Many parallels with what is going on with NFTs right now.
Agreed. 19.94B locked up in NFTs atm https://defillama.com/nfts
The reserve bankers would look at stats like that and just shake their head at the money wasting away.
The Beanie Baby Bubble of '99
21–30 of 141 posts
Re: The Beanie Baby Bubble of '99
#22There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because…
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing.
A few points on housing:
- real home prices have now surpassed the 2000s peak
- household formation and population growth has been decelerating, while building has been accelerating.
- there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of active listings.
- mortgage rates are climbing at a historically fast pace... If inflation doesn't abate we can expect 5-6% mortgages within a few months. Rates were kept low due to the belief in transitory, but confidence in this is quickly eroding. Mortgages roughly correlate with 10y treasury which is at 2%, while inflation at 7.5%. typically these values are close together
- all in affordability will reach record lows within a few months, if inflation and mortgage trends don't abate
- there's clearly a mass FOMO/psychological phenomena going on right now. Buyers aren't acting rationally from a financial perspective
Home prices can avoid a correction if we quickly return to 0 or negative rates, which could happen. If inflation persists, they will correct in a big way within a year or two as rates adjust to inflation
Sources:
https://fred.stlouisfed.org/series/QUSR628BIS
https://fred.stlouisfed.org/series/UNDCONTSA
https://fred.stlouisfed.org/series/SPPOPGROWUSA
https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fix...
EDIT: And the fervent denials that it's a bubble is surely a hallmark of bubbles too :). Please refute with actual data if you disagree
Re: The Beanie Baby Bubble of '99
#23Many parallels with what is going on with NFTs right now.
Agreed. 19.94B locked up in NFTs atm https://defillama.com/nfts
That's a total volume number, not a market cap.
If you want to see some market caps[0] they're still staggeringly high for what they represent, but beware: you can't see the demand curve on a price history chart. There's no way of knowing how much of the market could decide to sell before they ran out of buyers. Market caps are used to estimate value on wall street because it's imagined that the number of people who would want to buy MSFT today for $1 less than the price today are inexhaustible.
That's much closer to the truth on the NASDAQ than on whatever exchange people are using to trade their beanie babies.
Re: The Beanie Baby Bubble of '99
#24Many parallels with what is going on with NFTs right now.
except 1000x bigger. ppl are spending hundreds of thousands of dollars like it's nothing.
It's easier to spend money when purchasing things with a credit card versus cash. Or, users are more likely to make in-app purchases when it's with pre-loaded Robux or V Bucks rather than dollars.
There's got to be something like that at play here with ETH/BTC. It's so much easier to spend it when it's hard to put into perspective just how much physical cash the purchase represents.
Re: The Beanie Baby Bubble of '99
#25If you are curious about asset bubbles, how they form and how they unravel, I would suggest you read Hyman Minsky's "Can 'It' happen again?".
Re: The Beanie Baby Bubble of '99
#26There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because…
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of…
> while building has been accelerating massively
Nope, we have a decade of underproduction that led us to this crisis
Re: The Beanie Baby Bubble of '99
#27There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because…
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of…
As someone who just sold their home and is currently renting while waiting for a correction, I definitely want this to be true. Why are you confident those factors, absent a rate intervention, will produce a correction?
Re: The Beanie Baby Bubble of '99
#28My son learned SO MUCH from 3d printing and selling fidget spinners.
Bulk purchasing skate bearings, charging 3 times as much for the same plastic because it had different colors…and the STEM school really couldn’t do much, because that kind of thinking was in their charter…plus, you know, distract the hands while keeping their brains engaged.
Re: The Beanie Baby Bubble of '99
#29There's a great history of this, The Great Beanie Baby Bubble: Mass Delusion and the Dark Side of Cute by Zac Bissonnette. It's a quick read, almost entirely original reporting. Aside from the colorful characters, it's really compelling to see the way some individuals' and limited information combined with mass media fell together to create the bubble. It seems like it couldn't have happened at any other time because…
Oh, bubbles can surely happen even in the era of widespread information. Look no further than housing. A few points on housing: - real home prices have now surpassed the 2000s peak - household formation and population growth has been decelerating, while building has been accelerating. - there are 1.1 homes per household, same as the year 2000. We are not at historically low supply as some claim. Only low in terms of…
Sorry, I think I'm not following.
I think you're saying that housing prices are too high. Then you're saying that if inflation continues housing prices will drop?
I totally get that most home sales are based on the monthly mortgage bill, so when interest rates are high, house prices are lower. But, if we have 7% inflation why wouldn't rates increase AND prices increase? I don' think the outcome is obvious when high inflation is coupled with high rates - though I'm sure there are several experts ready to jump in with information about how the US 70's and 80's worked :)
Re: The Beanie Baby Bubble of '99
#30If I had $5 for every Beanie Baby my kids had…. Wait - I did.