Welcome to the Skeptical Investor Newsletter. A frank, hopefully insightful, dive into real estate and financial markets. From one real estate investor to another.

This week, we’re talkin’ labor markets, the wildly inaccurate way we calculate economic statistics, and….. I can’t let it go… This Federal Reserve Mortgage fraud is really grinding my gears!

Let’s get into it.

This is merely a signal of the robustness of our economy, but this week we received private sector wage growth numbers, and they were robust, up .7% for the month, or 5% annualized.

Sehr gut!

In fact, wages have been growing steadily above consumer inflation for 2+ years, including faster than shelter costs (even though it doesn’t feel that way).

In fact, wages have been growing steadily above consumer inflation for 2+ years, including faster than shelter costs (even though it doesn’t feel that way).

This is not to say that the labor market has not shown signs of weakening, as of late.

It has. (But this is something important to note on consumer resiliency).

Job growth was recently revised down dramatically (again), unemployment claims are trending worse, and the unemployment rate is now 4.2%. Not a problem yet, per se, but we can now see a clear trend in the data.

But there is a big fat elephant in the room...

…Can we trust this data and the actions our government overlords are taking?

This is a question we shouldn’t have to ask…And I’ve written about this recently. We just had massive revisions in the economic data, putting into question the accuracy of our government data. I’ve written about this recently.

And then I saw this…

The (embattled) Bureau of Labor Statistics released its job outlook for 2024-2034, calling for just 3.1% growth…. total!

Only 3.1% growth over 10 years??? This is not a serious number. Do we really think jobs will grow an anemic .3% /yr over the next decade? That’s 75% slower than the last 10 years. To put this in perspective, US job growth has averaged ~2.1% /yr since the mid-1900s.

And this, after the head of the BLS was fired for putting out wildly inaccurate data, forcing them to revise jobs data drastically for the second time in the last year.

The BLS should be renamed BS. Because that is the quality of rigor they are doing over there.

Now it may not totally be “their fault.” Their systems for data collection are straight out of 1950. Here is an important example:

Do you want to know how the BLS calculates housing costs?….

It’s called “Owners' Equivalent Rent (OER)” and it’s a joke.

Every day: 847 financial headlines, 2,300 Reddit stock mentions, 156 Twitter trading threads, 12 IPO updates, 94 crypto developments.

Your problem isn't lack of information; you have too much.

While you're scanning headlines wondering what matters, profitable trades slip by. The signal gets buried in noise.

What if someone did the heavy lifting for you?

Stocks & Income reads everything:

Then we send you only what can actually move your portfolio.

No fluff. No useless news. Just actionable stock insights in 5 minutes.

We track every source so you don't have to. You get the 3-5 opportunities worth your time, delivered daily.

Stop wasting time on useless “investing news” and start thinking critically about real opportunities in the stock market.

Subscribe to Stocks & Income

_{Stocks & Income is for informational purposes only and is not intended to be used as investment advice. Do your own research.}

You see, housing costs are a key component of the U.S. Consumer Price inflation (aka CPI). But to find that number, the BLS estimates the hypothetical rent that homeowners would pay if they were renting their own homes instead of living in them. They literally call homeowners and ask them this question: "If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?"

That’s it!

It’s a survey of homeowners guessing at what rent would be, having never actually rented the home in the market.

And what does BLS do when they don’t get a survey response?

They…. Guess! (They use the word impute, which means guess, based on an average).

The BLS calls this the “Non-Interview Method.” According to a 2023 BLS Inspector General’s (IG) report on the subject of BLS data limitations, “The non-interview imputation method imputes a price by using the average rent change of other housing units in their respective category.”

Again, this was back in 2023, so this is not political. The BLS is all seasons bad.

Or, instead of guessing, they just simply fill in the same value from… last time!

This reminds me of when I used to just bubble in all “D” on the scantron so I could go on break early in 9th grade…Damn, statistics be easy peasy y’all!

And the IG pointed out that the BLS may not know how this gueswork may be affecting the data they report.

And…

And BLS has not attempted to calculate this effect (unlike other agencies, which have done that analysis).

And the IG pointed out that BLS has not informed the public about the extent of its guesswork. For example, and to its credit, the Census Bureau does. The IG report “found the Census Bureau cautioned users when imputed values made up 20 percent of the CPS program’s estimates and informed users of how many imputations were used” (BLS IG Report).

Oh boy….

What about including other housing costs to help estimate?

BLS shelter data doesn't include actual/measured housing costs like mortgage costs or property taxes. In fact, these types of typical housing-related costs are purposely excluded from shelter costs, as the BLS views them as “investment costs,” not shelter costs.

From the BLS:

“Spending to purchase and improve houses and other housing units is treated as investment and not consumption in the CPI. Interest costs (such as mortgage interest), property taxes, real estate fees, most maintenance, and all improvement costs are part of the cost of the capital good and are also not treated as consumption items. These non-consumption costs of owned housing are out of scope for the CPI under the cost-of-living framework that guides the index.”

