re: When do interest rates rise

quote:

---

Do you people really think a 0.25% increase is going to pop a housing bubble and set off a yearslong economic malaise?

Banks are tight as hell compared to pre 2008. Jumbos are selling like hot cakes though

---

People usually prepare and look out for the last crisis in anticipation of the next one. Of course, the same crisis rarely repeats itself. So people expect another housing bubble. Or maybe it's car loans. Or stocks. Or student loans. Most people are looking for bubbles. And most people will be blindsided by the next crisis because it will be due to something different. The cycle will repeat because people, collectively, are stupid.

Don't get me wrong, I think asset prices in general are inflated due to cheap money policies. I'm not expecting a 0.25% increase in interest rates to cause some great market panic, though. However, since cheap money has resulted in generally inflated asset prices instead of mainly growth and increased consumption, cheap money for too long could potentially lead to one or more asset bubbles.

China may be the next catalyst for a pullback or crash, or it could be orange juice futures. But the average person isn't going to see it coming due to the prior reason, because the average guy neither has or seeks enough information to identify issues in the general economy, and because the average guy won't stay rational long enough to interpret the data even if he has it. And believe it or not, that's okay. We live and operate in a specialized economy, so we don't need everyone to point out the source of the next recession or stock market crash. People just need to have sufficiently robust investment portfolios that they can weather future storms.