I have also heard that people used to be very wealthy before the bubble. After the crash, did the average person's wealth dramatically drop (i.e. had to sell assets, defaults etc.). Also, did people in Japan ever recover to the wealth levels of the bubble era or were they always poorer ever since the crash. Also, (for those who live in Japan) does progress (not social progress but scientific and economic such as construction, infrastructure, innovation, digitalisation, living standard etc.) reflect the slow growth of GDP or is it at least comparable to other developed nations such as EU, UK USA etc.
Just wondering your thoughts on how it compares to the recent/future fallout? Not well versed here so forgive me if the idea and anything I say is absurd. But some of the root causes appear to be similarβ Money printing and lowered interest rates from the government, inflating real estate, over-speculation. As an outsider itβs easy to think history is repeating itself, but I feel like I may be comparing apples to oranges
Even people with no interest in economics have probably heard of the famous crash that ended about 5 years of insane economic growth in 1990/1991. The subsequent 10 years are known as The Lost Decade (https://en.wikipedia.org/wiki/Lost_Decade_(Japan))
My question is...maybe this actually helped cause the golden age of JRPGs?
Hiroshi Yamauchi famously said that [People who play RPGs are] "depressed gamers who like to sit alone in their dark rooms and play slow games." We can study the stupidity of this comment from a PR standpoint. But I believe he does have a point, at least where Japan is concerned. Japan already had a problem with higher suicide rates than most of the western world. Maybe depressed Japanese people both make and consume the best Jrpgs.
Economic depressions are no joke. I think it's no coincidence that after the Wall Street Crash, for example, the world was soon given Superman, Batman, Doc Savage, and countless other pulp icons to a generation that was unemployed and had a lot of time on their hands. Obviously, pulp and Jrpgs are different kinds of entertainment though.
I'm going off track a little here. I think I'd better explain what birthed this crazy theory of mine.
Quite recently at gamefaqs there was a poll that put the SNES/PS1 era (the 90s, or the lost decade) as the golden age of JRPGs. Link here.
I Couldn't help thinking, why the 90s? Is it the average age of posters at gamefaqs that puts their nostalgia in the 90s? Does Grunge Rock and Groove Metal go well with Jrpgs? Maybe it was just that the relatively low tech of Jrpgs worked better with hardware of game consoles at the time.
Maybe I'm overthinking this. But maybe games like Final Fantasy VII and Chrono Trigger would have been big hits in Japan anyway?
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
... keep reading on reddit β‘
Sorry if this is the wrong subreddit. r/econocmics doesn't allow posts like this :/
- There is retrospectivelly a ton of litterature on historical asset price bubble formations and burst, from tulipomania to recent dot.com bubble or in some way subprime crisis and credit default swaps and cdo market boom and burst, but I'm not sure if and/or how this litterature could be used to build a predictive model neither what kind of real time data source could be used for inference.
I recently read an article from hedge fund researcher/manager using nlp toolset to analyse twitter tweets in order to predict price movements of company stock but the learning domain was dedicated to a single company at a time and oriented to short term price movements (timeframe of a week).
Without entering into the debate of the legitimacy and future status of bitcoin in particular and cryptocurrency movement in general , I would say there is numerous and clear signs of an asset class bubble formation and exhuberance exhibited by market players but pointing those will not settle the debate between pro and opponent, as it seems to be the case in every speculative bubble, or even predict if and when it will burst.
That kind of predictive model could be helpful for policy makers as well as market players.
https://www.marketwatch.com/story/white-house-to-unveil-steps-to-address-housing-crisis-11630450249?mod=mw_latestnews
For those unfamiliar, the Japanese stock and property markets by 1989 had run up to absurd valuations (the Nikkei 225 hit a Shiller CAPE of 80) and then collapsed, never to recover. I used to think this massive bubble proved you canβt just buy and hold ignoring all fundamentals and valuations, but recently came across this: https://ritholtz.com/2017/10/japan-greatest-bubble-time/
Key takeaways:
> Never underestimate how far people can take the markets to the extremes. This works in both directions. The pendulum swings back and forth but always seems to go further than most would assume is possible.
