What are all the current bubbles?

Government bonds. Those don't have any value atm and have biggest risk to fail when matured.

Tulips

>bonds
>which bonds?
>government bonds
which government?

Silicon Valley

Houses

low interest rates -> housing bubble
qe -> financial asset bubble

my guess is raising interest rates will pop the housing bubble first. and it will drag part of the financial markets based on mortgage securities with it.

Bitcoin and all of its altcoins.

Credit cards and student loans

>student loans
Would love to see your logic behind this.

>The financial industry has outgrown its usefulness and stands to shrink by a lot
The financial industry IS the economy now. The US is no longer an industrial nation or a service-based nation, Wall St makes us the most money.

>biggest risk to fail when matured
Go back to undergrad if you don't understand how treasury and muni's are protected against default.

That would imply that the mortgage-derivatives markets are filled to the brim with adjustable rate loans which is no longer true. The majority of loans within the ABS markets are fixed rate mortgages, credit cards, vehicles, and student loans. The CDS markets are filled with these ABS market instruments so there will be no 2008 round 2. If you don't believe me then fill free to dig through some ABS instruments that are commonly used in education pensions and what not.

>CDS markets
meant to say CDO markets, the markets for swaps has to do with what I'm talking about but it doesn't fit here

to pop the housing bubble you don't really need the existing mortgages to default. it's enough if rates go up and nobody feels they can afford the loans especially the fixed rate loans. it will drop the housing prices like molten lead and that will drag the payable loans down the sewer would you finish your payment for your house when it's worth less than half the original buying price and you have to pay twice that on mortgage? you probably wouldn't. it would actually make sense financially to default on the loan and let the bank get anally annihilated on the real estate it forecloses especially if you are in the very beginning.

>especially the fixed rate loans
Which wouldn't be effected by rates increasing since the rate is fixed for the life of the loan. Raising interest rates doesn't directly effect housing prices either.

Don't confuse what happened in 2008 with the normal way thing work when rates go up. Go do some research on previous rate hikes and housing prices.

2 not really mentioned otherwise

Europe

Auto loans

>auto loans
Now we're on to something. Google "auto loan default rates" and read up on subprime auto loans.

Googling looks like pretty much what I already knew.

Thankfully the backing assets are just cars and they depreciate in value anyway, but the rate at which lenders are approving is pretty ridiculous. Also, the volume is there. There are only so many houses, and it's actually pretty tough to get approved. A lot of people rent and virtually noone with more than one mortgaged property would be too risky a borrower

Everyone could use a couple cars though and it doesn't matter what you can afford

In terms of the UK
Housing.
Government policy continues to inflate the cost and prevents supply increases.

Globally
Tech companies
Profitability appears to be far too high compared to ability to profit in many many tech companies.

e.g. How in the world Snapchat got a multibillion dollar valuation boggles my mind when the entire core concept of the application can be replicated and replaced by a simple feature on Whatsapp pre-IPO. Unlike Facebook the historical and current layouts of the app do not make adverts mandatory to view, make adverts link directly to a third party site nor increase product engagement beyond that of traditional media (posters or magazine adverts).

Even if the company were to raise their game by integrating sponsors into some of the filters, charging for some filters in a clear and simple way (i.e. via apple/android pay) I still doubt the company would ever produce a significant profit. The biggest problem though is that this app is ultimately a fad with little staying power beyond a few more years.

>Would love to see your logic behind this.
When is an exponential growth in debt with diminishing returns not a bubble? It doesn't matter if they're government backed: it's still a bubble.

>The financial industry IS the economy now. The US is no longer an industrial nation or a service-based nation, Wall St makes us the most money.
And that doesn't seem the least bit unsustainable to you? Jesus christ.

