A new credit bubble gets ready to burst

Is this why I've been seeing signs advertising something like "learn how to flip houses like a PRO! Call 555-555-5555" popping up around my little suburban town? Also bank managers hitting up my elderly relatives for home equity loans again.

It feels very much like we're in 2002-2005-ish again.

Re: A new credit bubble gets ready to burst

#5

Post by RandomInteger4 » Sun, Jun 02, 2019, 5:55 PM UTC

cascom wrote: post #3

The huge difference here is leverage. The typical bank in the US is levered ~5-12x which means, many of these "shadow banks" are unlevered, this creates an entirely different dynamic

Are there any ways to hide leverage?

Re: A new credit bubble gets ready to burst

#6

Post by yardie » Sun, Jun 02, 2019, 5:58 PM UTC

For those looking for a non-paywalled link: https://outline.com/yR7ZNK

Re: A new credit bubble gets ready to burst

#7

Post by temp129038 » Sun, Jun 02, 2019, 5:59 PM UTC

If SF, I'm seeing ads all over for 1) Brex (corporate credit cards for startups) and 2) Zerodown (pitching no down payment for homes).

It would be quite something if tech and not banks caused the next great recession.

Re: A new credit bubble gets ready to burst

#8

Post by klyrs » Sun, Jun 02, 2019, 6:00 PM UTC

RandomInteger4 wrote: post #4

Is this why I've been seeing signs advertising something like "learn how to flip houses like a PRO! Call 555-555-5555" popping up around my little suburban town? Also bank managers hitting up my elderly relatives for home equity loans again. It feels very much like we're in 2002-2005-ish again.

Indeed. Despite all of the objections to the "startup party is over" story, this and that combine to feel like another collapsing bubble.

Re: A new credit bubble gets ready to burst

#9

Post by nugget » Sun, Jun 02, 2019, 6:13 PM UTC

temp129038 wrote: post #7

If SF, I'm seeing ads all over for 1) Brex (corporate credit cards for startups) and 2) Zerodown (pitching no down payment for homes). It would be quite something if tech and not banks caused the next great recession.

I just looked up Zerodown. How does their model account for the foreclosure risk if there's a real estate recession?

Re: A new credit bubble gets ready to burst

#10

Post by subpixel » Sun, Jun 02, 2019, 6:15 PM UTC

RandomInteger4 wrote: post #4

Is this why I've been seeing signs advertising something like "learn how to flip houses like a PRO! Call 555-555-5555" popping up around my little suburban town? Also bank managers hitting up my elderly relatives for home equity loans again. It feels very much like we're in 2002-2005-ish again.

I suspect that if you call the house flipping number someone will try to sell you a course or seminar, not loan you money.