The Bubble Puns

I live in Teton county, Wyoming, widely known as Jackson Hole. It is one of the wealthiest counties in America. The uber rich own houses here, so they can visit once a year and go skiing for a week.

Housing here is so bad that a studio apartment can go for $2000 a month, and it isn’t that good of an apartment. One of my supervisors makes almost twice as much as I do, and she lives with three roommates.

I know people with college degrees that illegally live on public land here (National Parks/Forests) and take showers in rivers because their three jobs can’t pay their rent. If you’re lucky, your employer will offer housing. In this situation grown adults share rooms that can be worst than college dorms.

I’ve heard conversations with rich people that come here for the scenery and low Wyoming taxes and they are completely delusional. They have no idea why we have a worker shortage, they just complain that their favorite restaurant had to shorten their hours. And their response to increasing pay when I ask? “People don’t need higher wages, they are just being selfish”

Do they really believe that their barista is going to happily serve them for literal shit? Is the cashier going to commute 2 and a half hours each way so they can live in an apartment instead of their car while being berated by spoiled assholes? No!

Eventually something is going to drastically change, the bubble will pop. Either our wages are going to be increased so that we can actually survive, or the working class is going to leave because the tips aren’t going to cut it anymore.

This isn't financial advice nor is it me saying buy up Sony stock. After seeing a bunch of EV companies such as Lucid motors, Rivian, NIO, and now apparently Sony wanting to dive into the EV space. I'm beginning to understand why Burry claimed Tesla is a bubble. Sony was the final nail in the coffin to convince me that there will be plenty of competition in the future for EV vehicles simply because Sony is a tech company.

WTF is a tech company doing trying to get into the car industry you may ask? Well my friends, we were asking the same question when Apple announced their plans to dive into this industry as well. The simplest answer is most likely because they can. Seeing as EV's consist of mostly electronics and a battery, what's stopping these companies from selling a fresh (over priced) product that is finally not a phone, television, or refrigerator. Seeing two tech companies making cars has me jacked, like really fucking jacked. Not only that, but there will also be competition with the more established auto companies that have been around for more if not close to a hundred years. Do not even get me started on the more luxury focused car companies.

TLDR: Tesla may seriously be in trouble in a few years.

Edit: To all you Elon fan bois, how’s that hyper loop coming along?

2021 was the year of many big hypes in the crypto space such as:

• Smart Contracts
• DeFi / Stacking / Yield Farms
• Memecoins
• Gaming
• Metaverse / Web3
• NFTs

What do you expect will be the next big thing’s, that will hype/bubble up in the next year?

IMO we could see the first few cypto projects filing for banking licenses (but I am not sure if they will succeed trying to do that, as well as we could see a revival of cheap and feeless payment coins (like DASH, Nimiq and NANO) as businesses trying to adopt crypto payments more in the eCommerce with the web3 adaption

Ok, so weird question.

We're in the US, NJ if that makes a difference.

I have a mortgage on a house currently valued at 1.1m, which I recently bought for ~900k. I put down 300k downpayment, and got a 600k mortgage at 2.875%. I have around 580k left on the loan. My family and I can afford the payments (~4500/mo), and I've made multiple contingency plans for loss of income so I'm not really worried about that aspect of it.

I've just been reading random articles saying that we're currently in a housing boom/possibly a bubble, etc. I want to get educated on what the long-term effects of such a situation is. What if the housing market crashes? What if the 'bubble bursts'?

Thanks!

I have been seeing a lot of posts and comments that the tech bubble has burst just 2000, so here is the comparison of how both bubbles ended.

Reasons for 2000 dotcom bubble burst:

• On March 13, 2000, news that Japan had once again entered a recession.

• By May 2000, the Fed had increased rates on six occasions within the space of 10 months, with the benchmark federal funds rate standing at 6.5%.

• The average price-to-sales (P/S) ratio of companies that went public in 2000 reached 48.9.

