Quote :

"No one actually saw it coming, and anyone who said they did was just a broken clock right twice sort of thing."

bullshit

8/25/2017 8:35:28 PM

Quote :

"So I have zero proof to substantiate it, but my half baked prediction for the next financial meltdown is that it could to be due to a perfect storm "

...

i know your premise is different, but i think an actual megastorm may trigger a financial spiral..

Irma is about to raise all hell on properties in Florida, and potentially kill a number of people. another one much more massive than this may trigger a lot more death and destruction.

..perhaps it will be the big west coast earthquake, or the eruption of a supervolcano. it could be one of a number of megadisasters that triggers a societal/systemic threat. something akin to when Lisbon had its big quake, and they moved the capital to Brazil for a while.

like you, cannot substantiate & is half baked... Irma's stressing me out

9/7/2017 1:42:59 AM

I could totally see a string of insurance companies going bankrupt, and leaving homeowners holding the bag, with no collateral, and then defaulting on mortgages on a large scale. I don't know if Irma (even if it tears up every beach house between Key West and the Jersey Shore) could cause enough financial damage to create a market crash like the mid 2000's... but maybe, and when combined with a bad Harvey and some earth quake on the west coast... maybe...

9/7/2017 12:26:08 PM

I'm seeing not a lot of understand of why the last meltdown happened in this thread. I will repeat this. A bubble or two bursting, or a single housing market crashing, does not cause a financial meltdown. If you want to convince me something singular like keeps being discussed is going to cause a meltdown, you've got to show that almost the whole entire financial system is overly invested (massively, to the point of being irresponsible) and unprepared for that particular market to fall.

People defaulting on their housing loans caused the housing market to burst. Just about every major bank and insurance company caused the financial meltdown by betting against the former occurring. Are similar bets being made in any of the scenarios being discussed?

[Edited on September 7, 2017 at 1:31 PM. Reason : asdf]

9/7/2017 1:30:16 PM

I guess the point of the thread was to point out the *potential* for some unexpected 'perfect storm' that nobody sees coming. And while some people in this thread have stated that what happened in 2007/2008 was some sort of unpredictable exception to what can lead to a financial crisis, that's not really true. Plenty of people saw what was going on and actually ending up profiting- some of them quite handsomely.

I'll admit that I live in a bubble in the Bay Area, but things are just crazy right now. I really think something has got to give because I just don't see how anyone making less than 100K a year can actually make ends meet. Incentivizing people who are already strapped for cash to take on additional debt for the promise of a future 'reward' is pretty big red flag to me, especially when you consider the types of people who are now in high powered positions (thanks, 45).

But yeah, it could be two devastating hurricanes in highly populated states, along with a massive CA earthquake that actually triggers an economic collapse.

Great times we're living in, huh?

[Edited on September 7, 2017 at 4:31 PM. Reason : .]

9/7/2017 4:30:23 PM

Quote :

"People defaulting on their housing loans caused the housing market to burst. Just about every major bank and insurance company caused the financial meltdown by betting against the former occurring. Are similar bets being made in any of the scenarios being discussed?"

I don't know, but I would guess that there is some sort of derivative investment available for purchase regarding homeowners insurance, similar to Credit default swaps. I wouldn't imagine the rating companies are as careless with their ratings any more, but who knows, AND, it's certainly possible that insurance companies are insuring those investments against loss.
As for the credit card scenario, maybe there is a similar derivative investment. I wouldn't expect that to be rated too highly either, but I wouldn't be surprised if there were similar "bets" being made, and insured.

9/8/2017 2:30:21 PM

I mean it's only tangentially related to this thread, but that Equifax breech is highly disconcerting. I put little to no faith in our banking/credit institutions to put consumer protections ahead of profits. Call me a pessimist if you want, but that's how I see it.

9/8/2017 3:33:54 PM

Quote :

"I think now would be a good time for 143 million people to dispute their credit score at the same time. Seriously though, if 143 million people sent an envelope with 3 pieces of paper, that's like 4.7 million pounds of mail. The manpower just to throw it away would cripple Equifax, not including having to respond to it."

The next reply said it would be like fightclub without explosives. Good imagery but not likely unless the all go down.

[Edited on September 8, 2017 at 7:40 PM. Reason : .]

9/8/2017 7:38:15 PM

^ It won't even take that. We just lost our credit system, we just don't realize it yet. When a third of the country's credit numbers can no longer be considered legitimate, you've got a problem. It's only a matter of time until the lawsuits hit and we realize that we have to start from scratch, unless somebody comes up with a brilliant way to identify people over the phone which will pass Constitutional muster.

9/10/2017 10:18:48 AM

I think you'll find this turns out to not be as bad as you think. And nothing will change because of it.

9/10/2017 11:02:39 AM

^

9/10/2017 12:12:18 PM

Quote :

"I'll admit that I live in a bubble in the Bay Area, but things are just crazy right now. I really think something has got to give because I just don't see how anyone making less than 100K a year can actually make ends meet. Incentivizing people who are already strapped for cash to take on additional debt for the promise of a future 'reward' is pretty big red flag to me, especially when you consider the types of people who are now in high powered positions (thanks, 45)."

This is just supply and demand again. More and more people want to live in cities on the coast. These people could move to the Dakotas, or even the South and make ends meet but thats just not cool.

The easy solution is for the government to put in rent controls. They could solve the problem by simply prohibiting municipalities from enforcing development laws that limit the size and number of units in urban housing developments.

In a lot of coastal california towns, you can't even build more than 2 stories without council approval and councils only want to approve large commercial only projects because they bring in tax money without putting more students in the schools. This goes against free market ideals and puts extra strain on transportation infrastructure.

The whole process is occuring on steroids as people continue to flock to cities. A lot of cities also outlawed tiny homes as well as SRO buildings.

Developers could make money off of other types of developments but the rules make it so they have to build luxury condos to make money off so few units. People end up putting up fake walls and splitting rent 3 ways in a 1 bedroom.

9/10/2017 2:09:00 PM

^I tend to agree with you on the rent control thing as well as the "want to live in cities" comment, although keep in mind that you have to go where the jobs are and some of this overflows from the college degree problem right now. That is, there aren't many computer science jobs, for instance, in Boise, Idaho or Sioux Falls. Also, it's pretty hard to get a job out of state without a lot of previous experience. They're focused on providing for the local community to start with.

9/10/2017 5:34:09 PM