

Ask HN: In terms of the economy, are we any better off than in Sept of 2006? - csmeder

The Nasdaq is currently at the level it was in September of 2006. In 2006, due to dividend trading and loose regulation, low interest and great speculation in the housing markets, we were driving 80 miles an hour towards an economic cliff.<p>.<p>It is now 4 years later. We just printed a bunch of money to bail out the banks. We have lowered interest rates rock bottom.<p>.<p>My question: Have the laws changed regarding dividend trading? Has any thing changed regarding all the other factors that led to this?<p>.<p>My mom is getting a lump sum of money from her pension, she wants to buy a second home. Isn't this a big gamble. In another 2-6 years isn't the market going to crash but only larger?<p>.<p>HN what are your thoughts?
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nostrademons
If we could answer this with any degree of certainty, we'd all be rich. ;-)

I think there're some areas that we're better off in. Banks are no longer
making those crazy subprime loans. People are saving again. A lot of the
"walking dead" companies that were going to go bankrupt have gone bankrupt.
Lame web startups that are nothing but Rails or Django frontends aren't
getting started. Pretty cool web startups that actually take use of some
technology enablers (say, cloud computing and mobile) are getting started.

In other areas, we're worse off. Now, people aren't just losing their houses
because they should never have bought them, they're losing them because they
lost their jobs. There's a shitload of extra money out there that's bound to
come out as inflation sometime. The government has added something like $2T of
extra debt. We've lost the confidence of the international community, who we
need to finance our debt. The government has basically blown its wad as far as
fiscal and monetary stimulus goes.

So I dunno. A lot of the excesses that led to this have been trimmed, but
things are so much more fragile now that it takes a lot less to set us off on
a downward spiral.

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csmeder
"So I dunno. A lot of the excesses that led to this have been trimmed, but
things are so much more fragile now that it takes a lot less to set us off on
a downward spiral."

What I worry about is that if no laws have changed, soon as people start to
feel safe again the Banks will start making sub prime loans and dividend
trading will back to where it was.

Is the only thing stopping this personal responsibility? Companies are going
to prey on the uninformed, do the same things they did in the first half of
this decade and hope to get out before it collapses again?

