Author Topic: Are You Feeling It Too?  (Read 11820 times)

Peter Parker

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Are You Feeling It Too?
« on: September 01, 2017, 09:10:09 AM »
I have a 70 mile one way commute. On my drive to work, I like to observe the cars and trucks on the freeway and have noticed a change in those driving around me.

Prior to 2008, I saw a lot of new construction vehicles on the road and a lot of high-end cars (I puttered along in my Honda Insight).  Then when the crash happened, Those vehicles seem to disappear. 

I'm again starting to see lots of new (not previously used) construction vehicles and really high end vehicles all around me again--Teslas, Beamers, Mercedes, etc.  I even saw that two colleagues of mine bought crazy cars--a Porsche 911 Carrera and the other was a McClaren (which is over the top crazy expensive)--I'm currently driving a Prius.  To further my concern, there seems to be a run-up in housing prices around me with a lot more flippers getting into the action.  And then there are the TV/radio ads that make it seem that credit needed to make these crazy purchases are relatively easy to get again.....My non-MMM friends seem to be spending a lot more money too....

For those of you youngsters, a good crash might be welcomed.  But this is making me nervous, since I'm 3 years, 10 months, 1 week, 3 days, and  21 hours from FIRE.  I've got my money in appropriately diversified accounts and know I SHOULD be ok, but it makes me nervous nonetheless. 

Anyone else feeling it?

Raenia

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Re: Are You Feeling It Too?
« Reply #1 on: September 01, 2017, 09:15:57 AM »
Why are you driving 70 miles one way for work?!?

I'm still early in the accumulation phase, and my job is reasonably secure, so I'm not too concerned about a recession.  On the other hand, I wouldn't necessarily predict the timing of the next crash based on the cars people are driving, that doesn't make a lot of sense to me.  When times are good, people buy nice cars.  When times are bad, people drive older cars.  That's an effect, not a cause.

exige

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Re: Are You Feeling It Too?
« Reply #2 on: September 01, 2017, 09:21:17 AM »
my wife and I have been talking about this recently. We are in early accumulation so it would be ok for us we have ample cash and no debt other than the mortgage which we could pay with minimum wage jobs. However, all around us people our age early 30's are buying million dollar homes with no where NEAR the income levels needed to sustain this and they are not even putting down 20%. They are all buying new cars as well, I do not try and time the market or predict things like a crash but it does seem very similar....

jax8

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Re: Are You Feeling It Too?
« Reply #3 on: September 01, 2017, 09:26:27 AM »
I'm noticing housing prices creeping back up, and houses selling quickly instead of lingering.  (I'm in Western PA, 1 hour north of Pittsburgh.)  Lots of new cars in my company (where we all make $40K or under) but most of them are leased.

What I'm noticing is that cash flow may be tighter, but people don't want to realize it. There is this head-in-the-sand stubbornness that has people overpaying on houses, not blinking at $40,000 cars, going on expensive vacations, etc.  It's a I DESERVE THIS, DAMN IT!!! consumer attitude that feels very similar to the attitude of the country pre-crash.  I guess very few people learned a financial lesson from the crash?  Payment periods are longer, people are shackled to their debts longer than ever, but they really don't think about it.

Just my observations, anyway!

protostache

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Re: Are You Feeling It Too?
« Reply #4 on: September 01, 2017, 09:33:39 AM »
Winter is coming.

Winter is always coming.

The best thing to do is prepare. If you're 3 years, 10 months, 1 week, 3 days, and 10 hours away from FIRE than you're already well-prepared to weather a recession just fine, even if the market drops 30% and stays there for a year or two. It may push your plans back a bit but you're not going to be on the streets.

Peter Parker

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Re: Are You Feeling It Too?
« Reply #5 on: September 01, 2017, 10:30:21 AM »
Winter is coming.

Winter is always coming.

The best thing to do is prepare. If you're 3 years, 10 months, 1 week, 3 days, and 10 hours away from FIRE than you're already well-prepared to weather a recession just fine, even if the market drops 30% and stays there for a year or two. It may push your plans back a bit but you're not going to be on the streets.

