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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?

#191

Post by abeppu »

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…

> Personally, I think the price is structural adjustments as people shift to remote work and that makes different houses more valuable (suburbs and exurbs have really increased quite a bit).

To back up the idea that the price changes are mostly just about mortgage rates changing:

- In California, Redfin data shows that the peak for median sale price was in April 2022, at $839,100, and now we're at $706,000 for Feb 2023. Ooh, that looks like a >15% drop in less than a year!

- But FreddieMac shows that the average 30y fixed was 5% in mid April '22, and was 6.32% mid last month. The median home with an average mortgage was signing up to pay $4504/mo vs $4379/mo last month. That's a decline of roughly 2.8%

So it seems like home buyers today are willing to pay almost as much per month as they were at the price peak, which has drawn prices down.

https://www.redfin.com/state/California/housing-market https://www.freddiemac.com/pmms

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

#192

Post by frumper »

reducesuffering wrote: post #173
bacchusracine wrote: post #165

Earlier quoted context omitted.

>As someone who spent time volunteering for Bernie Sanders campaign How do you feel about his three houses? The truth is people with the money don't want to change things and those with the power stop caring as much once they too get more.

All US senators and reps should have a residence in their home territory and DC (they need to understand their constituents' area and they need to be in DC a lot). Bernie's is a 1 bedroom in DC, so those two are a given imo and nothing to be concerned about. His third is a $575k rural lake house; probably a country retreat from being in the cities of Burlington and DC all the time. So while getting a little extravaga…

I don't have an issue with his rural retreat, but calling Burlington a city isn't exactly conveying how quaint of a town it really is. It feels like a town I'd visit when I want to get out of my also not big city.

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

#193

Post by dragonwriter »

bjourne wrote: post #183
dragonwriter wrote: post #176

Earlier quoted context omitted.

> But this time we have had governments causing unemployment to curb inflation. That’s true of most recessions, because by definition a recession is the period after a business cycle peak, and the peak of business cycles is when inflationary pressures are high and monetary policy tends to be tight to constrain inflation. It is definitely not a difference between today the 2007-2009 Great Recession where interest rate…

As I remember it the job market was doing well up until investments banks began failing in mid 2008. That is not the case today. Many large companies have already announced major job cuts. Because governments have announced that interest rates will remain high to increase unemployment. The idea is that more unemployment means more poverty and with people too poor to pay high prices producers will have to lower their…

> As I remember it the job market was doing well up until investments banks began failing in mid 2008

It was doing pretty similar to today in unemployment % terms until 2007, when that started getting worse too, with 6 years prior to that of declining incomes for virtually the entirety of the income distribution; if you call that “well”, then right now is doing great.

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

#194

Post by dragonwriter »

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…

> 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?

Considering how bad things were before the Fed, quite a lot before there is support for the idea that it isn’t making things better.

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

#195

Post by latchkey »

roarcher wrote: post #187
shagymoe wrote: post #186

Earlier quoted context omitted.

It's clear you don't understand how nodes or "voting" works. There's no mechanism there which would induce wild swings.

I do, actually. I never said there was a mechanism that induces swings--there doesn't need to be one. The users do it through speculation, just like with any other asset, only it's worse with Bitcoin because it isn't tied to anything of real value, even theoretically (unless you think wasted CPU/GPU cycles are valuable). Being "democratic" doesn't magically safeguard against that. I'm not a fan of the fed and I think…

Bitcoin has been using ASICs for over 9 years now.

Maybe you're thinking of Ethereum, which just moved off GPUs last year and as a result, destroyed the economics around mining with GPUs. So, that whole wasted cycles argument doesn't really hold up any longer.

Bitcoin is a store of value. I can borrow against it as collateral, which gives it real value in finance.

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

#196

Post by roarcher »

latchkey wrote: post #195
roarcher wrote: post #187

Earlier quoted context omitted.

I do, actually. I never said there was a mechanism that induces swings--there doesn't need to be one. The users do it through speculation, just like with any other asset, only it's worse with Bitcoin because it isn't tied to anything of real value, even theoretically (unless you think wasted CPU/GPU cycles are valuable). Being "democratic" doesn't magically safeguard against that. I'm not a fan of the fed and I think…

Bitcoin has been using ASICs for over 9 years now. Maybe you're thinking of Ethereum, which just moved off GPUs last year and as a result, destroyed the economics around mining with GPUs. So, that whole wasted cycles argument doesn't really hold up any longer. Bitcoin is a store of value. I can borrow against it as collateral, which gives it real value in finance.

> Bitcoin has been using ASICs for over 9 years now.

Uhh...okay? My point is obviously that it's a waste of energy. If someone manages to mine it using vacuum tubes powered by an ox on a treadmill, do I have to mention that too?

> Bitcoin is a store of value. I can borrow against it as collateral, which gives it real value in finance.

I'm not disputing that some people are foolish enough to agree to park their money in it. That doesn't make it a stable place to do so, which is, you know, a slightly important quality in a currency.

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

#197

Post by reducesuffering »

2000UltraDeluxe wrote: post #188
reducesuffering wrote: post #175

Earlier quoted context omitted.

Now do Sweden

As much as the rest of the Nordics hate to admit it, Norway's economy is far more stable than those of their neighbours, including the Swedish one.

I wouldn't say far more. As long as oil is in high demand, sure, 50% of their exports are shipping reliably. But Sweden's GDP is 30% larger, much more diversified, and will withstand the eventual contraction of petroleum based income. Take a look at their respective exports:

https://commons.wikimedia.org/wiki/File:Norway_Exports_Treem...

https://commons.wikimedia.org/wiki/File:Sweden_Export_Treema...

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

#198

Post by 3dbrows »

reducesuffering wrote: post #175
3dbrows wrote: post #168

Earlier quoted context omitted.

Sitting atop the world’s largest sovereign wealth fund, accumulated over decades of judicious management of national oil wealth, perhaps insulates Norway from realities that apply elsewhere.

Now do Sweden

I’m no expert, but I wonder what the long-term socioeconomic effects are of Sweden not having been involved in major wars or colonial empires for hundreds of years.

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

#199

Post by [deleted] »

nebula8804 wrote: post #174
shagymoe wrote: post #157

Earlier quoted context omitted.

I was right there with you. We're collectively too stupid or too easily manipulated to enact the change we need.

Gen-Z are absolute rockstars. I like to think that part of the surprise win for Dems in 2022 was boomers passing away (possibly accelerated due to anti-vax COVID deaths) and Gen-Z really coming out in the hopes of some sort of college loan relief. Hopefully down the road the millennials and gen-z become a large enough collective that they finally push out the garbage...although the establishment wont go down without…

[deleted]

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

#200

Post by yborg »

philipwhiuk wrote: post #142
yborg wrote: post #45

>There are people on HN who weren't alive in 2008. Are there that many under-15s here? As someone who lived through the S&L crisis of the Middle Ages, the current agitation doesn't even rise to that level; so far there hasn't been an indication of widespread outright fraud perpetrated by bank execs. This seems more like a less favorable (i.e. less free money from the Fed) environment exposing a few banks with very po…

> S&L crisis of the Middle Ages 1986 is not the Middle Ages. This one fraction suggests to me I'm responding to a hallucinating bot.

Was attempted irony. And ChatGPT would have probably written a better comment.
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