> Valuations donβt work as a timing tool. If you tried to use them in Japan you probably would have gotten out of the market a decade before the peak. Itβs easy to say this in hindsight, but there were few scenarios where the late-1980s real estate and stock market valuations could have been validated going forward.
> Diversification, as always, is the key to avoiding a blow-up. The entire point of diversification is to avoid having your entire portfolio in a Japan situation. The global stock market has done just fine since 1990 even when you include Japan in the results.
Other assets you mightβve deiversified into that wouldβve saved you: Japanese government bonds, Japanese small cap and value stocks (the Nikkei 225, as name suggests, only has mega caps), and foreign real estate.
Due to the accelerated spread of delta variant virus, the epidemic in many countries fought back again, and the economic recovery was threatened, but risky assets such as US stocks continued to hit new highs. Wall Street agencies have issued early warning of risk asset bubbles. Guggenheim believes that bitcoin may fall to $15 thousand, and US stocks will probably fall by 15% or more by the end of October.
So far this year, the S & P 500 index has risen by 15%, which is 93% higher than the low in March 2020. Meanwhile, the S & P / CS20 big city house price index (HPI) shows that house prices in the United States have increased by 15% in the past year as of April this year.
In response to this market phenomenon, some media recently conducted an interesting survey of world-renowned economists: "from the 1 to 10 level, how much is the risk of asset bubble bursting?"
Here are some economists' Views:
Pessimists
Jeffrey Frankel, an economics professor at the Kennedy School of management, Harvard University, USA, gave a 9 point risk rating. He cited four examples of the "amazing" bubbles he thought of: bitcoin and other encrypted currencies, video game retailer Gamestop soaring, NFT (irreplaceable tokens) and SPAC's prosperity, Jeffrey Frankel. He compares these phenomena with the notorious repute of the South China Sea in 1720.
Ewald Nowotny, former governor of the Central Bank of Austria, also belongs to the 9 Distribution camp. He is worried about the real estate market and believes that excessive risk-taking exists in a large number of markets, and non bank financial intermediaries with low supervision grow too fast.
Novotny also pointed out that leveraged loan financing has promoted a fast-growing high-yield market, resulting in excessive leverage and liquidity mismatch in many markets.
Optimist
However, not all economists are worried about the current market.
Joseph Gagnon, a senior researcher at Peterson Institute for international economics, believes that the market risk rating is only 2. He believes that the prices of bonds, stocks and real estate markets have not significantly exceeded their basic values.
Gagnon said that by historical standards, the aging labor force, declining population growth and weak productivity growth have pushed real interest rates to record lows.
Thomas Mayer, former chief economist of Deutsche Bank and founding director of flossbach von Storch Institute, rated market risk as 3. Mayer said that low interest r
... keep reading on reddit β‘Donβt be looking back in a few years thinking I wish I brought more silver when it was under $30, stack now and stack high. Let us be the beneficiaries of their corrupt tamping. Many a millionaires will be made when the silver boom comes.
House prices soared by 12.0% from a year ago, the biggest increase since February 2006, near the peak of Housing Bubble 1, according to todayβsΒ National Case-Shiller Home Price IndexΒ for βFebruary,β which reflects the three-month average of sales recorded in public records in December, January, and February.
I have also heard that people used to be very wealthy before the bubble. After the crash, did the average person's wealth dramatically drop (i.e. had to sell assets, defaults etc.). Also, did people in Japan ever recover to the wealth levels of the bubble era or were they always poorer ever since the crash. Also, (for those who live in Japan) does progress (not social progress but scientific and economic such as construction, infrastructure, innovation, digitalisation, living standard etc.) reflect the slow growth of GDP or is it at least comparable to other developed nations such as EU, UK USA etc.
I have also heard that people used to be very wealthy before the bubble. After the crash, did the average person's wealth dramatically drop (i.e. had to sell assets, defaults etc.). Also, did people in Japan ever recover to the wealth levels of the bubble era or were they always poorer ever since the crash. Also, (for those who live in Japan) does progress (not social progress but scientific and economic such as construction, infrastructure, innovation, digitalisation, living standard etc.) reflect the slow growth of GDP or is it at least comparable to other developed nations such as EU, UK USA etc.