>When is an exponential growth in debt with diminishing returns not a bubble?
"A bubble is when the price range of an asset strongly deviates (in an upward direction) from the corresponding asset's intrinsic value." -en.wikipedia.org/wiki/Economic_bubble

The price of student loans (the interest attached to them) doesn't deviate from the corresponding intrinsic value (the default risk of borrowers of student loans. More kids going after dumbass degrees and not being able to pay back student loans just means higher interest rates on student loans. More kids are taking out student loans in the first place due to college being seen in this new mindset of, "everyone of you is smart enough to go and should definitely go, if you don't then you'll be poor and if you do you'll make $100k your first year out" that the middle class seems to have adopted.

Long story short, student loans aren't in a bubble, the market just expanded due to the mindset of consumers in the US.

>And that doesn't seem the least bit unsustainable to you? Jesus christ.
It's been that way since the Carter administration in the late 1980s back when Paul Volcker was in charge of the Fed. One can maybe make a case that it has caused larger and larger booms and busts within the US economic system since then but that's not the point, it's still sustainable.

If you disagree then I'd love to hear you explain how the US didn't prosper during the 1980s, 1990s, early 2000s, and 2010s.

This. People get approved for anything nowadays.

i'm talking about new loans i thought that was clear. nobody will go for new fixed rate or variable rate because fixed rate will be expensive variable rate will be scary. fall in demand will pop the prices and equity of owners paying mortgage.

Life, WWIII soon

Not sure of any bubbles so to speak but there's a lot of money to make for businesses overpaying for acquisitions and shorting startup Ipos

There was an interesting article in the WSJ about a likely bubble in loans used to finance solar panels. It sounded very confident, and it kind of reminded me of all those articles before the housing crisis that clearly predicted what would happen. Unfortunately I didn't actually read it because it was boring.

That's not how we've observed consumer confidence in the market of loans behave historically. Unless you have reason to believe that this time it will be different then I'd suggest you adjust this line of thinking.

I can see it, all the start-ups I'm seeing now are solar companies.

Not a bad thing on the surface, but honestly, the equipment is pricey there aren't many people who can afford solar panels without a line of credit anyway.

I found the article without a paywall:
America’s Fastest-Growing Loan Category Has Eerie Echoes of Subprime Crisis
realtor.com/news/trends/americas-fastest-growing-loan-category-eerie-echoes-subprime-crisis/

>Lenders offering energy-conscious loans care little about borrowers’ creditworthiness, contractors function as loan brokers

>PACE loans [are likely] the fastest-growing type of financing in the US.

>Plumbers and repairmen ... often pitch PACE loans ... to earn referral fees from lenders

Yup, I knew those things were a scam.

google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=solar kansas city&rflfq=1&rlha=0&rllag=39053044,-94587381,4441&tbm=lcl&tbs=lf_od:-1,lf_oh:-1,lf_pqs:EAE,lf:1,lf_ui:4&*

5 of those companies popped up within the last 3 years.

sunsmartusa.com/benefits-of-solar/

This one even offers loans kek. I can't see any solar company being a solid investment unless you really care about the environment.

>That's not how we've observed consumer confidence in the market of loans behave historically.
what? this literally happened in my country a dozen times. interest rates go up real estate drops like a sick fly.

Apologies, I incorrectly assumed we were discussing the US markets. What country are you in where that happens?

seems to me it's kinda true for the us too.

>Housing.
>Government policy continues to inflate the cost and prevents supply increases.
how exactly is it a bubble then by any definition?

The only correlation in that graph is from 79 to 86, the rest doesn't even look close. Even during that period, housing prices are shown to have risen as the 30 year fixed rate decreased, and then again decreased as the 30 year fixed rate decreased which would mean that any correlation is null.

Look at my graph instead.

Here's two more for you since you chose to only pick the one chart which confirms your bias.

Here's a nice graph for your student loan argument since you think raising rates will destroy every credit market.

In case you have any questions about deliquency rates for said student loans, read this:
>stlouisfed.org/on-the-economy/2015/april/student-loan-delinquency-rates-arent-getting-worse

the effect is obviously delayed you are reading your charts wrong user, but that's just my opinion. i see clearly there is a correlation.

