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The doomsayers waiting for the economy to crash

businessinsider.com

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Re: The doomsayers waiting for the economy to crash

#41

Post by constantcrying »

throwaway22032 wrote: post #37

The thing is that the economy in the West hasn't actually "crashed" in any meaningful way in my lifetime. Maybe during Covid, kind of, when we had supply chain issues for a bit? A lot of that was self inflicted too. A crash to me is like, I wake up, £1 is worth 50p and in one fell swoop I'm significantly net negative every month. Or like, the supermarkets start closing down, there's no fuel left in the petrol station…

>A crash is not - things cost 5%, 10% more over a period of months, and it's a bit harder to find a job.

A crash is when this continually happens.

>All you need to do to almost completely immunise yourself against this stuff is to spend, say, 70-80% of what you earn, less if that's viable.

And do what with that money?

Re: The doomsayers waiting for the economy to crash

#42

Post by constantcrying »

throwaway22032 wrote: post #40
constantcrying wrote: post #39

Earlier quoted context omitted.

But doing that is very expensive, the moment your interest starts rising you are paying hundreds of dollars/euros/etc. each month just so that you have the money available in your account, constantly depreciating. That is obviously something you need to be able to afford.

I don't understand what you are saying. If you can afford a 250k house then you can afford a 200k house + 25% saved per month. It's exactly the same amount of money. You then have a buffer. It's the opposite of expensive.

Not spending money to pay off debt means you continue to pay interest on the remaining debt you decided not to pay off.

If you spent money to reduce your debt, you aren't just reducing the money you own, you reduce all future interest. Saving money instead of paying off your mortgage is expensive, it costs a lot of money each month.

Re: The doomsayers waiting for the economy to crash

#43

Post by throwaway22032 »

constantcrying wrote: post #42
throwaway22032 wrote: post #40

Earlier quoted context omitted.

I don't understand what you are saying. If you can afford a 250k house then you can afford a 200k house + 25% saved per month. It's exactly the same amount of money. You then have a buffer. It's the opposite of expensive.

Not spending money to pay off debt means you continue to pay interest on the remaining debt you decided not to pay off. If you spent money to reduce your debt, you aren't just reducing the money you own, you reduce all future interest . Saving money instead of paying off your mortgage is expensive, it costs a lot of money each month.

Mortgage rates where I am are basically always within 1-2% of the risk free rate and less than most investments return over time so this isn't really true.

You have a very small opportunity cost, which reduces your risk of default to near zero.

Holistically, you can then take greater risks in other areas and end up longer term positive.

To me your argument is like saying that an airbag, or a crumple zone, or a seatbelt, increases the weight of your car, and therefore fuel consumption, and therefore it's expensive. It's true but only in a pedantic way, when you need it it suddenly goes from being "expensive" to a huge net positive no brainer.

Re: The doomsayers waiting for the economy to crash

#44

Post by constantcrying »

throwaway22032 wrote: post #43
constantcrying wrote: post #42

Earlier quoted context omitted.

Not spending money to pay off debt means you continue to pay interest on the remaining debt you decided not to pay off. If you spent money to reduce your debt, you aren't just reducing the money you own, you reduce all future interest . Saving money instead of paying off your mortgage is expensive, it costs a lot of money each month.

Mortgage rates where I am are basically always within 1-2% of the risk free rate and less than most investments return over time so this isn't really true. You have a very small opportunity cost, which reduces your risk of default to near zero. Holistically, you can then take greater risks in other areas and end up longer term positive. To me your argument is like saying that an airbag, or a crumple zone, or a seatbe…

What? This makes no sense, if you want to have money in case of economic trouble you obviously do not invest it. This is just contradictory, so you have to actually have the money in a savings account.

Over the decades you are paying off your loan you pay tens of thousands of dollars for having that savings. Each month of having that safety net will cost you money, the result will be that it takes you many years longer to pay it off.

I am not saying that in moderation it is a bad thing, but it certainly has serious downside, especially if you are tight on money.

Re: The doomsayers waiting for the economy to crash

#45

Post by flappyeagle »

FooBarBizBazz wrote: post #31
flappyeagle wrote: post #28

Earlier quoted context omitted.

Are you saying people making 5 figures should not follow this advice?

They can't do (1) because they don't have extra to save. Maybe (2) is doable, but it's hard when you're worrying about next week. (3) is basically the same as (1). I'm not sure about (4). Your choice is between throwing money away on rent, and being house-poor, overleveraged on a house. Again, you can't do (5) when the only asset you have (and can just barely hang on to) is a house. And most people sure as hell don't…

> pooling resources

This is a great way to achieve (1). Immigrant families have been doing it forever.

It’s a good tactic no matter how much money you make.

Re: The doomsayers waiting for the economy to crash

#46

Post by southernplaces7 »

silverquiet wrote: post #22
jamil7 wrote: post #13

Earlier quoted context omitted.

