4 ms·

It's going to be hard for the market to correct while (1) rates stay low, (2) housing demand > housing supply, (3) wages stay high enough to support buying. It

• nicoburns 5y ago
  I'm rather anticipating (1) collapsing in the next couple of years. It's possible governments will try to put it off, but it's going to have to happen at some point.
  • runako 5y ago
    People keep saying this, and perhaps they will be proven correct at some point. But it brings to mind the economics maxim that "in the long run, we're all dead." Japan's interest rate has not exceeded 0.5% for the last 25 years: https://tradingeconomics.com/japan/interest-rate https://tradingeconomics.com/japan/interest-rate Ours hasn't been in a "normal" range for almost 15 years. At what point are low interest rates just the backdrop of our time here rather than something we should expect to change? Would we assign a higher probability of (say) the USSR reconstituting or the Euro becoming the global reserve currency or US interest rates going back to a more normal rate like 6%? If all are improbable, why assert that one must happen at some point?
    • linksnapzz 5y ago
      Another economics maxim: "Things that obviously can't go on forever; will go on for far longer than you would believe...but when they stop, they also stop faster than you'd think." Also: "The market can remain irrational far longer than you can remain solvent".
  • ethbr0 5y ago
    What do you see leading to the collapse? At least in the US, mortgage debt only recently hit 2008 levels in absolute terms (i.e. not adjusting for 12 years of population growth), which doesn't seem overly burdensome.
• cinntaile 5y ago
  If financial crises could be predicted we wouldn't be in that mess every x years.