I read The Road to Ruin last year. I don't know if it's viewed very credibly or not but the guy purports to have had a ringside seat to the 2008 GFC. That book reckons it's all about complexity theory and it's just becoming more and more complex and the next time it happens the complexity will be unparalleled and hence it is going to get hectic.
Now maybe that is just a way to sell books and it was a fun read, but I don't know.
I get the feeling we all know something is coming because it always has and it always will. Some suspect it's going to be catastrophic like never before. It's at least assumed it's going to hurt. We don't know when but it seems people are in agreement it's edging closer and closer and things are about to get really unfun for a while.
I just hope all the pain and misery happens to other people and I get through it unscathed. Totally going to take my share of the hurt most likely and that's OK I suppose. It's sort of fingers crossed at this point.
Financialization follows a cycle much like the hype cycle: something gets securitized, immense profits are made, people overextend and there's a crash, then it's reined in and becomes boring, and the next crash happens in something further out. If you read Liar's Poker, even in the '80s corporate equities were boring and all the action was in bonds. After the S&L crash, bonds were made boring (at least in the US for established companies) and the action moved to "emerging markets" and hot new IPOs. Asian crash of '97, dotcom crash of '99, these things get made boring and the action moves to mortgage securitization.
2008 crisis, mortgages get made boring, and the action now is in... well, if you can figure that out then there's a lot of money to be made. Car loans? Corporate loans? Foreign exchange? Commodities? I've seen all of those bandied about.
Now maybe that is just a way to sell books and it was a fun read, but I don't know.
I get the feeling we all know something is coming because it always has and it always will. Some suspect it's going to be catastrophic like never before. It's at least assumed it's going to hurt. We don't know when but it seems people are in agreement it's edging closer and closer and things are about to get really unfun for a while.
I just hope all the pain and misery happens to other people and I get through it unscathed. Totally going to take my share of the hurt most likely and that's OK I suppose. It's sort of fingers crossed at this point.