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Is there strong evidence yet that this is a 2010-bubble-pop vs a 2020-bubble-pop? The last few years were particularly nuts in a lot of speculative markets. Big

Is there strong evidence yet that this is a 2010-bubble-pop vs a 2020-bubble-pop? The last few years were particularly nuts in a lot of speculative markets. Big difference between back to normal or even a bit slowed from 2019 and a huge downturn, but I'm not seeing indicators yet that things are gonna fall off a cliff. People are still spending a lot of money and demand for a lot of things is still high - that might not continue, but I don't know what people are basing the "worst in a century!!" type reactions off. Edit: the worst case certainly might come true, but people are pattern matching on like n=1 scenarios here. That's why people have been predicting collapse as long as I've been alive... but the more people are prone to jump to conclusions and panic immediately, the more it might be self-fulfilling.

daxfohl 4y ago
Haha yeah I think I've probably predicted collapse annually since like 2010. So either you can safely ignore me, or we're due for a 12x apocalypse.
Jensson 4y ago
> People are still spending a lot of money and demand for a lot of things is still high Yes, that is how you create a gigantic crash. Look at this graph, click 25 years, does this look to go in the right direction? The US economy is shifting more and more towards consumption of imported goods instead of producing things itself, this isn't sustainable. You see how the 2008 crash got the curve back and track, a similar thing should happen this time around as well. https://tradingeconomics.com/united-states/balance-of-trade https://tradingeconomics.com/united-states/balance-of-trade
- majormajor 4y ago
  I mean, the crash, by definition, is when the demand stops, yeah? "A crash is coming because currently demand is still high" is a bit incomplete as far as theories go. That graph matches my original point about the last two years being very different from 2010-2020 - but it doesn't tell me anything about where to expect things to "correct" to or whether or not such a correction would be good or bad - a lot of people would love to see a US spending shift back to spend on services/experiences rather than manufactured goods. If you look at the 2000 dot com bubble, for instance, that line didn't move as much as in the 2008 crash. Does that tell us that tech valuations popping doesn't affect other things as much as other crashes might? I don't know - but I don't believe you can know for sure either on knowing what'll happen next. We've been defying predictions for years! Is that crazy luck, or is it that the predictions are extrapolating from small samples against an ever-changing background and so basically just throwing darts? Everything is unprecedented, both good and bad, at this point in human history.
  - Jensson 4y ago
    Yeah, it could play out differently. But it could also play out to be the largest crash in American history. We don't know, so don't bet anything important on it not being a crash. Worst case the graph tells the story of the rest of the world shifting their industries to be less dependent on the American one, ending American dominance, that is how this would lead to the biggest crash in American history. Best case USA just slowly starts to shift back to producing things internally and creating new goods others wants to import and things stabilize. We will see what happens, but it is very rare for curves to shift without huge consequences.
- woobilicious 4y ago
  You're looking an a macro economic indicator that only politicians seem to care about, Most other countries don't even bother to measure it. Trade deficit is just as much an indicator for foreign sentiment to hold US cash, as it is to import non-US made stuff. All that indicator says is that consumer behavior changes during a recession. You can argue the same thing with private debt. https://tradingeconomics.com/united-states/private-debt-to-gdp https://tradingeconomics.com/united-states/private-debt-to-g... https://www.econlib.org/library/Columns/y2017/KleinBoudreauxtradedeficits.html https://www.econlib.org/library/Columns/y2017/KleinBoudreaux...

daxfohl 4y ago

Haha yeah I think I've probably predicted collapse annually since like 2010. So either you can safely ignore me, or we're due for a 12x apocalypse.

Jensson 4y ago

> People are still spending a lot of money and demand for a lot of things is still high Yes, that is how you create a gigantic crash. Look at this graph, click 25 years, does this look to go in the right direction? The US economy is shifting more and more towards consumption of imported goods instead of producing things itself, this isn't sustainable. You see how the 2008 crash got the curve back and track, a similar thing should happen this time around as well. https://tradingeconomics.com/united-states/balance-of-trade https://tradingeconomics.com/united-states/balance-of-trade

majormajor 4y ago
I mean, the crash, by definition, is when the demand stops, yeah? "A crash is coming because currently demand is still high" is a bit incomplete as far as theories go. That graph matches my original point about the last two years being very different from 2010-2020 - but it doesn't tell me anything about where to expect things to "correct" to or whether or not such a correction would be good or bad - a lot of people would love to see a US spending shift back to spend on services/experiences rather than manufactured goods. If you look at the 2000 dot com bubble, for instance, that line didn't move as much as in the 2008 crash. Does that tell us that tech valuations popping doesn't affect other things as much as other crashes might? I don't know - but I don't believe you can know for sure either on knowing what'll happen next. We've been defying predictions for years! Is that crazy luck, or is it that the predictions are extrapolating from small samples against an ever-changing background and so basically just throwing darts? Everything is unprecedented, both good and bad, at this point in human history.
- Jensson 4y ago
  Yeah, it could play out differently. But it could also play out to be the largest crash in American history. We don't know, so don't bet anything important on it not being a crash. Worst case the graph tells the story of the rest of the world shifting their industries to be less dependent on the American one, ending American dominance, that is how this would lead to the biggest crash in American history. Best case USA just slowly starts to shift back to producing things internally and creating new goods others wants to import and things stabilize. We will see what happens, but it is very rare for curves to shift without huge consequences.
woobilicious 4y ago
You're looking an a macro economic indicator that only politicians seem to care about, Most other countries don't even bother to measure it. Trade deficit is just as much an indicator for foreign sentiment to hold US cash, as it is to import non-US made stuff. All that indicator says is that consumer behavior changes during a recession. You can argue the same thing with private debt. https://tradingeconomics.com/united-states/private-debt-to-gdp https://tradingeconomics.com/united-states/private-debt-to-g... https://www.econlib.org/library/Columns/y2017/KleinBoudreauxtradedeficits.html https://www.econlib.org/library/Columns/y2017/KleinBoudreaux...