It's a bit terrifying how "alive" the crisis of 2008 still is. 10 years have passed and it doesn't look like the economy has recovered, not by a long shot. There are strong points in this article, I can't recall exactly, but I think it was the idea of Slavoj Zizek, that the strongest point of ideology is to define something as "non-ideological". Exactly how the crisis was communicated, like something natural, a hurricane or something. Not the ideological mechanisms that allowed for the bankers to take huge risks in their loans, for sure not Henry Paulson with his bank bailout. The link to the far-right seams scary too, thanks for sharing.
> The link to the far-right seams scary too, thanks for sharing.
Point is, the far-right/fascism/nazi ideology always thrives when social safety nets are being dismantled or are no longer existing. The rise of Hitler, for example, was based on him blaming the Jews for Germany's messed up economy (when it was the insane reparation load of WW1 that caused the economy situation), the rise of Trump was and is based mostly on rednecks blaming the loss of their jobs on immigrants (instead of climate change rendering e.g. coal superfluous plus decades of dismantling every social system the US has), and the rise of the AfD in Germany is based on the SPD dismantling the social safety net over a decade ago as well as stagnation in wages over the same time, which of course the AfD blames immigrants for...
But what you describe is a real conundrum for governments isn't it?
If this hypothesis is true then you would think that the government in place would do everything they can to stop the far right/far left from rising from the ashes of the failed social safety net.
Instead, what we see mostly is the mainstream parties blaming the far right/far left without even addressing the issues that have led to people actually joining their ranks.
Its the same in Europe. Some people say they want a different Europe, mainstream politicians say no.
People then have the impression that their voices have not been heard. What do they do? They vote far right or far left and say: "now, can you hear me?"
But even that's still not enough, because most politicians are only concerned with being reelected, they still don't listen and they even blame the people who now despise the mainstream parties.
Addressing the far-right/far left for the mobilization of unheard voices is kind of like treating the symptom. What we have here is a failing economy based on the enormous banking sector, debt and trickle down economics. Most of it is based on ideological premises, the belief that big profits will be reinvested to create more jobs, the idea of "responsible business", whatever that is. I mean, I can imagine small responsibilities that successful businesses take upon themselves, but can't imagine them solving global or national-scale scale problems.
Anyway, the public political discourse is usually addressing the symptoms, like far-right blaming the immigrants or far-left bringing back some welfare-state memories. Looks like ever since the iron curtain was lifted global economies have been rocked by constant crisis and the voters want an answer, so they choose either left or right or whoever is speaking "the truth". And of course it's hard to address economic problems, requires a well-educated know-how.
> If this hypothesis is true then you would think that the government in place would do everything they can to stop the far right/far left from rising from the ashes of the failed social safety net.
The problem is that politicians care about their individual pockets, not what happens to society after their term. Politicians are not incentivized to serve the people - quite the contrary. And even if they do end up thrown out of office, a nice private sector job is waiting for those who let themselves be bribed.
> If this hypothesis is true then you would think that the government in place would do everything they can to stop the far right/far left from rising from the ashes of the failed social safety net.
I don't think they can. When the mainstream messes up really badly, people turn to the fringe. The mainstream can try to hinder them, but can't really stop them by anything other than not messing up badly. Once something like 2008 has happened, it's already too late.
You do realize issues about immigration aren't just about jobs, its about having a home. Maybe it's too hard for the rootless masses on HN to understand what its like being rooted in an area over generations to just watch it become a foreign country within a decade.
Then to be told if only you cared more about climate change everything would be fine...
Which kinda makes sense. Why would you life in an area with high Immigration if you dont Like/Support it.
You would have to look at the data of people living in areas where Immigration just begins/recently started to see if they are happy about it
> You would have to look at the data of people living in areas where Immigration just begins/recently started to see if they are happy about it
I live in Munich. Aside from exorbitant rents caused by politicians ignoring housing issues for decades, we don't have a significant problem w/ immigrants and refugees. We do have a couple Nazi groups (two different Pegida groups, plus the "old" NPD nazi party plus the AfD neo-fash) with maybe two dozen people on the streets, but no one except Antifa gives a flying f..k about them.
The exorbitant rents were the reason i didnt move to Munich, but Nuremberg.
Rent is a Gatekeeper though, only "succesfull" people can afford to live there. The conflict seems to be more about gentrification.
Also i personally dont know anybody who got negatively affected (besides closed school Gyms) by the refugee crisis, but many worry anyways.
Probaly Social Media makes it feel worse then it is,similar to people feeling less safe now despite way lower crime rates.
Internal immigration flows fairly closely correlate with external immigration flows. In other words, people are moving from areas of low immigration to areas of high immigration, not the other way around.
My point was: Are people who live in an area for a long time happy if a low immigration area turns into a high immigration area.
High immigration(besides nearby catastrophes) usually means something good happended to the area. So people can have the same overall happiness but for different reasons.
For example: Job opportunities are better now, Property prices are rising(Great my home is worth more), but it feels less at home then before.
But isn't it a problem of integration? Globalization did happen and open borders were celebrated both culturally and economically. I understand that people care about their neighborhood, but I think it has a lot to do about safety. If the immigrants do get lower waged jobs or don't get jobs at all, or if it's harder for them to get equal opportunities then, even if it's definitely wrong, crime becomes the solution. And that's what needs to be addressed.
> to just watch it become a foreign country within a decade.
Jeez, that's basically directly quoted out of the conspiracy theory playbook ("Umvolkung"). Germany has 5% Muslims and people whine about Islamization.
It's bollocks fueled by media. When media and politicians does nothing but draw migrants or "foreign" people as problems, then you'll see the non-whites on the streets automatically, subconsciously, as a problem. THIS is why the Nazi rhetoric and framing is so dangerous.
Germany has 5% Muslims now, but they reproduce at a much higher rate. Unless they manage to integrate those children much better than in the past, in two generations Muslims will be a majority.
The reason is that while first generation women usually stay at home and care for kids, second and following generation women go to universities and then into jobs which means delayed childbirth and less kids overall (because each kid means a drop in career). In addition, Germany has easy and cheap access to family planning - everything from pill and condoms over "plan b pill" to abortions - than typical "origin countries", further lowering the rate of unwanted pregnancies.