• On March 20, 2000, Barron's featured a cover article titled "Burning Up; Warning: Internet companies are running out of cash—fast", which predicted the imminent bankruptcy of many Internet companies

• ENRON scandal

Reasons for 2020 tech bubble burst:

-Fed said they will raise rates and reduce their balance sheet in the futuee while reiterating that they will still buy at least $60billion worth of Bonds and securities a month.

I’m a fairly new investor (post Covid crash—started investing around late June) and I was wondering where I could find some reading material on the psychology of traders/investors before the crashes in 2000 and 2008. I’m 16 years old so I haven’t really lived through a financial crisis, I believe it’s crucial to study the history of the markets to have better judgment about the future of the stock market.

Im super curious as to what people were thinking about the state of market prior to the market crashing. If people could provide some articles, forum pages, papers etc concerning this topic that would be very helpful.

This has sparked a debate between my housemates.

Edit: This is a lot more controversial than I anticipated. Seems to be about 60:40 to rinsing.

Edit 2: There has been significantly more team rinser over night.

First, read here:
https://www.elitedangerous.com/news/galnet/salvation-recruits-naval-crews

So, to recap:

• Salvation is actively undermining Aegis, our (deeply flawed) best line of defense against the Thargoids (at least until Salvation showed up).
• They are refusing to identify themselves, keeping their true nature a closely guarded secret. Huge red flag.
• They somehow knew Thargoids were going to show up in Cornsar (an unremarkable system with nothing that would provoke a Thargoid attack) before our own early warning systems did. Salvation refuses to tell us how they predicted the attack so we could protect other systems with the same early detection tech. That's another red flag.
• Salvation deployed a "wonder weapon" against the Thargoids, again without telling anyone what the weapon is, how it works, or where it came from. This is a weapon that apparently works against an entire system at once at superluminal speeds, which should be terrifying to anyone paying attention. What if this weapon could be used against humans?
• Oh yeah, they asked CMDRs to smuggle weapon components under the guise of humanitarian aid. Nothing shady about that at all, right? Salvation is comfortable using clandestine methods to achieve their goals, and I shudder to think what else they're willing to do under the motto of "Exitus acta probat."
• Now, after deploying three more wonder weapons against the Thargoids, it's become apparent that Salvation has been actively pilfering military personnel from all three superpowers.

I'm going to bold the next part, because this is where this is all leading towards:

Salvation is building an army. They are dragging humanity into an all-out war with the Thargoids, a war which we will not be able to win except with Salvation's wonder weapons. We will be at Salvation's mercy, and if Salvation at any point withdraws their support, billions and billions will die. Salvation will be in a position to make any demand they want of humanity, and we will be forced to acquiesce.

I believe this is Salvation's endgame. The only way to save humanity from becoming enslaved by this hidden enemy is to try to learn everything we can about their true nature, reverse engineer their weapons, and kick their ass back to whatever hole they crawled out of.

And maybe start fortifying our settlements in Colonia. I have a bad feeling that we'll be seeing a lot of refugees making for the far colonies before long.

So you're all probably already aware that the ASX is on an absolute dumper of a day - one of the worst days of the past year. As I write this, the ASX200 is currently down just under 3% from yesterday's close.

What some of you may not know is why this happened. Essentially what it boils down to is the US Federal Reserve releasing the minutes of their December meeting. Link for those interested in the primary source: here Some key takeaways from the minutes:

• Inflation appears to be more widespread and persistent than the Fed expected (shocked reactions only, thanks 😲)
• Participants noting "significant amount of balance sheet shrinkage could be appropriate over the normalization process, especially in light of abundant liquidity in money markets and elevated usage of the ON RRP facility" (this is the Fed tacitly admitting to there being far too much money running making its way through the economy, makes you wonder where all that liquidity came from?)
• Almost all participants stated that they had revised up their forecasts of inflation for 2022 notably, and many did so for 2023 as well.
• The Committee would quicken the pace of reduction in the Federal Reserve’s net purchases of Treasury securities and agency mortgage-backed securities (MBS), and the median respondent projected net asset purchases to end in March 2022. The median respondent’s projected timing for the first increase in the target range for the federal funds rate also moved earlier from the first quarter of 2023 to June 2022.