What an odd point of view.

Shelter costs are really really meaningful, accounting for,,, wait for it,,,, ~36% of the total consumer inflation number (CPI)! OER is 26% alone. So this is a data point we really should be more accurate in reporting.

Now, the BLS also calls actual renters (this is called Rent of Primary Residence) and asks them their rent rate. But, fun fact, the weight for that number is just ~7.5%. Relatively tiny.

So homeowners’ guesswork and not quantitative/measurements make up most of how we calculate shelter costs.

More fun facts:

What the actual fuck…It’s 2025. Why aren’t we collecting this data directly from private sector operators? The government doesn’t have this data; businesses do.

Meanwhile, over at the Census…

I wrote about this before, but it bears re-mentioning. The other week, we received new housing construction numbers, showing new construction starts for multifamily apartments apparently jumped 11.6% month over month in July and 27.4% YoY. This would be “the highest number of starts for any July in the past four decades (MFD).”

Really? Where is this happening? Most operators in the space are seeing an annual decline of 8%-10%, not an increase, let alone a 27% increase!

And since my last article, multiple operators in the space have questioned this housing data, saying:

According to Parsons, Census housing data has likely been inaccurate and lagging since 2016. Comparing the Census to private sector business data, like from CoStar (whose business is housing information), we see “divergence starting in 2016, with Census consistently undercounting starts, until this year, where it's flipped. Could be some of the Census 2025 uptick is simply catchup of earlier/missed starts.”

To put the Census number in context, 27% new construction numbers would be more than we had in the zero interest rate policy / uber-cheap debt COVID era (2020-20222). The data just doesn’t align with the current financial/economic environment. Remember, the Census is an estimate (aka a guess), as is far too much government-sourced data, I am just now really finding out. CoStar tracks individual projects actually happening.

Blah…. this just crazy to me. The Census is putting out Non-Census.

Hey BLS and Census: CHANGE YOUR DATA COLLECTION SYSTEM. Call businesses and get accurate data. STOP THE SURVEYS.

Whew,,, ok I’m good now.

This made me think of the current Fed Governor firing controversy. And this topic really gets me going…

…now, for my second cup of coffee….

I want to revisit what is happening over at the Federal Reserve. With some new information.

Earlier this week, I posted my comments on Fed Governor Lisa Cook, and her alleged Mortgage Fraud. To review, Gov Cook took out two simultaneous primary residence loans, which require the buyer to occupy the home (allegedly…). Instead, she rented the home (allegedly…). This would be considered mortgage fraud, misrepresenting or lying to gain a favorable interest rate on her mortgage.

And we real estate investors, who pay a premium for our mortgages, just hate that someone in government is trying to game the system to get favorable treatment.

Ah! This really grinds my gears more than a classic episode of Family Guy.

Since then, Reuters, CNN, and The Washington Post are all now reporting on the facts of the story and, well, it doesn’t look good for the Governor.

As expected, there seem to be two sides to the President trying to fire Fed Governeor Cook. And, unfortunately, opinions in the media and amongst government officials are split based on partisanship and loyalties:

He very obviously is putting pressure on them, but the question is whether this is not warranted/or too invasive so as to upend the independence of the Federal Reserve as an institution. One could argue this is too far and that he is making accusations in order to gain an extra Fed Governor seat that he would not otherwise be able to appoint during his term. We know his opinion is that interest rates should be lowered. He's made that abundantly clear. Cook’s firing would give the President a path to obtain a majority of Governors who ostensibly support his position for lowering interest rates sooner (although it should be said, even Chairman Powell has made it clear. We are in a restrictive monetary policy environment. The question here really is how soon and quickly the Fed should lower rates to the equilibrium level.

Then there are those who think: if a Fed official committed mortgage fraud, this should be examined, and that they shouldn't be serving as one of the nation's leading financial regulators. And what we haven't heard from Governor Cook at all on is whether she did it or not! She keeps saying the President can't remove her, and her lawyer (she hired Hunter Biden’s defense attorney, eh maybe not a good look?) has only said that the process of the President firing her is not legal. The courts will have to decide this. And the Fed, specifically Chair Powell, has been silent on the issue. And in court filings they literally say they are taking no sides. Is she actually fired as of last week? Is she allowed in the building and coming to work?

In all likelihood, both are true.

The President may be applying undue pressure and disrupting the independence of the Federal Reserve. At the same time. This person should be fired and has likely committed mortgage fraud, multiple times.

According to statements by Cook and her Lawyer, this may have been a “clerical error.”

This cannot be the case. Here’s why:

When you apply for a loan, the lender asks you directly, on the phone/in person, what the loan is for. It’s not just a “box you check.” The bank will want to know exactly what asset they’re lending on.