Google "interest rates vs housing prices" then select the "images" tab. Now tell me that poster didn't nit-pick the one chart that remotely backs up their opinion. If you disagree then post a graph/chart that shows your point besides the one that posted.

you are looking at housing prices but that's misleading you. inflation can mess up the picture bad. look at "real housing prices". and account for the delayed effect of interest rates.

obviously i'm oversimplifying this shit because it's more complicated. the other factors can make or break it at certain times. but the basic equation is this: more affordable mortgages mean the housing prices go up, less affordable rates mean they go the fuck down and existing mortgages by this alone become worse and worse deal even if they are fixed rate. but regionally home prices might be more influenced by rent prices which are influenced by demographics and work opportunities more than interest rates.

Auto loans are small thought.

And you can always easily sell a car, at a loss if you must.

your car is worth less by 30% immediately when you roll out the dealer with it.
then it will lose about 10% of it's value yearly faster at first few year then slower.

So you can always sell the car that underlies your loan (at a significant loss since it is used, has an outstanding loan balance, and depreciates wildly fast as it is a vehicle) to pay off said loan?

kek

Also

This post:
contains a graph that is adjusted for inflation. I don't think I'm overlooking anything I think some people just assume their assumptions are correct because they've only ever lived through one big market correction (2008).

you clearly see what i'm talking about on that graph including the 2008 recession.

Which graph?
This:
Or this:

both

In order for that to be correct the graph(s) would have to show a correlation between increase/decrease more times than not (which it fails to do, in my opinion).

Serious answer? The stock market as a whole. Its overpriced by at least 10-15%. There are fucking dividend blue chips with a P/E's of 20-25+. How does that make any sense? These companies are barely growing.

Coke (KO) - P/E of 27
AT&T (T) - P/E of 20
GE (GE) - P/E of fucking 29
3M (MMM) - P/E of 23

I know P/E isn't the only metric you should look at but its definitely gotten to the point where its serving as a warning signal. For companies with little growth, a P/E of 25 makes zero sense.

The fact of the matter is, theres just nowhere else for people to put their money and get good returns at the moment. If you're buying housing, thats just getting into another bubble. So theres no telling how far this current rally goes. But the losses will be huge as is typical with bubbles bursting.

>Would love to see your logic behind this

Too many loans given, not many paying them back.

>too many loans given
Volume of loans doesn't matter, read the thread I've already explained why.

>not many paying them back
Enough pay them back and that's what matters. Delinquency rates for student loans are also decreasing. Also note that the majority of student loans are government-backed so they can just be forgiven (via bankruptcy or some other program) then paid off using tax-payers money.

Also, they are not in a bubble by default using the definition of an "asset bubble." Try again.

Here in the UK, our student loan system is a huge bubble.

Basically it's £21,000 of debt total, but you only pay 2% on everything over £22,000 it all gets written off when you reach 50, but the mean salary is £22,984 a year.

That means that based on average career progression, there's going to be a huge problem exactly 27 years from now when the government suddenly has to start writing off billions of pounds of loans each year.

How can something be a bubble when it never existed?

>Go back to undergrad if you don't understand how treasury and muni's are protected against default.

Arrogance of thinking what your econ professor told you is true. What you learn at college is fucking nonsense, through and through.

Actually, the biggest bubble is the bullshit people are programmed with in colleges, it's pure blue pilled garbage, but because people paid a fuck ton of money for their 'education', it's hard to accept that you've been misinformed.

Completely gentrified central cities with every former garage or industrial space converted into open air restaurants or boutique shopping and far too many updated former meth lab apartments going for exorbitant rents. Might just be a Sun Belt phenomenon but the center cannot hold. There's not enough concentrated wealth to support it. Most of the working class in these areas can no longer afford to live near their place of employment.

Says the kid without a post-secondary degree posting cat pictures on a european rice farming forum.