I do have several dragons in my arsenal--So I am well prepared.   And even in a worse-case scenario, I think I can keep my FIRE date.  It was just more of observation--that the night is dark and full of terrors :-)

meatface

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Re: Are You Feeling It Too?
« Reply #6 on: September 01, 2017, 10:44:19 AM »
I haven't noticed the physical things, but the one thing I've noticed this year is that more and more people believe something bad will happen soon. I am one of those people. There is the smell of a big stock market dip in the air. I hope it's just my kid's diaper, but I think it's the stock market. Oh well, it will recover.

koshtra

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Re: Are You Feeling It Too?
« Reply #7 on: September 01, 2017, 10:46:43 AM »
Panagnostocracy* doesn't particularly encourage economic confidence, either.

*government by not knowing how anything works

nouveauRiche

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Re: Are You Feeling It Too?
« Reply #8 on: September 01, 2017, 11:26:24 AM »
Part of my emergency fund is in Vanguard non-retirement.  I split it evenly between a money market fund & a stock fund (but now the stocks are higher).  If I need cash, I take from whichever is higher & re-balance.

fattest_foot

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Re: Are You Feeling It Too?
« Reply #9 on: September 01, 2017, 11:37:42 AM »
I guess very few people learned a financial lesson from the crash?  Payment periods are longer, people are shackled to their debts longer than ever, but they really don't think about it.

Just my observations, anyway!

It doesn't feel like it, but it's been almost a decade since the recession. People probably don't think about it.

soccerluvof4

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Re: Are You Feeling It Too?
« Reply #10 on: September 01, 2017, 12:15:50 PM »
I've notice the housing boom by us and also the people buying fancy cars BUT I also see more construction on the roads then ever before in my lifetime as well as more signs looking to hire than ever before. Companys are doing well , people are working so barring a world event things might just roll along for awhile. One will not know, and like in 08 did you know the banks were on collapse to the degree it went bad? Just do your thing, stick to make your life the way you want it and find away to not live in fear.  That 70 mile ride to work one way is insane.

skeeder

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Re: Are You Feeling It Too?
« Reply #11 on: September 01, 2017, 12:39:48 PM »
I've noticed a lot of cars being newer, but nothing really pointing towards the 'exotics'.  I live in Michigan though, mostly blue-collar town.  I'm sure some places are more influenced by this than others.

I know most people appear to 'accept' the car loan now days. 






Peter Parker

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Re: Are You Feeling It Too?
« Reply #12 on: September 01, 2017, 12:58:03 PM »
That 70 mile ride to work one way is insane.

Yes I deserve a face punch for the 70 mile commute--but I have meaningful work that has gotten me to where I want to go.  For the most part, I have enjoyed working there for 20+ years.    My wife has her own meaningful work in the opposite direction of mine,  close to our home, so I bite the bullet and do the commute.   Our home is where we will live in retirement--perfect location, good walking neighborhood, filled with restaurants, coffee shops, and near water, so we didn't/don't want to move closer to my work.

The good news is that there is no traffic, and a gives me a chance to listen to books on tape as I drive about an hour.  At this point it is what it is. 

Cranky

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Re: Are You Feeling It Too?
« Reply #13 on: September 01, 2017, 12:58:20 PM »
We commented this summer as we drove across Indiana and Illinois 3 times in 3 months that the economy is clearly booming, because it's trucks, trucks, trucks everywhere.

StarBright

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Re: Are You Feeling It Too?
« Reply #14 on: September 01, 2017, 01:01:35 PM »
We're feeling . . . .  something.

DH and I have been talking about this a lot lately. There is generally a feeling of nothing makes sense right now.

We're due for a recession, but the recovery is so slow and wages haven't risen, so maybe this cycle is slower, but the stock market has definitely recovered but nothing seems to be following the "rules."

We also notice friends doing lots of stuff that just costs money ( in a way they didn't used to do).


Optimiser

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Re: Are You Feeling It Too?
« Reply #15 on: September 01, 2017, 01:03:54 PM »
We commented this summer as we drove across Indiana and Illinois 3 times in 3 months that the economy is clearly booming, because it's trucks, trucks, trucks everywhere.
Gas has been cheap for quite a while too. That definitely helps with truck and SUV sales.

