What you’re describing is basically stagflation. It doesn’t necessarily mean a crash. It’s possible for the majority of people to keep on earning less and less real income for a long time without a crash.
I do wonder what the effect of all the layoffs from tech and the public sector and all the cuts in federal funding will do though. Dunno if that’s enough to flood the housing market and crash it or not. I think I’ve read that banks are in a good position to absorb housing market losses, so it won’t be like 2008.
AFAIK, most current economic indicators are OK. Not necessarily great, but not dire either.
The stock market makes no sense to me. It doesn’t appear most stocks move on the fundamentals of the companies or anything like that. It all appears to be driven by hype/gambling, and propped up from sustained lows by 401ks on auto-pilot and people trained to “buy the dip” by the quick Covid recovery.
The USD appears to be rapidly losing a lot of value compared to other currencies like the EUR. But, that fits well into the plan to reduce imports and boost US exports. Inflation with stagnant wages makes US exports more attractive/cheaper.
Isnt a crash in the housing market a good thing for the average person?
The crisis happened because everyone got credits to buy a house, even if they shouldnt, and banks made money by betting against them ever paying it back. This caused a huge bubble that had to burst.
It was more a housing-credit crash than anything else.
Sure, it’s bad for people wanting to sell their house to make profits, but it’s good for people that want to buy a house.
Only if there’s laws in place to keep the ultra rich from buying up multiple properties, otherwise it’s just an opportunity for people to keep hording homes to rent out.
That’s exactly what happens; crisis capitalism wherein the upper wealth layer scoops up assets for pennies on the dollar, which it then uses to extort more wealth from the less advantaged. So even when the greater economy “turns around,” there are more people who have less access to the mechanisms that have historically allowed upward economic mobility.
The 2008 financial crisis is a perfect example, and much of what we are still suffering today stems from that manufactured catastrophe. Ultimately, none of the perpetrators were held accountable, while wealth simply flowed upward, concentrating even further at the top, while the average American has seen almost none of the benefits of our productivity growth, 17 years later. Big businesses, on the other hand, had nearly 14 years of open purse monetary policy from the Fed, and could therefore operate on nearly free debt. This long period of finance junkyism has created a capability trap of today, where most businesses don’t actually have many capabilities, ie don’t produce, service, or generate any real commerce, AND largely refuse to invest in their employees or business functions, which is why we have been gliding downward in a spiral of enshitification and massive inflationary pressure.
Ultimately, the “good jobs” of yesteryear have been dismantled through outsourcing, arbitrary job requirements, collapsing white collar work, and decades of demonizing trades and union busting, while further roadblocks have been erected through insane education costs and a dearth of the “starter homes” that Boomers used 50 years ago to launch themselves in financial prosperity. They promptly pulled up the very ladders they climbed afterwards, ensuring no successive generations would be able to participate. Boomers mortgaged their children and children’s children’s futures for their own well-being. Which has continued to today.
What you’re describing is basically stagflation. It doesn’t necessarily mean a crash. It’s possible for the majority of people to keep on earning less and less real income for a long time without a crash.
I do wonder what the effect of all the layoffs from tech and the public sector and all the cuts in federal funding will do though. Dunno if that’s enough to flood the housing market and crash it or not. I think I’ve read that banks are in a good position to absorb housing market losses, so it won’t be like 2008.
AFAIK, most current economic indicators are OK. Not necessarily great, but not dire either.
The stock market makes no sense to me. It doesn’t appear most stocks move on the fundamentals of the companies or anything like that. It all appears to be driven by hype/gambling, and propped up from sustained lows by 401ks on auto-pilot and people trained to “buy the dip” by the quick Covid recovery.
The USD appears to be rapidly losing a lot of value compared to other currencies like the EUR. But, that fits well into the plan to reduce imports and boost US exports. Inflation with stagnant wages makes US exports more attractive/cheaper.
Could the housing market crash independently? Or would it be always with the other markets?
Isnt a crash in the housing market a good thing for the average person?
The crisis happened because everyone got credits to buy a house, even if they shouldnt, and banks made money by betting against them ever paying it back. This caused a huge bubble that had to burst.
It was more a housing-credit crash than anything else.
Sure, it’s bad for people wanting to sell their house to make profits, but it’s good for people that want to buy a house.
Only if there’s laws in place to keep the ultra rich from buying up multiple properties, otherwise it’s just an opportunity for people to keep hording homes to rent out.
That’s exactly what happens; crisis capitalism wherein the upper wealth layer scoops up assets for pennies on the dollar, which it then uses to extort more wealth from the less advantaged. So even when the greater economy “turns around,” there are more people who have less access to the mechanisms that have historically allowed upward economic mobility.
The 2008 financial crisis is a perfect example, and much of what we are still suffering today stems from that manufactured catastrophe. Ultimately, none of the perpetrators were held accountable, while wealth simply flowed upward, concentrating even further at the top, while the average American has seen almost none of the benefits of our productivity growth, 17 years later. Big businesses, on the other hand, had nearly 14 years of open purse monetary policy from the Fed, and could therefore operate on nearly free debt. This long period of finance junkyism has created a capability trap of today, where most businesses don’t actually have many capabilities, ie don’t produce, service, or generate any real commerce, AND largely refuse to invest in their employees or business functions, which is why we have been gliding downward in a spiral of enshitification and massive inflationary pressure.
Ultimately, the “good jobs” of yesteryear have been dismantled through outsourcing, arbitrary job requirements, collapsing white collar work, and decades of demonizing trades and union busting, while further roadblocks have been erected through insane education costs and a dearth of the “starter homes” that Boomers used 50 years ago to launch themselves in financial prosperity. They promptly pulled up the very ladders they climbed afterwards, ensuring no successive generations would be able to participate. Boomers mortgaged their children and children’s children’s futures for their own well-being. Which has continued to today.
Its the 1% vs the proletariat. Not generation vs generation.
Not that this means you’re wrong.
That’s because “The market can remain irrational longer than you can remain solvent.”