Altogether, the "Umvolkung" theory is utter bullshit spewed out especially by the Identitäre Bewegung neo nazis.
Also the birth rate of the source population (Syria) is 2.5x. Germany is 1.5x. It's not really that far apart. Between that and the drop in the birth rate after the first generation, and the conversion out of Islam that will start happening as later generations assimilate and intermarry with locals, I doubt if there will be a substantial change in the Muslim population over the long term.
The demographic crisis has a lot to do with economics, Europeans choosing to have (if have at all) children later in life. And we need to acknowledge the fact that Merkel did accept a lot of immigrants fleeing from war in middle-east, no thanks to western policies there. I really don't think that religion is the issue here.
You’re suggesting a subgroup will increase tenfold in two generations, assuming that the majority population stays roughly constant. That implies a birthrate of something like 9 children per woman, maintained for two generations. Meanwhile every bit of sociological evidence shows that increases in income and living standard reduces total fertility.
> You do realize issues about immigration aren't just about jobs, its about having a home. Maybe it's too hard for the rootless masses on HN to understand what its like being rooted in an area over generations to just watch it become a foreign country within a decade.
The amusing thing in the case of Germany is that the country never really was a real nation with a unifying culture etc (like e.g. France). Having only been unified in 1871, it was a hodgepodge of dukedoms for centuries. It's for example completely arbitrary that Bavaria became part of Germany but Austria didn't. To this day there is no unifying culture to speak of, e.g. the stereotypical German-Bavarian would scoff at "traditional" food from Northern Germany and vice versa. It was migration, immigration and arbitrarily drawn borders since practically forever. Many inhabitants of northern Germany have slavic surnames, because half of the local population has been wiped out in the Thirty Years' War, with immigrants replacing the dead. We don't even have a common religous tradition.
Most people mostly don't care so long as the new residents don't gentrify the crap out of the place.
White people tend to be the biggest offenders in the gentrification regard but people tend to take it out on the newcomers who are visibly different from them so in white communities it because an "immigration problem" and in nonwhite communities it becomes a "gentrification problem".
Immigration is just about the most American thing there is. If you think having a bunch of immigrants move in makes the area “a foreign country” then you have no idea what this country is even about. If being around different ethnicities bothers you, then I suggest returning to your ancestral homeland.
> Maybe it's too hard for the rootless masses on HN to understand what its like being rooted in an area over generations to just watch it become a foreign country within a decade.
I can't remember the exact number, but the majority population feels threatened when the non-majority reaches some like 5-10% of the total population. When you feel threatened, the minority population isn't exactly overwhelming. America has had this kind of xenophobia before. Irish, Italians, Ukranians, Jews, it's all the same noise, and it turns out the same - you still have America, it's just a little different, a little more culturally complex. And don't give me that whole "but they aren't integrating" shtick. They may not integrate easily, but 2 generations from now their grand kids will be as American as anybody.
> The rise of Hitler, for example, was based on him blaming the Jews for Germany's messed up economy (when it was the insane reparation load of WW1 that caused the economy situation)
Hitler spent far more time blaming Democracy for that, and several missteps in a row really handed it over to him. He despised Jews and blamed them, but you don't really come to power by blaming hidden minorities. He had to first destroy Democracy, which he did, to rousing applause. He convinced everyone that autocracy was the solution. And man, was it fast. As soon as he was Chancellor, they were up and murdering what was left of the minority opposition. It was fast and ugly. And after that, it was ironclad. People should be more worried.
He doesn’t have control of the justice department. It’s also uncertain the military would violate the constitutional ban on law enforcement at his order.
To get closer to autocracy he’d need better control of one of those two branches.
> Except he did exactly this, repeatedly and publicly, in his writing, speeches, and policy.
Sure. He pointed a hell of a lot of fingers. He had a special hatred for Jews, yes. He said it publicly, but my point was that it he didn't come to power by solely blaming Jews for everything. The "humiliation" that he felt Germany suffered due to the end of WWI generally played much better.
"the rise of Trump was and is based mostly on rednecks blaming the loss of their jobs on immigrants"
Please stop calling them "rednecks" and please don't assume that all his supporters were simply anti-immigration. While "redneckism" was a part of their campaign, Trump was elected by college educated, white suburban women too. Personally, the Trump supporters I've talked with are mostly well-off (small business owners), and mostly disconnected from world news. They don't identify as rednecks, and live in a very blue state. The usual justification goes like this "I worked for what I have, I don't think others should get hand outs" and "Politicians are all evil, I like that Trump is 'shaking things up'"
To be clear, I'm not defending Trump supporters but rather advocating for looking at them with a broader view. While my state is one of the most liberal in the nation, 50% of my neighbors identify with GOP messaging.
I think all of what you’re saying can hold for people who supported Trump before his election, to an extent. Now however? I’m not inclined to cut people who still support him any slack. He’s more than demonstrated that in addition to all of his many hideous qualities, he’s not shaking anything up. The massive tax cut, continuing with the wars, involvement in Syria, etc, are all pure status quo. The ways in which he’s demonstrably different are his open racism, misogyny, and anti-democratic, anti-immigration stances.
And polls keep showing that the people who voted for him do not regret their vote. “Redneck” may be unfair, and a slur, but the spirit of it in term of cultural identity (small-minded racists) has sadly been proven through his continued support.
A logical thing to assume for someone who is fully engaged with current events/news. However, most don't follow /r/politics religiously, and the nightly network news certainly isn't covering it (with the outrage that they should be) so many are still blissfully ignorant. Or is it willfully ignorant?
It shouldn't but ...these people don't have to testify in court. They get to cast a vote, in private, while also publicly decrying Trump and harmful GOP policies to their neighbors.
> the nightly network news certainly isn't covering it
Even from here in Germany, newspapers make headlines with every little tweet that Trump spews out, not to mention every tiny detail from the Mueller probe. Same for social media. You gotta run through the world blindfolded to be unaware of Trumps scandals...
In the US we have "network news" and "cable news".