Cranky

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Re: Are You Feeling It Too?
« Reply #16 on: September 01, 2017, 01:04:56 PM »
We commented this summer as we drove across Indiana and Illinois 3 times in 3 months that the economy is clearly booming, because it's trucks, trucks, trucks everywhere.
Gas has been cheap for quite a while too. That definitely helps with truck and SUV sales.

What we were noticing was semis. Goods are moving!

Ftao93

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Re: Are You Feeling It Too?
« Reply #17 on: September 01, 2017, 01:15:51 PM »
I think there's a dip coming, or a plateau.  Mostly there's not enough product to back up the wealth.   

In Denver, we're now the 9th most expensive city, and the only one in teh top 15 or so that isn't on a coast.

I don't feel badly paid, but wages have certainly not kept up.  Sooner or later, you do have to buy a few things.  Minor things, like food and rent.  You know, the cheap stuff....

Our neighbors pay 2k in rent.  That's nuts.

my unscientific opinion is that people didn't learn their lesson.  They think it's fine to finance a 50k car.    Some people might not have a choice, and not everyone can just save up 5k in cash to buy a reliable used car, but sheesh.

We still managed to save about 50% of our income, and I know for a fact that I deserve multiple face punches.   We have 0 debt.   The belt will get tighter next year, and we'll still have a nice vacation/0 debt.   

mathlete

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Re: Are You Feeling It Too?
« Reply #18 on: September 01, 2017, 02:08:23 PM »
It's not just you. Per the fed, motor vehicle loans outstanding have crossed one trillion and are at an all-time high.

https://fred.stlouisfed.org/series/MVLOAS

The post-recession decline in consumer credit is now merely a blip on the radar:

https://fred.stlouisfed.org/series/TOTALSL

The S&P P/E ratio is well above historic averages, and the Shiller P/E looks even worse:

http://www.multpl.com/shiller-pe/

Not sure what there is to do though, outside of staying the course while staying nimble. Waiting for the markets to become rational in order to invest more, retire, or make any other major decision, can mean a very long wait.

Peter Parker

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Re: Are You Feeling It Too?
« Reply #19 on: September 01, 2017, 02:20:08 PM »
It's not just you. Per the fed, motor vehicle loans outstanding have crossed one trillion and are at an all-time high.

https://fred.stlouisfed.org/series/MVLOAS

The post-recession decline in consumer credit is now merely a blip on the radar:

https://fred.stlouisfed.org/series/TOTALSL

The S&P P/E ratio is well above historic averages, and the Shiller P/E looks even worse:

http://www.multpl.com/shiller-pe/

Not sure what there is to do though, outside of staying the course while staying nimble. Waiting for the markets to become rational in order to invest more, retire, or make any other major decision, can mean a very long wait.

Nice links.  Good to know it wasn't my imagination.  Thanks for the info!

surfhb

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Re: Are You Feeling It Too?
« Reply #20 on: September 01, 2017, 02:45:45 PM »
If you have only been investing a very short time (under 10 years ) with several $100K stashed,  a crash like we saw in 2008 would be a gift from God folks!

soccerluvof4

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Re: Are You Feeling It Too?
« Reply #21 on: September 01, 2017, 02:57:52 PM »
I think there's a dip coming, or a plateau.  Mostly there's not enough product to back up the wealth.   

In Denver, we're now the 9th most expensive city, and the only one in teh top 15 or so that isn't on a coast.

I don't feel badly paid, but wages have certainly not kept up.  Sooner or later, you do have to buy a few things.  Minor things, like food and rent.  You know, the cheap stuff....

Our neighbors pay 2k in rent.  That's nuts.

my unscientific opinion is that people didn't learn their lesson.  They think it's fine to finance a 50k car.    Some people might not have a choice, and not everyone can just save up 5k in cash to buy a reliable used car, but sheesh.

We still managed to save about 50% of our income, and I know for a fact that I deserve multiple face punches.   We have 0 debt.   The belt will get tighter next year, and we'll still have a nice vacation/0 debt.



