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The Everything Bubble Is Ready to Pop
- trebor 9y agoAre there any other sources corroborating this?
- jacquesc 9y agoI think it's just a prediction. There's always people predicting a downturn when things are frothy in the stock market. Inevitably someone gets it right and looks like a genius when things crash.
- trebor 9y agoWell, normal markets have a sawtooth growth pattern. It's only a matter of time till each of the discussed markets reaches bubble-proportions, then pops. History proves that with both the stock/real-estate markets. But I haven't heard anyone else predicting 5 simultaneous bubbles like this.
- bognition 9y agoThere are a lot of people calling bubble right now, but the number of people claiming a thing has 0 effect on how true a thing is. The better question to ask is: What evidence is there that suggests the metrics discussed have predictive power?
- trebor 9y agoProbably the same evidence for phrenology. I'm just skeptical that there's even 5 bubbles right now.
- sushisource 9y agoHow can there be an "index" bubble like at the bottom of the infographic. Who cares how the funds are invested? It's this exactly equivalent to saying there's a general stock market bubble, which he says earlier? Why does it matter if a large part of that money is being invested by index funds?
- goodoldboys 9y agoThe housing bubble part of the infographic made me laugh. Saying we’re in another housing bubble because prices have risen dramatically since the bottom of the last crash is laughable. We may very well be, but those numbers are more indicative of a recovery not a bubble, imo. In a lot of markets the median prices still are below what they were at the peak of the bubble 10 years ago, not even factoring in inflation. We’re probably due for a correction but not related to real estate, though home prices would certainly be affected.
- bitexploder 9y agoIf you smooth out the case shiller over the last 30 years the market on the whole is right where it would have been given typical growth without the crazy manipulation.
- freedomben 9y agoBubbles can be concentrated more heavily in higher growth areas, and there's been a lot of urbanization in the last 10 years, particularly tech heavy areas. I'm not saying I agree with his prediction, but I wouldn't dismiss it because some markets have lagged relative to others.
- Boxbot 9y agoIf housing prices were indeed inflated then there's little difference between a "recovery" and the bubble inflating again (assuming prices didn't crash to something well below reasonable value).
- audleman 9y agoSeattle home prices, which have seen a staggering 9-10% increase year over year, are actually only 20% higher than the peak of the 2007 bubble. That's 2% average growth per year over the last 10 years, which doesn't seem so alarming. Edit: source http://seattlebubble.com/blog/wp-content/uploads/2017/09/Case-ShillerHPI_Decline-From-Peak_2017-07.png http://seattlebubble.com/blog/wp-content/uploads/2017/09/Cas...
- csomar 9y agoWhat if it is just the USD losing value against assets? You know, inflation not reported correctly. If "everything" is bubbling, then relatively speaking prices are the same.
- freedomben 9y agoThis is a great point, one I wish more people would consider.
- rbehrends 9y agoThat'd be asset price inflation [1], not regular inflation (CPI). [1] https://en.wikipedia.org/wiki/Asset_price_inflation https://en.wikipedia.org/wiki/Asset_price_inflation
- csomar 9y agoThat would be true if it was only happening in the stock market. But if all assets are inflating: housing, stock market, cars, top wages, etc... then it'll affect consumer good at the other end.
- psyc 9y agoThis is exactly the first thing that occurred to me, but I'm far from an economist. It does seem that if literally everything was in a bubble, that would be equivalent to the dollar having less value. It would be wildly out of line with CPI inflation, and I'm not sure what that means. Perhaps consumer goods have just become very cheap. Alternatively, maybe "everything bubble" means a very high amount of capital investment.
- csomar 9y agoI don't think consumer goods are getting cheaper. The iPhone is getting more and more expensive (even not counting the iPhone X price bump). But should consumer goods (food/small items) be small in developed economies? Things like Rent, Transport (Car/Travel), Health Care, etc... should weigh more. Wait, these are all getting expensive or am I wrong?
- freedomben 9y agoThere's a really interesting book called "Fed Up" written by Danielle DiMartino Booth, who worked inside the Fed for a number of years during the last popping of a bubble. https://smile.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/0735211655?sa-no-redirect=1 https://smile.amazon.com/Fed-Up-Insiders-Federal-Reserve/dp/... She's done a number of interviews on podcasts as well. This one was decent: http://www.jasonstapleton.com/571-author-danielle-dimartino-booth-and-her-book-fed-up/ http://www.jasonstapleton.com/571-author-danielle-dimartino-...
- filereaper 9y agoThis infographic was seen recently, previous HN conversation here: https://news.ycombinator.com/item?id=15364537 https://news.ycombinator.com/item?id=15364537
- rednerrus 9y agoYou can't loan people huge sums of money with no interest and expect bubbles not to arise.
- randomfinn 9y agoTwo quotes from his newsletter: > Passive investing is all the rage. Buy SPY, make regular contributions, retire. That’s today’s wisdom, and it’s completely wrong. > Think like Warren Buffett for a second I don't know what he's trying to sell, but I wouldn't take any financial advice from him.
- greenyoda 9y ago> Think like Warren Buffett for a second Buffet is actually a fan of S&P 500 index funds, such as SPY: Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds https://news.ycombinator.com/item?id=15268726 https://news.ycombinator.com/item?id=15268726
- majewsky 9y ago> I don't know what he's trying to sell He's trying to sell that he can outperform a trivial algorithm. You know, because his income depends on it.