Network news is what the workers, families and people who just want a quick update on the world watch. This nightly news (30-60 min) focuses mostly on local horrors like murders, robberies, fires etc. with a smattering of positive local happenings. They might touch for 1-2 minutes on national/political news, and in doing so attempt to tell it in a way that doesn't piss off 50% of their audience. People that watch this news, as their primary source are blissfully unaware of how bad it really is. They think it's just "politics as usual" and don't want to be bummed out after a long day at work.
Then we have cable news, which is is a 24/7 IV drip for retirees, stay at homes, jobless Americans and the most militant supporters on both sides. If you identify with Republicans you watch Fox News if you identify with Democrats, you watch MSNBC. Both leave you feeling outraged, exhausted and convinced the other side is "lying to you".
Then, both sides retreat to social media, where their friends and family re-enforce what they already feel - further widening the divide between Americans.
I’m all all for cynical reductionism, but come on. There are hundreds of millions of Americans and only a fraction watch Fox or MSNBC. There are newspapers, blogs, forums, social media of varying quality, PBS, NPR, CBS, NBC, ABC, CNN, Twitter, news magazines, and much more. There truly is no excuse for being totally ignorant of politics after two years of this except deliberate action to blinker yourself.
This, in a country of cord cutters, and massive internet consumption, with access to the world’s press in addition to their own.
For brevity, maybe I went too far in my reduction-ism. I stand by my assertion however that "network news" isn't covering it enough (leaving most in the dark) and cable news is creating a divisive atmosphere due to the mixing of commentary and actual factual news which leads both sides to believe the "others" are lying to them.
I think you need to broaden your social circle, as the Americans I know personally aren't as connected as you assume. Every revelation I share with them is responded to with shock and disbelief. "What do you mean it's illegal but no one is doing anything about it?" or "If that was true, shouldn't those people be arrested and in jail?"
I only know a couple "cord cutters" and even those that have cut the cord, still watch network news; CBS, NBC, ABC, Fox. Facebook we know is an echo-chamber, not open to dissenting opinions by design.
Furthermore, these people aren't on Twitter, they don't even know what a "web forum" or blog really is ("is it like a website?").
They don’t identify as rednecks because most of polite society looks down on those types of people. Over the past 40 years we’ve demonized manual labor and the people who perform it as lower class and undeserving of nice things. Real success after all is an office job, just ask any high school guidance counselor.
Most people have the innate sense that something in our society is deeply unfair and they’re looking for someone to blame. Trump offers easy solutions.
What we should refuse to do is let anyone off the hook for supporting Trump. Just because you like his business policies doesn’t mean you get to look the other way when he does monstrous things like locking migrant families in detention centers.
American identity politics started long before Trump, and long before the GOP's modern assault on governance. I just finished reading; White Trash: The 400-Year Untold History of Class in America - it was illuminating.
The war against "cultural elites" started with the first "mountain men" that ran for office in contrast to the 'educated elites' from "the North". Sound familiar?
It's not liberals, leftists or elitists who started the war on manual labor - they used it to separate themselves a long time ago.
This of course was connected to slavery, which left the south under-educated and feeling personally attacked. Too much to cover here, just read the book!
In 2007 the World Bank issued a report stating, in effect, it wanted more right-wing governments in power around the world because they tended to borrow more (for wars) and it was better for the World Bank to have right-wing/crypto-fascsist in power than the liberal social democrats that had been paying off their bills.
And now, look where we are. In short, if you're sick of all the right-wing nonsense, follow the money: who loaned them the money to get where they are today, in power? Follow that trail all the way back and you'll see the real string-pullers behind the puppets...
Politicians cannot and will never fix the economy by going against the business cycle. It's all just hype, lies. Polarization will happen whenever people are discontent and facing hardship. They will look for someone to blame.
I feel like it’s like that everywhere. The status quo is to convenient for upper management, while adopting sustainable policies within large companies is too cumbersome and not valued.
Several key highlights for me here: (de)politicisation of, and power dynamics of finance. Attacking trust in institutions. And this:
Financial crises foment authoritarianism. In 2015, a trio of German economists studied financial panics in 20 advanced economies dating back to 1870, and concluded that they almost always result in major gains for “far right” political parties after a lag of a few years. The most pressing question for policymakers facing a banking meltdown is not, “How do we restore our banks to profitability?” but, “How can we prevent social collapse?”
Facing a banking meltdown, no one's mind is fixed on what the political winds might turn into, after the seams burst, and the clean-up effort hoses off the sidewalks and sweeps the remains into the gutter.
It's survival mode, not even women and children first. So before the dust settles, or even earlier when the economy is clearly imbalanced, unstable and listing off to one side, they expect people to think about the extremists this is going to bake over the next half decade. Never going to happen.
Business people, accountants, financial operators, their minds do not work this way.
But there's easily multiple folds or layers that all add together to produce such an effect. And part of it is age brackets. If this is a fifteen year cycle, it's partly generational, and as much about the ritual of hand-off as it is about who is actually landing in the driver's seat.
But the roughest part is the polluter's mindset of those who set up the meltdown. They're definitely there to say: not my problem; so long, suckers!
Immediately prior to that there's probably some mild discussion about incentives driving performance. Why perform at all, if not to reap rewards? And immediately prior to that, there's probably a period with a good record of following the rules, aging out and retiring uneventfully.
So, if the process seems to havea natural rhythm, it's probably because human mortality means good teams eventually kick the bucket, and upstarts fill their shoes with less integrity. The faces change, but the story doesn't.
I remember reading an article (which I unfortunately can’t remember the title of) whose thesis was that there are two types of economic crisis, major and minor; that minor crises happen fairly often (every 8 to 15 years or so), while major crises happen every… I think it was 40 to 80 years; and all the major crises are followed by radical political transformation. French Revolution, replacement of the Tsars with communism, fall of the Whigs and the UK’s Liberal party, the end of the Weimar Republic, the fall of the Soviet Union, that sort of thing.
It furthermore claimed that the major political upheaval only became apparent at the next minor economic crisis, because political scenes reacts to a major or a minor crisis by switching between two dominant schools of thought, and once both schools of thought are shown to be incapable of dealing with the situation, society forces them to be replaced with a different dichotomy.
