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A comment on Office real estate crash will be so sharp, values unlikely to recover by 2040. Parent comment

Re:Office real estate crash will be so sharp, values unlikel... by throw9away6 on Sunday June 25, 2023 @11:40AM (#36469374)
There is an element of ponzi because none of the actors have an interest to break the cycle. Mutual hallucination might be a better term though.

Like you would think the asset buyers would have an incentive to stop holding the loans and the whole thing would collapse, but because the buyer are investing with other peoples money they are also incentivized to keep the cycle going. The people whose money is eventually going to be lost have no way to stop this because the money is either in a pension fund or they aren’t knowledgeable enough to understand the issue

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Re:Office real estate crash will be so sharp, values unlikel... by JumpCrisscross on Sunday June 25, 2023 @04:42PM (#36472386)
> none of the actors have an interest to break the cycle

This is collective behaviour. If you discover you’re in a Ponzi scheme, it’s in your interest to get your money out first.

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Re:Office real estate crash will be so sharp, values unlikel... by throw9away6 on Sunday June 25, 2023 @06:45PM (#36473434)
Yeah but here it’s never actually your money and if the cycle breaks you are screwed anyway. If you fail with everyone else then you can say that nobody could have ever predicted this.
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Re:Office real estate crash will be so sharp, values unlikel... by sangnoir on Sunday June 25, 2023 @07:21PM (#36473688)
> If you discover you’re in a Ponzi scheme, it’s in your interest to get your money out first.

You can either cut your losses and not get your money back (if you're an ethical operator), of you can actively or passively allow other people topit in their money so you can get yours out first. There are similarities where rational vested actors want the charade to continue for a little while longer - the more money you put in, the longer your commitment to the mirage is.

[ Parent | on HN ]