Infographic: The Everything Bubble Is Ready to Pop(mauldineconomics.com) |
Infographic: The Everything Bubble Is Ready to Pop(mauldineconomics.com) |
Also not proof of "a bubble", but more interesting to me are the four metrics presented graphically here https://isthestockmarketgoingtocrash.com/
And it's fun to watch those astronomically large debt numbers increasing in real time.
Even assuming all that, I'm not sure this site could ever convince me it is a 'problem', given the clear purpose of this site is to sell me something to fix that 'problem'.
That said, this infographic is missing a lot of context, and basically any sort of rigorous analysis.
I believe we are in a bubble, because the valuations of a lot of companies defy all real logic, and for a number of other reasons I won't get into because it will just devolve into an argument about what I believe. But I still find this infographic lacking.
All it takes is the right high profile failure(s) and investors get spooked. They stop investing, which causes more collapses of companies that can find investment. They pull their money out, the selling undermines market confidence and things go kablooie. That's just one example of how it could happen based on how it did happen before, not a prediction of what will happen.
The valuations are based on confidence, if the confidence is reduced (not even entirely gone) it can start a downturn. That can go fast or slow.
If everything is in a bubble, what will pop the bubble? An interesting take is the baby boomers hit max earning power at 55 and buy a second house, but then around 65 or 70 they realize the don't need either big house and they downsize (which will create downward pressure on housing) and they want to annuitize their assets (sell non-dividend paying stocks, etc)
My initial assumption was that you'd see a glut of housing because of this (Boomers unloading real estate to downsize), pushing down home prices, helping first time home buyers. I've recently updated my assumption: Boomers are going to hold onto their property as long as possible as rentals. People are seeking out returns where ever they can, which is going to make this intergenerational housing problem drag on for at least another decade or two.
Housing supply metrics:
https://www.usatoday.com/story/money/2017/10/23/heres-why-ho...
To call something a bubble you need to identify a market that's "bubbling", a whole area or sector. otherwise you've only identified a few assets.
housing market is more sensible, but bubble on the housing market have been announced for the last thirty years, and prices kept climbing. everywhere. maybe it's not a symptom of a bubble, but just that there's more and more people, and less and less places they want to live in.
But when it comes to the stock market, I think there's a lot of people that have gotten on board with that in recent years; at least from my own perspective, regular boring old savings account have gone from 5% or more down to 0.5% or even negative interest in some cases; this is probably due to EU-wide laws to help economic growth in the less economically well-to-do countries, but still.
On the plus side of that equation however, is that mortgage interest rates are still very low. I bought a house this year and fixed the interest for 30 years, I'm sure it's going to go up again soon enough.
if you think Apple, Google and Facebook dominate now, wait until the next recession. can your company laugh off losing half it's market cap temporarily? they can
Indeed. The only solution is to either 1) hustle incredibly hard and hope for success/a liquidity event/etc or 2) walk away/opt out and find another economy where you can succeed.
I'm honestly shocked that more first world countries with low birth rates below replacement rate don't appeal to US citizens to import them, train them, and have them join their society as valued workers (vs raking them over the coals in the US with student loans, a broken healthcare system, underpaid/non-existent jobs, and housing that might be forever out of their reach).
Most higher education in Europe is free, even for international students. More and more countries are offering programs at Bachelor or Masters level taught in English.
What more of a red carpet welcome do Americans need?
This is a great point, which I'd counter with: marketing. Ever notice how many locations around the world advertise to come bring your business there? Or holiday/vacation there? Same idea.
France made a very public appeal to climate scientists. [1]
> Or holiday/vacation there?
Anecdotal evidence I know, but almost all of my friends in Canada have or want to visit Amsterdam. But while they're enjoying pot brownies and the red light district, Amsterdam has many startups who will hire English speaking employees.
Or the people who really want to visit Oktoberfest. Munich also has many firms willing to hire English speakers with the right qualifications.
I will grant that perhaps Europe can do a better (more obvious) job of appealing to North Americans who want to immigrate. Personally I found it extremely easy to immigrate from Canada to Europe (no family ties to gain Eau citizenship), though I had already finished studying.
Another easy option that is often overlooked is the Working Holiday visa. It's quite easy to obtain and allows someone under 35 to work and travel between 6-12 months in many EU countries.
[1] www.businessinsider.com/emmanuel-macron-american-climate-scientists-france-2017-6