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That's a fair point, but most of those Mortgage assets have already lost 70-80% of their value. Look at the REM ETF. So are you making the argument that mortg

That's a fair point, but most of those Mortgage assets have already lost 70-80% of their value. Look at the REM ETF. So are you making the argument that mortgage-centric stocks are going to go to zero? It should be no surprise that Tech/NASDAQ is doing well since both individuals and companies are investing more in tech during this crisis, while industrial/travel/etc are all still down substantially. Maybe the banks will take a larger hit, but the overall market has already priced in what you are saying.

anoncareer0212 6y ago
The divide here is what you're calling "doing well" is "all time highs" and tech is "cutting edge retail/ads".
zzzzzzzza 6y ago
reits aren't doing well... but you are missing that credit/debt drives the economy not the stock market. And land values are actually the biggest store of wealth... and house prices haven't even registered any effects yet.
- lonelappde 6y ago
  I know you meant land when you said "house prices", but it helps to keep using the correct term to avoid misleading confusion. Houses are terrible money pits. Land (in an economically active location) is a scarce valuable resource. This is important because people overbuild SFH not understanding the expenses, and people ruin their financial lives buying mobile or fake-mobile homes to put on rented land, not understanding that the land is where all the value is.
commandlinefan 6y ago
> already lost 70-80% of their value And don’t forget, property taxes are based on their value as of Jan. 1 - huge, unpayable tax bills are coming this year, too.
- toomuchtodo 6y ago
  Cook County in Illinois is reassessing property taxes for commercial real estate based on post pandemic valuations. They’re already deep in the red financially, but there is some relief for the property owner.
  - Spooky23 6y ago
    Reassessments just change the way the pie is divvied up. It makes things more equitable, it isn’t a relief unless the assessment rolls are out of whack. (Like California)
  - vkou 6y ago
    I'm glad that taxpayers who work for a living will end up subsidizing property owners, who have other people work for their living.
    - toomuchtodo 6y ago
      I too am dismayed. Short of being actively engaged in the political process, your only other option is to remove yourself from the jurisdiction.
nostrademons 6y ago
The risk is in financial contagion. The economy can handle individual firms going bankrupt - they'll just get replaced by other firms. The problem is when creditors start taking haircuts and going bankrupt themselves. At that point, things that people thought were secure assets (like, say, their bank accounts) suddenly get called into question, and markets lock up because of panic. In 2008 we thought that the problem was contained to the subprime housing market, and once the Fed started supporting that market people breathed a sigh of relief and there was a rally and recovery from March-May. It wasn't until first Bear Stearns and then Lehman Brothers failed that people realized we were in a crisis. These were centuries-old, multi-hundred-billion-dollars institutions. The idea that they could cease to exist was unthinkable to anyone not actively looking at their balance sheet and doing the math, which is why there was such a panic when they did cease to exist.
- sigstoat 6y ago
  > At that point, things that people thought were secure assets (like, say, their bank accounts) what possible justification is there to be worried about their FDIC-insured bank accounts? even sticking that in as an off-hand comment is spreading FUD.
  - cstejerean 6y ago
    This is describing what happened in 2008. The FDIC limit was only $100,000 but many people assumed they had no reason to worry about the security of higher balances in excess of the FDIC limits. So when big stable banks started to fail or were at risk of failing that caught folks by surprise. As a result: > The Emergency Economic Stabilization Act of 2008 is signed on Oct. 3, 2008. This temporarily raises the basic limit of federal deposit insurance coverage from $100,000 to $250,000 per depositor. The limit was subsequently permanently raised. So with a limit of $250,000 there’s less reason to worry about bank accounts today. But the important point remains, what causes panic is when things that everyone assumes to be safe turn out to no longer be so safe after all.
    - lonelappde 6y ago

anoncareer0212 6y ago

The divide here is what you're calling "doing well" is "all time highs" and tech is "cutting edge retail/ads".

zzzzzzzza 6y ago

reits aren't doing well... but you are missing that credit/debt drives the economy not the stock market. And land values are actually the biggest store of wealth... and house prices haven't even registered any effects yet.

lonelappde 6y ago
I know you meant land when you said "house prices", but it helps to keep using the correct term to avoid misleading confusion. Houses are terrible money pits. Land (in an economically active location) is a scarce valuable resource. This is important because people overbuild SFH not understanding the expenses, and people ruin their financial lives buying mobile or fake-mobile homes to put on rented land, not understanding that the land is where all the value is.

commandlinefan 6y ago

> already lost 70-80% of their value And don’t forget, property taxes are based on their value as of Jan. 1 - huge, unpayable tax bills are coming this year, too.

toomuchtodo 6y ago
Cook County in Illinois is reassessing property taxes for commercial real estate based on post pandemic valuations. They’re already deep in the red financially, but there is some relief for the property owner.
- Spooky23 6y ago
  Reassessments just change the way the pie is divvied up. It makes things more equitable, it isn’t a relief unless the assessment rolls are out of whack. (Like California)
- vkou 6y ago
  I'm glad that taxpayers who work for a living will end up subsidizing property owners, who have other people work for their living.
  - toomuchtodo 6y ago
    I too am dismayed. Short of being actively engaged in the political process, your only other option is to remove yourself from the jurisdiction.

nostrademons 6y ago

The risk is in financial contagion. The economy can handle individual firms going bankrupt - they'll just get replaced by other firms. The problem is when creditors start taking haircuts and going bankrupt themselves. At that point, things that people thought were secure assets (like, say, their bank accounts) suddenly get called into question, and markets lock up because of panic. In 2008 we thought that the problem was contained to the subprime housing market, and once the Fed started supporting that market people breathed a sigh of relief and there was a rally and recovery from March-May. It wasn't until first Bear Stearns and then Lehman Brothers failed that people realized we were in a crisis. These were centuries-old, multi-hundred-billion-dollars institutions. The idea that they could cease to exist was unthinkable to anyone not actively looking at their balance sheet and doing the math, which is why there was such a panic when they did cease to exist.

sigstoat 6y ago
> At that point, things that people thought were secure assets (like, say, their bank accounts) what possible justification is there to be worried about their FDIC-insured bank accounts? even sticking that in as an off-hand comment is spreading FUD.
- cstejerean 6y ago
  This is describing what happened in 2008. The FDIC limit was only $100,000 but many people assumed they had no reason to worry about the security of higher balances in excess of the FDIC limits. So when big stable banks started to fail or were at risk of failing that caught folks by surprise. As a result: > The Emergency Economic Stabilization Act of 2008 is signed on Oct. 3, 2008. This temporarily raises the basic limit of federal deposit insurance coverage from $100,000 to $250,000 per depositor. The limit was subsequently permanently raised. So with a limit of $250,000 there’s less reason to worry about bank accounts today. But the important point remains, what causes panic is when things that everyone assumes to be safe turn out to no longer be so safe after all.
  - lonelappde 6y ago