is the bubble due to burst? | Page 123 | FerrariChat

is the bubble due to burst?

Discussion in 'Vintage Ferrari Market' started by PFSEX, Jan 18, 2013.

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  1. Juan-Manuel Fantango

    Juan-Manuel Fantango F1 World Champ
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    It did look nice but non matching engine?
     
  2. gbutler

    gbutler Formula Junior

    Jun 9, 2005
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    Glenn Butler
    Car was for sale at Fantasy Junction for 249k and ran thru one of the auction houses in Monterey last year with a no sale at 195k hammer.
     
  3. wintrader

    wintrader Rookie

    Dec 22, 2010
    21
    Strong prices today.

    Sent from my Redmi Note 4 using Tapatalk
     
  4. donv

    donv Two Time F1 World Champ
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    Yes, I think $181k on BaT was the correct price for the car. I'm just saying that I think $249k was probably a reasonable price a year ago.

     
  5. Renman57

    Renman57 Formula Junior
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    Bottom line......no one knows, no one can predict. Period. If they do predict it, they are lucky. Period. If you try to figure it out, you'll go crazy over time.
     
  6. cheesey

    cheesey Formula 3

    Jun 23, 2011
    1,921
    if the current economic optimism continues, the Fed continues with rate increases, general economic expansion should create some inflationary pressures, there shouldn't be any contraction in Fcar prices. Skeptics will have more stories about the Fcars that they should have purchased
     
  7. nis1973

    nis1973 Formula Junior

    Jan 19, 2013
    484
    NYC/CT
    Who knows... The run-up started 5-6 years ago, precisely when the economy sucked so it's a bit more complicated. In the long term the truly collectible rare stuff should do ok so if that's what one is after and the right car comes up it's as good a time as any...
     
  8. wintrader

    wintrader Rookie

    Dec 22, 2010
    21
    It is not just classic cars. All assets are kinds expansive. It seems there is not much confidence in cc ash money which they print out of thin air. Money they can print stock you can also print. But classic Ferrari's. No there are only a few. And one thing you now for sure...they are not printable. Sooner or later fractional reserve system is going to fall. The choice is your...Classic cars or paper money. Not a difficult one i guess. Ok you can sell but what to do with the money. Put it on interest??? Too risky. So you have to buy something else. I think that is the story.

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  9. energy88

    energy88 Two Time F1 World Champ
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  10. Ferrarifan2016

    Ferrarifan2016 Karting

    Oct 26, 2016
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    I have a hard time believing that value dropped 30% in one year when stocks went up almost 25% in same time. It makes no sense. I keep reading on here the same thing and seeing cars maybe 30% lower but this is a BUY opportunity when stocks are so high.

    How much are 308/328 today compared to a year ago? I think everyone agreed those would keep going up more and now I see them dropping a lot and not even selling.

    I think the market is crazy not buying these cars that are maybe half of the prices I saw people talking about a year ago. It is the deal of the century when there are no more manual cars and these are classics now.

    Maybe there is opposite bubble now? What is that called?

    I see no reason for prices to drop so much when everything else is much higher.
     
  11. rob lay

    rob lay Administrator
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    Dec 1, 2000
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    there are many factors that influence the market, for prices to move there has to be an imbalance. you can have an influence that strongly indicates a weakening market and then you can have one for improving market, but if they are equal in force market may just stay flat.

    stocks can have a positive or negative impact on certain cars. if everyone wants to be in stock market, then they might pull money from cars. if people have made some nice money in stock market they may spend it on discretionary things like cars.

    I personally think major drivers of the bubble right now are Boomers and other havens of money being volatile. When will the Boomers start selling to pay for retirement or start dying off? When will interest rates go up enough there are some attractive debt investments? also remember the more the bubble, the more potential for panic sell off.
     
  12. Zaius

    Zaius Formula Junior

    May 8, 2014
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    #3062 Zaius, Apr 6, 2017
    Last edited: Apr 6, 2017
    There really isn't anything to understand here.

    I offer car for 1million, client goes to bank and obtains 1million. Bank created the money needed to buy the vehicle.

