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When the next great stock crash will happen - and how it will look
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2018 Sep 21, 7:19pm 7,362 views 46 comments
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41
Shaman
2018 Sep 27, 3:40pm
Shaman
2018 Sep 27, 3:40pm
The 2008 downturn was easy to predict. It’s just that so many people had so much skin in the bogus game to entertain the notion that everything was about to fold up.
I predicted it two years before, and even timed my 401k so I switched to bonds in December 2007.
Of course I wasn’t a homeowner or major investor, so I had little reason to believe in the current state of things. I think that’s what it came down to. People were too invested in the housing market and the current economy to take a step back and consider that everything was just nuts! But if you’d applied anecdotes and noticed all the low test people buying expensive houses with no money down and no plan for how to pay their mortgages now let alone if anything happened to their variable interest rates or jobs, you’d have been a little worried.
I predicted it two years before, and even timed my 401k so I switched to bonds in December 2007.
Of course I wasn’t a homeowner or major investor, so I had little reason to believe in the current state of things. I think that’s what it came down to. People were too invested in the housing market and the current economy to take a step back and consider that everything was just nuts! But if you’d applied anecdotes and noticed all the low test people buying expensive houses with no money down and no plan for how to pay their mortgages now let alone if anything happened to their variable interest rates or jobs, you’d have been a little worried.
42
WookieMan
2018 Sep 27, 6:37pm
WookieMan
2018 Sep 27, 6:37pm
Quigley says
This. I can't recall if the story was true or not from the Big Short movie, but when you see a stripper buying multiple houses, that's a problem. The stats will show you that sales volume and prices are great, even though it's all BS because people are getting houses that should never be getting them. The data failed and it fails a lot.
This is why I liken it to baseball or sports in general. Take the Chicago Cubs for example. They play a lot of day games in a city where it's easy to party. On paper, you could scout a guy that looks amazing. Dig into his personal life and SEE that he likes his booze. Yes this is research and data in a sense, but it's more of a feel thing. The data/analytics look great, but this dude might not be a good fit for the Cubs because he likes to be out late and they play a ton of day games in the city he'll be living in.
There's no database for drunks, so this is what I'm getting at about anecdotal in my baseball reference above. Data is a tool. As I've said, I use it. But when it comes to pretty much ANY news source, don't bite the turd. The data they're using was likely biased and they're then putting their spin on it. Double turd.
But if you’d applied anecdotes and noticed all the low test people buying expensive houses with no money down and no plan for how to pay their mortgages now let alone if anything happened to their variable interest rates or jobs, you’d have been a little worried.
This. I can't recall if the story was true or not from the Big Short movie, but when you see a stripper buying multiple houses, that's a problem. The stats will show you that sales volume and prices are great, even though it's all BS because people are getting houses that should never be getting them. The data failed and it fails a lot.
This is why I liken it to baseball or sports in general. Take the Chicago Cubs for example. They play a lot of day games in a city where it's easy to party. On paper, you could scout a guy that looks amazing. Dig into his personal life and SEE that he likes his booze. Yes this is research and data in a sense, but it's more of a feel thing. The data/analytics look great, but this dude might not be a good fit for the Cubs because he likes to be out late and they play a ton of day games in the city he'll be living in.
There's no database for drunks, so this is what I'm getting at about anecdotal in my baseball reference above. Data is a tool. As I've said, I use it. But when it comes to pretty much ANY news source, don't bite the turd. The data they're using was likely biased and they're then putting their spin on it. Double turd.
43
bob2356
2018 Sep 27, 9:42pm
Quigley says
WookieMan says
Ok got it, you guys were out interviewing all the strippers and low test people asking if they bought houses with no money down on a variable rate with no plan to pay their mortgage. That was clever. How many did you check out and how many did you find that met the criteria?
You do remember in the big short it was reams of analytical data (or as you say stats) that sent them out looking for anecdotal strippers to check out.?
WookieMan says
How do you use data as a tool when there are no sources you trust?