Some of the implications of this, I think, are pretty interesting:

• A foreign country's Central Bank, announcing that they will taper their asset purchasing program slightly quicker than expected and increase rates slightly faster than anticipated caused a 3% decline to our stock market in a single day. A lot of the poopoo-tier investments that run of nothing but speculation and cheap money (read: BNPL) shat the bed even harder. Afterpay down 10% (let's face it though, it's always been a junk investment).
• In light of the above, I think it's clear that despite what regulars on this subreddit will have you believe, market participants believe that QE and low rates have a SUBSTANTIAL effect on asset prices. The mere talk of a reduction in aggressiveness of those in a FOREIGN economy has a led to a fairly sizable single day dip.

In terms of what I'm doing to mitigate such ri

To start with, personally I'm quite bullish on crypto and feel good about having the investments into the coins I trust in that I have. That said, I do wonder how risky the whole crypto market is.

Many of us put our hard earned money into it and I feel there's strong cases to be made for a long term bearish or bullish outlook, as in what the crypto market may look like if you hold onto top coins for years.

IE- will bitcoin soar to 150k in a year or two from now or fall down to something like 30k? Will ETH reach new highs in the future of 10k plus or reach a plateau at some point and then fall down in price?

What do you all think?

🌙 ✌

Check out Part 2 here after reading! (https://www.reddit.com/r/Superstonk/comments/rqpup4/the_big_short_again_the_auto_loan_asset_backed/)

Hey all! Welcome back to another DD but this time on a different type of Asset Backed Security. You probably know me now as the 'SLABS guy' (Student Loan Asset Backed Securities) due to my recent 5 Part DD Series on SLABS, but I figured at the request of many comments I'd take a deeper look at the auto market.

As many have pointed out, there are a ton of different collateral markets for different types of loans. Credit cards, medical, auto, student loans, etc. I am of the belief that these ABS markets are all inherently risky, as the regulatory measures like ratings have been corrupted in the pursuit of money. I decided previously to look into the Student Loan ABS bubble because of how big the market was - about $1.6T in student debt is held by the USA total. I didn't even realize that the auto market has about the similar amount of debt outstanding - approximately $1.3T. Wow. Time to go down this rabbit hole for a bit. SLABbit hole? ALABbit hole?

This is the first time I've ever really looked into auto loans and the securities market associated with them. So take this with a grain of salt. We're all still learning here.

With that said, let's go! This is gonna be a fat DD. I'll include a TL:DR at the bottom, but I'd still recommend reading the whole thing.

First of all, the structure of Auto Loan Asset Backed Securities (ALABS) functions very similarly to how SLABS work, or Mortgage Backed Securities worked back in 2008. This link (https://www.stockmarketloss.com/securities-law/auto-loan-backed-securities/) explains: "Subprime auto loans have been and are being bundled into auto loan asset-backed securities (“ABS”) and sold to the public as solid, income-producing debt investments similar to corporate bonds. They’re marketed as secure products offering above-average interest. But while a bond may be backed by an issuing company’s income and assets, these auto loan ABS products are backed solely by a pool of auto loans.  The loans are bundled and the rights to receive the payments generated by the loans are sold to investors.  Those rights are divided into tranches." Tranches? Subprime loans? Asset backed securities that are

Lately, there has been growing chatter around whether the current rally that we are experiencing over the past one and half years is mainly driven by speculation and if we are in one of the largest investment bubbles ever.

>Why the Stock Market is in a bubble? - Business InsiderInvestors are overestimating earnings growth far more than they did during the dot-com bubble - Bank of America

Even professional investors whom I consider level-headed and not indulging in sensationalization are calling the current rally unsustainable.

>This Will Not Last - Nick Maggiulli

Adding to all of this, we can see that the Shiller PE Ratio is now climbing close to the 2000 dot-com bubble level.

