Is the bubble about to burst?
Discussion
For the benefit of some of us younglings.... Can someone explain what happened last time round during the 80s/early 90s when the car bubble went to pot? Weren't there £1mil F40s back then? I remember as a a spotty teenager seeing F40s advertised for £100k in stuff like Octane in the mid-noughties. As someone with a modicum of financial nous, but too young to have experienced a true 'burst' first hand I do wonder what it actually feels like to go through it.
Loads of super-cars had to be sold under-valued right after credit-crunch. I know a few people who actually financed their f360s, or gallardos and ended up losing their jobs + selling their cars under-value due to the market conditions and still owed loads to finance companies. Back in 2008-09, If i remember correctly you could easily find 30-35k ferrari 360s, 13-15k 993s and many more super cars were available. Not to mention abandoned cars in Dubai, some of those pictures you would see on social media correct, many of those cars bought on cheap finance and over-valued. This ofcourse did not only include cars, same with the real-estate/property and land had a massive slap from the market
Fezzaman said:
For the benefit of some of us younglings.... Can someone explain what happened last time round during the 80s/early 90s when the car bubble went to pot? Weren't there £1mil F40s back then? I remember as a a spotty teenager seeing F40s advertised for £100k in stuff like Octane in the mid-noughties. As someone with a modicum of financial nous, but too young to have experienced a true 'burst' first hand I do wonder what it actually feels like to go through it.
Basically there was a recession - lots of people lost their jobs / pay cuts /no or low bonuses. Resulting is people putting secuityvof their own home food on the table first. Sometimes this meant people with assets had to sell them to pay off other debt ie Mortgage and it was a case of we have to sell this at all costs.
When that happens on a large scale those who are heavily leveraged want to offload too else fearing being locking itnto an asset with a huge unrealised loss to take some I guess also had margin calls. Others potentially saw other investment opportunities so got out to invest elsewhere Or get out watch the market collapse then be a vulture and buy up some more for way way less and far far better than what you had.
Some people basically were bankrupt too
ooid said:
I know a few people who actually financed their f360s, or gallardos and ended up losing their jobs + selling their cars under-value due to the market conditions and still owed loads to finance companies.
The classic cocktail for personal difficulty . Financing without a concrete back-up plan is an acquired taste 
I'm pretty 'wired' into post 2009 events as we began this BTFD era along with car values since. My thinking/'concern' is a 30 year old banker/trader/analyst/whatever today, if they'd done an undergrad and a MSc/MBA, would have been at uni from what 2005-2009? These people went into a 'real world' of just buy the dip... QE will save the day... US tapering QE? Saved by BoJ blasting the world with more QE. Europe struggling? Draghi will blast it with QE. China devaluing? Not a concern. Brexit? Meh. Trump? So what. 2 hikes from the Fed so far? US is up and away with more to come. All is well. Keep buying.
There is a generation of permabulls growing that know not of a world of financial prudence or recession beyond something in a textbook or old newspaper articles. All of them on the hunt for yield. I'm not saying a bunch of millenials and hipsters are buying old Porkers (maybe they are!) but most people will only learn if they themselves get burnt (sometimes not even then!) and very few are willing to learn from others' mistakes. If the financial 'powers that be' haven't seen first hand how ugly things can get, what can be expected of those without any financial intelligence?
Probably a rant for the finance section, but oh well.
There is a generation of permabulls growing that know not of a world of financial prudence or recession beyond something in a textbook or old newspaper articles. All of them on the hunt for yield. I'm not saying a bunch of millenials and hipsters are buying old Porkers (maybe they are!) but most people will only learn if they themselves get burnt (sometimes not even then!) and very few are willing to learn from others' mistakes. If the financial 'powers that be' haven't seen first hand how ugly things can get, what can be expected of those without any financial intelligence?
Probably a rant for the finance section, but oh well.
Fezzaman said:
I'm pretty 'wired' into post 2009 events as we began this BTFD era along with car values since. My thinking/'concern' is a 30 year old banker/trader/analyst/whatever today, if they'd done an undergrad and a MSc/MBA, would have been at uni from what 2005-2009? These people went into a 'real world' of just buy the dip... QE will save the day... US tapering QE? Saved by BoJ blasting the world with more QE. Europe struggling? Draghi will blast it with QE. China devaluing? Not a concern. Brexit? Meh. Trump? So what. 2 hikes from the Fed so far? US is up and away with more to come. All is well. Keep buying.
