Odd Lots · Thursday, October 1, 2026
The traditional role of housing as the primary driver of the business cycle has shifted, with AI now occupying that position. Luke Kawa suggests that the wealth effect from stock market gains, fueled by AI investments, is now the dominant force, mirroring past consumption patterns driven by housing equity.
“Well, A, housing was the business cycle for multiple reasons. People spent out of their home, equity, et cetera. Now we have this miserable punk housing market, and it hardly seems to matter.”
“But now AI is the business cycle, which worries.”
“So do I think it lasts forever? No. Do I think it's kind of more of an anomaly around now? Certainly. Because like at the end of the day, we're all either businesses trying to make a profit or consumers trying to buy something we like.”