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Ask HN: Do you think this is the start of the new financial crisis?

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Re: Ask HN: Do you think this is the start of the new financial crisis?

#121

Post by lmpdev »

smt88 wrote: post #38
peyton wrote: post #28

Earlier quoted context omitted.

We have a gigantic housing bubble and banks are holding the bag.

Housing bubbles don't always burst (see: Australia)

Australia is in DIRE need of reform - unfortunately we voted against Shorten's election plans in 2019 that would have dramatically reduced the upward pressure on housing prices

Anecdotal but I cannot afford to move back to the lower middle class regional town I grew up in, as there are 0 rentals and buying is minimum $800,000

My mother's place has gone from: 1990 - $100,000 AUD 2006 - $600,000 AUD 2021 - $1,200,000 AUD

The local council estimates we can only add 0.29% to the population YoY

Re: Ask HN: Do you think this is the start of the new financial crisis?

#122

Post by jmillikin »

yeahsure22 wrote: post #104
dchftcs wrote: post #48

Earlier quoted context omitted.

No, the bonds are worth something, and the losses can narrow by a lot if they're allowed to hold to maturity, deposit interest rates rise slowly enough and if broad interest rates drop some time on the future. The risk that they can't narrow is indeed real and whether to backstop that is a source of contention here.

Unfortunately we are stuck living in the present where the bonds are worthless and not the future.

If you happen to be holding any "worthless" Treasury bonds, I would be happy to take them off your hands for $0.10 on the dollar.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#124

Post by b1c1jones »

prepend wrote: post #105
abeppu wrote: post #67

Earlier quoted context omitted.

Is it a gigantic housing bubble? Prices clearly peaked, and the YoY price increase in some places had gotten a bit silly. But don't a lot of cities still just have a lot less housing than they should because of decades of not building enough? And even the decline in prices is mostly about the higher mortgage rates?

Everyone refinanced to very low interest rates. If home prices drop and people default then that’s lots of exposure to potential negative equity in all those home loans. I think the bubble is due to extremely high home prices. In my metro area, prices are up 70% since 2020. So a drop of 40% to correct to 2020 levels isn’t unheard of. Personally, I think the price is structural adjustments as people shift to remote wo…

Your metro area is not my metro area, nor is it any other metro area besides your metro area.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#125

Post by shagymoe »

The emperor has no clothes.

How many crises do we have to go through before we admit the fed and banks either have no idea what they are doing or they know exactly what they're doing and it's malevolent?

The number of people here defending the system and saying this isn't inflation is mind boggling. Where do you think the money comes from when the government rescues banks? No matter how you slice it, the taxpayer pays through higher fees, higher rates or inflation.

This system of rescuing banks with no prosecution of the people responsible and printing a mountain of money is unsustainable. It's clear that humans will never implement an equitable system and it makes the case for Bitcoin every day...unless you profit from the financial system and then I'm sure you'd be thrilled to kick the can down the road.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#126

Post by throwayyy479087 »

meghan_rain wrote: post #123

Note that this thread will have the same Danning-Kruger level of plausible but wrong info as would a banker forum discussing "do you think ChatGPT will be able to drive cars?".

This is very accurate- I’m seeing a ton of very confident, completely wrong answers.

Finance Twitter is likely a better source.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#127

Post by throwayyy479087 »

bbunix wrote: post #55
varunjain99 wrote: post #17

I don't think this will be anywhere close to 2008. In many ways, SVB was a perfect storm of many factors. High uninsured deposits. Few, tech-savvy despositors. Bad investment choices w.r.t. interest rates. Makes sense why a run was possible. Other smaller banks - while they may even have similar investment choices - are likely to have many depositors who are under the FDIC limit. So... rationally... they shouldn't ca…

Multiplied by VC/tech driven by a herd mentality at the speed of light.

Groupchats likely caused the failure of SVB. Allowed for a lightning run.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#128

Post by throwayyy479087 »

jnmandal wrote: post #97

I have no idea but I'm laughing because HN is almost always wrong about these things. I remember about a year back reading a thread here about the UN FAO food price index showing inflation and most of the responses were about how wrong it was to say that there was inflation, how it won't correlate with that index, etc, etc. The funniest thing about that thread, IMHO, was the surety and confidence of all the responses…

These remind me of finance people talking about tech. They use the right words but in semantically meaningless sentences.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#129

Post by nwah1 »

shagymoe wrote: post #125

The emperor has no clothes. How many crises do we have to go through before we admit the fed and banks either have no idea what they are doing or they know exactly what they're doing and it's malevolent? The number of people here defending the system and saying this isn't inflation is mind boggling. Where do you think the money comes from when the government rescues banks? No matter how you slice it, the taxpayer pay…

Bitcoin regularly dives by orders of magnitude worse than the 2008 financial crisis.

Angsty posting like this probably sounded really cool to people in high school, but I'm not sure why we should be impressed with your fact-free faux-radical grifterism.

Re: Ask HN: Do you think this is the start of the new financial crisis?

#130

Post by erlich »

shagymoe wrote: post #125

The emperor has no clothes. How many crises do we have to go through before we admit the fed and banks either have no idea what they are doing or they know exactly what they're doing and it's malevolent? The number of people here defending the system and saying this isn't inflation is mind boggling. Where do you think the money comes from when the government rescues banks? No matter how you slice it, the taxpayer pay…

Everyone in charge are already extremely wealthy. They have zero skin in the game. J. Powell, 50MM. Yellen, 20MM. There is no ability for them to empathize with a regular taxpayer. Whatever happens their lifestyle will not be impacted one bit.

You have to ask: what drives someone in this position.

And this is a question that only the 200k ultra high net individuals (30mm+) in the world can answer.

I think people stop chasing material possessions and start chasing prestige and power. These people don’t interact with the average joe much so they don’t really care about their opinion, unless you are a populist like Trump for eg. They care about their family friends and peers. So I think it creates a broey kind of culture where you want your peers to be happy with the job you are doing. If you are in finance you want the bankers to be happy. Your political party to be happy etc.

I think it becomes more about making and keeping friends. This stage for life without need for material possessions is all about people and relationships and power.

You just have to imagine yourself with infinite wealth but no friends. You would quickly run out of things to spend it on, and you would just want people to love and respect you.

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