https://nypost.com/2018/09/22/next-crash-will-be-worse-than-the-great-depression-experts/

I've had enjoyable discussions with @Tony C. in the past, learn alot.

I thought this is always relevant for collectors both young and old as this could potentially affect our funds for watches be it buying it at a "good" price or an "premium" price.

Seems like the current Rolex trend both vintage and modern continue to rise, but for how long?

Can't imagine how the economy could crash and burn so badly that everyone might be offloading their 1680/5513/1675/ modern hulks/batman etc for say 20-30% less than what they are now?

As always, open for discussion, please keep politics out of the replies; focused on perhaps personal collecting experience and even some insights on market outlook etc.

 

Nobody has any idea what is going to happen. It's all speculation at best, scaremongering at worst. 2008, they all say "We never saw that coming."
The guy himself even admits it.
"Although Schiff has gotten some calls wrong in the past — he incorrectly predicted the US Federal Reserve would fail in its roundabout quantitative easing campaign to “reflate” housing and stocks in the wake of the financial crisis — he is convinced he is right on the money this time."

 

True.

However, is this continued rise and booming economy actually possible, say for the next 10 years? Doubt so.

Also, there's the 10-12 year "cycle" if you do read about some financial books/articles. They do mention and its about time or rather long overdue.

 

And the people paying high amounts for watches are not affected as much by a crisis.

 

Personally, I hope the market crashes and watch prices drop through the deck. I can buy more then. A DRSD for US$10K or a 105.12-65 for US$5K? Count me in.

 

"Continued rise and booming economy"? Where are you?

 

This is nonsense. There were many people who saw the 2008 crisis coming. If you mean that they didn't see the precise timing, or the exact nature of the widespread damage that it would cause, then yes, that may be true. But, like the last time, it is easy to see that another major crisis is inevitable.

The reason is that the structural problems leading to the previous crisis were not resolved, as politicians and Central Banks chose instead to suppress interest rates for a decade (and counting), while creating trillions of dollars of "money", created by keystrokes on keyboards, a high percentage of which ended up bailing out (or propping up) TBTF banks, and fueling stock market and property bubbles. Here are three illustrative graphs:





The world is at the peak of by far the greatest debt bubble in history. Governments predictably spew propaganda, and *massage* statistics, such as GDP. For a sobering and more accurate look at the GDP of the U.S., here are two useful charts:





Add to the above the fact that demographics are an increasingly big problem. If you live in the U.S. and believe that your pension and/or 401k are safe, you are likely to be in for a very rude awakening. Pensions are blowing up now, when markets are at all-time highs! What do you think will happen when the markets, propped up by years of cheap money and share buybacks, inevitably decline significantly?

I've mentioned this before, but it bears repeating: Interest rates are designed to reflect risk. When they are deeply and artificially suppressed, as they have been for 10 years, the amount of resulting malinvestment and excessive risk taking is incalculable.

Schiff is absolutely correct about there being an inevitable reckoning. Yes, timing the precise inflection point is almost impossible, but there is another major crisis already "baked into the cake", thanks to Central Bank policies.

 

How did the 2008 crisis effect watch prices?

 

Top 1% is not afected by the crisis as much, but is a huge part of the total watch market right?

 

They are a big part of a certain segment of the watch market. But even the rich will be affected by the next crisis, as they were by the previous one.

 

That's true, but not sure how much impact it will have on the watch market

 

It is already having a serious impact on the market! You must be looking at a narrow segment. I collect primarily in the middle of the vintage market, which is a broad range, say $200-4000. Setting aside the most desirable models, and those in exceptional condition, there is, and has been downward price pressure for some time. That pressure is accelerating, and the reasons are straightforward. As middle-class collectors continue to suffer due to economic policies, they are increasingly curtailing luxury purchases, and many are are disgorging in order to raise cash. This trend will accelerate much further.

 

Markets seem to be tanking a little, but if you look at 2018, its still upward, 2016/2017 is definitely upward.Especially with the crypto hype.

I'm in Singapore.

 

The US stock market is up over 300% since the bottom in 2009, mainly because the Fed refuses to allow true price discovery and has instead chosen (again) to reflate an asset bubble. The Fed pursued a zero interest rate policy for years, in order to shovel free money to the profligate US banks to protect them from the consequences of their irresponsible risk-taking. The Fed's stated goal was to force people out of cash and into risk assets, to prop up the stock market. They've destroyed a generation of savers, who saw no yield on their cash for more than 8 years, and rewarded banks who made reckless bets with their depositors' funds and shareholders' capital.

The stock market is not the economy, at least it never used to be. The US became over-"financialized" post-NAFTA in the early 90's, as manufacturing jobs left for cheaper locales like Mexico and China, and banking, insurance, and other financial industries became a greater share of the economy. There needs to be a day of reckoning for all of this financial irresponsibility. You can't create trillions of dollars in debt out of thin air and have the Fed monetize trillions in debt without consequences - which should be higher inflation and lower asset prices. Sadly, the Fed and the US government will try to ride this all the way to the bottom.

 

From a European perspective, there have been large amounts of regulation imposed upon the banks, furthermore with the propagation of CCPs I believe the risk of one bank bringing the rest down to be reduced. However, it is inevitable there will be a crash, this is the nature of the beast and the nature of the pro-cyclical economy which we have. However, I don't believe that it will be as deep or as long lasting as 2008 (Unless the CCPs fail, in which case its Armageddon)

 

Let's not forget the Asian ponzi schemes.....

 

Let's not forget Money is the biggest Ponzi scheme of all time now and most probably will be for all time.

I mean after all there is more money and debt in the world then there is money or assets to cover the sums, it is impossible to balance the books never mind all the Billions or maybe Trillions of $'s that are in off shore accounts or the stacks of cash drug cartels have. Once the banks and financial institutions were able to just create money and not have to actually you know have deposits or assets to cover it, it was the beginning of the end IMHO. But in all honesty there is very little most of us can do but carry on riding it out and live the best we can.

Marc

 

I can say this much. On your first point. The "current" Rolex trend has been going on for as long as I can remember. 2005-6 were the years you could pick up then "regular" sports models such as non PCG 1675s, 5513, white 1680s, transitional (16800' 16750s, 16660s, for a so called pittance. Ironically, those have been skyrocketing since the 2008 crash. Even the 5 digit modern sports models are insanely priced. So, no end in sight IMO. Collectible watches are very liquid and there will always be somebody out there willing to spring big money for one. Regardless of the economic landscape. So your second point is also unlikely to happen.

Skyrocketing prices have spilled over to many other brands because of the crazy money commanded by Rolex and now Omega Speedmasters.

I went through my archives and checked out some of my purchases between 2005 and 2010....did the 2008 crash affect the value? Hell no!

1675 Mk 2 - $ 2100
1680 W - $ 3200.00
5513 MF - $ 2500.00
1665 W Mk 1 - $ 8500.00
1665 DRSD Mk 4 - $ 7500.00
145.012-67, 68 x 5 - All between $1900.00 and 2200.00
105.002-62 - $ 7000.00

 

I predict, and have NEVER been wrong btw, that the (fill in your favorite) market/economy will either go up, down, or stay level. This is BREATHTAKINGLY obvious of course.

In other news, the world will end... eventually.

 

Can inequality only be fixed by war, revolution or plague?

https://www.economist.com/open-futu...=scn/fb/te/bl/ed/howtofixinequalityopenfuture