This certainly pattern-matches what’s going on in the UK at the moment. I’m not sure about the USA — although most of the Americans I know think poorly of Dem and Rep alike, that’s a massive sampling bias on my part because my American partner is a volunteer for the Green Party.
I'm closest to a Green, but I would never vote for them in a national election. They should focus on winning some local elections. And work like a PAC at bigger levels.
>all the major crises are followed by radical political transformation
Personally I think the last economic crisis was major, but there was no great political upheaval after it. The bad actors were propped up with bailouts, the advisers that really drive politics remained in power.
Which makes me think the next crisis will be even more major, because we haven't solved any of the underlying problems. This is kind of like with a bug caused by technical debt. We implemented a workaround that will cause much bigger failures than the last one instead of refactoring.
Great read, the cancer of de-regulated financial services still hasn't been addressed, and might not ever if Trump and his richest cabinet in history continue to hold power.
Wall Street continues to take on obscene amounts of debt from the government for essentially no interest, see Quantitative Easing, so that they can avoid paying even more taxes on their even greater profit. This is also fueling bubbles in other wealthy assets as everything is actually just leveraged debt. The prospects of another financial crisis is just as real as it was 10 years ago and again the lower-middle class will be left to hold the tax bill while the fat cats get fatter.
Hah, if that was the issue it won't be bad. Wall Street taking debt is no concern really.
The real issue is the extraction of wealth from citizens by Wall Street, Wall street builds nothing, absolutely nothing. They claim they provide liquidity, but yet when things look bleak, that liquidity dries up as they run and tighten up on credit. When they going is good, it's all about wealth extraction, they extract it from 401k, pension funds and from every day transaction between average investors trying to make an investment. The entire world of HFT is a joke. They have turned the market into something worse than a casino. In Vegas, you really know your odds, at wall street some of the instruments that are being pedaled shouldn't even be allowed in a video game.
They're both the same issue, a lack of regulation creates an entire web that makes everything it touches super fragile.
When Lehman Brother's tanked they were one of the highest leveraged at 38:1, and current legislation allows 20:1 which many were originally operating at. If you look at any wealth asset, real-estate, wine, art, etc. these are all artificially high making the leverage crisis exponentially worse because when it comes time to shore up accounts these people don't actually have the value their writing in their books.
Most of these retirement funds have to prove some basic stress solvency, but they're doing it with leveraged funds and debt. Thus when a downturn happens and it comes time to pay back the middle class we will have to bail them back out. We're paying twice! Student loans almost certainly will be the next bubble, Wall Street already sells these as an asset backed security (see SLABS). At over a trillion in value with the rules written against students when mass defaulting happens the whole system will come down again with individuals having absolutely no protection, and no one willing to fight for them.
It dredged back up the insecurities and feelings of personal and professional failure in the aftemath of the financial crisis from watching my home value being decimated and small businesses tanking, those being the bread and butter of my growing freelance design & development.
All the time, financial, and emotional investments completely sunk while watching the rich, entitled Wall St set have their billions of dollars in gambling debts paid off with my tax dollars.
(And then to come to the realization that I probably had that home to begin with largely thanks to the real estate gambles they were making back in ‘02…)
I've composed 3 lengthy replies to you describing my all-too-similar experience but deleted each because of the pain, and mountain of venting that can't be conferred in a simple comment.
All I can say is that - I feel you brother. Been there, was screwed, my wealth was transferred (via real estate) to an older generation. I was left to rebuild my life and have yet to full recover.
The one thing that remains in my head 10 years later: "Markets can remain irrational for longer than you can remain solvent" -John Maynard Keynes
Is there a solution to this at all? What can a normal person do to protect themselves and their loved ones? I am not talking about voting, running for office etc, though that is probably the correct, long term fix. But short term?
My mistake (with hindsight) was not being more cautious. I needed a home to start my family, and moving hundreds of miles away (which would have made me jobless) to a depressed region just to find an affordable house was out of the question.
My wife and I were told that real estate was a "sure bet". I distinctly remember my mortgage broker telling me "I can't promise you anything, but real estate prices have been going up for 12+ years straight" Everyone a generation older than us were living in (and selling) houses that were skyrocketing in value. We felt that if we didn't buy now, we'b be priced out of the market forever.
That being said, there wasn't a single person in my wife (personally or professionally) who could have warned me. It was either keep renting or jump in.
Just to ++ this sentiment. This echoes my situation back then as well. The only thing I can think that _might_ have helped me in hindsight, was a combination of better consumer protections (I got that loan with zero down ... and they glossed over the details of the adjustable rate mortgage); and also just wish I would have had better financial literacy.
I take full responsibility for my own situation and the outcome. The only thing I can do now, is incessantly knock the knowledge into my kids. Hopefully when it comes time for them to "make their own mistakes", they can at least learn from our experience.
"I got that loan with zero down ... and they glossed over the details of the adjustable rate mortgage"
Stupid me! I saved 20% like a dope and watched it go poof! I'm kidding (not really), but they also "glossed over" my income statements, which I could have made up because I was self-employed. I also got stuck with an ARM, which I thankfully dropped before rates starting climbing. The ARM was sold to me based on the "fact" that my home value would skyrocket, and I would re-mortgage before rates increased.
"I take full responsibility for my own situation and the outcome. "
Everyone burned like you and me does this. We own it, because that's the right thing to do. It's the ones who made out like bandits who don't and won't own up to the damage they caused.
> Everyone burned like you and me does this. We own it, because that's the right thing to do. It's the ones who made out like bandits who don't and won't own up to the damage they caused.
Same. Painful, expensive lesson that I own up to for my part (mostly, blissful ignorance…)
>I take full responsibility for my own situation and the outcome.
This pisses me off (not at you! just the sentiment).
Every one around you (people you trust and respect) says buy a house before you can't afford it. Your experience is housing prices rising for 10+ years. Nothing in your environment suggests the party is nearing a close.
Society creates a system where home ownership becomes not just a way to keep a roof over your head, but an investment. Moreover, it becomes one of the few investments attainable by the middle and lower-middle classes.
