You're acting like something ended in 2008. A bubble popped, yes.
Ever seen Lawrence Welk?
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?
#22Yes - 2008 was like stepping on a land mine, and right now it feels like we’re staring at multiple rocket launchers pointed right at us.
Someone said they remember 2007-8 vividly and it felt precarious. I don’t, but from what Hollywood tells me, this person must be Michael Burry. Now we have a bunch of money that has been printed, which has done nothing to improve the economy and just caused a lot of wealth disparity and inflation. The Fed trying to get that under control is one of 2 concrete reasons for SVB. It has probably caused issues at many banks (they’re bag holding) with the only difference being their depositors are less reactive. What’s the solution? Print more money. Add to that geopolitical conflict between the US - which (let’s be real) doesn’t really stand for anything anymore other than the value of a dollar - and BRICS - which doesn’t stand for anything other than devaluation of the dollar. Putin once said the US economy is based on housing prices and he’s more or less right. It’s all tech and finance - which is either exploitative or can be done anywhere. BRICS has most of the resources and most of the production capability. A globalized world is more efficient and better, but debts need to be paid.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#23I think it's more like 2000 when there was a significant over-investment in tech, then Greenspan increased interest rates quickly and all the companies had to adapt to non-free money.
I think the housing market will correct (crash) and tech jobs will be harder to come by for junior folks and people who aren't that great at it. Not a great time to job hop. It won't be horrible like 2008 but it won't be great. Should be over by the 2024 election.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#24I wonder how much bot written replies I read here. Sure it might be all storm in a glass of water (that's what I read in pretty much every top level quote). But we also know that big biz protects it's status quo and they have used bots before.
Familiar with the "dead internet theory"?
Also why do we like HN? Because here I can interact with some thought leaders: this would be exactly the place I'd point my bots at :)
Sorry for the paranoia spread. Take it with a grain of salt.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#25I was wondering about this same question today. The reason was a PBS documentary[1] and Jeff Bezos' advice to not make big purchases[2] (which is a stunning stance for the CEO of an online shopping company). I don't know enough to know whether these folks know what they're talking about - I don't think anyone does. Maybe it's a wait and watch game since this is a complex system with millions of variables.
[1] https://www.youtube.com/watch?v=EpMLAQbSYAw
[2] https://www.businesstoday.in/latest/world/story/dont-buy-tv-...
Re: Ask HN: Do you think this is the start of the new financial crisis?
#26The vibes are similar to early 2008. But the financial structure is different. Banks are not overleveraged. Housing is not all adjustable rate. That being said, easy to see weakness. Commercial real estate is a big one. I'm somewhat concerned about non-bank Financials. Some large foreign banks (CS(dead) , DB, HSBC) I'm skeptical of. And a recession feels imminent (felt to me this way even before SVB). To sum up, I do…
Commercial real estate feels like Wile E. Coyote running off a cliff and not falling because he hasn't looked down yet.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#27Every crisis introduces a new type of failure that was not expected. The 2008 came with the realization that the housing market was not as bullet proof as people thought.
This one is no different. It's possible we recover from it very quickly, but it's also possible that the bank run that we saw earlier this month introduce a new type of failures that no one thought was possible. I'm of a curious nature, so I really wonder what's coming.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#28No, I remember 2007-2008 pretty clearly. That felt much more precarious. Right now it seems pretty clear that if your bank fails you're going to get your money. That's not to say that this isn't the start of some kind of a financial crisis. But it could be very different from 2008. In this case I think the risk is more towards high inflation - for example, if enough banks were to fail (hypothetically - I doubt this w…
We have a gigantic housing bubble and banks are holding the bag.
Re: Ask HN: Do you think this is the start of the new financial crisis?
#29No, I remember 2007-2008 pretty clearly. That felt much more precarious. Right now it seems pretty clear that if your bank fails you're going to get your money. That's not to say that this isn't the start of some kind of a financial crisis. But it could be very different from 2008. In this case I think the risk is more towards high inflation - for example, if enough banks were to fail (hypothetically - I doubt this w…
Precautionary demand for money isn't inflationary - it has a low velocity i.e. just sits, in it's precautionary state. [1 for an example during Covid lockdowns in AU].
The identity is MV=PY where M is money, V is velocity, P is the price level and Y is real income. [2]. A precautionary demand has a lower V.
While a rise in narrow money may be expected, there may be a fall in in broader money, typically much larger than M1, driven by a reduction in sought exposure to non bank financial companies.
[1] https://www.rba.gov.au/publications/bulletin/2021/mar/cash-d...
[2] https://en.m.wikipedia.org/wiki/Quantity_theory_of_money
Re: Ask HN: Do you think this is the start of the new financial crisis?
#30No, each time is different. We just had the biggest and longest bull run in history. The economy moves in cycles. The longer the prosperity move the steeper the correction. Something like this is long overdue.