Wealth Effect & Porsche GT Prices
#77
And the cherry on top? Read your bank deposit agreements. It's not even your money when it goes into the bank, you're simply a creditor to the bank when you make a deposit. If things go south, you'll need to get in line for your own money, behind those higher on the food chain.
I heard that the biggest landowner in the USA is the Federal Reserve, due to mortgaged backed securities held by them. Maybe that's the end goal, fee simple ownership of everything by global banking interests. Have a good evening
I heard that the biggest landowner in the USA is the Federal Reserve, due to mortgaged backed securities held by them. Maybe that's the end goal, fee simple ownership of everything by global banking interests. Have a good evening
#79
And the cherry on top? Read your bank deposit agreements. It's not even your money when it goes into the bank, you're simply a creditor to the bank when you make a deposit. If things go south, you'll need to get in line for your own money, behind those higher on the food chain.
I heard that the biggest landowner in the USA is the Federal Reserve, due to mortgaged backed securities held by them. Maybe that's the end goal, fee simple ownership of everything by global banking interests. Have a good evening
I heard that the biggest landowner in the USA is the Federal Reserve, due to mortgaged backed securities held by them. Maybe that's the end goal, fee simple ownership of everything by global banking interests. Have a good evening
Notwithstanding the FDIC fund into which all FDIC regulated banks pay premia, depositors are well protected by the very thing you denigrate - the degree of leverage inherently necessary in profitable, efficient, fractional reserve banking.
Banks (and bank holding companies, to an extent) are highly supervised by their primary regulator, whether the institution is nationally or state chartered; assuming the absolute worst case scenario (and nothing anywhere near this transpired during the most recent financial crisis) in which a bank failed to open one day and instead said "Surprise, we took some losses and don't have any equity left! Sorry common equity holders!" ... the bank would no longer operate, could not take subsequent, further losses, and depositors would (eventually) be fine.
If you bank at a public institution, call into their earnings call next quarter and ask the CEO what will happen to your funds if the bank fails.
#80
I don't think productivity will ever take up the slack of these asset valuations, but to get to the "big reset" we will have to go through a sovereign debt crisis. I don't think this country is prepared for anything like that. Martial law, food lines, bartering, etc...
And I never said it would be rapid, or a large reset. The correction could just as easily manifest itself as an underperformance over the longer term. The only way asset values will continue to rise (IMO) is through more manipulation by central governments, and there just isn't much more room for them to move the levers without big consequences. God help us if we really did have a major debt/financial crisis somewhere in the a first world power at the moment. The central banks shot all their arrows manipulating us out of the last one and don't have much of any left.
Debt is the new equity and, thanks to the Central Banks, it's massively underpricing risk in this environment.
#81
I know I sound like a broken record, but I totally disagree that it would take anything like that to cause a dramatic reduction in asset values in the U.S. We've had 'big resets' in the past with nothing remotely resembling that, and just because the risk factors/root causes are different this time, doesn't mean the end result won't be similar.
And I never said it would be rapid, or a large reset. The correction could just as easily manifest itself as an underperformance over the longer term. The only way asset values will continue to rise (IMO) is through more manipulation by central governments, and there just isn't much more room for them to move the levers without big consequences. God help us if we really did have a major debt/financial crisis somewhere in the a first world power at the moment. The central banks shot all their arrows manipulating us out of the last one and don't have much of any left.
Debt is the new equity and, thanks to the Central Banks, it's massively underpricing risk in this environment.
And I never said it would be rapid, or a large reset. The correction could just as easily manifest itself as an underperformance over the longer term. The only way asset values will continue to rise (IMO) is through more manipulation by central governments, and there just isn't much more room for them to move the levers without big consequences. God help us if we really did have a major debt/financial crisis somewhere in the a first world power at the moment. The central banks shot all their arrows manipulating us out of the last one and don't have much of any left.
Debt is the new equity and, thanks to the Central Banks, it's massively underpricing risk in this environment.
