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Can We Survive the Next Financial Crisis?

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Re: Can We Survive the Next Financial Crisis?

#21

Post by y-c-o-m-b »

The definition of "we" and "survive" needs to be established clearly first and I don't think all those fancy graphs and market trends will define them. There's a lot of people that ended up bankrupt, in a bottomless depression, turned to drug abuse or committed suicide because of the last crisis. Wages are still relatively low while prices continue to climb. Many people are working 2-3 jobs and having trouble affording rent across major cities in the U.S.

A glimpse at American's savings accounts shows a single healthcare incident can wipe out most anyone, let alone financial crisis: https://smartasset.com/checking-account/savings-account-aver...

Re: Can We Survive the Next Financial Crisis?

#22

Post by perfmode »

craftyguy wrote: post #15
HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

> The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. If that's true, then why is the current government working hard to remove any protection (however meager it is/was) to prevent the same mistakes from happening all over again? If the working class has no tolerance for these things, then it definitely isn't reflected in the people the working class has ele…

do you really believe that representatives controlling these knobs care about the true concerns of the working class?

Re: Can We Survive the Next Financial Crisis?

#23

Post by losteric »

cycrutchfield wrote: post #12
HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

So a bunch of folks with poor credit and not enough income took on way more debt than they should have and got caught with their pants down. How exactly did they get robbed?

The general public bailed out banks that profited off financial recklessness - banks that simply were not doing their job of managing risk.

Re: Can We Survive the Next Financial Crisis?

#24

Post by darawk »

cycrutchfield wrote: post #12
HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

So a bunch of folks with poor credit and not enough income took on way more debt than they should have and got caught with their pants down. How exactly did they get robbed?

The robbery was the bailout, not the people who took on irresponsible debt.

Re: Can We Survive the Next Financial Crisis?

#25

Post by HashThis »

craftyguy wrote: post #15
HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

> The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. If that's true, then why is the current government working hard to remove any protection (however meager it is/was) to prevent the same mistakes from happening all over again? If the working class has no tolerance for these things, then it definitely isn't reflected in the people the working class has ele…

The USA government has been selling out US citizens for decades (except the priviliged classes) The US government hasn't fixed it self, and won't.

Re: Can We Survive the Next Financial Crisis?

#26

Post by oihoaihsfoiahsf »

HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

> It caused a $5 trillion in transfer from wealthy away from the working classes to the investor class in that 2008 Mortgage crisis.

This sounds like a made up number. What is your source?

> The 2008 Mortgage crisis robbed the working classes

How? I.e. what did working class people own that was subsequently taken away by some other entity?

> Wall Street over leveragged had huge wealth handed to them in money printing that was giving directly to their balance sheets.

A common misconception. The government did recapitalize various Wall St. entities on favorable terms, and did, via quantitative easing, give owners of some securities more than they might have gotten in the market without intervention. But there were certainly not any "no strings attached" givings of cash to the big financial entities.

The other stuff about how working Americans were the ones most hurt by the financial crisis also sounds incorrect to me. If I had to categorize winners and losers, owners of mortgage debt and homeowners would be the biggest losers of the crisis. Working Americans suffered knock on effects, or direct effects to the extent they were in the other categories, but they were not the primary victims.

Re: Can We Survive the Next Financial Crisis?

#27

Post by jorblumesea »

ram_rar wrote: post #19
jorblumesea wrote: post #7

Earlier quoted context omitted.

If you bought an actively managed fund 30 years ago, it was literally an index fund with more fees attached. Active managers actually just index, but try hard to obfuscate this fact to justify their high fees. If you dive into their books, they are basically buying the market. I think it begs the question, how active was/is active? The math is clear, you are statistically unlikely to beat the market.

But, what if everybody only buys index funds and there arent any active players anymore ? I am not an expert in this field, but I do feel that the passive nature of index funds has been benefiting greatly from the actions of active investors.

No one really knows, to be honest. But, many "active managers" were indexing before indexing was widespread, so it's unclear how much of a real change this is. Even hedge funds use index funds to back some of their riskier moves and it's common to use a blend of indexes and shorts. It really begs the question...how active was active before wide spread indexing?

It's not really as binary as many perceive. It's not as simple as active vs passive. The future is probably some kind of balance between active and passive.

Re: Can We Survive the Next Financial Crisis?

#28

Post by waterphone »

busterarm wrote: post #14
badbug wrote: post #11

Earlier quoted context omitted.

The working class will be too busy trying to keep up. There won't be time for a revolution.

I'm bullish on the sentiment expressed by the parent poster, actually. Like another commentator, I believe index funds are going to be ripped hard and this is what the average saver has been told to dump their money into by the banking industry since the last crisis.

Investing in total market index funds is literally investing in the economy as a whole. (Or as much of a whole as the index represents.) So while yes, they will crash with future market crashes, of which there will be many in each of our lifetimes, historically in the U.S. so far the market has always recovered.

Re: Can We Survive the Next Financial Crisis?

#29

Post by phil248 »

craftyguy wrote: post #15
HashThis wrote: post #5

The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. Working American's had to financially absorb the 2008 Mortgage crisis. 2008 was a direct robbery because Mortgage Orginators KNEW the mortgages would blow up, because their own Underwriting equations said they would. That is why they did fraud on the customer's income levels or worked with politicians to al…

> The surprise that is coming is that the working class won't tolerate being robbed in the next financial crisis. If that's true, then why is the current government working hard to remove any protection (however meager it is/was) to prevent the same mistakes from happening all over again? If the working class has no tolerance for these things, then it definitely isn't reflected in the people the working class has ele…

The "current government" is barely functional. I'd point to changes like the unpopularity of tax breaks for the wealthy, the increasing embrace of democratic socialism and the leftward shift of the Democratic party as signs that the American public is going to be far less forgiving the next time around.
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