EPBResearch
Substack: https://epbresearch.substack.com/
Timestamps:
00:00 Introduction and welcome Eric Basmajian
01:03 Macro view + Eric's four economies framework
03:17 Explanation of leading, cyclical, aggregate, and lagging economies
07:29 Current state of the economy and growth rates
09:32 How to discern signal from noise in economic data
13:15 Discussion on economic revisions and their significance
16:23 Addressing common misconceptions about the economy
20:55 Inflation trends and relationship to the business cycle
23:03 Analysis of Fed's September rate cut decision
25:22 Impact of backlogs on economic activity post-COVID
30:48 Overview of the residential housing cycle
33:55 Current housing market supply and demand dynamics
37:08 Forecast for unemployment rate trends
43:53 Long-term economic outlook factors (debt, demographics, government size)
48:16 Declining growth rates in real private sector income
50:51 Impact of increasing government size on economic growth
54:15 Optimal government size for economic growth
57:37 Connection between rising home prices and demographic changes
The Julia La Roche Show