While it’s easy to say that it’s all a bubble and we should be liquidating all our investments based on the current trend, I feel that we might be missing the other side of the story. The 2020s are wildly different times compared to the 2000s and we should not be looking at both scenarios through the same lens. There is an immense difference in the available capital, interest rates, and ability of the retail crowd to invest in stocks now compared to 20 years back [1].

So what I wanted to analyze is: Should we really be worried about the current trends or is this the ‘new normal’ given the drastically different situation we find ourselves in? Finally, this would give us an insight into how to manage our current portfolio and future investments! [2]

The Warning Signs

Let’s first look at the dive into the various concerning trends that we are observing in the current market. (Spoiler alert — there are a lot of them!)

PE /Shiller PE (CAPE)

The price to earnings ratio has been historically used to understand if the market/company is overvalued when compared to historical trends. Shiller PE is adjusted for the cyclical nature of earnings when compared to normal PE.

The current concern is that as of Nov’21, the Shiller PE for the S&P 500 crossed 40, which is the highest reading in the last two decades. The last time the Shiller PE crossed 40 was during the 2000 dot com bubbl

Is it safe to invest in the current climate? I did start with some ETFs but moved to gold like 0.005% after I saw the P/E ratio and Buffet indicator. The rest are tied to government backed bonds at 5.5% p.a. Investing this year in US stock ETFs will get you more than 20% ytd. A handsome return. I see some stock prices which make no sense. Lucid motors having more market value than Ford. I don't understand how a new company selling less than 1000 vehicles can be more valuable than Ford which sells a F-pickup every 35 seconds.

Is there something I don't know? What am I missing out? Or I can am freaking out for no apparent reason?

Edit 1: Thanks all for the feedback. I guess it is not that big of a deal. Will invest in stages rather than putting the whole lot. (maybe after a crash I will do that 👌).

Edit 2: DCA it is

In 1717 the Mississippi Company, chartered in France, set out to colonize the lower Mississippi valley, establishing the city of New Orleans in the process. To finance it’s ambitious plans, the company, which had good connections at the court of King Louis XV, sold shares on the Paris stock exchange.

In 1717 the lower Mississippi valley offered few attractions besides seasons and alligators, yet the Mississippi Company spread tales of fabulous riches and boundless opportunities. French aristocrats, businessmen and other members of the bourgeoisie fell for those fantasies, and Mississippi share prices SKYROCKETED.

Initially, shares were offered at 500 livres apiece. Two years later on August 1st, 1719, shares traded at 2,750 livres. By the end of the month, they had nearly 2x and traded at 4,100 livres. Less than a week later, they shot up to 5k livres. By December, they had pumped to 10k livres per share and euphoria swept the streets of Paris. Instead of people taking profits and enjoying their gains, people sold ALL their possessions and took out huge loans to buy Mississippi shares. Everyone believed they had found their rocket to the moon.

In early December, the panic began. Speculators realized that share prices were totally unrealistic and unsustainable. People started selling and an avalanche ensued. In order to stabilize prices, the central bank of France bought up Mississippi shares, but it could not do so forever. Eventually it ran out of money. So what did they do? What banks do best; they printed more money. The entire French financial system was placed within a bubble and while big speculators got out in time, the small investors lost everything.

The moral of the story? FOMO has existed since the beginning of capitalism, taking profits is hard to do when everything is only going up, banks will win more often than not because they write the rules and if you’re a small fish in a big pond, nobody is gonna look out for your best interests except for you.

I’ll elaborate a bit more in case the question is not as clear as I wish it to be.

When Brutus, Cassius and co killed Julius Caesar, they thought they had done the Republic a favor. Calling themselves ‘Liberatores’ or stating the famous line ‘Sic semper tyrannis’, they genuinely thought they had done the best thing ever.

It clearly was not the best thing ever as what subsequently happened seems to show the only people Caesar had actually pissed off were essentially these 20 or so senators who participated in the killing. Saying the people weren’t happy would be an understatement.

Most importantly, they poorly planned what was gonna happen after the assassination leaving the Republic in a state of civil war for basically the next 15 years, ultimately leading to its demise.