    This is how the monetary system works folks. Higher asset prices means rich people can take on more debt means higher asset prices. The incovenient truth about the economic history of the United states since 1776 is basically fraud fueled booms followed by busts which leads to higher and higher wealth concentration(more bids on old junk ferraris). One merely needs to do a road trip around the US to see this history unfold before ones eyes. Everything from abandoned railroad tracks, to industrial towns, to factories to suburbia. Excess credit growth = money created = economic growth. The 'discipline' of the free market is a complete lie sold to the public at large.

    It eventually collapses because of compound interest which is the root cause of the economic malaise plagueing all western economies.

    It really is that simple if you understand this then you can understand why rich people things are bid up to such extreme levels and then always end up plunging until the government comes in to save rich asset holders.

    When will the bubble burst? Who knows, probably when rich people stuff like realestate and stocks goes down 20% they'll all be rushing in cash in on their rust bucket 'vintage' luxury. The greedy bondholders end up with the windfall.....

    Alan Greenspan raised interest rates by 400% from 05-08 which collapsed the economy because the USURERS needed to watch their dollars breed more dollars. So we are starting off with a much higher level of private debt than before and the fed is raising rates. Will that be enough to trigger it? Hard to tell.

    Speculating I can see this coming off hard within the next 24months unless Trump admin is able to increase deficit spending substantially so new dollars are available to keep prices propped. It comes down to that, higher deficits = more gdp, lower deficits = risk of debt deflation. Unfortunately the idiotic republicans don't understand this. If Trump can deficit spend 5-10% of GDP than the likely hood is the asset prices will remain high, if he can't(from congressional opposition) than everything will come down and it could be hard.
     
  13. Zaius

    Zaius Formula Junior

    May 8, 2014
    863
    #3063 Zaius, Apr 6, 2017
    Last edited: Apr 6, 2017
    Thats not really how that works.

    If I have a 250 and sell it for 20 million to put 'money' into stocks the guy who gave me the 20 million now has my 250. All we did was swap assets. The money never went into anything just ownership changed.

    If I buy stock then the seller now has my 20 million and I have stock. So what exactly changed? Nothing. It just asset swaps! There is no such thing as 'sideline' money and other nonesense.

    In order for high prices to be met, the money has to be created via 2 ways. Either the gov adds it to the economy via deficit spending or private banks create it with loans.

    There are no 'market forces' or other occultic explanations. Very simple high deficits = more money in economy = more activity for the top 5% of population because of the wealth concentration. More money in hands of few people = rare stuff being bid up!

    High asset prices = more available collateral for new loans = more money to bid with! Has there ever been examples of Ferraris holding their value during a stock market crash? No.
     
  14. Ferrarifan2016

    Ferrarifan2016 Karting

    Oct 26, 2016
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    I am even more confused

    If govt spends more money then inflation and then interest rates goes up right?

    Trump immigration policy means less low cost workers means higher salary means inflation

    Trump spending on infrastructure means higher more inflation and also higher interest rates

    Trump tax cut means more spending and then higher inflation too

    So if we have higher inflation and higher rates what does this mean?
     
  15. Ferrarifan2016

    Ferrarifan2016 Karting

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    thank you for a very useful overview and helpful way to think about it!
     
  16. Zaius

    Zaius Formula Junior

    May 8, 2014
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    #3066 Zaius, Apr 6, 2017
    Last edited: Apr 6, 2017

    The US government has a MONOPOLY on money issuance. Interest rates are set by decree.

    The natural rate of interest for government issued fiat money is ZERO. How do I know that? If you take 2 100 dollar bills and put them in drawer will they have children? No.

    The federal reserve intervenes into the market to prop interest rates higher than they otherwise would be. This acts as a handout to bondholders who receive free money.

    Government spending does not necessarily mean higher inflation because if you have a large % of your economy idling and you put them to work it means more goods/services = more wealth.

    The reason the economics profession is obsessed with inflation is because inflation kills the return of BONDHOLDERS. Basically we have an economy run for and by bondholders at the expense of everyone else. You have to understand this dynamic! Price wages or the Sp500 in bonds and you see a massive wealth shift from those who produce to those who idle.

    That money shift than leads to rich people going out and buying rare limited stuff, and since their pool of money keeps growing ad infinitum the prices for rich people assets also increases.