There is a generation of permabulls growing that know not of a world of financial prudence or recession beyond something in a textbook or old newspaper articles. All of them on the hunt for yield. I'm not saying a bunch of millenials and hipsters are buying old Porkers (maybe they are!) but most people will only learn if they themselves get burnt (sometimes not even then!) and very few are willing to learn from others' mistakes. If the financial 'powers that be' haven't seen first hand how ugly things can get, what can be expected of those without any financial intelligence?
Probably a rant for the finance section, but oh well.
You play with fire you get burned. There is a generation of permabulls growing that know not of a world of financial prudence or recession beyond something in a textbook or old newspaper articles. All of them on the hunt for yield. I'm not saying a bunch of millenials and hipsters are buying old Porkers (maybe they are!) but most people will only learn if they themselves get burnt (sometimes not even then!) and very few are willing to learn from others' mistakes. If the financial 'powers that be' haven't seen first hand how ugly things can get, what can be expected of those without any financial intelligence?
Probably a rant for the finance section, but oh well.
Nothing wrong with risking it and losing it all - mony or stuff do not make you happy family and friends do. You could be potless but the happiest guy or girl around and rich and be a sad miserable stingy person.
That all said. As those who are in charge have no idea what they are doing. The so called financial experts have no idea what they are doing. If you have the spare cash you could put it with National Savings and earn 1%.
So who should I be guided by and take seriously. None of them.
Or take some educated guesses and put it into some cars. For me it would be stuff I would like to drive. Nothing that is new. So if the value goes up happy days. If it tumbles I still own some lovely cars that I can gaze at, drive and enjoy.
Value is only relevant if you want to sell.
Borrowing a shed load of money to feed that idea is too risky IMO
So who should I be guided by and take seriously. None of them.
Or take some educated guesses and put it into some cars. For me it would be stuff I would like to drive. Nothing that is new. So if the value goes up happy days. If it tumbles I still own some lovely cars that I can gaze at, drive and enjoy.
Value is only relevant if you want to sell.
Borrowing a shed load of money to feed that idea is too risky IMO
anonymous said:
[redacted]
And this is what I really despise - why do we accept it being fine that our children and grandchildren and great grandchildren have to pay for our frivolous lifestyles. They will have a lifestyle vastly financially poorer and have to work longer. I wonder how much extra tax we should be paying now to ensure generational fairness.
Politics though is struggling to play catch up with people. The people have rejected centre left politics (the can kickers) but nobody really has an answer as yet just the challenge. Its strange when you think about that the one group which avoided the blame for 2016 is the one group which created the void for Farage/Trump etc. to prey on. Its something Peter Hitchings mentions every now and then and he is 100% spot on, we need a vibrant left wing in politics to create balance, even if you have no intention of ever voting that way you need them.
Back on topic I got my pension projection through today, the growth projection over the next 20 years is less than the value of our house has gone up over the last 5. Property values up around 10 to 15% this year in our area, even more crazy is buy to let still works as the rent on houses like ours is about the same as initial mortgage repayments. Its still Assets all the way.
Back on topic I got my pension projection through today, the growth projection over the next 20 years is less than the value of our house has gone up over the last 5. Property values up around 10 to 15% this year in our area, even more crazy is buy to let still works as the rent on houses like ours is about the same as initial mortgage repayments. Its still Assets all the way.
Welshbeef said:
And this is what I really despise - why do we accept it being fine that our children and grandchildren and great grandchildren have to pay for our frivolous lifestyles. They will have a lifestyle vastly financially poorer and have to work longer.
I wonder how much extra tax we should be paying now to ensure generational fairness.
Why is your frivolous lifestyle - and the impact it is having on your family's future - the Govt's problem? If you "despise" it why not start changing things close to home e.g. not buying cars like BMWs and RS6s (or Porsches on this thread) and put your money into helping your next generation? Which is what many families are doing. It is not just those in power that have to make hard choices - we all have individual responsibility too. I wonder how much extra tax we should be paying now to ensure generational fairness.
Rather than pay more tax I would prefer to pass on the equivalent direct to my near and dear. Naive I know as we all will end up doing both.
anonymous said:
[redacted]
Agree wholeheartedly. But Weshbeef seems to be directing his ire at the system and forgetting that while fiscal events may have encouraged frivolity in some quarters, they don't force anyone to do anything.Anyway, back to the bubble (from the man who sold his classics 2 years early - but my 2.2s sale did enable my daughter get on the property ladder).
Edited by drmark on Saturday 31st December 14:51
Except for the rate of taxation, no Government has made a direct impact on me regardless of their party colour. Individual values, disciplines and choices are the things which make a tangible difference.
