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0 pointsstillbourne6y ago0 comments

Did you even bother reading the article? It basically states that we haven't learned out lessons from 2008. Was the 2008 crash because of fed interest rates? No, it was because of poorly designed high-interest junk bonds. The article says the same behavior that caused the market to tank in 2008 in happening again. Furthermore, if we take a look at past crashes we can see that there has been quite a few that were caused by the same issue, the early 80s Savings and Loan Crisis, the 89 bust of the high-yield bond market, the Dot Com Bubble of the early 2000s, and the Financial crisis of 2008 we all caused by Junk Bonds NOT the Fed.

Additionally the idea that new money flowing into the system from 401Ks, IRAs, etc is extremely naive. These are long term investment instruments sure but as they are generally not actively managed they are not immune to fluctuations in the market and the market is not immune to people who have the misfortune to retiring in an economic bust. I have observed this in the second person as my grandfather was well to do before 2008, did not listen to my advice to allocate his retirement money to a guaranteed interest plan until after the market hit bottom (which was the wrong time to do that) he basically lost 500k.

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maimeowmeow6y ago

My take is that financial crises only happen on years that contain 8, 9, 0, but you should be more careful if the year ends in those numbers.

Looks like 2020 is going to be an unfortunant year.

zzzzzzzza6y ago

the big reason why the economy cyles is due to speculative cycle in land values, the booms/busts that aren't, are more like tulip bulb manias than real recessions/depressions

you could fix it by raising land value taxes high enough to extract all land rent and thus almost eliminating land speculation. At the same time you could get rid of most of our other taxes like capital gains and income taxes.

AnimalMuppet6y ago

> the big reason why the economy cyles is due to speculative cycle in land values

Baloney. The last one was, true. The Great Depression wasn't land, though - it was the stock market.

And rents these days don't primarily come from land. Your land value tax fits the economy of a few centuries ago, where the income primarily came from land, but it doesn't fit today, where the income primarily comes from other kinds of assets. (The value of the land it occupies is not how Amazon makes money.) All your land tax would do is penalize land compared to other asset classes. And, since you are wrong in your first point (that economic cycles are driven by speculation in land), you would do this for no good reason. That's probably not going to end well.

TheOtherHobbes6y ago

The current default isn't going to end well either.

The obvious solution is a wealth tax instead of income taxes. Take back the money that's been privatised, end the pointless and inefficient boom and bust hamster wheel, and spend bigly on productive social investment - education, gamechanger R&D, small business development, aerospace, robotics, AI, renewables, and other physical infrastructure.

Why isn't this happening already?

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zzzzzzzza6y ago

bullshit. a big part of the assets the stock market is valuing is land/property. Banks lend out... mortgages... mcdonalds has... stores. There was totally a land value bubble preceding the great depression. Right now we have a land value bubble AND a nifty fifty style stock market bubble... but compare the dot com bust to the great recession. One was way more devastating than the other. Right now, tech companies have very high pe ratios... BUT if and when those profits actually materialize, they will be capitalized into land values.

Even 10000 years from now, when civilization consists of a bunch of satellites orbiting the sun in a dyson swarm, an analogous orbit value tax will be the most logical source of tax revenue for a far future government. Land is always a prequisite for doing business, and absent an LVT, private sector actors will benefit from the network effects inherent therein, instead of the community that that value was actually generated by.

What's your alternative to a LVT, a sales tax? A vat? Income tax? Deadweight loss, deadweight loss, deadweight loss.

turk736y ago

Don't lose sight of the fact that in the case of 2008, we had absolute fraud taking place in both the mortgage bond market (abetted by the ratings agencies) as well as in the banks through fraudulent loan originations. Not only were there no-doc mortgages (NINJA loans), but also just outright fake people in the end. I don't think the same level of fraud is going on right now, okay maybe in cryptos...

Also, your grandfather shouldn't have had all his money in equities. He should have retired and lived out of a savings account while the markets rebounded then re-balanced into bonds/CDs as the market bounced back. I got whacked in '08, but then made it all back and more. 2 yrs. of living expenses in cash would have prevented losing 500K.

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0 pointsstillbourne6y ago0 comments

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maimeowmeow6y ago

My take is that financial crises only happen on years that contain 8, 9, 0, but you should be more careful if the year ends in those numbers.

Looks like 2020 is going to be an unfortunant year.

zzzzzzzza6y ago

the big reason why the economy cyles is due to speculative cycle in land values, the booms/busts that aren't, are more like tulip bulb manias than real recessions/depressions

AnimalMuppet6y ago

> the big reason why the economy cyles is due to speculative cycle in land values

Baloney. The last one was, true. The Great Depression wasn't land, though - it was the stock market.

TheOtherHobbes6y ago

The current default isn't going to end well either.

Why isn't this happening already?

1 more reply

zzzzzzzza6y ago

What's your alternative to a LVT, a sales tax? A vat? Income tax? Deadweight loss, deadweight loss, deadweight loss.

turk736y ago

j / k navigate · click thread line to collapse