• Light/Dark
  • Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.
  • We have made minor adjustments to how the search bar works on ResetEra. You can read about the changes here.

Reddit theory that a repeat or continuation of the 2008 financial crash has been looming for some time now.

Arta

Arta

Banned
Oct 27, 2017
8,445


Original reddit thread.
www.reddit.com

r/Superstonk - The Bigger Short. How 2008 is repeating, at a much greater magnitude, and COVID ignited the fuse. GME is not the reason for the market crash. GME was the fatal flaw of Wall Street in their infinite money cheat that they did not expect.

59,155 votes and 4,821 comments so far on Reddit
www.reddit.com www.reddit.com

The idea is that the factors that led to the 2008 financial crash never went away and have been exacerbated since. Banks that had been using their insane leverage and packages of bad predatory loans to people leading up to 2008, have been doing the same to businesses, and got exposed in 2019-2020 with the pandemic. And a possible reason why things haven't gone belly up just yet.

Side note, the surge of WallStreetBets meme stocks this year (Gamestop back in January and probably AMC in a couple months) apparently helped expose the insane leverage some of these financial groups have had in the market, like hedge funds possibly flooding the market with naked shorts to aggressively drive down company stocks and profit even further.
 

reKon

Member
Oct 25, 2017
13,878
Michael Burry came back to twitter and was sounding off recently as well.
 
PinkCrayon

PinkCrayon

Member
Oct 25, 2017
1,162
Can't wait for it happen again, see these financial groups get bailed out again and not face any repercussions again. So they can, you know, make it all happen again!
 
Dr. Feel Good

Dr. Feel Good

Member
Oct 25, 2017
3,996
What's funny about all of this is it's in fact retailer investors who are going to see the brunt of the pain. Do you really think big banks and hedge funds are not anticipating all of this gold rush mentality that we have seen emerge through crypto, Robinhood/gamification, and meme stocks? The market will fall and they will be the ones who come out on top. You can't "stick it to the man" and this guy making the video is just as stupid as every Redditor who talks about HODLing when he says he keeps AMC as fuck you to Wall Street for manipulating the market. The market isn't being exposed. It's always been corrupt and will continue to be so even in a bear market, and when everyone in the ocean is hungry it's the big sharks that survive. Not the millions of minnows.
 
GYODX

GYODX

Member
Oct 27, 2017
7,265
Throw enough shit at the wall and eventually you'll get a prediction or two "right."

Just tune out the noise. Nobody knows shit about what they're talking--and as the Good Judgement Project has shown us, those who are most confident in their predictions tend to be wrong the most.
 
Window

Window

Member
Oct 27, 2017
8,290
I don't think any of these fears are new or particularly a reddit theory. Several Economists and Fund managers have talked about the current bubble in the past couple of years. Yet the market keeps on trucking.
 

eathdemon

Banned
Oct 27, 2017
9,690
Window said:
I don't think any of these fears are new or particularly a reddit theory. Several Economists and Fund managers have talked about the current bubble in the past couple of years. Yet the market keeps on trucking.
Click to expand...
Click to shrink...
this is a buble, but the effects likely wont be on many people, but likely on vcs that are buying a bunch of property to rent.
 
Jam

Jam

Member
Oct 25, 2017
7,060
The thing is that there is always a perspective of looming crashes within the markets. There are thousands of different models and outlooks that could lead to outcomes like 2008 but the issue is that it's nigh on impossible to accurately ppoint which model is occurring to climax until it's essentially too late. You don't know what's going to happen until the point of no return already.

Henceforth why the big players are playing all their hands at 20 different tables at once because the law of averages protects them. Meanwhile the retail market is struggling at 1 table.

What's discussed in that thread could very well happen. But so could theory X,
Y or Z in the house of cards that is financial markets. It doesn't deserve credence above a multitude of other models.

mister.metronome said:
wasn't he specifically sounding off on the cryptocurrency crash? 'cuz with the intro of new coins on a regular basis, there's bound to be a bubble burst somewhere along the way.
Click to expand...
Click to shrink...

Wasn't he exclusively trading commodities too before being somewhat involved in GME?
 
Ramsay

Ramsay

Member
Jul 2, 2019
3,624
Australia
Keynes: "The market can stay irrational longer than you can stay solvent."

I think most people who have been acquainted with finance are at least somewhat aware of the insane personal and corporate leverage that's been in the market since probably 2016 or 2017, but most of them probably aren't paying any attention until the money stops rolling in.
 
GoldenEye 007

GoldenEye 007

Roll Tide, Y'all!
Banned
Oct 25, 2017
13,833
Texas
I guess I don't fully follow. Yes I do think the stock market is not reflective of financial reality. And there certainly is a looming issue with commercial real estate, but ultimately what does it mean for me?

It seems like one of the main conclusions is to not sell when SHTF. Is that it?
 
Poyunch

Poyunch

The Fallen
Oct 25, 2017
2,377
Yeah I've seen a lot of stock sites mention this. I'm totally new to this stuff so idk how reliable this it or if I should be worried.
 
