For those of you in the “this time it’s different” camp.
Here’s an article from Dec 20 2007. It could have been written today. We all know what happened in 2008. What about 2019? https://www.marketwatch.com/story/7-economic-warning-signs-for-2008
I’m waiting for the 2/10 year yield inversion
Predicts 9 out of every 7 recessions. Tough part is we’ve never had to unwind quantitative easing, which throws the old rules out the window.
QE was basically the US propping up home values. If we ever choose to really unwind QE, we might have a better sense of what the market thinks home prices should be.
Yeah, the small part that’s missing this time is the systematic & near complete failure of the entire financial system... other than that, they’re pretty much the same...
Thank you, Donald Trump.
did people lose their savings in 2008?
No. Just their PlayStation
Sort of. The market downturn forced many company layoffs. There are many Americans living paycheck to paycheck, others have only a few months to live off of savings. So when these people are laid off, they withdraw from savings and retirement accounts to make ends meet. There's also the home owners who many became underwater on their loans vs house value.
Clouding your economic predictions with politics and a sample size of 1 (2008 financial crisis). Thank you all for funding my portfolio of longs and shorts. If you want to look for signs of a repeat of 2008 how many people are underwater on their mortgage and over leveraged?
The article mentions 7 signs and they’re relatively universal. That’s the point of the post/article.
More importantly, how many banks & investment firms are over leveraged & all insured by a single insurer that would not be able to cover the swaps...
Love it. Under housing: "We believe the housing shock is about half over" said .. Lehman Brothers economist. It had barely begun!! I know, it's like dancing on a corpse, but the takeaway is, if stocks were gonna drop by 50% from here in next 6 months, no "respected person" will be telling you that.
Housing is local and long-term. With trillions in wealth creation in the Bay and Seattle, why would those go down over the long term? Wives still want to own houses.
@Roggik you misunderstand. I am not saying housing will be down 50% this time. But it drop by that much in most of the country in 2008 after this article (and countless others like it) was published.
There is a 100% chance there will be a recession in the future. The trick is the timing, magnitude, and how to profit from it. Ideas? Otherwise, this is just another dumb f’ing post.
All in on put options.....already late in some sectors like home builders who are down 40%
GE puts
Can you reference a paper from 2018 so we can compare
It's not December 20 yet.
www.fool.com/amp/investing/2018/08/28/6-signs-were-closer-to-the-next-recession-than-you.aspx Published in August and spot on