Remember, when you buy real estate, the bank owns the vast majority of it, normally 75 to 80%+. They really, really care about what it’s going to be used for, and they’re very direct in asking the borrower this.

Saying it’s a “clerical error” is not a possibility; to say otherwise is disingenuous.

One more thing…

Breaking news: now, we have a third Property that Gov Cook may have misrepresented.

Oh boy….

With a Fed Interest Rate decision coming in just a couple of weeks, this cloudy situation is not a good look for the Federal Reserve, and is detrimental for businesses and homebuyers trying to operate in this environment.

A Quick Ad Break…

Cut Costs. Not Corners.

Economic pressure is rising, and doing more with less has become the new reality. But surviving a downturn isn’t about stretching yourself thinner; it’s about protecting what matters most.

BELAY matches leaders with fractional, cost-effective support — exceptional Executive Assistants, Accounting Professionals, and Marketing Assistants — tailored to your unique needs. When you're buried in low-level tasks, you lose the focus, energy, and strategy it takes to lead through challenging times.

BELAY helps you stay ready for whatever comes next.

Want to advertise to the more than 20,000 weekly readers of The Skeptical Investor? You can! Advertise with us; we can help you grow your business. Reach out.

Ok, back to business.

All this really gets me steamed…time to take a few and finish up my coffee table. Something I can actually control.

But first, my closing thoughts…

I’m officially on tilt.

On the Fed Governor, it’s so highly unlikely that this is unintentional, especially for such an accomplished person and for one who in large part controls interest rates.

On the BLS, god, this data inaccuracy just continues to be embarrassing. As a result, the President fired the previous head last month.

Is the President likely trying to get his way, meddling in the Federal Reserve and BLS by replacing current leaders who are more pro-growth and less risk-averse and agree with the Administration’s policy approach? And who are “on the Team,” politically?

I believe this is obvious and true.

But it is likely also true that both of these folks deserve to be fired for poor performance. Hell, the Fed hasn’t exactly been on target and their mistakes is a primary reason why we have such high prices, resulting from years of “transitory” inflation denial.

So we are here now. The Courts have some work to do.

The bottom line now is: we have an interest rate cut decision in a few weeks. I hope the Fed, courts, and the Administration can figure this all out this week, so that the decision is both unmired and we have some clarity on the allegation/causes for firing.

Oh, and they should still cut rates in September. Housing is still in a 3-year sales activity recession.

Folks, get your shit together.

Sincerely, -The American People

Until next time. Stay Curious. Stay Skeptical.

Herzliche Grüße,

-The Skeptical Investor

P.S. Want to start investing in real estate but are you STUCK? If you need a little push, read my new book! It is a must read for all investors. The 5 Ways Real Estate Investors Make Money and Build Wealth: Anyone can create wealth through real estate. Including You! (yes yes it’s a shameless plug, but I get ~$1/book, FYI. This is about education!). So pick your copy up today and get in the arena.

We have passed 30,000 subs! Thank you for your support, next stop, 40,000!

Please help grow the community!

It takes me several hours to write this weekly article, and they will always remain free (but you get some pretty cool perks with premium, including a one-on-one with yours truly :). All I ask is that you share it with 1 friend. Just 1. If you do, you will get two gifts: free education for one of your friends, and good karma for helping to grow a community of folks trying to figure out a way to create wealth for their family.

What, did you think I was going to send you a Starbucks gift card? 😅

Paid subscribers get the best stuff! Join the Skeptical Investor Community to access:

We are real estate agents for investors, because we are investors. We specialize in helping investors find, analyze and negotiate great real estate deals, as well as manage their rental properties, here in Nashville, TN. We pride ourselves on being tough negotiators. We want our clients to get an amazing deal, we never let our clients pay retail.

Enjoying this newsletter? Know somebody looking to buy real estate? Send them to the best in the business, THE Nashville Investor Agent! Referring real estate business helps us keep the lights on and me keep pushing out fresh real estate analysis each and every week. Help peep this newsletter going for all you awesome folks out there; refer someone to us when you may hear they are in need. We promise to take great care of them and make sure they get a fantastic deal. They will thank you for it.

If you or someone you know are looking for an investment property, give us a call today!

You can also find out more about us and what we offer on our website: www.NashvilleInvestorAgent.com

Why Nashville? There is always a bull market somewhere, and one of them is Nashville. We have the lowest unemployment rate of the top 25 major cities and folks are moving here to take those jobs. Nearly 90+ people per day move to Nashville. And tourism continues to hit record levels. This past year 16.8 million folks visited our lively city. Plus we have 3 professional sports teams (hopefully a 4th soon), massive healthcare and entertainment industries, heavy manufacturing, more than a dozen colleges, no state income tax… to name a few amazing advantages. Come check us out, the water is warm :).