Jam

Jam

Member
Oct 25, 2017
7,060
Poyunch said:
Yeah I've seen a lot of stock sites mention this. I'm totally new to this stuff so idk how reliable this it or if I should be worried.
Click to expand...
Click to shrink...

It's reliable but no more reliable than other scenarios and timelines.

The market will crash, but what the domino will be when the domino will fall is theoretical at this point.

That's the problem, financial markets have the "writing on the wall" but on 100 different walls so until that the right wall falls we don't know. Then everyone who pointed at wall X can be smug they "predicted" the crash - nah you just backed the right horse in a massive field.
 
Dozer

Dozer

Member
May 30, 2019
891
Orlando, FL
Reddit has predicted 56 of the last 1 financial crashes

Is there another crash coming? Eventually, almost certainly. But it will almost certainly come from a place no one expects and at a time no one expects.
 

Deleted member 70788

Jun 2, 2020
9,620
People say this every few months and eventually someone will be right by pure luck and be called a genius.
 
Stencil

Stencil

Member
Oct 30, 2017
10,447
USA
GYODX said:
Throw enough shit at the wall and eventually you'll get a prediction or two "right."

Just tune out the noise. Nobody knows shit about what they're talking--and as the Good Judgement Project has shown us, those who are most confident in their predictions tend to be wrong the most.
Click to expand...
Click to shrink...
Doesn't that just stand to reason as a heuristic for anything in life? Like, if Jill says "Oh it'll absolutely rain tomorrow" and Jack says "well, I'm not sure, yes it could rain tomorrow but I don't think it will absolutely rain tomorrow." and it doesn't rain tomorrow, Jill is categorically wrong. However, Jack is not considered incorrect.
 

Deleted member 70788

Jun 2, 2020
9,620
I'll also add there are so many people that have seen the Big Short and act like they know everything about the market. Like watching John Wick and thinking you could take on an army with a pencil.
 
GYODX

GYODX

Member
Oct 27, 2017
7,265
Stencil said:
Doesn't that just stand to reason as a heuristic for anything in life? Like, if Jill says "Oh it'll absolutely rain tomorrow" and Jack says "well, I'm not sure, yes it could rain tomorrow but I don't think it will absolutely rain tomorrow." and it doesn't rain tomorrow, Jill is categorically wrong. However, Jack is not considered incorrect.
Click to expand...
Click to shrink...
That's not what the Good Judgement Project was measuring, though. People were simply asked to make predictions about various things--whether they qualified it with "well this is just what I think will happen" vs whether they were super confident in their responses didn't factor into their "score."

Really good read: https://www.amazon.com/Superforecasting-Science-Prediction-Philip-Tetlock/dp/0804136718
 
thediamondage

thediamondage

Member
Oct 25, 2017
11,430
I've predicted 33 of the past 2 market crashes

it'll eventually happen but could be years and will require a shock event, its honestly surprising that covid19 wasn't it
 

TKM

Member
Oct 28, 2017
541
I'm not watching the video, but that reddit OP is some weird stuff:

The market crashing no longer was a matter of simply scooping up defaulters, their assets, and consolidating power. The rich now have to worry about the potential of infinite losses from GameStop and possibly other meme stocks with high price floor targets some retail have.

It's not a fight against Melvin / Citadel / Point72. It's a battle against the entire financial world. There is even speculation from multiple people that the Fed is even being complicit right now in helping suppress GameStop. Their whole game is at risk here.

Don't you think they'd fight tooth-and-nail to suppress this and try to get everyone to sell?
Click to expand...
Click to shrink...

GME isn't a battle between "the people" and hedge funds, let alone the entire financial world. It's between Meme pumpers and marks. Retail is holding the bag.
 
Stencil

Stencil

Member
Oct 30, 2017
10,447
USA
GYODX said:
That's not what the Good Judgement Project was measuring, though. People were simply asked to make predictions about various things--whether they qualified it with "well this is just what I think will happen" vs whether they were super confident in their responses didn't factor into their "score."

Really good read: https://www.amazon.com/Superforecasting-Science-Prediction-Philip-Tetlock/dp/0804136718
Click to expand...
Click to shrink...
Isn't that just reducing everything to binaries, though? Like, not including degrees to their answer: Positive, likely, unlikely, negative etc, of course it's going to have some surprising results when it's saying "In a yes/no question, the people who answered X were wrong Y amount of times!"
 
JVID

JVID

Member
Oct 25, 2017
3,196
Chicagoland
I feel like alot of these financial guys are just conservatives wish casting that it happens under a democratic president. Markets gonna crash eventually, as they do. When and how badly? Who really knows.
 
GYODX

GYODX

Member
Oct 27, 2017
7,265
Stencil said:
Isn't that just reducing everything to binaries, though? Like, not including degrees to their answer: Positive, likely, unlikely, negative etc, of course it's going to have some surprising results when it's saying "In a yes/no question, the people who answered X were wrong Y amount of times!"
Click to expand...
Click to shrink...
Not all questions are yes/no questions, though.