    So when the SP500 increases by 1000% or a old Ferrari by 5000%, do they call that inflation? No. Everytime rich people stuff goes up its called 'investment returns' or 'capital gains'.

    Inflation hysteria occurs when wages go up. So if wages for 95% of the populace increase by 10% suddenly everyone is in a panic yelling inflation inflation! But if rich people stuff does 1000% nobody says anything.

    Look, Obama admin came in and ran 8-9% deficits which rebooted the economy but the gains all went to richest % because the distribution of the new money did not occur through the wage channel.

    The government has to run a budget deficit because you need new dollars created to pay interest charged on private sector loans. If the government shrinks the deficit or runs a surplus the economy crashes. This is what happened with Bill Clinton he ran a surplus then the economy crashed.

    So if you want to know IF ferrari prices will go up or down its very simple. High government budget deficit = high prices for rich people stuff because in the United States monetary transmission all goes to the top of the pyramid.

    If Trump will not be able to increase the gov deficit or if he attempts to balance the budget, than DOWN WE GO!
     
  17. rob lay

    rob lay Administrator
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    no, that's not the point. money isn't a 1:1 exchange, the market changes because it isn't a 1:1 exchange.
     
  18. donv

    donv Two Time F1 World Champ
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    Well, another driver-quality 365GT just sold at Amelia for $192,500, so that seems like the level. Now, a fair question is whether they were really $250k a year or two ago, and I don't know that for sure.

     
  19. Ferrari 308 GTB

    Ferrari 308 GTB F1 Veteran

    Feb 21, 2015
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    You need something fairly big to happen to trigger a big fall in the markets/cars/whatever.. nothing on the horizon at the moment.

    Oh wait ...Trump pulls the trigger and bombs Syrian airbase,Russia not impressed,China not impressed.

    What next North Korea?

    This could escalate beyond anyone's comprehension.
     
  20. Mckinney

    Mckinney Karting

    Mar 29, 2013
    199
    ..and with astonishing speed. But let us hope not.
     
  21. rob lay

    rob lay Administrator
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    Ha, I couldn't believe your post was going that way until I saw you were sarcastic. You get it!
     
  22. Zaius

    Zaius Formula Junior

    May 8, 2014
    863
    #3072 Zaius, Apr 7, 2017
    Last edited: Apr 7, 2017
    High US gov deficits = RISING asset prices.

    Low gov deficits = opposite.

    That all you need to know.

    https://www.cbo.gov/sites/default/files/cbofiles/images/pubs-images/45xxx/45229-land-Baseline1-yellow.png

    Look here.

    1998 1999 2000 gov deficit is surplus, this means money being removed from economy.

    So 1998 1999 2000 you would be selling stocks selling Ferraris.

    What happened after? Economy crashed, it has to.

    2003 you start BUYING! Because deficit is expanding.

    06 07 deficits are shrinking so you are SELL FERRARI sell stocks.

    2009 you are BUYING! BUY BUY 9% deficit = GOOD FOR ECONOMY.

    Right now if TRUMP cannot increase the deficit because of republican 'hawks' and 'freedom caucus' the economy will go DOWN. You want to be selling assets now!

    So as I said what happens to vintage car market? IF GOV is not adding new money odds are they are going down!

    People think deficit is bad because they do not understand how a fiat money system works. Its the opposite!

    Higher deficits channel more money into the economy which all ends up in the pockets of rich people via various RENTIER schemes like interest payments, dividends, landlord rents. This means rich misers going to the auction houses with their money to BID UP rare things like vintage Ferrari!

    Why am i speculating on asset price going down? Simple. Trump couldn't modify OBAMACARE so how he going to get through a massive increase in fed deficits? HE WONT.
     
  23. rob lay

    rob lay Administrator
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    I'm with you on that Zaius.
     
  24. 166&456

    166&456 Formula 3

    Jul 13, 2010
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    Ha. If there is a conflict the USA is involved in, and defense spending is needed, is congress going to deny an expansion of the debt ceiling?
    Absolutely not.
    That aside, I don't think there is a precedent it has ever NOT been expanded.
     
  25. Ferrari 308 GTB

    Ferrari 308 GTB F1 Veteran

    Feb 21, 2015
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    I thought Obamacare was on life support right now ...Trump will flick the switch shortly?
     

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