Let's say everything written here is accurate, not cherry picked, and fully contextualized.
Even assuming all that, I'm not sure this site could ever convince me it is a 'problem', given the clear purpose of this site is to sell me something to fix that 'problem'.
That said, this infographic is missing a lot of context, and basically any sort of rigorous analysis.
This infographic isn't very convincing. It shows a bunch of forms of valuation and debt have drastically increased in the last 7 years, but that doesn't alone mean it's a bubble. You need to establish that the rate of growth is the same type of thing that preceded other corrections. You need to show that the growth is irresponsible or problematic.
I believe we are in a bubble, because the valuations of a lot of companies defy all real logic, and for a number of other reasons I won't get into because it will just devolve into an argument about what I believe. But I still find this infographic lacking.
Please indulge? I feel there is a bubble, and I know why, but I’m entirely powerless to understand how can it possibly deflate? Panic might cause temporary flight to safety, but there has to be something drastic going on for the bargain-hunters to sit this one out and let it fall...
All it takes is the right high profile failure(s) and investors get spooked. They stop investing, which causes more collapses of companies that can find investment. They pull their money out, the selling undermines market confidence and things go kablooie. That's just one example of how it could happen based on how it did happen before, not a prediction of what will happen.
The valuations are based on confidence, if the confidence is reduced (not even entirely gone) it can start a downturn. That can go fast or slow.
but in the first .com bubble, companies lived and died only on their stock activity. these days, the winners have enough cash piled up that a recession would actually be welcome; it would allow them to buy companies and employees on the cheap, and many of their flimsy competitors would fold.
if you think Apple, Google and Facebook dominate now, wait until the next recession. can your company laugh off losing half it's market cap temporarily? they can
Apple, Google and Facebook are not the issue dude. All the companies that have yet to really be profitable are. Come on, that's obvious. Of course those companies which have cash on hand would be fine.
Sometimes it is just a self fulfilling prophecy. If everyone feels we are in a bubble, a non trivial selloff can cause panic and lead to a cascade of more selloffs.
QE money inflated asset prices and low interest rates mean bonds don't deliver good return so people buy stocks instead. And since we have the looming pension crisis the we will need a lot more money printing.
If everything is in a bubble, what will pop the bubble?
An interesting take is the baby boomers hit max earning power at 55 and buy a second house, but then around 65 or 70 they realize the don't need either big house and they downsize (which will create downward pressure on housing) and they want to annuitize their assets (sell non-dividend paying stocks, etc)
> An interesting take is the baby boomers hit max earning power at 55 and buy a second house, but then around 65 or 70 they realize the don't need either big house and they downsize (which will create downward pressure on housing) and they want to annuitize their assets (sell non-dividend paying stocks, etc)
My initial assumption was that you'd see a glut of housing because of this (Boomers unloading real estate to downsize), pushing down home prices, helping first time home buyers. I've recently updated my assumption: Boomers are going to hold onto their property as long as possible as rentals. People are seeking out returns where ever they can, which is going to make this intergenerational housing problem drag on for at least another decade or two.
Good point, why sell your house when you can't buy anything that gives a good return? Better to rent it. So we're in the everything bubble and there is no pin in sight.
> So we're in the everything bubble and there is no pin in sight.
Indeed. The only solution is to either 1) hustle incredibly hard and hope for success/a liquidity event/etc or 2) walk away/opt out and find another economy where you can succeed.
I'm honestly shocked that more first world countries with low birth rates below replacement rate don't appeal to US citizens to import them, train them, and have them join their society as valued workers (vs raking them over the coals in the US with student loans, a broken healthcare system, underpaid/non-existent jobs, and housing that might be forever out of their reach).
> I'm honestly shocked that more first world countries with low birth rates below replacement rate don't appeal to US citizens to import them, train them, and have them join their society as valued workers (vs raking them over the coals in the US with student loans, a broken healthcare system, underpaid/non-existent jobs, and housing that might be forever out of their reach).
Most higher education in Europe is free, even for international students. More and more countries are offering programs at Bachelor or Masters level taught in English.
What more of a red carpet welcome do Americans need?
> What more of a red carpet welcome do Americans need?
This is a great point, which I'd counter with: marketing. Ever notice how many locations around the world advertise to come bring your business there? Or holiday/vacation there? Same idea.
> Ever notice how many locations around the world advertise to come bring your business there?
France made a very public appeal to climate scientists. [1]
> Or holiday/vacation there?
Anecdotal evidence I know, but almost all of my friends in Canada have or want to visit Amsterdam. But while they're enjoying pot brownies and the red light district, Amsterdam has many startups who will hire English speaking employees.
Or the people who really want to visit Oktoberfest. Munich also has many firms willing to hire English speakers with the right qualifications.
I will grant that perhaps Europe can do a better (more obvious) job of appealing to North Americans who want to immigrate. Personally I found it extremely easy to immigrate from Canada to Europe (no family ties to gain Eau citizenship), though I had already finished studying.
Another easy option that is often overlooked is the Working Holiday visa. It's quite easy to obtain and allows someone under 35 to work and travel between 6-12 months in many EU countries.
the choosen metrics seem very suspicious... "number of cryptocurrencies" doesn't mean anything other than it's easy to create one. bitcoin market cap growing means there's probably a bubble, but 65 billions is too small to trigger a systemic crash by orders of magnitude. putting the two close one to a other is a really cheap trick to make you feel like the monetary system is in danger. Same for tesla, it doesn't make any sense other than to show that stock is overvalued.
To call something a bubble you need to identify a market that's "bubbling", a whole area or sector. otherwise you've only identified a few assets.
housing market is more sensible, but bubble on the housing market have been announced for the last thirty years, and prices kept climbing. everywhere. maybe it's not a symptom of a bubble, but just that there's more and more people, and less and less places they want to live in.
What is supposed to be the relevance of stating that there are more cryptocurrencies than fiat currencies. It seems like stating that there are more cavalry troops than there are aircraft carriers. Both are true, but you have to be completely deluded to think that raw numbers equates to significance.
Re: crypto, it's relatively easy to get into and there seem to be a lot of success stories, so yeah, a lot of people jump into those which boosts the price to bubble proportions. I'm fairly sure we're going to see a crash after new year's, once tax evasion periods have passed.
But when it comes to the stock market, I think there's a lot of people that have gotten on board with that in recent years; at least from my own perspective, regular boring old savings account have gone from 5% or more down to 0.5% or even negative interest in some cases; this is probably due to EU-wide laws to help economic growth in the less economically well-to-do countries, but still.
On the plus side of that equation however, is that mortgage interest rates are still very low. I bought a house this year and fixed the interest for 30 years, I'm sure it's going to go up again soon enough.
Also not proof of "a bubble", but more interesting to me are the four metrics presented graphically here https://isthestockmarketgoingtocrash.com/
And it's fun to watch those astronomically large debt numbers increasing in real time.