Author Topic: The Great Crash 10 Years Later  (Read 2523 times)

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Offline irvinehomeowner

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Re: The Great Crash 10 Years Later
« Reply #15 on: October 12, 2018, 06:55:00 AM »
So is this Dow instability the paired event?

Stay tuned.
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Offline Mety

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Re: The Great Crash 10 Years Later
« Reply #16 on: October 12, 2018, 12:06:55 PM »
So when the 90s real estate pop happened... was there any other event? If I recall (which now is suspect), interest rates were pretty high... did the drop cause rates to fall (I think they did... obv not to current levels)?

IIRC, there was a recession and housing market took a hit. 

And the mortgage was indeed high.  I bought my first home in '94 and my rate was 9.5%.
Just out of curiosity, for 9.5% rate with '94' home prices, how much was the mortgage monthly payment at that time?

Around $1800 for $210k mortgage.  $1800 was not much by today’s standard but that was a big deal for me back in 1994 and I was just started working with a tiny starting salary.

In 1999, I had a mortgage of 270K @ 8.75 my mortgage was 2200 with no PMI, I nearly faint when signing my mortgage shackles Imagine that.

Let's put those numbers in today's inflation standard.
Those numbers $1800 in '94 or $2200 in '99 will result around $3200 by 2018's inflation calculation. Now with a current interest rate about 4.5% with 20% down payment, a $850k home will have $3200 mortgage payment. So your 8% or 9.5% interest rates back then are not so crazy numbers if you compare with today's inflation.

Now the question is - has the home price gone up too far or is it the interest rate that's risen too high? Or both? Or does everything sound reasonable to you as of now?

#fepo

Offline Mety

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Re: The Great Crash 10 Years Later
« Reply #17 on: October 12, 2018, 03:39:29 PM »
So when the 90s real estate pop happened... was there any other event? If I recall (which now is suspect), interest rates were pretty high... did the drop cause rates to fall (I think they did... obv not to current levels)?

IIRC, there was a recession and housing market took a hit. 

And the mortgage was indeed high.  I bought my first home in '94 and my rate was 9.5%.
Just out of curiosity, for 9.5% rate with '94' home prices, how much was the mortgage monthly payment at that time?

Around $1800 for $210k mortgage.  $1800 was not much by today’s standard but that was a big deal for me back in 1994 and I was just started working with a tiny starting salary.

In 1999, I had a mortgage of 270K @ 8.75 my mortgage was 2200 with no PMI, I nearly faint when signing my mortgage shackles Imagine that.

Let's put those numbers in today's inflation standard.
Those numbers $1800 in '94 or $2200 in '99 will result around $3200 by 2018's inflation calculation. Now with a current interest rate about 4.5% with 20% down payment, a $850k home will have $3200 mortgage payment. So your 8% or 9.5% interest rates back then are not so crazy numbers if you compare with today's inflation.

Now the question is - has the home price gone up too far or is it the interest rate that's risen too high? Or both? Or does everything sound reasonable to you as of now?

Forgot the most important fact:
$210k from ‘94 or $270k from ‘99 home price should be around $400k in 2018’s inflation.

#fepo

Offline OCAgentGold

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Re: The Great Crash 10 Years Later
« Reply #18 on: November 13, 2018, 12:11:30 PM »
I have officially shorted the S&P 2 weeks ago. Purchased SH and gonna hold on for the ride down.
Very good move... it wont be the slaughter of 07, but there is money to be made now on the shorts.

Offline rickr

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Re: The Great Crash 10 Years Later
« Reply #19 on: November 20, 2018, 03:27:40 PM »
I have officially shorted the S&P 2 weeks ago. Purchased SH and gonna hold on for the ride down.
Very good move... it wont be the slaughter of 07, but there is money to be made now on the shorts.

Funny thing is everyone I talk to still thinks we have 1-2 years of a bull market to go. I don't believe it. My company does business with a lot of top tier OEM's across all industries. Business has completely dried up on the commercial front. Especially that big "fruit" company (We are not allowed to use their name). Aerospace/Defense work is still strong but that is only because Defense budget has expanded so much and Tier 1 OEM's are trying to get it while the business is still there.

Housing Market Softness + Inflation + Rising Rates + Tarrifs + Trade Wars + Crazy President + Corporate Debt + .... = Strong Recession

I guess I must be crazy. 10 year bull run has to eventually end. Sorry, not trying to be schadenfreude but expressing my opinion.




Offline Irvinecommuter

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Re: The Great Crash 10 Years Later
« Reply #20 on: November 20, 2018, 03:50:49 PM »
I have officially shorted the S&P 2 weeks ago. Purchased SH and gonna hold on for the ride down.
Very good move... it wont be the slaughter of 07, but there is money to be made now on the shorts.

Funny thing is everyone I talk to still thinks we have 1-2 years of a bull market to go. I don't believe it. My company does business with a lot of top tier OEM's across all industries. Business has completely dried up on the commercial front. Especially that big "fruit" company (We are not allowed to use their name). Aerospace/Defense work is still strong but that is only because Defense budget has expanded so much and Tier 1 OEM's are trying to get it while the business is still there.

