Recession Predicted

book smarts

I remember reading an article in the Economist praising the team of wunderkinds that invented derivatives. I saw a figure (estimated) the other day of $596 trillion- the global pile up of derivatives. Thats 10 times the worlds GDP.

pinder

in all fairness alot of people were predicting this,saying whens the bubble going to burst and all that.what was most obvious was the construction industry,how could they think the level they were at could continue indefinitely is beyond me,complete greed

MortgageBroker

amacachi wrote: »

I predict that in 10 or so years the Worldwide economy will be growing again and that several years after that there will be another recession.
They call me mother****in Nostradamus.

First class in economics, everything happens in cycles.

i have an EVEN BETTER prediction, and its as accurate or better

in 20 years from now the sun will come up, and then go back down again, it will repeat that process for quite some time, the actual cycle described for that day will happen daily between now and then.

abitlonely

We had the boom years and any sensible person knew that growth could not continue at such a rate.
What most people didn't know was the size of the CDS and MBS industries, that the credit rating agencies had screwed up royally and the value of
securities based on subprime mortgage repayments was greatly overvalued. The CDS sellers couldn't possibly cover the losses suffered by MBS investors,
2 Bear Sterns Hedge Funds collapsed and no banks knew how exposed each other was to these payment defaults - so they stopped lending to each other.
Northern Rock couldn't borrow enough cash to continue its day-to-day operations and people queued at its doors to cash their deposits.

This put upward pressure on interest rates, increasing the likelhood of mortgage default. Since we were falling over each other to buy apartments off plans,
we are now suffering from negative equity in our homes. A lot of respected economists:eek: and media contributers said that we would see a leveling off of
property prices, a drop in house price inflation. Anyone who said prices would fall significantly was castigated. Maybe these people were just saying
what suited their employers but anyone who conducted a little thought experiment would realise that 2bed apartments outside Dublin are not worth over 300k.
The banks were urging us on, GS estimated that 60-70% of AIB's loan book was directly exposed to property. What fool would admit not knowing what
a tracker mortgage is? We had foreign property expos, inspection trips, 100% mortgages and guaranteed returns - we were living the dream.

At home, we built up to 70,000 houses a year, half the amount they were building in England! We couldn't employ enough foreigners and Polish shops and
newspaper sections started to appear. He was working on the site and she in your local spar. They all seemed to have places to live while increasing
our housing stock. When the economy levelled off, a lot would go home and spend their savings, leaving us with a lot of empty accommodation. House prices had
to take a tumble and I predicted by up to 25% for a 3bed commutable to Dublin. What I didn't know about was the extent of ABS / MBS mess. I'm holding out to
buy a 2bed house/apartment commutable to Dublin for about 190/220k, hopefully about a year for now because I think that no more than €900p/m
is reasonable for a young couple for a starter home. I may well get to buy a bit cheaper

...or so my taxi driver said

albert-bundy

Remember the predictions for midnight 1999. come on people stop the jibber jabber

krugerrand

albert-bundy wrote: »

Remember the predictions for midnight 1999. come on people stop the jibber jabber

We'll said !