History shows people don't learn there lesson! Trucks are selling like crazy because fuel was down. Automakers have to retool to keep up to the demand. Fuel prices go up and things crash and truck sales collapse. That's just the auto industry.  Maybe its just happening slower because of some of the protection regulations that's been put in place by the government but it will happen again. 9 years , a whole lot of young people that didn't know what happend in 2008 as well. But its more my guess barring a world event that we would slowly grind forward then collapse for awhile BUT that is just a total guess.

koshtra

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Re: Are You Feeling It Too?
« Reply #22 on: September 01, 2017, 03:05:38 PM »
It's not just you. Per the fed, motor vehicle loans outstanding have crossed one trillion and are at an all-time high.

https://fred.stlouisfed.org/series/MVLOAS

The post-recession decline in consumer credit is now merely a blip on the radar:

https://fred.stlouisfed.org/series/TOTALSL

The S&P P/E ratio is well above historic averages, and the Shiller P/E looks even worse:

http://www.multpl.com/shiller-pe/

Not sure what there is to do though, outside of staying the course while staying nimble. Waiting for the markets to become rational in order to invest more, retire, or make any other major decision, can mean a very long wait.

Aye. "The market can stay irrational longer than you can stay solvent" -- John Maynard Keynes

scottish

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Re: Are You Feeling It Too?
« Reply #23 on: September 01, 2017, 03:35:46 PM »
Panagnostocracy* doesn't particularly encourage economic confidence, either.

*government by not knowing how anything works

You made that word up, didn't you?

I'm hoping for a big housing crash in western Canada so we can buy a retirement house in the rockies.


BlueMR2

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Re: Are You Feeling It Too?
« Reply #24 on: September 01, 2017, 03:51:52 PM »
I'm just amazed to see all the college/immediate post-college kids rolling around in brand new cars that they're paying on, all while crying about not being able to make student loans (which the payments are quite a bit lower than what's going into the cars).  Whatever happened to not having a car in college and then getting whatever cheap beater you could get your hands on after graduating?

FI4good

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Re: Are You Feeling It Too?
« Reply #25 on: September 01, 2017, 06:53:13 PM »
I remember the feeling in 2004 , the economy went on booming right up until 2007.
My take the cash and run then come back to the uk later once things had crashed didn't work out to well as i jumped to early.
So soon after the tech bubble, i guess it was too soon.

It is the nature of bull markets to run on longer than you think possible, i have my asset allocation exactly for this purpose and i re-visit it every year, 6 months to go.

Although countries don't go in for competitive currency devaluation anymore as we're all friends and would never do that kind of thing , it's interesting to notice how brexit has dumped GBP 20% and how the dollar index seems to have gone to about 90 from 100 what with N korea and the fed pushing interest rate rises into the long grass .   

If Donald wants a chance of winning in 2020 i suppose late 2018 early 19 would be the best time for him to lance the boil if something is building up, also brexit is due in 2019, although we're only No.6 or 7th largest economy in the world doubt and worry are infectious .   

When Cramer bangs the table on CNBC and nearly is in tears i'll know to sell some of the boring stuff and buy some equites .

BTDretire

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Re: Are You Feeling It Too?
« Reply #26 on: September 01, 2017, 07:49:57 PM »
 Everyone relax, this has been such a slow recovery that we have another 10 years before any large correction.






  Or, maybe not.

inline five

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Re: Are You Feeling It Too?
« Reply #27 on: September 01, 2017, 09:07:57 PM »
Despite the many judgey attitudes I find there is a lot more people out there with money than those doing the judging actually know about.

Roughly 1:10 households in the US have over a million in liquid assets. Could be your neighbors, your friends, or those driving that $40k new car on lease for cheap because automakers are trying to make sales and residuals are high nowadays.

nancy33

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Re: Are You Feeling It Too?
« Reply #28 on: September 01, 2017, 09:41:52 PM »
I'm in CA and hearing stories of people making insane amounts of money growing cannabis, all cash no taxes, I just figured that was why I was seeing so many 100 K cars on the road and everybody has been taking nice vacations...

rdaneel0

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Re: Are You Feeling It Too?
« Reply #29 on: September 01, 2017, 10:01:03 PM »
I feel it a bit. Everyone I know seems willing to pay a lot more in rent than I do, which I don't understand. Recently I know a few people who bought used cars, even though we have a fantastic public transit, they do it for "weekend trips" which usually involve spending money at hotels/events. I also see lots and lots of international travel (like huge trips once or twice a year) and people going into major debt for weddings, that kind of thing.

