When will the next worldwide financial crisis happen? Could 2007 happen again?

Train Dragon

I was watching The Big Short last night and I thought to myself: "could this happen again?"

I was also reading online a few months ago that the Italian banks are in trouble and if they fail it will have a domino effect worldwide.

I also think the Irish property market is wildly inflated.

When will we see another crash?

super_furry

It'll be 2007 times 100!

200700!

petrolcan

What an odd first post.

Train Dragon

petrolcan:

It's probably more thought provoking than "Where are you right now?"

ygolometsipe

Train Dragon wrote: »

I was watching The Big Short last night and I thought to myself: "could this happen again?
Is another crash coming?

I think it's not an "if" but a when. Nothing got fixed since 2008 a few minor slaps on banker bonuses but that's it.
Donald Trump wants less regulation for the banks.
It's primed to collapse again. We have had a recession every 8 years or so since about 1930. This time the central bank can't do anything to cut interest rates as they are already too low.
We will have high inflation soon as everyone wants a house and nothing else.
We're already all loosing money to quantative easing, no interest on savings etc.

kjl

Student load debt is rising and being sold off as bonds similar to sub prime mortgages. But how can a student pay off his debt if going to college doesn't guaranty you a job.

osmiumartist

Train Dragon wrote: »

It's probably more thought provoking than

There's a man who doesn't know his audience...

The Moldy Gowl

Probably not for another long time. Nothing to the extent of 2008 anyway. There will be recessions every decade or so like usual.

As much as people don't want to think, there is a lot of auditing and new regulations in the finance market these days.

Would have to be another perfect storm for it to happen.

josha1

super_furry wrote: »

It'll be 2007 times 100!

200700!

Wouldn't that be 1.873057e+161?

Train Dragon

"Donald Trump wants less regulation for the banks"

So that's how he got in.

ygolometsipe

Train Dragon wrote: »

"Donald Trump wants less regulation for the banks"

So that's how he got in.

Yeah here it is the Dodd-Frank act.
https://en.m.wikipedia.org/wiki/Dodd–Frank_Wall_Street_Reform_and_Consumer_Protection_Act

There's a financial times article but it's pay wall. You can web it though. Yeah he's appointing former bankers on his team.

Nobody can predict the future, it unfolds chaotically. If Irish people in 1993 could have seen how much the country changed by 1999 they would have been astounded.

Grayson

Roughly every 8 years since the great depression there's been a crash. The last one was 2008, not 2007. For example here's the Icelandic stock market during a 5 week period in 2008.
https://upload.wikimedia.org/wikipedia/commons/c/cb/OMX_Iceland_15_SEP-OCT_2008.png

The reason it hasn't happened this year is because all the controls that were put in place post 2008 such as quantitative easing, lower interest rates etc are still in place. That means that the markets are still being held in an "unnatural" state. However they're still pretty fragile.

Before a crash there are always certain warnings. You see the rich become very rich. As a consequence of that they start spending money like mad. Art, jewellery, precious stones and stuff like that reach prices that have never been seen before. The same happens to the stock market.

If you take a look at this graph you can see that the stock market is currently higher than it was during the last boom.

We will have another crash. It will probably happen next year or the year after depending on what Trump does. If he starts slapping on tariffs or starts a trade way it will be bad. In the short term his tax cuts will cause stocks to increase but most forcasters say that it will not be good in the long run.

SEPT 23 1989

The only reset after the printing machine last throw of the dice has failed is war

Mass youth unemployment across Europe

Perfect

Oodoov

The Moldy Gowl wrote: »

Probably not for another long time. Nothing to the extent of 2008 anyway. There will be recessions every decade or so like usual.

As much as people don't want to think, there is a lot of auditing and new regulations in the finance market these days.

Would have to be another perfect storm for it to happen.

I'd be very surprised if it's not a lot worse than 2008 tbh.

SEPT 23 1989

Oodoov wrote: »

I'd be very surprised if it's not a lot worse than 2008 tbh.

2008 was only a cushion

Train Dragon

I wonder will we ever see "run on the banks" type armageddon in our lifetime.

Train Dragon

Grayson, that was an excellent insight. Thanks.

Aloneagain

Grayson wrote: »

Roughly every 8 years.

Not quite correct, a recession cycle (bust to boom) lasts on average 21 years, 7 in cuts, 7 in growth and 7 in boom !

The Moldy Gowl

The Moldy Gowl wrote: »

Probably not for another long time. Nothing to the extent of 2008 anyway. There will be recessions every decade or so like usual.

As much as people don't want to think, there is a lot of auditing and new regulations in the finance market these days.

