And we should also know if SUI provides free flotation devices such as: the standard blow up pool rafts and inflatable ducky arm floaters for all residents of at risk properties!
I'm sure SUI has flood insurance in these areas. If the damage was going to be material to the company they would have already disclosed it. With the overall number of communities owned, this will be of minor significance to SUI.
I look at QE, and all stimulative monetary policy actions, as filling the pool to a certain water level--an effort to find the right amount of stimulus to attain a certain amount of economic growth with low inflation (full employment is another Fed mandate component here as well). Given the present excessive debt level in our country, and given the still after effects of the financial panic of 2008/2009, the Fed is needing to put in QE "water" to try to maintain an appropriate level in the pool. They will continue QE as long as it is needed because the negative consequences of not doing so are unacceptable to them. And it is worth noting that Japan's QE program is three times the size of ours when adjusted for the size of their economy. So to think the Fed cannot increase its QE size from the current baseline level is a mistake in my opinion. Until such time as the negative consequences from QE are painfully obvious (and your point is correct, there are misallocations and trouble-a-brewing, likely in future years)--but until we can see the whites of troubles eyes, the Fed will continue QE to maintain the water level of the pool. And that means forever if they deem it necessary and the negatives are not painfully at our door.
I was teasing with a bit of fun in my set up--, but to answer you, yes, I watched a good bunch of the post-release commentary Bernanke gave and he stated that "real rates were too high".
It's worth pointing out again that though you and I have differing views, that is entirely acceptable in the realm of economics, as there is ample data for both of us to point to in support of our view. This is why economics is known as a "soft science".
I'm glad to hear Bernanke asserting my position though. I have been surprised that the Fed was seemingly willing to taper with what I view as the economy weak and potentially slipping into recession. I think, as I stated previously, that with the government borrowing needs slimmed down, that the Fed may well be deciding to taper due more to their concern about "becoming the market"/dominating the market as a huge buyer of treasury paper issuance rather than any significant and sustained lift in economic strength.
That said, if we tilt into recession in the next year we may see the next move by the Fed being to increase their QE buying program or come up with some other creative means to try to stimulate the economy--perhaps targeting mortgage rates to try to boost refinance and purchase activity. Just a thought...
By the way--this is great news for REIT's, as long as we don't tilt into recession. If we go into recession, they will take the good girls out with all the rest! But then, that is precisely when you would want to be a big buyer. I know I will.
Yes, on this we can agree--there are limits to a message board format. The ability to fully dive into a subject with the breadth it deserves is severely limited. Technology has brought us many positives in life, but this discussion is far better suited to a couple of large cold beers and a table and chairs! Ah well....
Personally, I have focused for decades on the Fed and it's power to influence markets rather than the Treasury. Therefore, whether I agree with the Fed on all policy direction or interpretation or not I weight heavily how I THINK they perceive things such as inflation.
I am glad to report that I am still too young to have experienced the depression of the 1930's, and I suspect that you are thankful you are too young, too! Yet if you were to go back and read thoroughly of the time you would see the ravages that deflation can impart on a country. Fixed debt becomes ever harder to pay back, for example, as the price level falls. inflation is the friend of the borrower, not deflation. As a credit economy, this is why the Fed desires a slow rate of inflation, and why they abhor deflation. There are other reasons the Fed aims for low but positive inflation, but that is another discussion.
Our discussion about real rates and where we are compared to the historical norm hinges on the flimsy science of economics. We can each pick that which suits our position. This is why economics is a soft science--better known as the Dismal Science!
A question for you--
I mentioned my following the Fed and their view with vastly more weight that that of the Treasury, which is opposite of your view. I mentioned the power the Fed has over the market for my many decades of favoring the Fed over the Treasury.
So my question to you is, why do you put seemingly more weight on the Treasury than the Fed?
My reference was the 30 year long bond. It closed today at 3.86%. The Federal Reserve uses the Personal Consumer Expenditure (PCE) as its measure of inflation. Accordingly, the PCE states that annual inflation is at 1.2% at present. Deducting 1.2% from 3.86% to arrive at a real, inflation adjusted 30 year long bond rate brings you to a 2.66% real long bond rate. real rates on the 30 year using the CPE have hovered around 2%, hence, we will either revert to the norm or continue floating above for some time. But remember that usually markets are mean reverting. So either rates come down in a reversion to the mean or inflation moves up, and I don't see inflation in the cards near term for the reasons I expounded upon. And yes, deflation IS the devil at the door. You cannot tell me that the extraordinarily UNUSUAL and desperate measures taken by the FED via QE1, 2, and 3, are not an effort to stave off deflation! And THAT via QE the Fed is monetizing debt at roughly 1 trillion dollars at an annual rate (soon to be slightly reduced IMO--and debatable whether a stumbling economy can take even this reduction in stimulus without a hiccup)--but even with the Fed buying 1 trillion in treasury and mortgage bonds--that they have ONLY managed to create a 1.2% inflation rate tells you in spades that deflation IS the devil at the door.
Now, historically, these efforts to monetize debt have sown the seeds for higher inflation down the road, but that is down the road. At present, deflation is what keeps the Fed up at night wringing their hands.