Cryptocurrency Shines as US Mortgage Debt Exceeds 2008 Levels

Hydrogen

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Quote from: cheezcarls on January 19, 2020, 10:15:54 AM

Do you guys agree that Bitcoin and other cryptocurrencies will serve as hedges to this situation? Or is it not necessary at all? Would like to hear about your thoughts or reactions about this one.

If the future forecast for global economies, stock markets and real estate is bleak.

Cryptocurrencies may be deemed a more attractive investment in contrast to gold, bonds or other things which have traditionally been considered good investments during times of recession or economic downturn.

Wealth and wage inequality are major drivers of real estate debt, as well as debt in other markets. Controls put in place to prevent real estate value from falling through the floor, accumulate debt over time. But the central issue there is worker salaries failing to maintain pace with inflation, which in turn prevents an increasingly large proportion of the population from being able to afford real estate. Governments and state regulators try to patch the hole via funneling taxpayer dollars into real estate loans, to shore up the disparity. But it should never be viewed as a long term or permanent solution as has been the norm for a very long time now.

These precedents apply to markets other than real estate as well.

squatz1

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I wouldn't say that the Mortgage Debt is the biggest issue at the moment, as the biggest reason for something like that increasing would be because there are more homebuyers because there are more people being born, growing up, getting through school, buying homes, etc. So a stat like that isn't helpful because it isn't 'per capita'

I've obtained some pretty helpful data though, which compares certain things about the US mortgage market from 2008 to now. The source is Experian, one of the credit reporting agencies, so they're an authority on the topic (see here - https://www.experian.com/blogs/ask-experian/how-much-americans-owe-on-their-mortgages-in-every-state/)

The biggest takeaway from this info is that delinquency rates are pretty stablen right now,and NOWHERE NEAR the 2.4 percent delinquency of the 2008 mortgage crisis. Even as of the last couple years, less and less people are delinquent on paying for their mortgage.

webtricks

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Quote from: avikz on January 19, 2020, 12:34:31 PM

Lets summarize this. There are few economic indicators to watch for.

1. Increasing debt means increasing sales of real estate. Common people is seeing income stability and buying properties.
2. NPA is what we need to check. Even though we don't have any official parameter, it is believed that NPA should always remain lower than 3% to classify a sector as healthy.
3. The value of bitcoin fluctuates widely so it is not an ideal asset for hedging.
4. Finally US real estate market has little/no relation with cryptos. They are nowhere correlated!

Sounds good?

3% is too high for NPA. Ideally it should be below 1%. Banks make money on the difference between the lending rates and deposit rates. Usually the difference between the lending rate charged on housing loan and the deposit rate offered on fixed deposit is 1.5 - 2.5%. If 3% of the loans start turning bad then banks will have to face overall net deficit in their financial statements.

d.kevin29

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Quote from: Lucius on January 20, 2020, 09:29:30 AM

Of course, most of what comes from a source that OP promotes doesn't make sense, it's about clickbait titles and OP making money on all that. Also, don't expect any response from the OP - he's too busy to create as many threads as possible - the attempt to connect US Mortgage Debt with cryptocurrency just shows that these articles are written by people who have no idea about economics, let alone cryptocurrency.

Code:

https://beincrypto.com/cryptocurrency-shines-us-mortgage-debt-exceeds-2008-levels/?utm_campaign=amba&utm_medium=social&utm_source=bitcointalk&utm_content=jc

^^This is the real reason why OP spam forums with such nonsense.^^

Probably his temp ban wasn't harsh enough for him.

Check this out.

carter34

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Quote from: betty11 on January 19, 2020, 10:44:37 AM

Why does the USA continue allow her to be drawn into debt by the federal reserved bank which is even a private business? Now we will soon see another deadly global recession and the poor are going to be out of job, while the middle class will be pushed to the poor zone. As the USA debt profile rises, the world may look for something better than USD and that should be Cryptocurrency. When bitcoin? I don't know yet.

In such situation and scenario, bitcoin is not a solution, it can't mop up the USdollar because fiat currency is still recognized as the legal tender and therefore used in transacting while bitcoin is just a digital or cryptocurrency more or less complex for everybody usage.

wozzek23

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I don't know if this mortgage crisis is just like the other one, the other one was stemmed from the derivatives that came out of mortgage as well. Basically, the other one was bunch of mortgages colliding each other as a one big thing and then sold once again, this time it is mostly just mortgage itself which is fine as long as people pay and there is of course a bunch of people who default on their loans but as long as it doesn't reach to a critical point that won't be a problem.

