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> There’s Trouble Brewing > The clock is ticking > a reckoning > full-blown financial crisis I've been hearing about this since at-least 2021. How long wil

> There’s Trouble Brewing > The clock is ticking > a reckoning > full-blown financial crisis I've been hearing about this since at-least 2021. How long will it take for this 'crisis' to come to fruition.

gjsman-1000 2y ago
Some things are like pregnancy. Complaining you’ve been waiting 9 months and 2 weeks, therefore it will be fine, is incorrect logic.
- lazide 2y ago
  What about 10 months in?
  - gjsman-1000 2y ago
    If I just doubled down and said that 10 months of nothing happening proves there’s no greater likelihood of something happening now, then yes, it’s broken.
    - lazide 2y ago
      But something is happening, just maybe not what is being predicted eh? For instance in commercial real estate, vacancies are (and for some classes have been) through the roof for a long time. It’s unlikely this is entirely a nothing burger.
thejazzman 2y ago
To be fair, the 2008 crash was predicted for awhile before it happened Not saying you're right or wrong but that's not a sound basis for judgment
- cube2222 2y ago
  > was predicted for awhile before it happened As were the other 15 crashes that didn’t happen. Though you may of course try to identify possible triggers early and try to defuse them in advance.
nine_zeros 2y ago
> I've been hearing about this since at-least 2021. How long will it take for this 'crisis' to come to fruition. This crisis has been ongoing this year like a slow burn. Investors directly related to these assets know they are making heavy losses But - this is a full blown crisis in a small segment of real estate of only large cities. As such, this is affecting only a small fraction of investor portfolios. Moreover, the bank lenders who engaged in CRE lending have the backing of a very active Federal Reserve - see SVB. This is not going to have anywhere close to the kind of impact the US housing crisis had in 2008.
gedy 2y ago
Sure, but thinking back to 2008, the first clear signs of trouble were in like mid 2005, I don't think that was a case of broken clocks being correct twice a day.
- galdosdi 2y ago
  I just watched the 2005 Jim Carrey movie Fun with Dick and Jane, about a nuclear family whose father loses his job, pension, and house working at a place like Enron or WorldCom while a CEO resembling Ken Lay played by Alec Baldwin steals the whole pension fund. Watching it yesterday was a shocker though -- I had forgotten (having been so young) that the 2008 financial crisis had roots so much earlier. But then I reminisced a little more: this was based on what I recall actually going on at the time. I was a kid at the time, who got his first minimum wage high school job working side by side with a lady who was there because her husband had his pension stolen at WorldCom. A certain class of elites really got away with a lot then, and were never held to account. Instead, their elite grifting culture just spread wider and wider. We tried in 2011. If you were alive then, you know how big Occupy Wall Street was getting. You remember how big Bernie was. But they figured out how to use social media to divide us and redirect our anger into right vs left politics instead of ultrarich crooks vs everybody else working hard. Even I had been starting to forget until Jim Carrey shook me out of my millenial reverie. The youngest kids if they have any political consciousness now it's solely channeled safely into the left vs right pattern, unable to effect meaningful change to the robber baron economy. Smartphones and recommendation algorithms truly were a powerful technology that generated great value after all-- for just a very small elite that can use it to hold off any accountability for their monstrous crimes.
JumpCrisscross 2y ago
> I've been hearing about this since at-least 2021. How long will it take for this 'crisis' to come to fruition Crises foreseen and dealt with can be slowly deflated. If growth stays on track that seems plausible for CRE debt.
neffy 2y ago
Hard to say. A well run bank with no bad debt on its books can absorb ~0.75% losses on its total lending in a year from income, without hitting any of the regulatory limits that would start to curtail lending. From the article, the US banking system is already above that, so it is in trouble. From that point on, it's a case of how well the banks can push the can down the road, absorbing small percentages of bad debt every year from profits, versus being forced into insolvency by the FDIC. There is a lot of leeway in this, as long as the bank still has revenue. During much of the eighties the entire US banking system was technically insolvent, but the Fed essentially just papered over it. The Italian and Japanese banking systems managed this for decades - its only an actual loss when the bank recognises it after all, so you get the zombie bank phenomenon. There is a much better understanding since 2008 of how not to crash a banking system, so I suspect this will continue to be managed out. But if any other sector goes down, or Trump gets elected (since his policies would blow up the entire financial system if actually enacted), then all bets would of course be off.

