Global Financial Crisis Looming, Or speculation?

Today I was unfortunately home sick from work and have gained some valuable time to revise some study on my economics course. Scrolling through the internet and watching videos I very soon found myself delving into the 6-8 year "Bubble" cycle that the global financial sector seems to gets itself into. The Banks lending to much, debts outweighing actual personal wealth, obvious signs showing some serious economic issues are looming. Studying economics and owning an investment property I'm definitely not going too glance away as if its a pop-up ad showing cheap airfares. What are other peoples thought's on this situation, especially seeing as the banks are not going to be able too bail themselves out like in years before due too the significantly larger debt, How does this affect Australian economy and investors?

 

Yes google does have this effect on you, best to just stay calm and not worry

 

As long as you don't overcommit yourself financially (for whatever your situation is) and have some risk mitigation in place, I wouldn't worry.

Personally, I'd burn the economics books and stop watching the doom and gloom stuff.

But that's just me.

 

I disagree with burning the economics books that's for sure..... economics used correctly can foresee a future that is brought on by clear evidence that has been shaped by the past examples of financial crisis. I hate credit cards, still live at home and I'm renting my apartment, so I'm definitely in a better position than a lot of other people..... still understanding facts and gaining other peoples opinions is always a good thing. I'm definitely starting too stack my money up over the next 6 months.

 

What economics book do you have that can foresee the future?

 

Every deal I have closed to make money and build wealth over the last 15 years , there were economic pundits, graphs and fancy numbers showing imminent crashes, busts, slow downs, dangerous periods and so on. Economic data can be wielded to show almost anything it wants.

Now stringent risk mitigation measures, that's useful and needed. Anyway just my 2 cents. Good luck.

 

"Economics is the social science that describes the factors that determine the production, distribution and consumption of goods and services."

Economics can show a future of how all these things relate and produce an outcome that affects people in a lot of different sectors. With the majority of investors having money tied up in banks its definitely an issue to be weary of.

It seems like there are a few people here who just treat the study as a "Magic trick" or don't really think its relative to society.

 

Yep.

 

Economic data can't be wielded to show anything it wants when it is taking information of previous data......

 

ahh... my mentor would say to me.." do you want to build wealth or do as others do?". Brings back memories.

Good luck.

 

Actually quite shocked at the responses already...... imagine how much more profitable investment would be if your followed market trends and pulled your money out or sold it before an inevitable crash which is so clearly shown every 6-8 years.....interest rates lowering.....oil at an all time low.....big banks still saying the age is booming......all this happened before the 2008 financial crisis.......and that pure data......no magic tricks.

 

You are exactly right. But to do this, you need to be smarter than the market. IE, smarter than everybody else. No one is smarter than everyone else. Hence, you can't pick it. The troughs or the peaks.

 

What you say might be more accurate than everyone thinks.

Lots of folks lost everything when they were told; "Don't worry!"

Look at what happened in the movie; "The Big Short"...for a decent length of time everyone thought that Christian Bale's character was off his rocker.

Always a good policy to look for storms on the horizon - that is not being doom and gloom - that is being sensible and preparing for the worst, and make sure the cash coming in is more than the cash going out.

The assets may go up and down in value, but if your cashflow is solid; it won't affect you when the storm hits.

 

What will you do about your investment property. Sell or keep it knowing what you know?

 

And all the hedge fund managers who studied economics saw these irrefutable and obvious facts and made oodles of cash. Oh wait, they didn't.

Real world isn't a text book. There is a financial crisis coming, I just don't believe anyone can accurately predict it. Inevitably some will make their "predictions" at the right time and be hailed as a genius, unfortunately it is more likely to be luck.

What should happen often doesn't and the unlikely inevitably will.

 

At the moment I want to just keep my head down at work, save hard, probably stop paying the extra money off my loan. If the crisis hits I would change my loan to interest only so that the rent would cover any increases in interest rates from the bank.

 

All I'm after is opinions of investors who have managed property in turbulent times, if indeed they actually hit. Do the banks hit us hard to pull up the slack? Are investors concerned if there tenants loose there jobs? Pure preparation.....no doom and gloom predictions.

 

I'd like to make the bold prediction that if more Australian workers take a day off to scroll the internet and watch videos then the economy will indeed be stuffed lol.

 

See many investors are also prepared in regards to future shocks that can and do occur. Nothing wrong with doing what your doing, unless you know it's going to happen. If so, you should probably sell and keep the profits and buy back in after the next gfc, which will happen in time. But no one knows when.
There have been many threads started such as yours on here, have a read through as you might find responses that your looking for.

 

[QU"Ethan_89, post: 224995, member: 3363"]All I'm after is opinions of investors who have managed property in turbulent times, if indeed they actually hit. Do the banks hit us hard to pull up the slack?

Depends on banks, lvrs etc. Best thing to do is not overcommit for your financial situation.

Are investors concerned if there tenants loose there jobs?
No. part of risk mitigation is having buffers, LL insurance etc.