But if you’d applied anecdotes and noticed all the low test people buying expensive houses with no money down and no plan for how to pay their mortgages now let alone if anything happened to their variable interest rates or jobs, you’d have been a little worried.
WookieMan says
but when you see a stripper buying multiple houses, that's a problem.
Ok got it, you guys were out interviewing all the strippers and low test people asking if they bought houses with no money down on a variable rate with no plan to pay their mortgage. That was clever. How many did you check out and how many did you find that met the criteria?
You do remember in the big short it was reams of analytical data (or as you say stats) that sent them out looking for anecdotal strippers to check out.?
WookieMan says
Data is a tool. As I've said, I use it.
How do you use data as a tool when there are no sources you trust?
44
MisterLefty
2018 Sep 28, 4:30am
The crash happened already. Drugs in the water and food supply have turned everyone into zombies!
45
WookieMan
2018 Sep 28, 7:13am
WookieMan
2018 Sep 28, 7:13am
bob2356 says
I was and still am in the industry so to speak. It was stupid and it was obvious. The classic fear of missing out. I frankly was more naive (22ish) then and didn't see what was staring me in the face. I now look around a lot more closely and track these things. It has helped me to be on the path to retire by 45ish with no worries.
And yes, I don't trust the data. I look at the sources, analyze where it came from and make an informed decision based upon the source. You don't have to trust the data to still be able to use it. I know you're not saying this, but blindly trusting ANY data, especially when it's been spun by media is crazy.
WookieMan saysbut when you see a stripper buying multiple houses, that's a problem.
Ok got it, you guys were out interviewing all the strippers and low test people asking if they bought houses with no money down on a variable rate with no plan to pay their mortgage. That was clever. How many did you check out and how many did you find that met the criteria?
You do remember in the big short it was reams of analytical data (or as you say stats) that sent them out looking for anecdotal strippers to check out.?
WookieMan saysData is a tool. As I've said, I use it.
How do you use data as a tool when there are no sources you trust?
I was and still am in the industry so to speak. It was stupid and it was obvious. The classic fear of missing out. I frankly was more naive (22ish) then and didn't see what was staring me in the face. I now look around a lot more closely and track these things. It has helped me to be on the path to retire by 45ish with no worries.
And yes, I don't trust the data. I look at the sources, analyze where it came from and make an informed decision based upon the source. You don't have to trust the data to still be able to use it. I know you're not saying this, but blindly trusting ANY data, especially when it's been spun by media is crazy.
46
barrister
2018 Oct 16, 2:37am
barrister
2018 Oct 16, 2:37am
Up to 60% off if you look here-
https://seekingalpha.com/article/4211614-hidden-bear-market
Did I win?
https://seekingalpha.com/article/4211614-hidden-bear-market
Did I win?
« First « Previous Comments 41 - 46 of 46 Search these comments
2018
2019
2020
2021
2022
After 2022
Backdrop: we're in the 4th turning, 10 years after 2008, 17 years after 9-11 FF, in a mid-term election cycle (who cares?), more student/auto/corporate debt, private central bank interest rates going up (we all care), long in tooth economic (debt fueled) expansion, tariff trade wars coming on (for show or not), continued US military war maintenance globally... we also had a "scare" in February or so of 2018 when stocks dropped 10% or so? Then there's bitcoin, no pets.com or webvan this time, but probably lots of similar angel investment; talk of the US Dollar giving way to a RMB-RBL-RUPEE-ETC "SDR" basket... energy prices are lower but maybe EROEI is lower too and the miracle shale "oil" milkshake is nearly all sucked out
This time more businesses seem to be run smartly than last time. But there are likely other mistakes, and cheap debt again.
Maybe the crash this time is more of a 50% of 2008? (Split into a "2019" -20% and a "2025" -20% to make it all seem less disastrous/epic vs 2008?)
Or maybe it's 200% of 2008 due to USD losing its status? (our military is still Murika Strong)
Or maybe Venezuela, China, Ethiopia, Haiti (always), and EMs are taking it on the chin for us?
FRACTIONS OF PENNIES FOR YOUR THOUGHTS