By Colter Devries, Ranch Investor at RanchInvestor.com
It’s 1:30am at the local nightclub when the bartender yells “last call.”
Patrons rush to the counter to buy one final round of drinks while others reach into their pocket to order an Uber.
Those who have responsibly had their fill of lights, music, drinks and dancing are already home, happily satisfied with the night’s events, and are now prepared to take on what lay ahead in the morning.
Others, however, showed up late to the party and are trying to squeeze out every last ounce of excitement they can due to suffering from fear of missing out (FOMO). Many there at this hour are simply gluttonous feigns disillusioned about the realities of their world; having no concept of diminishing marginal returns on each additional hour they spend at the club.
Yet, there are those too who are just insatiably greedy; what they have experienced this evening is not enough and thus they must consume more and more and more, longing to amass a hoard of “nights to remember ” because one-more is never truly enough.
As with everything in life, the condition of these lost souls rushing to last-call is multivariate. Another likely reason they are still at the club seeking an existential experience is that they are simply envious of those around them. They are jealous of those who seem to be having all the fun while they are having none.
This type of person is narcissistically incapable of realizing that the presentation they were delivering from their barstool was just simply not highly demanded; it was an undesirable, unmarketable, disingenuous, and inferior offering that reeks of desperation, deceit, and trickery.
The lights come on at 2:00am in the club, just as the lights came on in the farm/ranch market December 14, 2022, after the Federal Open Market Committee (FOMC) raised the federal funds target rate by 50 basis points, the fifth consecutive max-rate-hike and seventh increase of the year at the time.
Last call for alcohol in the farm/ranch market was July of 2022 when the Fed enacted its second consecutive max-rate hike just as inflation hit Carter-era levels from over 40 years prior; this was the most aggressive action the Fed had taken since the early 1990’s.
Then as the Consumer Confidence Index reached 2008 Financial Crisis lows, and continued to drop, July’s Fed meeting should have signaled to sellers and brokers that the party was over. It was time to gather their jackets, divvy up the tabs, and go home. Time to face the reality that nobody was willing to dance with you and the DJ wasn’t going to play your song.
Yet here in December of 2022 we are still seeing listings come on the market that are priced as though the Dow Jones Industrial Average is still at 36,000, as though the Fed Funds Effective Rate is still at 0%.
Like a 40-year old man wearing a black V-neck shirt with gold chains and too much cologne while creepily circling the room of 21 year olds acting as though nobody will notice he is out of place, these overpriced listers have not received the message about what is going on today. They continue to hang around, so self-assuredly and undoubtedly believing they fit right in with the dynamics and demographics of the party. The party, much like them, however, is long past its peak, waning, exhausted, and ready for a different pace.
The amount of denial setting in at this point in the farm/ranch market is emblematic of the lonely guy at the end of the bar hovering around a tray of unconsumed cheap, generic shots of “house tequila” saying to every passerby who’ll listen “it’s only a cold sore.”
Coming out with listings priced 2,3, and even 4X of what the Ranch Market will actually bear for a sales price is not capitalistic, opportunistic, or even speculative at this point in the cycle, it is flat out unprofessional and a breach of agency and fiduciary responsibilities. The industry needs to have a 12-Step program for this type of delusion. I’m not sure we can even call it delusional; nefarious, disgraceful, and borderline malicious. These sellers, and the undisciplined brokers who placate them, need a caring group of family and friends to surprise them with an intervention when they get home and walk through the front door.
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