Housing Bubble involved people buying long term assets (houses) with credit in part for speculation. When prices reached a peak people refused to sell because their neighbor had sold for a little more. Many are down 30-40%, hoping for a bottom. Wouldn’t it be more prudent to sell and become a renter if there was the choice to do so and the valuations dictated it? The Stock Market bubble involves people buying long term assets with equity in part for speculation. When prices reached a peak people refused to sell because the stock was sold in the past for a little more. Many are down 30-40%, hoping for a bottom. Wouldn’t it be efficient to sell and wait things out if there was the choice to do so and the valuations dictated it? Another similarity: even though a house or stock sold for X amount, it’s only the last seller. The rest is “paper” wealth. If everyone sold their house or stock at the same time, the price would be driving way down. One final one: Doesn’t the Real Estate economists predicting real estate couldn’t go down anymore sound like the 401k companies. Trouting out history, etc. Now as these two bubbles unfold I bring you the next crisis… Credit Cards. People spent money using their house… then the stock market/401k (many people stopped contributions/took out). Now it’s the last resort… Credit Cards. As people lose their jobs if their credit gets cut, they are out there. In the meantime spending will continue going down hurting companies who will add to the layoff rolls till a TRUE BOTTOM is reached. This WILL BE REALLY BAD… My advice. Have a good 6 months cash on hand and do a night class or two to add a skill (Excel, VB, etc). If you need a new job, it may be the difference between an interview and missing out.
One last thing. Houses can be diluted by more property taxes. Stocks are now being diluted by numerous additional offerings. So 1 share of stock isn’t exactly 1 share…
Have you been drinking?
Wow dude. What kind of skill are you working on? I know my job is fine . . .
I could go for a brush up on xcel. Or, not.
JoeyDVivre Wrote: ------------------------------------------------------- > Have you been drinking? lol!
Just saying… Look at Nikkei from 1989 to now… There can be a slight bounce back… But fundamentals whether it’s housing (avg salary X N years) or stocks (P/E and dividends) matter.
Also public pensions are coming due… They have been hidden by accounting… http://paul.kedrosky.com/archives/2008/10/07/cbo_on_pension.html 2 trillion in losses…
Random tangent - but are you a trainer in one of the gyms here in the city?
i did interview today and guy did not have a pleased look when I said I didnt do much macros. I’ll be doing macro/VBA ramp up after CAIA 2 and CFA 2.
Still think I’m drunk as the Nikkei goes does nearly 10%? I was a trainer to pay my way through undergrad…