Here are some example questions:

When will Japan report having vaccinated 70 million people?

When will the number of COVID-19 vaccine doses administered reach 5 billion worldwide?

goodjudgment.com

See the future sooner with Superforecasting | Good Judgment

Get early insights from professional Superforecasters. Or train your team on Superforecasting techniques. Either way, Good Judgment can help you manage risks and seize opportunities ahead of the competition.
goodjudgment.com goodjudgment.com

But I did misspeak: they weren't asked to give binary responses. Their responses were a probabilistic forecast, and then their score was given as a Brier score, which does reduce to mean-squared error in the case of binary questions.

So yes, f = 0.5 is the best heuristic in the case of binary questions. But again, not all the questions are going to be binary questions.
 
Combo

Combo

Banned
Jan 8, 2019
2,437
Reddit theory? Lots of informed people have been warning about this for years. It will be worse than 2008.
 
Cass_Se

Cass_Se

Member
Oct 25, 2017
3,130
Arta said:
Side note, the surge of WallStreetBets meme stocks this year (Gamestop back in January and probably AMC in a couple months) apparently helped expose the insane leverage some of these financial groups have had in the market, like hedge funds possibly flooding the market with naked shorts to aggressively drive down company stocks and profit even further.
Click to expand...
Click to shrink...

If someone thinks retail traders have enough power in the market to do this they're deluding themselves. Basically this:

R0b1n said:
That sub is a cult
Click to expand...
Click to shrink...

Some sort of economic crisis will come, that's the way the cycle works, but superstonk is full of wackos
 
Stencil

Stencil

Member
Oct 30, 2017
10,447
USA
GYODX said:
Not all questions are yes/no questions, though.

Here are some example questions:

When will Japan report having vaccinated 70 million people?

When will the number of COVID-19 vaccine doses administered reach 5 billion worldwide?

goodjudgment.com

See the future sooner with Superforecasting | Good Judgment

Get early insights from professional Superforecasters. Or train your team on Superforecasting techniques. Either way, Good Judgment can help you manage risks and seize opportunities ahead of the competition.
goodjudgment.com goodjudgment.com

But I did misspeak: they weren't asked to give binary responses. Their responses were a probabilistic forecast, and then their score was given as a Brier score, which does reduce to mean-squared error in the case of binary questions.

So yes, f = 0.5 is the best heuristic in the case of binary questions. But again, not all the questions are going to be binary questions.
Click to expand...
Click to shrink...
Oh, I understand better now, thanks for the breakdown.
 
Wolf

Wolf

Member
Oct 25, 2017
4,865
The world economy is going to be in a perpetual state of dangling from a cliff for the rest of time.
 
hurlex

hurlex

Member
Oct 25, 2017
3,143
Yeah, I don't think that YouTuber has any special insight. I used to watch him before, but stopped after a couple of vids. Good for him for building a large YouTube audience, but it doesn't make him some special financial genius.
 
competentcuttlefish

competentcuttlefish

Member
Oct 25, 2017
632
The thing about predicting recessions is that people do it all the time so eventually someone will be right. Remember when 2011 was supposed to bring a recession even worse than 2008?
 

reKon

Member
Oct 25, 2017
13,878
hurlex said:
Yeah, I don't think that YouTuber has any special insight. I used to watch him before, but stopped after a couple of vids. Good for him for building a large YouTube audience, but it doesn't make him some special financial genius.
Click to expand...
Click to shrink...
Perfect example of why you watch a video before commenting on it.
 
Cipherr

Cipherr

Member
Oct 26, 2017
13,485
GYODX said:
Throw enough shit at the wall and eventually you'll get a prediction or two "right."

Just tune out the noise. Nobody knows shit about what they're talking--and as the Good Judgement Project has shown us, those who are most confident in their predictions tend to be wrong the most.
Click to expand...
Click to shrink...


Yeah, its a gross simplification but I still operate on the "If you don't have a date, your prediction of a market crash is useless" because eventually it will always be right.

Reminds me of that episode of the Wire talking about being Rain Made.



I'll admit that the information CAN be important if you are already retired and living off of dividends, or will be soon. Or if you are in the market for a short term basis. But if you are still working with decades between you and retirement, knowing that the market will have a massive correction at some unspecified point in the future is not useful information. Your approach to investing will still remain the same.
 

reKon

Member
Oct 25, 2017
13,878
hurlex said:
? I watched the video. Him sharing the Reddit theory indicates he believes it enough that he thought it was worthy sharing to his 1.6M subscribers.
Click to expand...
Click to shrink...
All he did was try breakdown some of the concepts explained in the reddit thread. He would probably agree with you that he's not a financial genius and he did credit the reddit user. So I didn't get the point of your post...
 
evrythngwastakn

evrythngwastakn

Member
Oct 25, 2017
5,557
Will it make it so I can afford a house? Average price around here in a million bucks now. Even condos are $600k to start for something not a shit hole.
 
You must log in or register to reply here.