#82
And the only reason it doesn't appear there is inflation is because of the way it's measured and the fact that there are huge regional differences. My big four expenditures, housing, food, energy and health care have all increased dramatically in the past few years as this bubble has progressed. Of course, core inflation doesn't capture that, nor does it account for regional housing shocks.
#84
On that bolded part, we again disagree. IMO, that was not the real intent on the part of policymakers at all. It was to prop up asset prices, plain and simple.
And the only reason it doesn't appear there is inflation is because of the way it's measured and the fact that there are huge regional differences. My big four expenditures, housing, food, energy and health care have all increased dramatically in the past few years as this bubble has progressed. Of course, core inflation doesn't capture that, nor does it account for regional housing shocks.
And the only reason it doesn't appear there is inflation is because of the way it's measured and the fact that there are huge regional differences. My big four expenditures, housing, food, energy and health care have all increased dramatically in the past few years as this bubble has progressed. Of course, core inflation doesn't capture that, nor does it account for regional housing shocks.
Whatever the reason, it has not helped a portion of the population in the way that they want. It did not bring back $30 an hour jobs for under-skilled and under-educated labor. It did bring back meaningful industry in the communities that used to have them.
The four components that have increased for you have complicated connections to human labor in regards to production so none of this inflation seems to help the majority of people in the economy. Even healthcare, which is a service based product, hasn't been able to spread the gains across to the producers/servicers. There are so many ancillary costs associated with it that gets spread across so many industries that we can't make it work.
Look at IT law, it is crazy hot mess as we try to put a value figure on intellectual production. How do we value an idea? How do determine the exact origin of the production of that idea and reward it? Until we can effective come up with a solution to distribute wealth in a way that somehow encourages competition and compels sharing for the greater good, we will always have this crap.
In the end, you and I live in one the most affluent and opportunity filled areas of our country. We can have fun on forum boards talking about getting $150k toys and complain if we have to pay an additional premium to buy these toys. Even with the asset bubble, we hopefully have diversified investments, good health, good education, and good skills to further enrich ourselves or weather any economic storm.
I just want a new 6 speed GT3...
#85
I like leasing because my downside depreciation cost is fixed (absorbed but the manufacturer through a fixed residual) and I only pay sales tax on the part I use (e.g., tax on the 37.5% with a three year 12,000 lease on a GTS).
Of course financial discipline is always recommended.
#86
Anyone that think this hype will continue for the next 10 years is ignorant and doesn't have a rear view mirror.
Always been the problem with human greed. When things are up we get blindfolded and don't plan ahead for the bad times coming.
Every day I hear,
Money is cheap. Just borrow more and don't use your own money.
The opposite seems like a better idea. Pay off as much as you can when things are up and be depth free when it crashes.
Always been the problem with human greed. When things are up we get blindfolded and don't plan ahead for the bad times coming.
Every day I hear,
Money is cheap. Just borrow more and don't use your own money.
The opposite seems like a better idea. Pay off as much as you can when things are up and be depth free when it crashes.
#87
Read a few more articles yesterday about all the warning signs out there about how ridiculous valuations are at the moment and how similar the metrics are to the last crash, then watched the Big Short again last night just for good measure. Just need the bubble to keep floating for about 60 more days.
#88
Read a few more articles yesterday about all the warning signs out there about how ridiculous valuations are at the moment and how similar the metrics are to the last crash, then watched the Big Short again last night just for good measure. Just need the bubble to keep floating for about 60 more days.
#89
Totally agree and I'm not saying it's imminent or even that I really hope it happens, though I would welcome a slow return to a reasonably priced market. I also realize that the policy makers still have some power to manipulate the market for a while longer. Kinda like how the big banks manipulated the CDO market until they unloaded all their long positions during the last crash.
#90
Rennlist Member
Joined: May 2012
Posts: 13,427
Likes: 4,631
From: Mid-Atlantic (on land, not in the middle of the ocean)
So what's happening with mortgage interest rates? Why the spike up starting in November? Are the rates going to correct downwards before going back up again?