I am sure banks do not give out mortgage loans just like shark loans anymore and actually look at who can pay and who can not. Hell even mortgage debt going high could be seen as good because people have money to buy houses if they end up paying this off, so it is not that bad on face value.

panganib999

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Aaaand I don't see how Title's OP is relevant to the actual post. If it's related to the recent push of BTC to $9k, Still, irrelevant. The US debt could go and exceed more and more levels, but the crypto scene would barely make a dent on it to actually affect the waves. Especially since the current crypto scene already has its hands full expanding and trying to integrate to the world. It has no time to bother fixing the mistakes of those so called top of the globe kind of people.

Lucius

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Quote from: The Sceptical Chymist on January 20, 2020, 06:40:32 AM

OP, the title of this thread makes it seem like those two things are somehow related, but the comparison doesn't even make sense to me. Crypto might be shining a little right now, but the market as a whole is far from its ATH, and the state of it has nothing to do with the housing market.

Of course, most of what comes from a source that OP promotes doesn't make sense, it's about clickbait titles and OP making money on all that. Also, don't expect any response from the OP - he's too busy to create as many threads as possible - the attempt to connect US Mortgage Debt with cryptocurrency just shows that these articles are written by people who have no idea about economics, let alone cryptocurrency.

Code:

https://beincrypto.com/cryptocurrency-shines-us-mortgage-debt-exceeds-2008-levels/?utm_campaign=amba&utm_medium=social&utm_source=bitcointalk&utm_content=jc

^^This is the real reason why OP spam forums with such nonsense.^^

The Sceptical Chymist

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OP, the title of this thread makes it seem like those two things are somehow related, but the comparison doesn't even make sense to me. Crypto might be shining a little right now, but the market as a whole is far from its ATH, and the state of it has nothing to do with the housing market.

I didn't click on the article, but everything depends on the quality of debt that's issued. The big problem back in 2006-08 was that lenders were throwing money at people who never had a shot at paying it back, and then that debt was packaged into securities that were then sold to big Wall Street investors. I don't think that's happening again, even if Wall Street does have a very poor memory--it hasn't been that long since the crisis of 2008.

Sadlife

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Nothing can stop an imminent financial crisis, its gonna happen sooner as the US dollar is losing its value this could happen this year as the sign in US mortgage debt increased, the rates will surely go up triggering another global financial crisis plotted by the guys behind banking systems.
Bitcoin cannot stop this by being a hedge, the best way is to stack up safe haven assets like gold or BTC to not get caught by these schemes to accumulate more debts.

Wexnident

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No I don't think so? Crypto could be in effect a safe haven, but it being one stands on a very weak foundation. As a hedge? I think not. Crypto would do close to nothing with regards to the continuous debt accumulation done by the US. Hell, the only ones who can do anything about it are preparing to let it happen instead, and would only save themselves from the possible recession, as such they started gathering gold early on.

davis196

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This data only proves that the US real estate market bubble is going up again,funded by printed fiat money from the Federal reserve system.The mortgage ratio goes up,the future crisis is near. Grin

Cryptocurencies has nothing to do with the US mortgage levels and I don't think that it's about to become a hedging instrument.If a big crisis happens,the crypto prices will collapse too.

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When crisis strike hard. Everybody died, and only one person that survive, that’s the governments!
That’s the true colour for capitalism. Crypto currency? Nope! It would died a hundreds omega slashes.
You wonder why women recently moving to be agents of the govt, that’s it, they sense the govt can provide them the safety they want badly, not even the Cuck Norris has entitled these impression to women. That’s it the powerful Trump and his power level to attract whore.

Myfe

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Quote from: cheezcarls on January 19, 2020, 10:15:54 AM

Do you guys agree that Bitcoin and other cryptocurrencies will serve as hedges to this situation? Or is it not necessary at all? Would like to hear about your thoughts or reactions about this one.

Cryptocurrency serves as a hedge to any investment that it (cryptocurrency) has a negative correlation to, meaning if Asset X increases in value, cryptocurrency goes down (or vice versa). Cryptocurrency isn't a hedge to mortgage debt because they have not relationship to each other. Cryptocurrency offers a diversification though, keep your investments in multiple places so you can participate in several different markets.