When more people realise this fundamental they will stop trying to blame something or someone else.
When more people realise this fundamental they will stop trying to blame something or someone else.
drmark said:
Why is your frivolous lifestyle - and the impact it is having on your family's future - the Govt's problem? If you "despise" it why not start changing things close to home e.g. not buying cars like BMWs and RS6s (or Porsches on this thread) and put your money into helping your next generation? Which is what many families are doing. It is not just those in power that have to make hard choices - we all have individual responsibility too.
Rather than pay more tax I would prefer to pass on the equivalent direct to my near and dear. Naive I know as we all will end up doing both.
They already have 2 houses which when he come to a sensible age they will step into in my eyes that's them sorted (but then maybe they will get divorced lose the lot...)Rather than pay more tax I would prefer to pass on the equivalent direct to my near and dear. Naive I know as we all will end up doing both.
Welshbeef said:
They already have 2 houses which when he come to a sensible age they will step into in my eyes that's them sorted (but then maybe they will get divorced lose the lot...)
I wasn't having a dig at you Welshbeef. Just feel we must shoulder our share of the responsibility. Happy New Year.anonymous said:
[redacted]
Ahh but it's not as simple as that though is it? Post 2008, everyone put their chips on China etc and the developing economies to save us with their cheap labour and transition to a consumer economy. As far as the US is concerned, job done. Fed are on the hike path. Trump is ready to spend spend spend. NFP numbers are solid etc etc. At the grass roots level there is still very much unrest due to the failure of the labour force to reskill and the supposed 'disenfranchised'. But at the macro level, all is well. Technological change is all well and good, but if it's replacing labour those resources need deploying elsewhere - which currently they can't/don't/won't!Bo_apex said:
ooid said:
I know a few people who actually financed their f360s, or gallardos and ended up losing their jobs + selling their cars under-value due to the market conditions and still owed loads to finance companies.
The classic cocktail for personal difficulty . Financing without a concrete back-up plan is an acquired taste We do not have any children to worry about. Just cats and dogs. As they can't borrow any of my cars I will enjoy spending my hard earned on living the dream (I wish). As long as I am pointing in the right direction I intend to make the bloody most of it.
Happy New Year to you all. May it be a healthy, wealthy and Goodyear (not a Michelin) for all
Happy New Year to you all. May it be a healthy, wealthy and Goodyear (not a Michelin) for all
Fezzaman said:
At the grass roots level there is still very much unrest due to the failure of the labour force to reskill and the supposed 'disenfranchised'. But at the macro level, all is well. Technological change is all well and good, but if it's replacing labour those resources need deploying elsewhere - which currently they can't/don't/won't!
Two different aspects there which I wish to comment on, firstly on the de-industrialisation thing. This is really something that goes back to the 80s and 90s, perhaps much more than the 70s if stats are to be believed. I am an Engineer in my early 40s and many of the companies or factories friends worked at 20 years ago are long gone, some like Express lifts still have a landmark but others like the old Peugeot plant in Coventry completely wiped off the face of the earth. I don't know why people are talking about this now, maybe they just ignored it as a problem at the time, didn't care or where just not aware of how big the change was. Its over and gone in the past by a good 15 years now.However Engineering is still one of the most employable career paths to go down, we are continually being told about skill shortages and our 'system' not producing enough Engineers and Scientists.
Re-skill is perhaps a misnomer, the problem IMHO is more with menial jobs that didn't really have any skill associated with them, and again as with the de-industrialisation many of these jobs were replaced by machines long ago. If anything continuing mechanisation will probably hurt the developing countries far more as its those places the largely labour intensive manufacturing moved to long ago.
The second thing is the macro level. Governments of all colours for the past 30 years have obsessed with the macro-economic figures ignoring any of the subtleties underneath the figures or how we got there. The figures have been there for some time showing that the vast majority of the economic gains in percentage terms over the past 30 years have gone to a minority, many made no gain or got poorer in real terms over the more recent period. It says a lot about how divorced from reality our politics has been that it has taken Trump and Brexit to happen to even start talking about the thing right under our noses.
I have my own ideas about why wages have been repressed but I won't include that here as its based on a mixture of personal experience and ideological beliefs formed from that experience. As an example I will pose a question, why is it that despite working in a skill domain said that have huge shortages wage offers have barely increased at all in real terms over the past 15 years? I am talking about wages at 2x to 3x national average degree educated btw not technician stuff.
Despite it all though I am more excited about 2017 than I have been about a year a head for a long time, apprehensive but excited nonetheless.
Happy New Year Fezzaman and PH.
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