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Can We Survive the Next Financial Crisis?

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Re: Can We Survive the Next Financial Crisis?

#11

Post by badbug »

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

Re: Can We Survive the Next Financial Crisis?

#12

Post by cycrutchfield »

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?

Re: Can We Survive the Next Financial Crisis?

#13

Post by the_gastropod »

hndamien wrote: post #6
the_gastropod wrote: post #4

Earlier quoted context omitted.

> You know what made Bezos so rich in spite of a company that doesn't make much accounting sense? When everyone is betting on his success by blindly investing in index funds. Let's see... AMZN: up 62.93% YTD S&P500: up 6.81% YTD I don't think index fund investors are the cause of Amazon's growth.

My theory it is QE and maybe Roboinvesting.

We've been (slowly) raising interest rates for the past few years. And even if it were QE, why would it (and robo investing) affect Amazon 10x more than the broader market?

Re: Can We Survive the Next Financial Crisis?

#14

Post by busterarm »

badbug wrote: post #11
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 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.

Re: Can We Survive the Next Financial Crisis?

#15

Post by craftyguy »

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 elected to 'represent' them.

Re: Can We Survive the Next Financial Crisis?

#16

Post by FilterSweep »

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…

I disagree, I find the media quite seasoned at turning the working and middle classes against themselves at this point.

Re: Can We Survive the Next Financial Crisis?

#17

Post by yourbandsucks »

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…

We already had that surprise in the 2010 and 2016 elections.

I'd wager that people upset about this stuff will continue to vote for rah-rah morons who channel their anger while sinking the knife deeper into their back. Happy to be proven wrong.

Re: Can We Survive the Next Financial Crisis?

#18

Post by jorblumesea »

mikert5671 wrote: post #9
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.

Some of them do beat the market. They are also producing returns that are more robust to a downturn. So even if they dont match the S&P performance, in a downturn they dont lose as much as the S&P does. It's difficult to compare index funds to hedge funds, they have different purposes. When the market is always going up, it looks like a scam.

Hedge funds are also statistically unlikely to beat the market and finding one that does requires a huge capital buy in that few workers can make. You're talking 250-500k minimum buy in. Hedge funds have chronically underperformed for the last 10-15 years. Now that so much information is available, much of the market performance is priced in now.

Once again, the best bet for the average person is an index fund. On a 30 year timeline all of these blips are smoothed out. If you can afford top level financial firms you're probably way wealthier than the average person.

Re: Can We Survive the Next Financial Crisis?

#19

Post by ram_rar »

jorblumesea wrote: post #7
acconrad wrote: post #2

One of the few times Bettridge's Law of Headlines doesn't apply. "Survive" is an extreme word here, but I do see a big issue w/ index funds. Perhaps an unpopular opinion - but I believe index funds will be the next major bubble that cripples the financial system. It's one massive way to persist the same inequality status quo. You know what made Bezos so rich in spite of a company that doesn't make much accounting sen…

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.

Re: Can We Survive the Next Financial Crisis?

#20

Post by 1001101 »

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…

> Homes lost because of unemployment.

The good news is they can be rented back from Wall St firms who have been snapping up rental properties with that windfall.

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