In part 1, I suggested an empirical starting point for the Capital Asset Pricing Model - that expected returns on at-risk capital are stable.
What falsifiable predictions does your model make?
I think one important point that has played out in recent quarters, and has been a frequent topic of this newsletter is that rising real rates were bullish, and would not lead to a significant decline in housing completions or prices.
You just happened to catch me as I was posting this clip to Twitter from June 2021.
If the commenters at youtube are any indication, this was not an orthodox position at the time. :-)
https://www.youtube.com/clip/Ugkx9Kg5QixY7w-xy_aAi8DKYQFeaYJqp2ui
What falsifiable predictions does your model make?
I think one important point that has played out in recent quarters, and has been a frequent topic of this newsletter is that rising real rates were bullish, and would not lead to a significant decline in housing completions or prices.
You just happened to catch me as I was posting this clip to Twitter from June 2021.
If the commenters at youtube are any indication, this was not an orthodox position at the time. :-)
https://www.youtube.com/clip/Ugkx9Kg5QixY7w-xy_aAi8DKYQFeaYJqp2ui