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I remember in 2008, Oil prices and gas prices set record after record especially in the Summer. Now same thing is happening at least with gas prices and oil prices not record, but high. Gasoline and natural gas prices at records. And if you remember inflation was actually high in 2008 around 4.5%. Food and energy costs were getting very high. Not as bad as now, but still was higher than people remember.
Here we are 14 years later with record after record gasoline prices and natural gas prices. Though natural gas comes on the side of oil and oil is very high, but not the record it hit in 2008 and is like $25 to $27 below per barrel now despite gasoline prices and natural gas prices in particular the later being far far far worse. But both are insanely bad. Thank god right now it is not winter or heating bills would be beyond the roof far worse than months ago when it was winter despite them being high.
As for unemployment it is definitely lower now, but back then, it was actually ok and unemployment rate was fine. Now months later in 2008 from this time it started to get very bad, but as of June 2008, it was pretty low though not as low as it is now.
Inflation then was started to look bad too in most things.
What is the biggest difference between then and now. Home prices of course. Then they started to fall a bit and were throughout 2008 before crashing at the end of the year.
Now they have been going through the roof or certainly not falling even if gains were stalled and there are a shortage of homes and still sellers market it appears.
With oil prices and natural gas prices. It was felt that traditional very cheap easy to extract crude and side natural gas that comes with it was drying up and thus run up in prices. And there was no fracking yet?? The economic collapse due to subprime mortgage meltdown brought down every commodity price the following fall to early winter very late 2008 anyways.
Now oil prices and gasoline prices especially later being insanely high, but there is more than enough oil with fracking and even some more cheap crude found in Middle East and such. But Big Oil is sitting on it being greedy and gouging customers in the name of capital discipline putting their Wall Street crooks ahead of American economy and people.
Yes the oil companies need to practice some capital discipline to prevent over producing to the point where prices fall to the floor and they are hurt. But sitting on rigs at these insanely record prices is just wrong and tanking the economy with it that not only hurts motorists but even worse will drive prices of goods up that are shipped and transported as diesel and jet fuel prices have soared even worse than already inflated gasoline. SO airline industry is also going to be hurt badly. They need to produce when oil is $70 to $100 or even $60, but tap the breaks to prevent prices form falling below $60 a barrel. I know much is out of their control and OPEC + could step in and crank up production of the easy to extract profitable at $20 a barrel crude to hurt fracking industry and American oil companies. But still they need to do something. And OPEC is struggling t get things back online so that worry is gone.
Also lots of bubbles in assets now like then. Could be in for a pop sometime and a meltdown?? Subprime loans, people using homes as piggy banks, subprime student and car loans. Interest rates rising. We could have a bad meltdown, though home prices will not fall nearly as much, but other things could drag economy into financial crisis this Fall like 2008?? Maybe maybe not??
Now those are similarities and differences between now and 14 years ago exactly. What do you think??
Last edited by Wolverine607; 06-05-2022 at 10:57 AM..
what do I think?
same old same old,when we **** and mess up our diapers,there wlll always be a MOM to mop up after us and wipe our ass clean !
And it is getting better,besides the government and the central banks,we now have many billionaires who are kind enough to donate to food banks so we can continue to chow down and trade GME,AMC,Bitcoin,Ethe,Dogde coins,copper,silver,lithium,gold, without having to pay our landlord and student loan.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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This is the last economic cycle for us Boomers. We are seeing the realization of the generational shift of technical expertise, consumerism, housing, et al, to a smaller and more compact demograhic base.
I was too young to really pay attention to 2008. The crash benefited me though because I was able to buy cheap homes. With no frame of reference, this moment in time feels like a pressure cooker about to blow its lid….how high can the price of everything go before something blows? And prices going crazy yet not enough people wanting to work? Hard to find a car…rent for a simple brick ranch in my rural souther area at $1600/month, need a loan to buy playwood…McDonalds usually out of stuff or can’t take orders because they waiting on employees to show up?!? LOL.
I was too young to really pay attention to 2008. The crash benefited me though because I was able to buy cheap homes. With no frame of reference, this moment in time feels like a pressure cooker about to blow its lid….how high can the price of everything go before something blows? And prices going crazy yet not enough people wanting to work? Hard to find a car…rent for a simple brick ranch in my rural southern area at $1600/month, need a loan to buy playwood…McDonalds usually out of stuff or can’t take orders because they waiting on employees to show up?!? LOL.
The crash also benefited me cause I was able to buy my first home all cash in 2013 just in the nick of time as prices were starting to rebound and fast.
Though you were too young to remember 2008? How old were you. I was 24 years old. If you were too young how were you able to buy a home from the crash. Home prices started to rebound and fast in 2013 only 5 years later. And they were not even close to bottom in mid 2008 or even much of crash yet. They really only hovered flat at bottom in mid 2009 through mid to late 2012 before they started to go up and fast again.
The crash also benefited me cause I was able to buy my first home all cash in 2013 just in the nick of time as prices were starting to rebound and fast.
Though you were too young to remember 2008? How old were you. I was 24 years old. If you were too young how were you able to buy a home from the crash. Home prices started to rebound and fast in 2013 only 5 years later. And they were not even close to bottom in mid 2008 or even much of crash yet. They really only hovered flat at bottom in mid 2009 through mid to late 2012 before they started to go up and fast again.
I remember 2008 clearly but I was mostly worried with college and thinking I wanted to go to dental school. I bought my first home around 2010/2011. In the Charlotte area, home values recovered some but were still relatively cheap up until about 2018/2019. Then it was like they exploded.
The main difference in the housing market is there were so many bad loans and bad loan programs in 2007-8. You didn't need good credit, you didn't need to show the ability to repay, you could hire your best friendly appraiser instead of going through a third party, you didn't need a down payment, etc., etc., etc.
I believe with the interest rates raising at the fast pace in decades, that a correction will occur, but it is still based on supply and demand. The higher rates plus the rapid appreciation we have seen across the US in the past 3 years compound the affordability issue. That will cause at a minimum a massive slow down to the feeding frenzy to buy homes. Some areas of the country will see price declines. I think some might panic and reduce their inflated prices but it won't be a crash like we saw before.
Time will tell. Real estate goes through cycles and we over corrected when the market crashed and we might have over corrected on the upside as well. A pendulum always reaches it's highest and lowest point before it changes directions and repeats the process.
I remember 2008 vividly... it was total and utter carnage, the stock market was going down a bottomless pit, every second person I know had lost their job or lost their home, plenty of people were literally homeless, financial system was going towards total collapse....
there was also a huge amount of deflation. I took a trip to Japan in 2009, I got a roundtrip ticket from LAX to NRT for $500, then I stayed in Shinjuku in a nice hotel, center of Tokyo, for something like $60/night (normally something like $150-200/night) because nobody was traveling. Nobody had any money.
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