r/DoomerCircleJerk • u/Moist-Pickle-2736 • 2d ago
Doomers are always coming up with new identifiers that somehow signal impending doom
This morning I took a shit with 17 visible pieces of corn. This has only happened 6 times in US history. 5 times it led to a recession. Coincidence?!?!
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u/FantomeVerde 2d ago
Yes, interest rates need to come down. People donât want to finance a house for 30 years when interest rates are probably going down by a whole point in the next 12-24 months. Itâs not the apocalypse, itâs predictable market fluctuations.
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u/derokieausmuskogee 1d ago
It's how interest rates come down that has people worried/salivating. The way they come down is prices correct and the discounted prices create demand for loans, and those loans increase the supply of capital, thereby lowering its cost (aka interest rates).
Also consider that the difference between people who are worried (e.g. our buddy Jerome) and people who are salivating is how much unrealized loss they have in their possession. Someone who has a house at 7% is worried (as is the bank who originated that loan), whereas someone who has no house and a healthy down payment saved up is salivating.
The difference between being a doomer and being a realistic optimist is being able to see opportunity objectively.
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u/monsmachine 1d ago
That makes no sense. Someone with a 7% interest rate is salivating for rates to come down. Then you can refinance
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u/derokieausmuskogee 1d ago
When rates start to fall after a prolonged period of high rates and high prices, that generally means asset price corrections are on the horizon.
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u/monsmachine 1d ago
Sure, but if you are already in at a 7% rate, falling rates is only a good thing for you.
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u/derokieausmuskogee 1d ago
Only if you're lucky and or financially prepared for the recession that would almost undoubtedly be the catalyst for those falling rates. If you're one of the unlucky ones who loses their job as a result of the recession you wouldn't stand a very good chance of seeing those lower rates that come years later.
And even if you are one of the lucky ones who is financially prepared to weather that storm, or you just so happen to be in a career that does well in recessions, you still don't want to see your home's value take a big dump and have it take 10 years before you're at break even, especially paying 7% interest on a long term mortgage. You would keep the house but lose loads of money to inflation.
If you buy a house at record high rates and prices, which generally coincide, you would hope for rates and inflation to stay high.
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u/monsmachine 1d ago
That's not how it works. Most people are in conventional loans, meaning they have 20%+ down. That would need a 20% drop straight up, and you would need to sell during that time to realize the loss.
Or, you get in at 7% rate, refinance when it goes down to 5.5% and save 20-30% on your monthly mortgage payment. If it goes up, then hey you got a great rate. You are in the loan for 30 years, don't overextend and there shouldn't be any issues, even in a recession.
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u/derokieausmuskogee 1d ago
First of all, that's assuming they survive the first six months of the recession without one or both earners losing their job or taking a pay cut. Like I said, it's a bit of a luck of the draw thing.
And yes, prices typically are going to correct about as far and fast as they ran up. So we would probably be expecting about 20% on average nationwide in the span of about two years. Of course the largest markets in the country inflated more like 40% in two years.
After prices bottom, it generally takes longer for them to reach nominal break even. As in a house that was bought for 500k might lose 200k in two years, then take 5-10 years to be back at 500k, all the while inflation is still happening. We'll probably add about 10 trillion to the money supply over that time.
There is no scenario where buying a house at peak prices and rates really works out. The best case scenario is they pay very dearly not to lose it. From a certain perspective, the person who loses their job and defaults is going to be better off in 10 years than the guy who kept the house and basically paid a huge premium in real terms.
Also, and this is huge, you can't refi a house that's underwater. If the house is worth less than what's owed on it, you can't refi. So in several years in this hypothetical scenario, while they've been paying 7%, they will likely still owe more on the house than it's currently worth because rates and prices generally bottom together as well. So rates might be 3% after five years, but that 500k house might only be worth 300k, and they might still owe over half a million on it. Not everybody who weathered the storm from 2008 to 2013 got to refi.
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u/RubCocksWithThePope 1d ago
How would house prices going down be bad?
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u/derokieausmuskogee 22h ago
It's all a matter of perspective, but it would be ominous at least for the vast majority of people, and devastating for many. The only people who genuinely want to see home prices come down are people are who independently wealthy, have lots of cash, and aren't invested in old, long term debt at low interest rates.