Maybe my group isn't representative, but it feels unsustainable.

HipGnosis

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Re: Are You Feeling It Too?
« Reply #30 on: September 02, 2017, 08:48:12 AM »
I'm noticing more new, high-end cards too.  And more new construction than newly closed businesses.

But, what you are failing to notice is:
2008 was NOT the beginning of the economic 'boom' that predicated the crash / burst / correction.

BTDretire

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Re: Are You Feeling It Too?
« Reply #31 on: September 02, 2017, 01:53:12 PM »
Despite the many judgey attitudes I find there are a lot more people out there with money than those doing the judging actually know about.

Roughly 1:10 households in the US have over a million in liquid assets. Could be your neighbors, your friends, or those driving that $40k new car on lease for cheap because automakers are trying to make sales and residuals are high nowadays.
I was suspect of your number 1:10, so I went looking, and found your are correct.  I was surprised,
especially when such a high percentage can't raise $1,000 for an emergency.

inline five

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Re: Are You Feeling It Too?
« Reply #32 on: September 02, 2017, 07:59:47 PM »
Despite the many judgey attitudes I find there are a lot more people out there with money than those doing the judging actually know about.

Roughly 1:10 households in the US have over a million in liquid assets. Could be your neighbors, your friends, or those driving that $40k new car on lease for cheap because automakers are trying to make sales and residuals are high nowadays.
I was suspect of your number 1:10, so I went looking, and found your are correct.  I was surprised,
especially when such a high percentage can't raise $1,000 for an emergency.

Lots of headlines about folks not having $x in savings. Well for most of the millionaires I'd bet that's true. They don't have any money in a savings account, it's almost all in retirement and brokerage accounts with the rest in a money market or checking account.

Headlines are for click bait but the reality is a lot of Americans still have a boatload of wealth. While it's true more people are getting left behind from the middle class the opposite is also true, the percentage of wealthy is also increasing. Over the course of a couple decades there is going to be a huge contrast in society - basically the people that own land and those who do not. Instead of the top 1% it will be more like the top 20%, and the bottom 80% will have almost nothing to their name.

KarefulKactus15

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Re: Are You Feeling It Too?
« Reply #33 on: September 07, 2017, 11:02:54 AM »
Despite the many judgey attitudes I find there are a lot more people out there with money than those doing the judging actually know about.

Roughly 1:10 households in the US have over a million in liquid assets. Could be your neighbors, your friends, or those driving that $40k new car on lease for cheap because automakers are trying to make sales and residuals are high nowadays.
I was suspect of your number 1:10, so I went looking, and found your are correct.  I was surprised,
especially when such a high percentage can't raise $1,000 for an emergency.

I guess that somewhat fits the 80/20 rule.      1 in 10 are millionaire s, the other 9 don't have 1000$ for emergency.

mm1970

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Re: Are You Feeling It Too?
« Reply #34 on: September 07, 2017, 12:50:31 PM »
I'm noticing housing prices creeping back up, and houses selling quickly instead of lingering.  (I'm in Western PA, 1 hour north of Pittsburgh.)  Lots of new cars in my company (where we all make $40K or under) but most of them are leased.

What I'm noticing is that cash flow may be tighter, but people don't want to realize it. There is this head-in-the-sand stubbornness that has people overpaying on houses, not blinking at $40,000 cars, going on expensive vacations, etc.  It's a I DESERVE THIS, DAMN IT!!! consumer attitude that feels very similar to the attitude of the country pre-crash.  I guess very few people learned a financial lesson from the crash?  Payment periods are longer, people are shackled to their debts longer than ever, but they really don't think about it.

Just my observations, anyway!
The homeland!  I grew up in Western PA, ~2 hrs north of Pittsburgh.

The I DESERVE IT DAMN IT seems to be everywhere.  Housing prices are up where I live now, too, and lots of Teslas on the road, plus expensive vacations and the like.

However, lots of poverty and Go Fund Me requests also.  Some I have major sympathy and will likely donate to.  Others?  Maybe not so much.