Yeah well so its 2022 and we have another house bubble at least as big as the one in 2007. And oil prices are sky-rocketing. Do the math. I do not know about you but I am not buying property in this market. Market is meant to crash if we follow the logic from this article. But I could be wrong. Do not take my advice
Economists say that high gas prices triggered the housing crisis in 2007 (2012)
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Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#32Now we have high oil prices (not yet at the high) also with general (corporate induced) inflation, combined with an even greater separation of wealth. All things that point to a a recession again. But war is the variable here.
> (corporate induced) inflation Why did the corporations wait for the government to print tons of money to decide collectively to raise prices?
You say "government prints tons of money" like that goes to the people and not to the corporations.
See, inflation would not be a problem if wages kept up with rising prices. But they do not? Why? Because profit and stock buybacks. Corporation are not paying you a fair wage based on the cheapness of the money they can get from the fed. Instead of keeping profit stable they aim at not raising your salary and keeping that profit so their company looks better and their stock price goes up.
I guess you still believe in trickle down economics?
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#33Earlier quoted context omitted.
makes me wonder if student loan default en masse could follow this time.
How would that work? I thought most US based student loan can't be defaulted on.
It can't be discharged through bankruptcy (thanks Joe!), but neither can we squeeze blood from stone. Debtors who don't have the funds to both eat and make their payments will not make their payments.
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#34Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#35Now we have high oil prices (not yet at the high) also with general (corporate induced) inflation, combined with an even greater separation of wealth. All things that point to a a recession again. But war is the variable here.
> (corporate induced) inflation Why did the corporations wait for the government to print tons of money to decide collectively to raise prices?
When did the governments stop printing tons of money?
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#36Earlier quoted context omitted.
yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.
It's an entire economy. When someone else buys a Tesla, oil demand is rendered less inelastic. This also primes the market so that more EVs get sold, including cheaper ones, and eventually used EVs become available at a much lower price. You can get a used Nissan Leaf for I guess we should not do anything if it can't immediately be made affordable to everyone in the very first generation. So we should never have done…
so what you are saying is you are in favor of trickle-down economics? - where people who make $300K+ a year, buy government subsidized Tesla's, and somehow, somewhere, the poor single mother who now has decide between filling her car to get to work, and buying food - will somehow benefit from wealthy tech-bros driving $100K cars.
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#37The more EVs penetrate the market the less vulnerable we are to oil price spikes. Oil has been the rate limiting reagent of our civilization. That is ending.
yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.
In the EU, the DACIA Spring is sold at 20 to 18k€ before all the government credits. You can get this urban electric car for less than 12k€ with the government credits.
Yes this is a very simple car, but this is now less expensive than a similar gasoline car.
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#38> "The key word is, 'triggered,'" said JunJie Wu, an OSU economist and one of the authors of the paper. "This theory recognizes the role of subprime mortgages and lax lending practices as inflating the housing bubble, but high gasoline prices provided the trigger that burst the bubble." Are we in another bubble? And if so what is the theory for why? I assume subprime and lax lending wouldn't be the cause after the le…
Not a bubble because for the most part people are buying homes that they can pay the mortgage on. High energy prices are also going to spike inflation which eventually means rates rise. If that happens owners with their 2.75% mortgages aren't going to be inclined to sell. Coupled with higher new construction costs the housing market probably continues to rise.
They can pay those mortgages in the moment they sign for them.
They cannot necessarily pay those mortgages after inflation screws up the rest of their month to month budget.
People always love to circle jerk about inflation "inflating away your mortgage" but that's only if you manage to hold onto it.
Wages lagging inflation will still hurt a lot of people. "Just switch jobs" doesn't work in every industry and even where it does you're gonna stagnate in terms of skill/experience due to ramp up times in new roles so you're basically borrowing from your future earning potential by doing that.
Unfortunately most people who championed the bad decisions that got us here are wealthy enough to weather the storm with little more than reducing their retirement contributions.
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#39The more EVs penetrate the market the less vulnerable we are to oil price spikes. Oil has been the rate limiting reagent of our civilization. That is ending.
yea, all those poor people who can't afford to fill their cars should just run out and buy Teslas instead.
No, EVs are not just Teslas. As far as I can see in The Netherlands, EVs are penetrating the market very fast. Sure, it will begin with people who can afford the upfront costs with an eye on operational cost savings. But, it will only be a matter of time before the economies of scale applies and the value of an electric car with substantially lower operational costs become the better choice for those with current gas guzzlers(including me).
I am not running out to buy an EV now because I have a car which is a tool that works fine, and the alternative is more expensive. However, in a few years when I am in the market to replace my car, the EVs will be much more attractive when I calculate the total cost of ownership.
Re: Economists say that high gas prices triggered the housing crisis in 2007 (2012)
#40As opposed to the greed of the banks and the ratings agencies being catatonic?