Mortgage brokers abandon all pretense of due diligence and devolve into a sophisticated scamming machine. They offer financial instruments to people they know cannot fathom the consequences of. They advertise and amplify the societal pressure to get in now before it's too late.
You are not a rational super-human. No one is. (Any one who thinks they are just lucky, and humans are awful at understanding luck)
I don't blame anyone who signed their name to a ARM one bit. To do so is to completely ignore the intense societal and economic pressures of the time.
We used to understand that moneyed interests were not interested in the welfare of every one else. We used to ban snake oil. I don't know what changed. Maybe it was Reagan and Chuck Norris movies.
When I got my mortgage in 2001, I was offered 3x the debt I would take on. Three times the debt. I told the broker that was insane, and she just said it was very, very common. Nope, not going to do that, I said. She thought I was silly.
About 5 years later (not due to the 2008 crisis), I would have lost my home had I done the 3x. As it was, I was able to weather the storm.
In financial matters, be very conservative. That is my advice.
This. Always consider what happens if you lose your investment/ what is your worst liability. Be skeptical about assuming that events (e.g. different kinds of securities crashing) are independent. That is one of the usual assumptions asset managers persuade the world and perhaps themselves that has been a factor in multiple crises. Finally, I am a big proponent of Graham's approach that the risk you can take is proportional to your time investment and focus, i.e. analysis and research you have done. Markets change. The idea is to be able to survive the russian roulette in the process. You might be able to afford some debt now, but will you be able to in the future, if e.g. your currency crashes? For instance, several profitable Turkish businesses are on the hook now, as they signed U.S. dollar based loans.
Tip1: If a position on a security appears hot now, and people commonly buy it, it is probably overvalued.
Tip2: Learn to skip opportunities. Invest in areas where you have done your research and know.
Tip3: Assume the person in front of you always has a financial interest in convincing you to buy or sell -- except if they have a fiduciary responsibility to you by law (and still pick advisors carefully).
Do not ever, and I mean EVER, mistake a banker or finance person as a friend or ally with your interests in mind.
I've had bankers who were very friendly, and whose entire marketing pitch was how much they were there to help the small biz/startup turn around and pull things like call loans early because their other Real Estate dept f*ked up and lost tens of millions in the state -- even tho we were in an entirely different business sector (software/ networking) and had a PERFECT payment and reporting record.
A medium-large biz I did some co-development project had an interesting story from it's early days decades ago. The President was going to the bank for an expansion loan, and was turned down because they said the business was too uncertain. A few days later, he found out that an employee went to the same bank and got a loan for a motorcycle no problem because his paycheck was regular. Since this was obviously stupid as his paycheck depended on the same business, he vowed then and there to not use bank leverage to grow. The biz now owns a good portion of a town not to far away, and has plants all across the US and several other countries.
Keep them at great distance, and use them absolutely as little as possible.
When you're young, I don't think there is much of anything you can do.
When you're working in a career, this is what I think helps you weather storms:
1) Have a basic understanding of finance. Understand stuff like APR, adjustable rates, compounding interest, 401ks, IRAs, ETFs, index funds, etc.
2) Build an emergency fund.
3) Never invest money you're going to need in <5 years. That means you'll have cash in hand, that also means you might have a lot of cash in hand if you're saving for a down payment on a house or saving for a car. You're giving up possible returns but in turn gaining security.
4) Live below your means. That might mean trade offs, learn what the best way to spend your money is for you, it will be different for everyone. (If your living below your means and are happy don't let others tell you you are spending your money "wrong.")
5) Work to reduce your debt. Try to work towards paying cash for most purchases. A lot of unaffordable things look affordable when you only look at monthly payments. That being said, debt can be a useful tool when used properly.
6) Insure everything that you need to insure, but don't over insure.
7) Don't treat the house you live in as an investment, unless it's a multifamily home you're going to rent out the other unit(s), it's an expense. Houses have some magical money sucking abilities.
8) Never let other people push you into homeownership, it should be something you want to do.
9) Build strong interpersonal relationships.
10) Practice radical acceptance. Let go of fighting reality. Accept your situation for what it is. When you fight reality you turn pain into suffering.
The contagion is merely a symptom of the presence of one of the vampire-squid’s blood funnels attempting to extract all possible economic value from this new market.
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[ 3.2 ms ] story [ 188 ms ] threadPoint is, the far-right/fascism/nazi ideology always thrives when social safety nets are being dismantled or are no longer existing. The rise of Hitler, for example, was based on him blaming the Jews for Germany's messed up economy (when it was the insane reparation load of WW1 that caused the economy situation), the rise of Trump was and is based mostly on rednecks blaming the loss of their jobs on immigrants (instead of climate change rendering e.g. coal superfluous plus decades of dismantling every social system the US has), and the rise of the AfD in Germany is based on the SPD dismantling the social safety net over a decade ago as well as stagnation in wages over the same time, which of course the AfD blames immigrants for...
I'm slowly coming to realise this. You'd think that point might be more broadly advertised.
If this hypothesis is true then you would think that the government in place would do everything they can to stop the far right/far left from rising from the ashes of the failed social safety net.
Instead, what we see mostly is the mainstream parties blaming the far right/far left without even addressing the issues that have led to people actually joining their ranks.
Its the same in Europe. Some people say they want a different Europe, mainstream politicians say no.
People then have the impression that their voices have not been heard. What do they do? They vote far right or far left and say: "now, can you hear me?"
But even that's still not enough, because most politicians are only concerned with being reelected, they still don't listen and they even blame the people who now despise the mainstream parties.
I can't understand this kind of logic.
Anyway, the public political discourse is usually addressing the symptoms, like far-right blaming the immigrants or far-left bringing back some welfare-state memories. Looks like ever since the iron curtain was lifted global economies have been rocked by constant crisis and the voters want an answer, so they choose either left or right or whoever is speaking "the truth". And of course it's hard to address economic problems, requires a well-educated know-how.
The problem is that politicians care about their individual pockets, not what happens to society after their term. Politicians are not incentivized to serve the people - quite the contrary. And even if they do end up thrown out of office, a nice private sector job is waiting for those who let themselves be bribed.