gjsman-1000 2y ago

Some things are like pregnancy. Complaining you’ve been waiting 9 months and 2 weeks, therefore it will be fine, is incorrect logic.

lazide 2y ago
What about 10 months in?
- gjsman-1000 2y ago
  If I just doubled down and said that 10 months of nothing happening proves there’s no greater likelihood of something happening now, then yes, it’s broken.
  - lazide 2y ago
    But something is happening, just maybe not what is being predicted eh? For instance in commercial real estate, vacancies are (and for some classes have been) through the roof for a long time. It’s unlikely this is entirely a nothing burger.

thejazzman 2y ago

To be fair, the 2008 crash was predicted for awhile before it happened Not saying you're right or wrong but that's not a sound basis for judgment

cube2222 2y ago
> was predicted for awhile before it happened As were the other 15 crashes that didn’t happen. Though you may of course try to identify possible triggers early and try to defuse them in advance.

nine_zeros 2y ago

> I've been hearing about this since at-least 2021. How long will it take for this 'crisis' to come to fruition. This crisis has been ongoing this year like a slow burn. Investors directly related to these assets know they are making heavy losses But - this is a full blown crisis in a small segment of real estate of only large cities. As such, this is affecting only a small fraction of investor portfolios. Moreover, the bank lenders who engaged in CRE lending have the backing of a very active Federal Reserve - see SVB. This is not going to have anywhere close to the kind of impact the US housing crisis had in 2008.

gedy 2y ago

Sure, but thinking back to 2008, the first clear signs of trouble were in like mid 2005, I don't think that was a case of broken clocks being correct twice a day.

galdosdi 2y ago
I just watched the 2005 Jim Carrey movie Fun with Dick and Jane, about a nuclear family whose father loses his job, pension, and house working at a place like Enron or WorldCom while a CEO resembling Ken Lay played by Alec Baldwin steals the whole pension fund. Watching it yesterday was a shocker though -- I had forgotten (having been so young) that the 2008 financial crisis had roots so much earlier. But then I reminisced a little more: this was based on what I recall actually going on at the time. I was a kid at the time, who got his first minimum wage high school job working side by side with a lady who was there because her husband had his pension stolen at WorldCom. A certain class of elites really got away with a lot then, and were never held to account. Instead, their elite grifting culture just spread wider and wider. We tried in 2011. If you were alive then, you know how big Occupy Wall Street was getting. You remember how big Bernie was. But they figured out how to use social media to divide us and redirect our anger into right vs left politics instead of ultrarich crooks vs everybody else working hard. Even I had been starting to forget until Jim Carrey shook me out of my millenial reverie. The youngest kids if they have any political consciousness now it's solely channeled safely into the left vs right pattern, unable to effect meaningful change to the robber baron economy. Smartphones and recommendation algorithms truly were a powerful technology that generated great value after all-- for just a very small elite that can use it to hold off any accountability for their monstrous crimes.

JumpCrisscross 2y ago

> I've been hearing about this since at-least 2021. How long will it take for this 'crisis' to come to fruition Crises foreseen and dealt with can be slowly deflated. If growth stays on track that seems plausible for CRE debt.

neffy 2y ago

Hard to say. A well run bank with no bad debt on its books can absorb ~0.75% losses on its total lending in a year from income, without hitting any of the regulatory limits that would start to curtail lending. From the article, the US banking system is already above that, so it is in trouble. From that point on, it's a case of how well the banks can push the can down the road, absorbing small percentages of bad debt every year from profits, versus being forced into insolvency by the FDIC. There is a lot of leeway in this, as long as the bank still has revenue. During much of the eighties the entire US banking system was technically insolvent, but the Fed essentially just papered over it. The Italian and Japanese banking systems managed this for decades - its only an actual loss when the bank recognises it after all, so you get the zombie bank phenomenon. There is a much better understanding since 2008 of how not to crash a banking system, so I suspect this will continue to be managed out. But if any other sector goes down, or Trump gets elected (since his policies would blow up the entire financial system if actually enacted), then all bets would of course be off.