Hit the nail on the head. The pain of the 2008 crash was just kicked down the road by bailing out banks. We will have to reckon with the consequences of government economic meddling at some point. Shutting down the economy was just a shove towards the cliff.

I think that we are going to really see the crash kick off whenever the eviction moratorium is lifted. There is no way that all landlords are able to service their loans. Anybody that has been patient with savings will be cleaning house snatching up cheap properties and businesses.

The eviction moratorium is overblown. Forbearance on mortgages is an extremely cheap way to keep landlords from feeling the pain, and lenders have little upside and much downside from mass selling among landlords when financing is so cheap nowadays. Anyway NY state is $61b estimated lost rent which is comparable to student loan debt (like $40b), neither of these things matter as much as people think they do.

Why? These people are already in default. The renters who need the moratorium were already “in default,” you just didn’t account for it yet. To the degree that the market has known NYC and LA renters’ rent was “too damn high” for decades now, it’s hard to see how people predictably on the verge of default (ie economic default) now having to live somewhere they can afford (ie accounting default) will cause a crash. If anything REITs prices will rise as information (ie who is really capable of paying rents) flows into the system. The renters who can actually afford to live in NYC and LA are richer, and the people who move out will be richer than many people where they’re moving to.

Another way to look at this is that CDOs were responsible for the 2008 crash. Not people taking mortgages they can’t afford.

Constantly economic crashes are the result of derivatives. My feeling is that we will find out what toxic derivative will crash the economy for real when someone takes a long look at PIPEs for SPAC transactions. Another place I would look for nasty derivatives is untaxed cash of large corporations in offshore accounts, especially of the major tech companies.

>Why? These people are already in default. The renters who need the moratorium were already “in default,” you just didn’t account for it yet.

source?

Yeah sure lol, the federal reserve is willing to float asset prices indefinitely. Neither party wants to be incumbent the one that deals with the fallout of raising interest rates. Anyone who has been patient with savings will get wrecked by inflation.

Only if you're savings is in USD. If you have the foresight to see the impending crisis you would also have the foresight to exit USD well before it happens. Savings isn't just cash.

The way I see it playing out is the government is going to try to print prosperity. Foreign governments stop buying our debt and move on to a new reserve currency without the US. If the US is willing to use force to try to maintain USD reserve status things get really ugly. Domestically this is a world of hurt for middle and low income classes. Any country that is preparing for this eventuality is going to do better. But, all countries are playing the same monetary debasement game. Just a few countries are increasing their purchase of gold and decreasing their purchase of US debt.

Another great reason for bitcoin/ethereum

> We will have to reckon with the consequences of government economic meddling at some point.

Not necessarily, the Fed isn’t obligated to unwind its QE purchases. They may not even be willing to, see ‘taper tantrum’ and Oct-Dec 2018. We won’t see another bear market without another black swan.

House prices may come down when the moratorium is lifted, back to 2020 prices. There won’t be as much selling by landlords as you think, lots of them likely qualified for forbearance which makes non-payment of rent a virtual non-issue. It’ll take a 2.5-3% 10y yield to really push mortgage rates up enough to where it starts to affect house prices, or the Fed needs to stop buying MBSes, or both.

The Fed doesn't need to unwind its purchase to kill the dollar. All that needs to happen is the people lose trust in the dollar. There is nothing special about the dollar. It is worth just as much as any other national currency. Some people have already realized this. When the masses catch on it is already too late.

What percentage of landlords do you think are qualified for forbearance? It certainly isn't all of them. What percentage of landlords need to default before there is a crisis?

I wouldn't be looking at the Fed to change their practices. They believe they are in the right and can fix the economy with what they are doing.

Absolutely. Now add the absence of a welfare system that is meant to alleviate the distress.

The USA is actually in the top 10 welfare states in terms of spending per capita, behind only some northern European countries.

https://en.wikipedia.org/wiki/List_of_countries_by_social_we...

Spending pocketed by wealthy middlemen.

Are you saying it's a bloat and graft problem and not a funding problem?

Because if so, I agree.

You mean politicians?