Would have to be another perfect storm for it to happen.

eh I hate to break the news so late to you but there was plenty of regulation and auditing in 2008

Yourself isit

[Deleted User] wrote: »

Nobody can predict the future, it unfolds chaotically. If Irish people in 1993 could have seen how much the country changed by 1999 they would have been astounded.

They did see it by living 6 years. Most of them.

Grayson

Deleted User wrote: »

eh I hate to break the news so late to you but there was plenty of regulation and auditing in 2008

And Trump wants to get rid of most of the regulations too.

Phoebas

Grayson wrote: »

If you take a look at this graph you can see that the stock market is currently higher than it was during the last boom.

If you look at this graph you can see that its currently higher than its ever been, and after every crash it has recovered and become stronger than its ever been. And that's not an indication of an impending crash - look at the pretty much uninterrupted growth in the 80s and 90s.
If you want to see a crash on the scale of the recent one, you need to go back to maybe the 70s oil crisis and then back again to the great depression.

I wouldn't be looking at the stock market for anything but very general trends.

Wanderer78

Train Dragon wrote:

I wonder will we ever see "run on the banks" type armageddon in our lifetime.

Oh yes it's on the way, that's if our deposits aren't 'bailed in' before we can get them. Time for a public banking system me thinks! Steve keen and Michael Hudson are probably worth keeping an eye on as well!

Train Dragon

Wanderer78 wrote: »

Steve keen and Michael Hudson are probably worth keeping an eye on as well!

I'll Google both, thanks.

pure.conya

Train Dragon wrote: »

I was watching The Big Short last night and I thought to myself: "could this happen again?"

I was also reading online a few months ago that the Italian banks are in trouble and if they fail it will have a domino effect worldwide.

I also think the Irish property market is wildly inflated.

When will we see another crash?

well seeing as how these crashes have come cyclically since the great depression then yes there will be another crash and some will help it along the way and profit handsomely from the chaos, exactly like the last robbery

Permabear

This post has been deleted.

Wanderer78

Train Dragon wrote:

This post had been deleted.

Naked capitalism is also a very good source, many post-Keynesian economist post there.

Permabear wrote:

This post has been deleted.

I'm not a big fan of the bank of international settlements myself, as they have a tendency to move the goal posts when they seem fit, but light touch regulation certainly didn't work

irlcncrk

I'm not one for graphs but from past experience, I'm not ancient, I've already seen 3 crashes 1970s, 1980s and our most recent one.

As a previous poster has stated economic events up to now have been cyclical and until Govts radically overhaul how countries and economies function I'd imagine these cycles will continue.

As a simple proof of the cycles, at the moment the various rental news stories are not being exaggerated. Rents are now definitely back up and even higher than they were in the boom times. There are small 3 bed town houses in my area renting for sometimes €500 per month more than they were in the good old days.

Property taxes and the govts 2 year rental terms have defo front loaded these increases, but sadly no one seems to have any sensible solutions no matter what side of the political divide they're on.

Politicians of all flavours will sound bite their way from one election to the next without achieving "real" and meaningful change.

Saw an interesting piece the other day that in most transactions from buying petrol, building or buying a house and paying your phone bill the revenue take a very sizeable chuck. Clearly taxes are needed but how it's collected and who pays what needs to be shaken up.

Why not simply raise corp tax by 1 or 2%. For corps this would be miniscule but would give great scope to both balance the books and review other streams.

Of course pointless raising more taxes unless we Joe and Josephine Citizen get much better value for our buck, there lies the real problem!

Wanderer78

irlcncrk wrote:

Why not simply raise corp tax by 1 or 2%. For corps this would be miniscule but would give great scope to both balance the books and review other streams.

I'm really liking David McWilliams fairly radical idea on how to deal with the corporation tax dilemma, I.e. the Irish government should become share holder's of the multinationals. We need to get more from these companies but if the eu raises the rate, they might start leaving

irlcncrk

Wanderer78 wrote: »

I'm really liking David McWilliams fairly radical idea on how to deal with the corporation tax dilemma, I.e. the Irish government should become share holder's of the multinationals. We need to get more from these companies but if the eu raises the rate, they might start leaving

Interesting idea but I wouldn't/don't have any confidence in our politicians/civil servants ability to work/manage share portfolios.

I could be completely wrong, but from my limited view of things they're not very proactive with "our" ownership of the banks.

They put NAMA in place to manage the whole property mess, maybe they just should have scuttled Anglo and refinanced the rest and left banks to manage their own property debts.

Always like listening to DMcW view of things. Sadly the lads/lassies on Kildare St didn't/don't, and I can't see that changing anytime soon.