Quote from @Suzanne Player:
@James Hamling
You bring up a great point that things alter in response to each crisis. After the Great Depression we made changes like the Securities & Exchange Act of 1934 & the creation of the FDIC. So, bank runs shouldn't happen again and although people will try to do certain things with stocks (like market manipulation), we have regulations to use to shut it down.
Likewise 2008’s housing crash shouldn’t happen the same way again any time soon, banks seem to have gotten stricter with their requirements.
This is what makes it so hard to make predictions - any future crash/correction will happen differently. But certain fundamentals should apply regardless. For example, inventory gets too high, when the average homeowner gets too deep in debt, etc., it’s always a bad sign. We don’t seem to have that right now.. A lot of people paid down credit card debt while in quarantine & there’s a lot of equity in the market.
@Kelly Asmus
Be a hunter not a gatherer - well said. Reminds me of the Francis Bacon quote:
“A wise man will make more opportunities than he finds.” (Now, off to Google bc I probably should know who exactly was this dude…)
Stocks and the NYSE I would say is the greatest corruption and manipulation action in human history, without doubt. HFT (high frequency trading) which is now being ran by ai accounts for the vast majority of trades now. Not to mention the main HFT operation is, I kid you not, 35 feet from the NYSE trading floor, it is in the same building down the hall from it. Reason being it can intercept transaction orders in play and pre-empt those with it's own trades to then complete buy/sell orders in conjunction with to affect a net profit position. Time is measured in nano-seconds for trades now and profit per share in fractions of cents, but multiply that by millions of shares repeated hundreds of thousands of times, we are talking a lot of money. Not to mention things like recent "flash-crash" which was said a "hiccup" in ai programing lead to HFT tanking the market a few hundred points in a day. If that isn't manipulation I don't know what is.
Yes, I am an active WS investor.
As for '08', it will never happen again, Dodd-Frank Act saw to that.
Liquidity in the system has nothing to do with consumer spending or consumer finance. Actually consumer debt is at record highs, currently sitting around $92,727 per person as median, $15.84 Trillion as a whole. This is why there has long been talk of the next collapse being "The Debt Bubble" which speaks to the collapse of consumer financing and ripple effects across finance. I don't see that happening as a source action, as a ancillary amplifier effect from a different catalyst like say a Dollar Default, yes, but not standalone action, too easy to keep kicking that can.
According to NAHB it's estimated that if new home unit production is allowed to continue without impact to current production levels or growth rate, they will achieve parity (supply meeting demand) in the next 10 years. That's how net short we are, not just in units but in production. One must remember there is an even more significant shortage of skilled labor, we call it "the lost decade" or "lost generation" because there was near to no new entries into the trades for that entire time and now today, still a trickle. So it's all got to start with production, without that capacity supply will remain constrained.
All really serious about REI should know there local NAHB group, check in with it, go to the meetings. Every year the NAHB economist's come out to the various markets to meet face-2-face and discuss the #'s. It's mind blowing how few go. Last one I went to in Minneapolis the head economist for NAHB was there to talk, and maybe 40/50 people were in the room to listen, that's it. This is "THE" guy and only 40/50 came to ask what's going on and where things are going for future.
