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VeryMeanReversion

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Not that it really matters but I've been wondering why many commentators and posters refer the current bubble as a Ponzi scheme.

This bubble never had a single driver or even organisation behind it. It was just a case of mass stupidity, the latest in a series of bubbles.

Ponzi used new investors to pay off the previous ones. No debt or leverage required, just a basic money shuffling con. This limits its effect.

Bubbles tend to consist of debt and leverage. That makes them far more dangerous (we are in the biggest one of all time as far as I can tell).

VMR.

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Guest Mr Parry
Not that it really matters but I've been wondering why many commentators and posters refer the current bubble as a Ponzi scheme.

This bubble never had a single driver or even organisation behind it. It was just a case of mass stupidity, the latest in a series of bubbles.

Ponzi used new investors to pay off the previous ones. No debt or leverage required, just a basic money shuffling con. This limits its effect.

Bubbles tend to consist of debt and leverage. That makes them far more dangerous (we are in the biggest one of all time as far as I can tell).

VMR.

Ponzi bubble

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It's both a Ponzi scheme -- and a bubble.....

http://www.housepricecrash.co.uk/forum/ind...showtopic=81677

No sign of Ponzi-ness there.

My understanding of a Ponzi scheme is where early investors are promised great returns by the scheme leader. The first interest/repayments are made using their own capital.

The appararently good returns encourage others to follow suit. The later investments pay off early investors and keep it going until there is enough critical mass of investors seeking repayments that the scheme leader is better off running away. No debt or leverage is required, just paying off early investors with their own capital.

I propose that the housing boom has no Ponzi features.

It's just an old fashioned bubble. Mass-mania, debt and leverage.

VMR.

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Ponzi and Bubble on a generational scale.

This is the clincher : The later investments pay off early investors

Next generation(s) will buy the housing stock so that the profit can be realized.

It isn't going to happen the next generations are screwed.

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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