I don't think they can. When the mainstream messes up really badly, people turn to the fringe. The mainstream can try to hinder them, but can't really stop them by anything other than not messing up badly. Once something like 2008 has happened, it's already too late.
Then to be told if only you cared more about climate change everything would be fine...
I live in Munich. Aside from exorbitant rents caused by politicians ignoring housing issues for decades, we don't have a significant problem w/ immigrants and refugees. We do have a couple Nazi groups (two different Pegida groups, plus the "old" NPD nazi party plus the AfD neo-fash) with maybe two dozen people on the streets, but no one except Antifa gives a flying f..k about them.
Also i personally dont know anybody who got negatively affected (besides closed school Gyms) by the refugee crisis, but many worry anyways. Probaly Social Media makes it feel worse then it is,similar to people feeling less safe now despite way lower crime rates.
High immigration(besides nearby catastrophes) usually means something good happended to the area. So people can have the same overall happiness but for different reasons.
For example: Job opportunities are better now, Property prices are rising(Great my home is worth more), but it feels less at home then before.
Jeez, that's basically directly quoted out of the conspiracy theory playbook ("Umvolkung"). Germany has 5% Muslims and people whine about Islamization.
It's bollocks fueled by media. When media and politicians does nothing but draw migrants or "foreign" people as problems, then you'll see the non-whites on the streets automatically, subconsciously, as a problem. THIS is why the Nazi rhetoric and framing is so dangerous.
If a Muslim family on avg has kids around early 20s and have about 3kids each vs avg European family starting in early 30s and having 1 kid on avg..
In 60 yrs - Muslim pop will have 8x while European population will be at 1.75x
If Muslims are at 5%, they will then turn to 25% of population vs 75% Germans after 60 years.
The population change is exponential.
A lot of things that change you won’t even notice until it’s too late.
That assumes that reproduction rate stays constant. Fact is: after the second generation, reproduction rate is only a tiny bit above the one of the "host country" (per http://www.spiegel.de/politik/deutschland/demografische-stud...).
The reason is that while first generation women usually stay at home and care for kids, second and following generation women go to universities and then into jobs which means delayed childbirth and less kids overall (because each kid means a drop in career). In addition, Germany has easy and cheap access to family planning - everything from pill and condoms over "plan b pill" to abortions - than typical "origin countries", further lowering the rate of unwanted pregnancies.
Altogether, the "Umvolkung" theory is utter bullshit spewed out especially by the Identitäre Bewegung neo nazis.
https://news.ycombinator.com/newsguidelines.html
https://blog.kpmg.ch/swiss-immigration-recent-developments-o...
This is how immigration should be handled.
The amusing thing in the case of Germany is that the country never really was a real nation with a unifying culture etc (like e.g. France). Having only been unified in 1871, it was a hodgepodge of dukedoms for centuries. It's for example completely arbitrary that Bavaria became part of Germany but Austria didn't. To this day there is no unifying culture to speak of, e.g. the stereotypical German-Bavarian would scoff at "traditional" food from Northern Germany and vice versa. It was migration, immigration and arbitrarily drawn borders since practically forever. Many inhabitants of northern Germany have slavic surnames, because half of the local population has been wiped out in the Thirty Years' War, with immigrants replacing the dead. We don't even have a common religous tradition.
Because if it was white people moving into their hometowns then you/they wouldn't feel like a foreigner.
White people tend to be the biggest offenders in the gentrification regard but people tend to take it out on the newcomers who are visibly different from them so in white communities it because an "immigration problem" and in nonwhite communities it becomes a "gentrification problem".
I can't remember the exact number, but the majority population feels threatened when the non-majority reaches some like 5-10% of the total population. When you feel threatened, the minority population isn't exactly overwhelming. America has had this kind of xenophobia before. Irish, Italians, Ukranians, Jews, it's all the same noise, and it turns out the same - you still have America, it's just a little different, a little more culturally complex. And don't give me that whole "but they aren't integrating" shtick. They may not integrate easily, but 2 generations from now their grand kids will be as American as anybody.
Hitler spent far more time blaming Democracy for that, and several missteps in a row really handed it over to him. He despised Jews and blamed them, but you don't really come to power by blaming hidden minorities. He had to first destroy Democracy, which he did, to rousing applause. He convinced everyone that autocracy was the solution. And man, was it fast. As soon as he was Chancellor, they were up and murdering what was left of the minority opposition. It was fast and ugly. And after that, it was ironclad. People should be more worried.
To get closer to autocracy he’d need better control of one of those two branches.
"democracy is fundamentally not German: it is Jewish" - Hitler
Hitler believed the Jews invented and foisted democracy onto the world. So when he's blaming democracy, he's still blaming the Jews.
> you don't really come to power by blaming hidden minorities
Except he did exactly this, repeatedly and publicly, in his writing, speeches, and policy.
Sure. He pointed a hell of a lot of fingers. He had a special hatred for Jews, yes. He said it publicly, but my point was that it he didn't come to power by solely blaming Jews for everything. The "humiliation" that he felt Germany suffered due to the end of WWI generally played much better.
Hitler believed Germany lost WW1 specifically because they were "stabbed in the back" by the Jews.
Please stop calling them "rednecks" and please don't assume that all his supporters were simply anti-immigration. While "redneckism" was a part of their campaign, Trump was elected by college educated, white suburban women too. Personally, the Trump supporters I've talked with are mostly well-off (small business owners), and mostly disconnected from world news. They don't identify as rednecks, and live in a very blue state. The usual justification goes like this "I worked for what I have, I don't think others should get hand outs" and "Politicians are all evil, I like that Trump is 'shaking things up'"
To be clear, I'm not defending Trump supporters but rather advocating for looking at them with a broader view. While my state is one of the most liberal in the nation, 50% of my neighbors identify with GOP messaging.
And polls keep showing that the people who voted for him do not regret their vote. “Redneck” may be unfair, and a slur, but the spirit of it in term of cultural identity (small-minded racists) has sadly been proven through his continued support.
A logical thing to assume for someone who is fully engaged with current events/news. However, most don't follow /r/politics religiously, and the nightly network news certainly isn't covering it (with the outrage that they should be) so many are still blissfully ignorant. Or is it willfully ignorant?