Aurelian or Pertinax are notable examples from Ancient Rome where the post-assassination was just incompetently anticipated but those were from soldiers (Praetorian Guard) not aristocrats with standards of living way beyond their contemporary everyday citizens.

I am therefore wondering what are your ‘favorite’ other instances throughout history where rich/noble perpetrators of a regicide completely failed to see beyond their selfish interests and simultaneously triggering a chain of events of such massive proportions.

Oh boy. Realizing now that my first DD barely scratched the surface of these ALABS. I foresee writing in my future. Thank you all for your concern for my health and wellbeing! I love writing and researching this stuff. If I need a break, I will absolutely take it. But for now, I'm too interested in all this to just walk away.

You can read my Part 1 here. Obviously I'd recommend that before jumping into this one. Also make sure to check out my SLABS DDs. So many bubbles, so little time!

I don't really have any corrections I'd like to make to my first part. If that changes, I will edit this post, or include the edits in a Part 3, if it happens. Let's go!

First of all, I'd just like to quickly mention that the way these loans are rated works the same as most other asset backed securities. Yup, the same exact conflict of interest exists here as it did in 2008. Ratings agencies like Moody's and S&P are paid by the servicers of ALABS to rate these very ALABS. Just thought I'd bring that up here, as it helps to link all different types of ABS - the same scumbag rating agencies are involved with many different types.

Next up, used car prices. I didn't really address appropriately in Part 1 why I believe the used car market is so hot, and the significance. So here goes. The used car market being hot greatly benefits ALABS. The more loans have to be taken out, the more money these dealerships make from these loans. Obviously, the main cause of the hot market the insane chip shortage. There just is not enough supply of new cars to satisfy demand. u/Vnmous, who works in the auto industry, had a great comment on my first part, saying "Dealers are enjoying the position of the industry at the moment. They have never made more money, even though there are no cars on most lots". My part 1 DD supports this conclusion: dealerships now make a majority of their profit on loans, not profits from the physical car. Here's a graph that shows why this hot used market benefits these dealerships.

https://preview.redd.it/8ar8w3c89c881.png?width=450&format=png&auto=webp&s=14d4e5a33e7ed897a197fb83681b240d9d0d259f

Interest rates are significantly higher for used cars. This means that dealerships are making more money off used car loans. Interesting. This has led them to dealerships buying back used cars that they previously sold and selling them again - ma

Full quote:

"When we first walked in the bubble I let my guys know: get comfortable with being uncomfortable. I set the tone for my guys: I slept on the couch. I wanted to be the first one to make myself uncomfortable. I ordered a whole load of Campbell’s Soup and a bunch of snacks that I like, and got a little water bottle and filled it up with a little Hennessy, and had a lil’ Tequila on the side. I tapped into that dark place to go out there and get it done. I didn’t speak to nobody. I only stayed in my room or played cards with Jimmy [Butler]. Even LeBron, as much as I love Bron, I didn’t hang out with Bron one time in the bubble. My guys need to understand what we’re here for. They’re young: they don’t need to see me kickin’ it with Bron, playing cards with Bron. We here for a reason. I want to beat Bron. I don’t need you confused! They don’t understand how I can kick it with somebody and wanna rip they head off.

I ain’t leave my room. I ain’t fraternize with nobody. And for three, four months, it was just about that. What pisses me off, man, is that people discredit what [the Heat] did in the bubble because we didn’t have a great season the very next season. Don’t get mad at me because your favorite team and favorite player was a mental midget in the bubble. Trying to fry chicken and have pool parties and shit, we ain’t here for that. Ain’t our fault motherfuckers was soft!...why discredit us? The Lakers ain’t make the playoffs the next season either and ain’t nobody sayin’ shit about them!...that takes nothing away from what we did the year before. Doesn’t change that Milwaukee swept us last year, we still beat they ass two years ago! It’s still in the record books! They whipped our ass and we whipped their ass."

From the recent GQ interview with Udonis Haslem, would recommend reading the entire article, some good stories and glimpses into the day to day of the team