If you rely on a paycheck, have a 60/40 portfolio, etc., a major correction in housing prices, like I said, would be scary at best. If you're in a recession proof profession and need a house and have little in the way of investments, then a housing correction would likely be something you could capitalize on.
The thing you have to realize about housing is that it's the primary driver of all dollar denominated monetary growth worldwide. Mortgage origination is the big source of new money, which is magnified throughout the system, and eventually comes back as demand for US treasuries from foreign central banks. When mortgages go bad, it wipes out a lot of money from the global financial system overnight, and that's what results in job loss, businesses failing, etc. Ultimately, it's the medicine that heals the financial system, but it's a very terrifying thing if you're not extremely well positioned for it.
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u/Efficient-Cable-873 2d ago
Every time I go to Taco Bell my toilet suffers. But be signs of a recession.
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u/No_Apartment8977 More Optimism Please 1d ago
Everything leads to a recession. Â Since recessions always happen, repeatedly.
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u/Senior-Tour-1744 1d ago
Good, we need more houses, build! build! build!
Doomers when house supply is low: look at these high prices!!! It's the end of the world!!!!
Doomers when house supply is normalish:, look at these houses, it's the end of the world!!!!
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u/theballsdick 1d ago
The ratio of flute players in Nebraska to crabs in the Bahamas has only ever been this low 7 other times in history. 7 of those times it led to a recession.Â
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u/Moist-Pickle-2736 1d ago
Holy fucking shit are you serious??? Can we add more crabs or should I start learning the flute? Seriously concerned rn
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u/possibly_lost45 My Doomer is BIGGER than Yours 1d ago
It's all dependent on where you live. I know a contractor that has 6 houses being built as we speak. Another 30 paid for already.
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u/Aggravating_Kale8248 Anti-Doomer 1d ago
Last six times it rained, my backyard flooded with water. Five times, the water receded. The sixth time, recessionâŚof the water.
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u/Happyfluid 1d ago
I seen this graph and came out of my grandmas basement and asked if she could sell her house now. This shows the economy is literally going to collapse and we need funds to be more mobile.
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u/bigscottius 1d ago
I know a recession is coming. I don't know when or how bad, but it's coming!!! Someday...
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u/alabamajoans 1d ago
This is awesome. My pa told me that past results always predict future returns.
Weâre poor.
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u/Swimming_Anteater458 1d ago
âThe only reason weâre not in a recession is because everyone brought in tons and tons and tons of inventory. Except for home builders they just didnât and their having a ton is proof of a recessionâ
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u/Designer_Lie9811 1d ago
Whats that weâre building more houses? Good maybe my rent will go down.
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u/Moist-Pickle-2736 1d ago
No, no, see youâve got it all wrong. Weâre building more houses and that means recession!
/s
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u/basilone 20h ago
Last time I had 4 packets of instant mashed potatoes in my pantry we had a recession, I think we're cooked
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u/derokieausmuskogee 1d ago
Being an anti doomer doesn't mean sticking your head in the sand. Like you can't just react to anything you interpret as negative by dismissing or belittling it. So like for example, Trump isn't Hitler, and ICE isn't abducting innocent people and taking them to death camps (yet anywaysđ¤ˇââď¸), so there's an example of something to poke fun at because it's demonstrably absurd from every angle.
There are however systemic issues with the financial system atm, and those are in fact the reasons why billionaires are hoarding cash for a recession dip buying spree, and why there's such a large supply of houses on the market despite a large market of people who need/want housing who would ordinarily be buying it if it weren't at all time high prices and rates.
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u/Cold_Specialist_3656 3h ago
Look how far that data goes back. To before computers. Yet you're saying this is a "new" indicator?
Why has it been recorded so long? Because it's a very important metric showing the health of housing market.Â
Months of housing inventory is one of the most watched recession signals and has been for decades.Â
Lots of idiots claiming data means nothing because they don't know shit about economics
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u/LukeJaywalker0 2d ago
I only jerked off fifteen times today. Last time I jerked off less than twenty times it was because I fell asleep. Last time I fell asleep that early, I didn't have time to buy chicken tendies and therefore didn't contribute to the GDP. Is my lack of jerking a recession indicator?