Of course I heard the same lines in 2006....
Then you have places where I am from, like Vancouver, for which the past ~15 years has been rising quite a bit, and now staying at very high price levels. $1 million dollar houses are pretty average, and whats even worse is people don't make nearly enough income to live there.
So this recent rise is pretty worrying from my perspective. If I want to buy a place, my savings will be wiped out. I personally wish it didn't cost so much.
We wouldn't say "never" with a sample size of 5 in any other scenario, but with finance we seem to look at small samples and confidently say things like always and never.
How does this make any sense?
And my timespan was 31 years. That is after several booms and busts. If the pattern holds for even a decade +, that is a pretty significant part of my life span and something I have to consider.
Also on a more personal note, my father was basically forced out of Vancouver due to not buying a house when he had the chance 10 years ago, so it's a very real possibility that I might be forced out too here.
So the reason why people use 'small' samples is because those timespans are not small for a human being!
Finding the scandal will be much harder this time, but I agree it's out there. Cash prize to the one who finds it.
There was never a stock I wanted to short as bad as GPRN when it first floated, but my broker wouldn't let me, and it was too new for options. So frustrating.
It's the ones that are "too big to fail" that you have to worry about. And it might not even be explicitly accounting this time.
I've had this strange suspicion for a while that a lot of the companies selling ads are doing some bogus stuff. I mean, we all know there's a lot of fraud happening in terms of ad serving/tracking and accountability, but I suspect that it's been institutionalized somewhere.
Or it could be any number of things. The amount of bullshit I've personally witnessed by startups to close a new round is staggering. The number of times I've seen people find creative solutions to adding an extra zero to "monthly active users" is just too damn high. Investors keep investing, established firms keep acquiring, and no one cares.
Once one of the titans fall, investors get scared and pull back. Companies like Google and Apple, with huge cash positions, are okay. Everyone else runs out of capital in a few months. The fallen firm lets 10,000 people go. Everyone else either does layoffs or initiates a hiring freeze. Now you've got 10,000+ locals out of work who can't get jobs. Now you've got 10,000+ people who are a few months away from defaulting on a mortgage they could barely afford in the first place because it was so expensive to live in an area propped up by cheap money and heavy leverage.
People start defaulting, and things get even worse. You've got a bunch of people in San Francisco who got $200,000 no interest downpayment loans from the city. They can't pay them back and the city gets stuck with the debt. Now there's public crisis.
Everyone and everything attached to the real estate market starts to freak out that home prices might decline. More panic, more layoffs, more defaults.
The dust settles and we start over.