It’s because it’s an easier and more comfortable place to be. You don’t have to do anything if you don’t have a horse in the race. Changing habits, educating yourself, demonstrating, joining a party etc. all take time and effort. It’s a lot simpler to just throw your hands up and say nothing works, we’re all doomed.

The sea surface temperature of the Earth set records every day for an entire year and we just learned that the CO2 increase for 2023 was 4.7ppm, a new record as well. If people haven't gotten the message by now, I'm pretty sure we are in fact doomed. I agree that it is psychologically easier to throw your hands up and say that nothing works (and my life sure made a lot more sense when I realized that nothing works),…

Go read the actual science, read the IPCC's conclusions across several different scenarios and read their (and other) evidence-based assessments of probable consequences. In no way do they claim that humanity is doomed and in fact in many cases specifically assert that that isn't the case and that furthermore, there are still things that can be done to mitigate harm.

The amount of shrill hysterical fetishism of doom over climate change by many, many comments on this site almost takes on hive-minded, fervent proportions that fall well outside of even any evidence-based or rational discourse.

The ironic thing about that is that it's done by people who frequently deride so-called climate change deniers for their unwillingness to accept science. How could you expect those people to do so if even your own emotional conclusions in the opposite direction ignore the exact same science and reports you want deniers to take seriously? It's laughable.

Re: The doomsayers waiting for the economy to crash

#47

Post by silverquiet »

southernplaces7 wrote: post #46
silverquiet wrote: post #22

Earlier quoted context omitted.

The sea surface temperature of the Earth set records every day for an entire year and we just learned that the CO2 increase for 2023 was 4.7ppm, a new record as well. If people haven't gotten the message by now, I'm pretty sure we are in fact doomed. I agree that it is psychologically easier to throw your hands up and say that nothing works (and my life sure made a lot more sense when I realized that nothing works),…

Go read the actual science, read the IPCC's conclusions across several different scenarios and read their (and other) evidence-based assessments of probable consequences. In no way do they claim that humanity is doomed and in fact in many cases specifically assert that that isn't the case and that furthermore, there are still things that can be done to mitigate harm. The amount of shrill hysterical fetishism of doom…

There is some (I think valid) belief that the IPCC is an overly conservative (not in the right-wing sense) political committee who are as concerned with optics as they are science and do not want to sound doomerish themselves (and that makes sense to me). But their best path scenarios assume that we'd be drawing down carbon emissions steeply by now and beginning carbon sequestration programs (which don't seem to be developing fast enough) in the near future. As I said, given that we just experienced the largest ever increase in year-over-year CO2 levels, it seems we are still going in the opposite direction. Even the IPCC has said that the consequences of exceeding 1.5C temperature anomaly are dire, and we are clearly going to do that. And so they move the goalpost to 2C (again, I can't fault them for that).

I've followed the science rather closely and what becomes clear is that we just can't understand the climate system in its vast complexity; it's quite possible that there are dragons lurking that could cause a cascade of feedback loops that end very badly for humanity.

I suppose I'm just wired differently than most; it seems that others believe that because there is ambiguity in projections, they can just assume that all will work out. Many seem to believe that god or some force will watch out and protect them. I wish I had this belief as well.

Re: The doomsayers waiting for the economy to crash

#48

Post by southernplaces7 »

silverquiet wrote: post #47
southernplaces7 wrote: post #46

Earlier quoted context omitted.

Go read the actual science, read the IPCC's conclusions across several different scenarios and read their (and other) evidence-based assessments of probable consequences. In no way do they claim that humanity is doomed and in fact in many cases specifically assert that that isn't the case and that furthermore, there are still things that can be done to mitigate harm. The amount of shrill hysterical fetishism of doom…

There is some (I think valid) belief that the IPCC is an overly conservative (not in the right-wing sense) political committee who are as concerned with optics as they are science and do not want to sound doomerish themselves (and that makes sense to me). But their best path scenarios assume that we'd be drawing down carbon emissions steeply by now and beginning carbon sequestration programs (which don't seem to be d…

So to summarize, you're doubting the politics of the IPCC and consequently also its scientific evidence because you don't happen to agree with either and it doesn't fit what you want to believe. You also justify this by saying that the climate system is just too complex to trust models as currently presented by this body and those who agree with it or support it.

You do realize that you've taken exact pages out of the so-called denier playbook (I truly hate that phrase and all of its debate-censorious religious undertones, even though I don't doubt climate change myself) albeit in the other direction, while also criticizing those who practice that very same thing as doubters of climate change worries.

Re: The doomsayers waiting for the economy to crash

#49

Post by brokenmachine »

throwaway22032 wrote: post #37

The thing is that the economy in the West hasn't actually "crashed" in any meaningful way in my lifetime. Maybe during Covid, kind of, when we had supply chain issues for a bit? A lot of that was self inflicted too. A crash to me is like, I wake up, £1 is worth 50p and in one fell swoop I'm significantly net negative every month. Or like, the supermarkets start closing down, there's no fuel left in the petrol station…

>I wake up, £1 is worth 50p

>things cost 5%, 10% more over a period of months

In a 6 month period, these are the same.

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