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The Everything Bubble [infographic]

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Re: The Everything Bubble [infographic]

#91

Post by Nokinside »

bob_theslob646 wrote: post #83
Nokinside wrote: post #67

Earlier quoted context omitted.

The value of your condo going up gives very limited information if there is bubble or not. If you want to figure out what the correct price level is, find statistics that compares price of housing to median income in your area over time. That's the single most important metric determining the correct property valuations. Prices can go up as long as incomes go up. Major cities have higher productivity and prices can g…

Why not check the amount of domestic buyers versus foreign buyers?

That's good idea in some specific areas and price categories.

Re: The Everything Bubble [infographic]

#92

Post by mcguire »

"More cryptocurrencies than fiat currencies in circulation."

Yeah. Well, no, that's a completely meaningless point. Even "marketcap" for Bitcoin is useless---a marketcap is the marginal price that the greatest current fool is willing to buy one thingy for, multiplied by the number of thingys.

There may be too much money in cryptocurrencies, but this chart isn't showing that.

Re: The Everything Bubble [infographic]

#93

Post by abakker »

rosylamp wrote: post #89
abakker wrote: post #82

Earlier quoted context omitted.

yes, I should clarify, offer better deductions. i.e. For every dollar of wage, deduct 2 from the tax bill, or some such. Wage stagnation worries me a lot, specifically because of what it does to aggregate demand.

That sounds like something that would be absolutely abused

sigh, probably. OTOH, unless we drastically cut government spending, tax increases on the rich and tax decreases on the middle class won't really help much. Maybe my armchair policy is a bad one, but providing the carrot to corporations to increase wages seems more rational than constantly providing them tax incentives to relocate to places where they can lower their effective tax rate. (see GE moving to MA from CT, e.g.). If you could achieve the same tax rate change by encouraging them to simply pay their workers more, some good might actually come of that policy.

Re: The Everything Bubble [infographic]

#94

Post by mcguire »

lukewrites wrote: post #55

Why is more investors indexing a “bubble”? Is it just because of the growth line? While there surely must be some crappy indexes out there, one could argue that more indexing by (individual) investors is a sign of a more people understanding the difficulty of stock picking and harsh effects of management expenses on investment returns. I’m very happy indexing in my retirement portfolios, but am curious as to what the…

By definition, almost all investment money is in an index. What proportion of it is in low-cost index mutual funds vs. high-cost employer retirement and managed mutual funds is of interest only to the financial services industry, which makes more money in the latter case.

Re: The Everything Bubble [infographic]

#95

Post by mcguire »

sigstoat wrote: post #90
EvilGrin wrote: post #48

Earlier quoted context omitted.

So when they repo lots of cars due to a downturn the second hand market will crash. Which means the book value for all cars goes down the toilet.

> Which means the book value for all cars goes down the toilet. which isn't that big a deal, because average people aren't buying their cars as investments (or repeatedly refinancing them). your car still gets you to work just fine even if it is worth less than you owe. and that state of affairs would resolve itself in > So when they repo lots of cars due to a downturn the second hand market will crash. that would on…

I'm not entirely sure leases aren't the ARMs of the car world.

Re: The Everything Bubble [infographic]

#96

Post by fludlight »

The increase in corporate debt is worth watching because most of that will have to be refinanced and is thus sensitive to rising interest rates. Much of the proceeds were used for questionable purposes like repurchasing stock near historic highs instead of investment in the underlying business. This is a proven way to boost short term stock price and EPS, but not so much the capacity to repay.

That said, it's disingenuous to compare 10yr treasuries to indices comprised of bonds with a maturity of >=1yr. Issuance skews shorter term that 10 so those indices probably do, too.

Re: The Everything Bubble [infographic]

#97

Post by mabbo »

Nokinside wrote: post #67
mabbo wrote: post #42

Earlier quoted context omitted.

The value of my condo has gone up by over 60% in two years. Canada, Toronto especially, is in for some rough times in this housing bubble. The real issue is that the big cities like Toronto are the economic centers of the region. When they pop, everything else will be in trouble too.

The value of your condo going up gives very limited information if there is bubble or not. If you want to figure out what the correct price level is, find statistics that compares price of housing to median income in your area over time. That's the single most important metric determining the correct property valuations. Prices can go up as long as incomes go up. Major cities have higher productivity and prices can g…

Wages did not go up by 60% in two years. They barely went up at all.

Re: The Everything Bubble [infographic]

#98

Post by ghostbrainalpha »

munin wrote: post #41
shove wrote: post #33

Earlier quoted context omitted.

pretty sure you're not paying any tax on the money in your savings account (beyond income tax in the year in which it was earned)

possibly they mean pay as in losing value to inflation?

It's crazy what people are reading into this comment.

By practically pay, he just means he has a very low interest rate, and possibly some regular account fee's.

Re: The Everything Bubble [infographic]

#99

Post by speby »

saint_fiasco wrote: post #44
twobyfour wrote: post #35

The reason? Too much capital, not enough growth to invest in because demand isn't growing. Demand isn't growing because 60% of the population is barely scraping by. How do you increase demand? Roll back the tax cuts to the wealthy who have nowhere to put that money except into speculation and bubbles. Redistribute it back to the working class in the form of tax cuts, credits, higher minimum wage, and social programs.…

Among the things that people can't afford and really need, the most common ones are healthcare and housing. The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In pr…

> The problem with giving people more money to stimulate demand for those things is that it only solves half of the problem. Healthcare is limited by the supply of doctors so no matter how much government subsidizes it, the amount of people who can be seen by the constant number of doctors will be the same. In practice, this means the price will increase every time you try to give people more money for healthcare.

That's true but that's not true. While the # of doctors is constant right now, it is always changing as new doctors are trained and licensed (and also older doctors retiring). Just like computer science, as the demand increases and supply does not grow to catch up, wages will increase, but that doesn't mean there isn't at least some stimulus in the number of new people who decide to get into the profession.

While there won't be a glut of new doctors in 48 hours, obviously, but rather over years, it will (hopefully) eventually catch up.

Just consider the US population growing at around 0.7% yearly (https://www.nytimes.com/2016/12/22/us/usa-population-growth....). And if there are about 390 patients, on average, per practicing doctor in the US (http://bigthink.com/strange-maps/185-the-patients-per-doctor...), then given that population of the US increases around 2.2 million per year, that means we should be getting around ~5600 new doctors into the field every year. If you believe the stats, we will likely be facing quite a shortage over the next 7-10 years: https://www.washingtonpost.com/news/to-your-health/wp/2015/0...

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