Even from here in Germany, newspapers make headlines with every little tweet that Trump spews out, not to mention every tiny detail from the Mueller probe. Same for social media. You gotta run through the world blindfolded to be unaware of Trumps scandals...
In the US we have "network news" and "cable news".
Network news is what the workers, families and people who just want a quick update on the world watch. This nightly news (30-60 min) focuses mostly on local horrors like murders, robberies, fires etc. with a smattering of positive local happenings. They might touch for 1-2 minutes on national/political news, and in doing so attempt to tell it in a way that doesn't piss off 50% of their audience. People that watch this news, as their primary source are blissfully unaware of how bad it really is. They think it's just "politics as usual" and don't want to be bummed out after a long day at work.
Then we have cable news, which is is a 24/7 IV drip for retirees, stay at homes, jobless Americans and the most militant supporters on both sides. If you identify with Republicans you watch Fox News if you identify with Democrats, you watch MSNBC. Both leave you feeling outraged, exhausted and convinced the other side is "lying to you".
Then, both sides retreat to social media, where their friends and family re-enforce what they already feel - further widening the divide between Americans.
This, in a country of cord cutters, and massive internet consumption, with access to the world’s press in addition to their own.
I think you need to broaden your social circle, as the Americans I know personally aren't as connected as you assume. Every revelation I share with them is responded to with shock and disbelief. "What do you mean it's illegal but no one is doing anything about it?" or "If that was true, shouldn't those people be arrested and in jail?"
I only know a couple "cord cutters" and even those that have cut the cord, still watch network news; CBS, NBC, ABC, Fox. Facebook we know is an echo-chamber, not open to dissenting opinions by design.
Furthermore, these people aren't on Twitter, they don't even know what a "web forum" or blog really is ("is it like a website?").
Most people have the innate sense that something in our society is deeply unfair and they’re looking for someone to blame. Trump offers easy solutions.
What we should refuse to do is let anyone off the hook for supporting Trump. Just because you like his business policies doesn’t mean you get to look the other way when he does monstrous things like locking migrant families in detention centers.
The war against "cultural elites" started with the first "mountain men" that ran for office in contrast to the 'educated elites' from "the North". Sound familiar?
It's not liberals, leftists or elitists who started the war on manual labor - they used it to separate themselves a long time ago.
This of course was connected to slavery, which left the south under-educated and feeling personally attacked. Too much to cover here, just read the book!
And now, look where we are. In short, if you're sick of all the right-wing nonsense, follow the money: who loaned them the money to get where they are today, in power? Follow that trail all the way back and you'll see the real string-pullers behind the puppets...
Financial crises foment authoritarianism. In 2015, a trio of German economists studied financial panics in 20 advanced economies dating back to 1870, and concluded that they almost always result in major gains for “far right” political parties after a lag of a few years. The most pressing question for policymakers facing a banking meltdown is not, “How do we restore our banks to profitability?” but, “How can we prevent social collapse?”
It's survival mode, not even women and children first. So before the dust settles, or even earlier when the economy is clearly imbalanced, unstable and listing off to one side, they expect people to think about the extremists this is going to bake over the next half decade. Never going to happen.
Business people, accountants, financial operators, their minds do not work this way.
But there's easily multiple folds or layers that all add together to produce such an effect. And part of it is age brackets. If this is a fifteen year cycle, it's partly generational, and as much about the ritual of hand-off as it is about who is actually landing in the driver's seat.
But the roughest part is the polluter's mindset of those who set up the meltdown. They're definitely there to say: not my problem; so long, suckers!
Immediately prior to that there's probably some mild discussion about incentives driving performance. Why perform at all, if not to reap rewards? And immediately prior to that, there's probably a period with a good record of following the rules, aging out and retiring uneventfully.
So, if the process seems to havea natural rhythm, it's probably because human mortality means good teams eventually kick the bucket, and upstarts fill their shoes with less integrity. The faces change, but the story doesn't.
As is noting perverse incentives and adverse selection.
It furthermore claimed that the major political upheaval only became apparent at the next minor economic crisis, because political scenes reacts to a major or a minor crisis by switching between two dominant schools of thought, and once both schools of thought are shown to be incapable of dealing with the situation, society forces them to be replaced with a different dichotomy.
This certainly pattern-matches what’s going on in the UK at the moment. I’m not sure about the USA — although most of the Americans I know think poorly of Dem and Rep alike, that’s a massive sampling bias on my part because my American partner is a volunteer for the Green Party.
Personally I think the last economic crisis was major, but there was no great political upheaval after it. The bad actors were propped up with bailouts, the advisers that really drive politics remained in power.
Which makes me think the next crisis will be even more major, because we haven't solved any of the underlying problems. This is kind of like with a bug caused by technical debt. We implemented a workaround that will cause much bigger failures than the last one instead of refactoring.
Wall Street continues to take on obscene amounts of debt from the government for essentially no interest, see Quantitative Easing, so that they can avoid paying even more taxes on their even greater profit. This is also fueling bubbles in other wealthy assets as everything is actually just leveraged debt. The prospects of another financial crisis is just as real as it was 10 years ago and again the lower-middle class will be left to hold the tax bill while the fat cats get fatter.
The real issue is the extraction of wealth from citizens by Wall Street, Wall street builds nothing, absolutely nothing. They claim they provide liquidity, but yet when things look bleak, that liquidity dries up as they run and tighten up on credit. When they going is good, it's all about wealth extraction, they extract it from 401k, pension funds and from every day transaction between average investors trying to make an investment. The entire world of HFT is a joke. They have turned the market into something worse than a casino. In Vegas, you really know your odds, at wall street some of the instruments that are being pedaled shouldn't even be allowed in a video game.
When Lehman Brother's tanked they were one of the highest leveraged at 38:1, and current legislation allows 20:1 which many were originally operating at. If you look at any wealth asset, real-estate, wine, art, etc. these are all artificially high making the leverage crisis exponentially worse because when it comes time to shore up accounts these people don't actually have the value their writing in their books.