Cryptocurrency could serve as a hedge against currency inflation.

Kemarit

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Again, it has not yet proven that Bitcoin or cryptocurrency can be used as hedge, it's all speculation and rich people are not going to tell us if they're really into crypto or not. Maybe some of them are inside the space, or some of them have still their doubts about it and would rather go for a safe and traditional investment platforms. Crypto is good but haven't been tested yet in this kind of scenario, mortgage debt has been rising, I know it's very difficult to overcome it, but I would say that crypto is not the solution here, just saying.

jhontwis

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I think what is the reason for this is clear. It's about the dollar policy. Bitcoin price saw its biggest peak at the end of 2017. The US was following a loose dollar policy. If I remember correctly. If the market is more than dollars, things like Bitcoin and Gold are valued.

ChrisPop

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Almost all kinds of debt are hyper inflated in the United States. If mortgage debt is so big and continues to increase what should we say about the education debt. Banks are making huge loans to students who are not even capable of paying it back. Just a few of them can actually get a job in a decent amount of time. A lot of them default and go bankrupt by leaving school and some loans even excuse them from paying the credit if they don't finish the school or drop out on the initial stages as far as I have heard. BUT this is a big red flag and if all these bubbles pop around the same time it will be very hard for the economy to be revived at decent parameters.

avikz

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Quote from: cheezcarls on January 19, 2020, 10:15:54 AM

The total outstanding US mortgage debt has exceeded a staggering $15.8 trillion with no signs of slowing down, according to data sourced from the US Federal Reserve. Could cryptocurrency serve as a hedge?

This hedge matter has been discussed earlier as well. The answer is NO! Bitcoin has not yet reached that level of maturity where it can be used as a hedge for anything. Gold is the most preferred hedging instrument since ages and its attraction has not yet faded!

Quote

A chart published by the Economic Research branch of the Federal Reserve Bank of St. Louis shows that the total mortgage debt declined considerably between the years of 2008 and 2013, reflecting years of economic slowdown and home-ownership reluctance. However, this trend reversed in 2014, and ultimately resulted in the amount of debt surpassing 2008 levels.[/i]

Increasing debt in real estate sector is a good sign if the level of "non-performing-asset" remains low. Increasing amount of debt literally means that the investor class is showing interest in real estate sector and the housing sales is on the rise!

Quote

I am not sure guys if cryptocurrency can really do something with US mortgage debt, or if it's something related. However, the data proves it all that their mortgage debt in the country continues, and it may worsen in more years to come.

Do you guys agree that Bitcoin and other cryptocurrencies will serve as hedges to this situation? Or is it not necessary at all? Would like to hear about your thoughts or reactions about this one.

Cheers!

Lets summarize this. There are few economic indicators to watch for.

1. Increasing debt means increasing sales of real estate. Common people is seeing income stability and buying properties.
2. NPA is what we need to check. Even though we don't have any official parameter, it is believed that NPA should always remain lower than 3% to classify a sector as healthy.
3. The value of bitcoin fluctuates widely so it is not an ideal asset for hedging.
4. Finally US real estate market has little/no relation with cryptos. They are nowhere correlated!

Sounds good?

betty11

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Why does the USA continue allow her to be drawn into debt by the federal reserved bank which is even a private business? Now we will soon see another deadly global recession and the poor are going to be out of job, while the middle class will be pushed to the poor zone. As the USA debt profile rises, the world may look for something better than USD and that should be Cryptocurrency. When bitcoin? I don't know yet.

kryptqnick

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I think it's not just me having this feeling that the global economic crisis will be here soon (probably in 2020 already). I also think that this time it can strike harder than the previous one. Top fiat currencies have lost the vast majority of the value they had when they were created. I honestly believe that the next hit could finish off the dollar, and if it falls the others will follow shortly afterward. This would be devastating, but cryptocurrencies would get a chance of showing their usefulness at that point. They will be the only thing that can actually function as money well enough and make sure that this sort of devaluation never happens again. So I'm pretty sure that the eventual rise of cryptos when fiat fails is rather natural. It might not happen at once, but we'll get to that at some point.

Topic: Cryptocurrency Shines as US Mortgage Debt Exceeds 2008 Levels (Read 263 times)