11–20 of 161 posts
Though bubbles are a bad analogy: actual bubbles burst, economic bubbles deflate - not because of a puncture, but because they were continuously filled with air from a source that at some point can't provide it anymore.
Very curious to see what happens with the US housing / real estate market. I think stocks / equities are going to see a severe down turn this year and a good deal of money is going to leave the market. At the same time inflation is very high so sitting in cash is a loser as well albeit not as bad as riding the markets down. Will that money from the stock market go into real estate or will real estate crash too as the…
As we saw in 2008/2009, financial markets are linked more so than they tell you. Diversifying your portfolio is a good idea, but having both real estate and stock investments is probably not in fact diversifying.
I can't wait for the housing prices to go down, but there is no sign they will in France. They kept going up, even during the covid crisis.
> even during the covid crisis. Well yeah people wanted more space and had more money to spend - of course prices went up. Not sure why you've said 'even'?
Very curious to see what happens with the US housing / real estate market. I think stocks / equities are going to see a severe down turn this year and a good deal of money is going to leave the market. At the same time inflation is very high so sitting in cash is a loser as well albeit not as bad as riding the markets down. Will that money from the stock market go into real estate or will real estate crash too as the…
The fun bit is that everything is 'overvalued' now - stock market, real estate, even crazy things (many parts of crypto such as NFTs, but also Pokemon cards and other collectables) are through the roof, where will all this money go? money out of a bubble has to go somewhere... How far are we from the boomer generation leaving the market (one way or another)? This will create a lot of oversupply and negative pressure…
Inflation. Food, bills, gas, etc.
> How far are we from the boomer generation leaving the market (one way or another)?
20-30 years, during which time the younger generations will be entering. They are smaller slightly but most countries have immigration which keeps them fairly neutral.
> The answer to that is that we've been doing that already in the past decade with all the money printing / inflation / devaluation of wealth
This is not quite correct. Printing money does create inflation. Cross sector inflation does lead to devaluation of liquidity, but wealth includes more than cash on hand.
Earlier quoted context omitted.
> even during the covid crisis. Well yeah people wanted more space and had more money to spend - of course prices went up. Not sure why you've said 'even'?
Because tons of professions, small business, workers laid off, etc suffered from the lockdowns, so there was not exactly clear that "people had more money to spend".
As a concrete example, bank account deposits in the UK rose 10% during COVID.
Because that's the nature of bubbles? Though bubbles are a bad analogy: actual bubbles burst, economic bubbles deflate - not because of a puncture, but because they were continuously filled with air from a source that at some point can't provide it anymore.
Earlier quoted context omitted.
The fun bit is that everything is 'overvalued' now - stock market, real estate, even crazy things (many parts of crypto such as NFTs, but also Pokemon cards and other collectables) are through the roof, where will all this money go? money out of a bubble has to go somewhere... How far are we from the boomer generation leaving the market (one way or another)? This will create a lot of oversupply and negative pressure…
> everything is 'overvalued' now You are describing hyperinflation. Everything is up, except for salaries. There are two options: A) accept the prices as real, embrace the inflation, and raise salaries B) crash the markets and real estate, kill all the crypto-scam economy, keep jobs running with government money Some kind of mix of both will happen. I doubt that salaries can continue this low when basic needs cannot…
The two options you describe sound to me like they're only viable in a very centrally planned economy, and are fairly independent of general inflation. You can't really deliberately move prices like that unless you're willing to interfere in markets to the extent that, say, the Chinese government does.
Stock markets will do their own thing. The price of a share of a given company will go up and down based on ever-changing estimates of future earnings of that company.
Real estate demand is fairly inelastic, so prices there won't really go down unless you either massively increase supply (staring down NIMBYs and keeping costs under control - challenging on both counts), or decrease demand (somehow make huge numbers of people move to places with less pressure on housing, kill people's earning and saving potential, convince huge numbers of people to move back in with their parents and/or houseshare with others - also challenging on all counts).
I'm not sure how many HN readers we have in Ireland, but as an American I'd be interested to hear their perspective on this article.
https://www.bloomberg.com/news/articles/2012-07-19/ireland-b...
Also, the author claims that he couldn't find empty estates near Dublin, but if he went as far as Celbridge he would have found some. Futhermore he seems to jump back and forth between rural Leitrim and Dublin to make his point, depending on what suits his argument. Rural areas had huge ghost estates.
https://www.housing.eolasmagazine.ie/cso-publishes-breakdown...
You can see a comment below from mandmandam below with a personal take too.
The point about there being a credit bubble stands, and the author leaves out the commercial side of the bubble, purely focusing on residential.
The wikipedia article is superior to this one, normally I would have more time and respect for Ronan Lyons than this linked instance: https://en.wikipedia.org/wiki/Irish_property_bubble
And as to there being a myth about the Irish property bubble refuting the laws of supply and demand, I don't think anyone has made this point in my earshot or viewing. This third myth is itself a myth of the author's own creation.