Most of these retirement funds have to prove some basic stress solvency, but they're doing it with leveraged funds and debt. Thus when a downturn happens and it comes time to pay back the middle class we will have to bail them back out. We're paying twice! Student loans almost certainly will be the next bubble, Wall Street already sells these as an asset backed security (see SLABS). At over a trillion in value with the rules written against students when mass defaulting happens the whole system will come down again with individuals having absolutely no protection, and no one willing to fight for them.
It dredged back up the insecurities and feelings of personal and professional failure in the aftemath of the financial crisis from watching my home value being decimated and small businesses tanking, those being the bread and butter of my growing freelance design & development.
All the time, financial, and emotional investments completely sunk while watching the rich, entitled Wall St set have their billions of dollars in gambling debts paid off with my tax dollars.
(And then to come to the realization that I probably had that home to begin with largely thanks to the real estate gambles they were making back in ‘02…)
All I can say is that - I feel you brother. Been there, was screwed, my wealth was transferred (via real estate) to an older generation. I was left to rebuild my life and have yet to full recover.
The one thing that remains in my head 10 years later: "Markets can remain irrational for longer than you can remain solvent" -John Maynard Keynes
My wife and I were told that real estate was a "sure bet". I distinctly remember my mortgage broker telling me "I can't promise you anything, but real estate prices have been going up for 12+ years straight" Everyone a generation older than us were living in (and selling) houses that were skyrocketing in value. We felt that if we didn't buy now, we'b be priced out of the market forever.
That being said, there wasn't a single person in my wife (personally or professionally) who could have warned me. It was either keep renting or jump in.
I take full responsibility for my own situation and the outcome. The only thing I can do now, is incessantly knock the knowledge into my kids. Hopefully when it comes time for them to "make their own mistakes", they can at least learn from our experience.
Stupid me! I saved 20% like a dope and watched it go poof! I'm kidding (not really), but they also "glossed over" my income statements, which I could have made up because I was self-employed. I also got stuck with an ARM, which I thankfully dropped before rates starting climbing. The ARM was sold to me based on the "fact" that my home value would skyrocket, and I would re-mortgage before rates increased.
"I take full responsibility for my own situation and the outcome. "
Everyone burned like you and me does this. We own it, because that's the right thing to do. It's the ones who made out like bandits who don't and won't own up to the damage they caused.
Same. Painful, expensive lesson that I own up to for my part (mostly, blissful ignorance…)
This pisses me off (not at you! just the sentiment).
Every one around you (people you trust and respect) says buy a house before you can't afford it. Your experience is housing prices rising for 10+ years. Nothing in your environment suggests the party is nearing a close.
Society creates a system where home ownership becomes not just a way to keep a roof over your head, but an investment. Moreover, it becomes one of the few investments attainable by the middle and lower-middle classes.
Mortgage brokers abandon all pretense of due diligence and devolve into a sophisticated scamming machine. They offer financial instruments to people they know cannot fathom the consequences of. They advertise and amplify the societal pressure to get in now before it's too late.
You are not a rational super-human. No one is. (Any one who thinks they are just lucky, and humans are awful at understanding luck)
I don't blame anyone who signed their name to a ARM one bit. To do so is to completely ignore the intense societal and economic pressures of the time.
We used to understand that moneyed interests were not interested in the welfare of every one else. We used to ban snake oil. I don't know what changed. Maybe it was Reagan and Chuck Norris movies.
About 5 years later (not due to the 2008 crisis), I would have lost my home had I done the 3x. As it was, I was able to weather the storm.
In financial matters, be very conservative. That is my advice.
Tip1: If a position on a security appears hot now, and people commonly buy it, it is probably overvalued.
Tip2: Learn to skip opportunities. Invest in areas where you have done your research and know.
Tip3: Assume the person in front of you always has a financial interest in convincing you to buy or sell -- except if they have a fiduciary responsibility to you by law (and still pick advisors carefully).
I've had bankers who were very friendly, and whose entire marketing pitch was how much they were there to help the small biz/startup turn around and pull things like call loans early because their other Real Estate dept f*ked up and lost tens of millions in the state -- even tho we were in an entirely different business sector (software/ networking) and had a PERFECT payment and reporting record.
A medium-large biz I did some co-development project had an interesting story from it's early days decades ago. The President was going to the bank for an expansion loan, and was turned down because they said the business was too uncertain. A few days later, he found out that an employee went to the same bank and got a loan for a motorcycle no problem because his paycheck was regular. Since this was obviously stupid as his paycheck depended on the same business, he vowed then and there to not use bank leverage to grow. The biz now owns a good portion of a town not to far away, and has plants all across the US and several other countries.
Keep them at great distance, and use them absolutely as little as possible.
When you're working in a career, this is what I think helps you weather storms:
1) Have a basic understanding of finance. Understand stuff like APR, adjustable rates, compounding interest, 401ks, IRAs, ETFs, index funds, etc.
2) Build an emergency fund.
3) Never invest money you're going to need in <5 years. That means you'll have cash in hand, that also means you might have a lot of cash in hand if you're saving for a down payment on a house or saving for a car. You're giving up possible returns but in turn gaining security.
4) Live below your means. That might mean trade offs, learn what the best way to spend your money is for you, it will be different for everyone. (If your living below your means and are happy don't let others tell you you are spending your money "wrong.")
5) Work to reduce your debt. Try to work towards paying cash for most purchases. A lot of unaffordable things look affordable when you only look at monthly payments. That being said, debt can be a useful tool when used properly.
6) Insure everything that you need to insure, but don't over insure.
7) Don't treat the house you live in as an investment, unless it's a multifamily home you're going to rent out the other unit(s), it's an expense. Houses have some magical money sucking abilities.
8) Never let other people push you into homeownership, it should be something you want to do.
9) Build strong interpersonal relationships.
10) Practice radical acceptance. Let go of fighting reality. Accept your situation for what it is. When you fight reality you turn pain into suffering.
Disclaimer, this is just my opinion.
2. Diversify income streams.
3. Have 6 months' worth of expenses in liquid savings.
4. Build a solid neighbourhood/local community.
The oath family popup is awful.. Either agree or 'manage options' which leads to a load of crap. I'm not agreeing, or drilling into all those options.
Also, when you hit back, it brings you to the same page.. Thats some dodgy shit.