Housing Market Softness + Inflation + Rising Rates + Tarrifs + Trade Wars + Crazy President + Corporate Debt + .... = Strong Recession

I guess I must be crazy. 10 year bull run has to eventually end. Sorry, not trying to be schadenfreude but expressing my opinion.

Talking heads on CNBC were discussing chip companies being hurt by a downturn in data center business...that is a definitely a red flag.

Offline Compressed-Village

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Re: The Great Crash 10 Years Later
« Reply #21 on: November 20, 2018, 04:19:34 PM »
Turmoil is good. Buy when it goes on sale. Although, there are more down to comes.

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Re: The Great Crash 10 Years Later
« Reply #22 on: November 20, 2018, 04:21:44 PM »
I have officially shorted the S&P 2 weeks ago. Purchased SH and gonna hold on for the ride down.
Very good move... it wont be the slaughter of 07, but there is money to be made now on the shorts.

Funny thing is everyone I talk to still thinks we have 1-2 years of a bull market to go. I don't believe it. My company does business with a lot of top tier OEM's across all industries. Business has completely dried up on the commercial front. Especially that big "fruit" company (We are not allowed to use their name). Aerospace/Defense work is still strong but that is only because Defense budget has expanded so much and Tier 1 OEM's are trying to get it while the business is still there.

Housing Market Softness + Inflation + Rising Rates + Tarrifs + Trade Wars + Crazy President + Corporate Debt + .... = Strong Recession

I guess I must be crazy. 10 year bull run has to eventually end. Sorry, not trying to be schadenfreude but expressing my opinion.

Talking heads on CNBC were discussing chip companies being hurt by a downturn in data center business...that is a definitely a red flag.

How the Crypto Collapse is Hurting Nvidia

https://www.investopedia.com/news/how-crypto-collapse-hurting-nvidia/



Offline fortune11

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Re: The Great Crash 10 Years Later
« Reply #23 on: November 20, 2018, 06:56:57 PM »
Do a simple test

What were you reading and thinking back in December 2015 — January 2016

Were you thinking the cycle has gone on for 8 years , so it has to end ? Did it end back then ?

Or is 10 years like a nice round number so it has to end now ?

Good news comes together and so does bad news (misery loves company)

Lot of things you read the talking heads say right now could have applied to any point in time in the past 2 years .

Thing is , they didn’t have a receptive audience back then since everyone was making money and now they are not .

Trump is  crazy but there is only so much damage he he can do . The federal reserve is doing more damage now by singlehandedly leading us into an asset price collapse. Are people aware how much higher interest rates are in the US compared to rest of the developed world ?

If they are smart they will pause after hiking in December . If they continue with their plan for 3-4  0.25 percent each hikes next year , we could be looking at a fed induced recession


Offline Irvinecommuter

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Re: The Great Crash 10 Years Later
« Reply #24 on: November 21, 2018, 01:43:46 PM »
Do a simple test

What were you reading and thinking back in December 2015 — January 2016

Were you thinking the cycle has gone on for 8 years , so it has to end ? Did it end back then ?

Or is 10 years like a nice round number so it has to end now ?

Good news comes together and so does bad news (misery loves company)

Lot of things you read the talking heads say right now could have applied to any point in time in the past 2 years .

Thing is , they didn’t have a receptive audience back then since everyone was making money and now they are not .

Trump is  crazy but there is only so much damage he he can do . The federal reserve is doing more damage now by singlehandedly leading us into an asset price collapse. Are people aware how much higher interest rates are in the US compared to rest of the developed world ?

If they are smart they will pause after hiking in December . If they continue with their plan for 3-4  0.25 percent each hikes next year , we could be looking at a fed induced recession

I think he can do a lot more damage...Michael Lewis said in an interview that Trump could elect to default on Treasury Bonds because he really like to use BKs and defaults as leverage position.  Imagine a world where T-Bills are no longer 100% reliable.

Offline Kings

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Re: The Great Crash 10 Years Later
« Reply #25 on: November 22, 2018, 07:36:44 AM »
Do a simple test

What were you reading and thinking back in December 2015 — January 2016

Were you thinking the cycle has gone on for 8 years , so it has to end ? Did it end back then ?

Or is 10 years like a nice round number so it has to end now ?

Good news comes together and so does bad news (misery loves company)

Lot of things you read the talking heads say right now could have applied to any point in time in the past 2 years .

Thing is , they didn’t have a receptive audience back then since everyone was making money and now they are not .

Trump is  crazy but there is only so much damage he he can do . The federal reserve is doing more damage now by singlehandedly leading us into an asset price collapse. Are people aware how much higher interest rates are in the US compared to rest of the developed world ?

If they are smart they will pause after hiking in December . If they continue with their plan for 3-4  0.25 percent each hikes next year , we could be looking at a fed induced recession

I think he can do a lot more damage...Michael Lewis said in an interview that Trump could elect to default on Treasury Bonds because he really like to use BKs and defaults as leverage position.  Imagine a world where T-Bills are no longer 100% reliable.

sounds like fear mongering to me.  but after all, a trump-induced recession sounds much better than a fed-induced recession  :)

 

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