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> and yet the post-2009 economic expansion is the longest ever, and this is in spite of all the anxieties over tariffs and trade wards and the fed raising rates.

The economic expansion outside in the Eurozone is already over and that's despite interests rates going lower and lower. The Fed is done raising rates and it's exactly because the markets absolutely tanked in 2018 with the prospect of rising interest rates.

> There are tons of examples on Reddit of people in their 20s and 30s with homes and investments.

Why don't you look at a statistic instead of Reddit?

> Rather than a wealth transfer ,which suggests a zero sum game, more wealth is being created. Low rates makes it easier to get a mortgage and compound wealth by owning a home.

Rising prices do not equal an increase in wealth. If you pay double the price for the same home at a low interest rate, that's still a huge markup. If the prices fall, you will lose big time. The expectation is that prices can't fall because interest rates will not be allowed to rise. However, CPI inflation can still catch up to asset price inflation, it just hasn't happened yet.

A growing economy should all other things equal lead to a higher home ownership rate as the rising productivity means that fewer man hours are required to build a house. However the low interest rate environment the US (and the whole Western world) has experienced since 2001 has led to a declining rate of home ownership.

> Historically speaking, the homeownership rate has risen above the 50-year low it reached during the second quarter of 2016 when it clocked in at 62.9 percent. Still, it's several percentage points away from its pre-recession peak of 69.2 percent. [0]

[0]: https://www.thebalance.com/the-homeownership-rate-what-is-it...

Edit: you can also have a look at the graph on page five here. It shows that the home ownership rate topped around 2003 and has been on a steady decline since then:

https://www.census.gov/housing/hvs/files/currenthvspress.pdf

I think both arguments sound right to me in some degree.

It is a wealth transfer, and asset prices can’t go up infinitely, unless wages rise equally for the population of house buyers. It seems wages have been stagnating in the US for a while now.

When there’s a shock or wide drop, the latest buyers will be left holding the bag.

But nobody knows for sure, maybe it really is different this time.

Whether the period since 2008 has been a true expansion is arguable. On the surface level equity prices increased, yet there hasn’t been much if any inflation or wage growth and yields have gone down for most assets.

Why does owning a home compound wealth? Honest question.

This stuff is honestly way over my knowledge but the way I see it, as a renter wanting to buy in the next couple years, if I own a house I am paying a mortgage. That gives me equity every payment. So every month instead of my landlord getting my money the bank will and in the end I own the house so can sell it back. Also owning a house opens all sorts of opportunities a renter does not get. Subsidies to install solar panels and save energy would go to the home owner. If you own a house and want a loan for a car let’s say, you automatically get a better interest rate then me because I am higher risk. There are all sorts of ways owning a house can make or save you money. But based on my understanding of this article the entire value of houses will crash at one point as we can’t keep increasing the costs so when the market finally realizes we have been over selling, the people holding the houses at that point risk devaluation of their home and potentially lost all their investments. Again I am trying to figure what this all means and there are certainly a lot more knowledgeable people here that know more then my layman’s view.

> and yet the post-2009 economic expansion is the longest ever, and this is in spite of all the anxieties over tariffs and trade wards and the fed raising rates.

A crisis is not an economic fact that magically happens when some predetermined values for some set of indicators are reached.

A crisis is a mix of two things: 1) a big financial/economic issue that affects an important sector of the economy, 2) widespread panic.

There are already multiple candidates for 1), but what hasn't happened is 2).

Why? That's anybody's guess.

My guess is Trump.

For people to panic, there needs to be sustained media coverage and focus. But now whatever Trump says is more important than anything else for the media.

If you look at the media since Trump became president, the most important issues have been all stuff related to his government, and whenever the media has focused on anything for too long, he's come out with some other thing that the media shifts their attention to.

So we've had lots of small panics, which by now have mostly desensitized the public.

If someone like Trump can continuously interrupt the media, they effectively control it through disruption, and then the media cannot focus for long enough on anything for people to fully panic and cause a full blown crisis.

Actually 'crisis' just means 'decisive change is impending'. There doesn't have to be panic.

Coordinated or systemic movement of money in any form can be a crisis. There doesn't have to be reporting or emotion for the situation to spiral out of control. That is to say, the panic can follow the crisis.

> That is to say, the panic can follow the crisis.

You are technically correct. Maybe I should have used the word recession instead.

What I mean is that a lot (most?) of the damage in a crisis is actuallly done by big masses of people reacting to it rather than the crisis itself.

Think about bank runs, widespread stock shorting and selling, people not investing because of uncertainty, lenders abruptly calling their loans, etc.

> If someone like Trump can continuously interrupt the media, they effectively control it through disruption, and then the media cannot focus for long enough on anything for people to fully panic and cause a full blown crisis.

Coming out of two straight years of one collusion “bombshell” report after another I agree with you. I avoided the markets when I was unsure if what was being said was true (it definitely seemed true to me).

Now it seemed to be largely politically motivated and I’m totally “insensitive” to the MSM reports on Trump and I’m ready to make long term investments in the country again. Too bad I stayed out of the markets for the last year because those looked to be good times.

Making an investment asset out of a requirement to survive is capitalist insanity. The housing market crashes every 10-20 years, while most mortgages are 30 years, this means that many people stand to lose their entire "investment", but oh wait, its their home, not their fucking Robinhood account.

Saying that things are going well, therefore we are making good decisions is a terrible argument.

The loss or gain is not realized until the home owner sells the house. So just don’t sell during the crash.

People don't foreclose on their homes because they want to.

I thought in 2008 People were walking away as soon as they were underwater ?