Live from Chicago: A sneak peek at what's coming

Live from Chicago: A sneak peek at what's coming

The Walker Webcast gives you the most insightful hour of commercial real estate, with comments, research, data, and more shared by experts Dr. Peter Linneman and our CEO, Willy Walker. We’re going live from Chicago in a couple of weeks and wanted to give you a heads-up for an episode you won’t want to miss. Here’s a little appetizer of what we’re serving up:

1. Is inflation being misinterpreted?

Peter Linneman doesn’t mince words: there’s a difference between inflation and high prices. So, which one are we experiencing right now?

Peter shares a simple example: In 1970, his immigrant grandmother could purchase a loaf of bread for 10 cents. Five years later, due to inflation, that same loaf of bread increased to 30 cents. However, high prices remain when inflation stops, and the loaf of bread still costs 30 cents. Low inflation means that prices rise slowly, not that they fall.

This is what we’re seeing right now, and it’s hard for many to disentangle the two.

People are angry that things cost so much, especially everyday basics like groceries. However, wages also went up somewhat in excess of inflation over the past three years. Prices won’t go down unless there is major deflation.

When prices rise due to inflation, people get upset because prices are still high. They’re angry that the price of bread is 30 cents because they think it should be 10 cents. But ask if they’d be willing to have their wages go down. They believe they deserve the inflation in wages, but they feel that they do not deserve higher prices.

The broad human reaction is to ask when we’re going back to 10 cents a loaf. The answer is: Never. We’ll never see prices go back down, absent notable deflation (including wage deflation)..

2. What do inflation and high prices mean for capital markets?

Will the Fed cut rates? Will loan rates come down? If so, for how long? Who is lending and who isn’t lending? What about cap rates?

The questions keep piling on. Investors need to know where to put their money and when to invest. If interest rates might drop, it’s wise to wait until they do. On the other hand, if interest rates are about to jump again, investors might want to act sooner rather than later.

People are sour about high prices, inflation, and the upcoming election. They believe the election will have some impact on capital markets and want to know exactly what that impact of each candidate will be.

There’s a lot to unpack here, and you won’t want to miss the conversation.

3. How is the economy staying as strong as it is?

“People are sour” is a key theme in our upcoming Walker Webcast. They’re sour even though we’re adding a lot of jobs. They’re sour even though wealth is rising along with wages. And the economy is growing, but if you look at the data, it’s not where it should be based on historical indicators. It should be a bit better.

So, how is the economy staying as strong as it is? That’s another key question that has the room divided, but Peter’s thoughts are a refreshing change from politically charged responses. It’s fair to wonder whether we’re seeing false strength or whether we’re due for a recession. If a recession is in the near future, how bad will it be?

Despite Peter not being non-political, politics often come into play on such topics. Both the Democrats and the Republicans say the other party winning will trigger a recession. According to Peter, the economy at large depends less on who is in charge politically than people might think.

A Democrat win might be great for renewable energy, while if Republicans win, we’ll see a boost for fossil fuels, for example. But, we as Americans will drive cars, operate machines, and go about daily life. The gap is not so big, but it matters a lot to individual interests.

People often lose sight of this. Both parties have wasteful deficits, but America’s rich enough to be wasteful.

Bonus: What Linneman is reading

Willy often wants to know what book each guest is reading or what podcast they’re listening to. Peter always has something new to share — this time, it’s The Demon of Unrest: A Saga of Hubris, Heartbreak, and Heroism at the Dawn of the Civil War by Erik Larson.

It’s a far cry from nuclear fusion, algorithms, Stalin, and Greek conquests he’s read in the past. Although Peter is not generally a Civil War buff, he is constantly curious.

Hear the full conversation | Register for the upcoming Walker Webcast: Live from Chicago! | Jun 19, 2024 12:30 PM