Jul 25, 2017
Some times it is difficult to find a technology subject to blog about. So much of the news is centered around Artificial Intelligence (AI), the science fiction rants of Elon Musk or Mark Zuckerberg's latest wage or immigration comment. The other day there were ten articles at one news site alone about Elon Musk or his extraordinary uninformed opinion about some futuristic subject or another. Today I awoke to news chatter about the Zuckerberg verses Musk feud about AI! My three least favorite subjects all wrapped up together and discussed ad-nauseum by the tech news sites. Apparently, Zuckerberg said "Elon Musk's doomsday AI predictions are pretty irresponsible" at a barbecue on Sunday and Musk replied that he had spoken with Zuckerberg and that "Facebook CEO Mark Zuckerberg's knowledge of AI's future is limited". That is it, but this story will be talked about for days, probably week's and possibly months.
A second Article that CNBC ran titled "Roomba vacuum maker iRobot may start selling the maps it makes of your home" that peeked my interest. Apparently the newer iRobot vacuum cleaning robots that been working in peoples homes for years have been "collecting data not just cleaning your dirt". The manufacturer, a company called Roomba, has been collecting the data using spatial GPS to dimension the rooms of your home, the distances between your sofas, tables and other home furnishings to create a map. A map that Roomba plans to sell to other companies that would like to know more about you. Roomba says that selling this information is the next frontier and Wall Street loves the idea that something like this can make more money. I am not a conspiracy theorist but I have no intention of allowing the layout of my home to be public knowledge. Can you imagine the solicitation that you will receive from companies that notice that you don't seem to have enough end tables or whether your home has hardwood floors or carpets? Forget that. I know what won't becoming into my home in the future.
Finally, there was a big issue with the rise of housing prices. Wall Street was excited about this rise and hoped that it would signal a new surge in home building. One CNBC analyst noted that United States has grown in the last seven years by 63 million people. They cited the numbers from the United States Census department's estimates as the driver for a need in additional housing. The truth is that Census Department has absolutely no idea how many people live in the United States. No one really knows, but 63 million people in seven years is not remotely close to the truth. These US Census department figures are used by everyone from Wiki to State and Federal government agencies but that doesn't mean that they should be used for economic analysis by Wall Street.
The United States Internal Revenue Service (IRS) releases statistical data each year that is less than two years old. This data tells you how many people filed taxes and how much they made, paid, etc... This is the data that should be used for calculating how many new homes can be purchased or should be built. For example the IRS in 2015 said that the State of Alabama had a population of 3,840,100 based upon the tax records (the only people that matter when buying a house, by the way). The US Census Bureau claimed the Alabama population in 2015 was 4,817,678. The descrepency between the two figures is mind blowing. The IRS also says that the IRS data can move upward by 3-5% because a portion of the population does not file taxes documentation on time. Ok, at the top end, of 5%, that would mean the population could be as high as 4,032,105, almost an 800k difference. That is just one small population state. The IRS numbers do include the destitute and working poor. In fact, the Alabama number for 2015 was 33.83% of the population making less than 25k per household. The Census Data is pure garbage and should never be used by Wall Street or anyone else looking to sell a product or service. The lack of common sense on Wall Street these days is appalling. The only way to be sure of anything before you invest, is to check it out yourself. I have looked into this story and I think that Investing in a housing boom today, is a bad idea.