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The U.S. just had the most Q1 layoffs in a decade

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Re: The U.S. just had the most Q1 layoffs in a decade

#161

Post by mywittyname »

ajross wrote: post #87
jacquesm wrote: post #7

Earlier quoted context omitted.

The whole economy is powered by belief. No bank would be able to handle a bank run.

Yes, but the government can. The 2008 crisis didn't happen in deposit banking, but it was effectively a "bank run" in the same sense you're talking about -- all the assets banks could normally use to draw on to meet obligations froze up, and they ran out of money. And the government stepped in, becoming a lender of last resort. And it worked (not well, maybe, but it worked). Saying "the economy is powered by belief"…

> (not well, maybe, but it worked)

Obviously we don't have the alternative universe where President McCain opted to do nothing for comparison. But looking at the economic boom we're living in 10 years out, it's difficult to make an argument that the government's handling of the housing crisis was poor. I have a hard time coming up with an outcome more ideal than what we got.

2008->2018 was a much nicer decade than 1928->1938.

Re: The U.S. just had the most Q1 layoffs in a decade

#162

Post by manfredo »

geggam wrote: post #155
manfredo wrote: post #147

Earlier quoted context omitted.

Yes, banks can join the federal reserve system and other banks can be FDIC insured. But how do you go from that to "the Federal reserve is not part of the government". It's the central bank of the United States. Its chairman is appointed by the government. All profits are paid back to the United States. Is about as independent from the government as the FBI. Saying that the Federal reserve system is not part of the g…

:) we are getting closer. Now... lets say a company was allowed to buy shares in the govt and be able to act as a govt agency while remaining a private company. So they contract themselves to do some work, pay themselves for setting up the contract, switch hats then do the work. Bonus if they don't do the job right they simply aren't liable.

Sure... But what you describe is not how the Federal Reserve works. The Federal Reserve is accountable to Congress. If they do their job poorly, leadership can be removed. The Federal Reserve is not a private company.

They don't "buy shares in the government". I'm not even sure what that even means. Nobody can buy shares in the government because the government isn't a company. I guess you might be referring to government bonds. But those aren't shares, they're contracts to get paid a greater amount when the bond reaches maturity. The whole concept of "shares of the government" is just not valid because nobody owns the government. At least not in the US, there are some monarchies where all government assets are owned by the royal family.

Re: The U.S. just had the most Q1 layoffs in a decade

#163

Post by neffy »

ajross wrote: post #87
jacquesm wrote: post #7

Earlier quoted context omitted.

The whole economy is powered by belief. No bank would be able to handle a bank run.

Yes, but the government can. The 2008 crisis didn't happen in deposit banking, but it was effectively a "bank run" in the same sense you're talking about -- all the assets banks could normally use to draw on to meet obligations froze up, and they ran out of money. And the government stepped in, becoming a lender of last resort. And it worked (not well, maybe, but it worked). Saying "the economy is powered by belief"…

Erm... not quite. in the Insolvency vs Illiquidity stakes, 2008 was all about Insolvency.

That's why the government stepped in and bought the mortgages from the banks - if the banks had had to account for the losses on those loans it would have brought down the entire system.

Re: The U.S. just had the most Q1 layoffs in a decade

#164

Post by AnimalMuppet »

dba7dba wrote: post #146
JustSomeNobody wrote: post #142

Earlier quoted context omitted.

>... it is a manager's job to lay off employees. I feel awful for those people whose lives have just been disrupted so. I’m particularly empathetic because, as a foster parent, I know very well what may happen to some of those families.

I've never been a manager or had any role in laying someone off. But I've been laid off myself and know plenty people who get laid off and suffer the consequences, some quite severe. So I sometimes wonder, how do these managers who lay off people sleep at night? I mean they are just doing their job so that THEY themselves don't get laid off. And next I wonder, who are these rich rich people who want more money so tha…

You lay people off so that the company doesn't go bankrupt. Going bankrupt ruins more peoples' lives.

Re: The U.S. just had the most Q1 layoffs in a decade

#165

Post by moorhosj »

opportune wrote: post #148
moorhosj wrote: post #141

Earlier quoted context omitted.

==Assuming we only pay 2% interest on that debt== Where does this come from? the 10-year bond rate was closer to 3% for most of 2018 [1]. ==So that's a 4x ROI correct== You can't calculate ROI with an I. In this case, that is the 3.9% of GDP mentioned. Going forward, we may gain more tax revenue than we would pay in debt servicing each year, but that ignores the initial investment we made. In reality, you would need…

It doesn't matter, 2% or 3% is just splitting hairs. I also apparently underestimated the percent of US GDP going to federal taxes; it's around 19%, not 10%. So there is still more a lot more new tax money coming in than is necessary to service the new debt. "3.9% of GDP invested initially" How is this investing 3.9% of GDP? It costs 0$ in investment for the government to issue new bonds. The only way federal debt co…

Nobody said it was unsustainable. The point is that if you have to borrow almost 4% of your GDP to generate growth of only 3% of GDP, your underlying economy is not performing strongly enough to support itself. That we can’t escape deficit-fueled growth in a supposedly “booming economy” is a scary sign for future economic hiccups.

Re: The U.S. just had the most Q1 layoffs in a decade

#166

Post by DoreenMichele »

dba7dba wrote: post #146
JustSomeNobody wrote: post #142

Earlier quoted context omitted.

>... it is a manager's job to lay off employees. I feel awful for those people whose lives have just been disrupted so. I’m particularly empathetic because, as a foster parent, I know very well what may happen to some of those families.

I've never been a manager or had any role in laying someone off. But I've been laid off myself and know plenty people who get laid off and suffer the consequences, some quite severe. So I sometimes wonder, how do these managers who lay off people sleep at night? I mean they are just doing their job so that THEY themselves don't get laid off. And next I wonder, who are these rich rich people who want more money so tha…

Layoffs are the price we pay for stable employment for some people. Otherwise, we all get to be "consultants" scrambling for the next gig, basically.

Re: The U.S. just had the most Q1 layoffs in a decade

#167

Post by mywittyname »

mikeash wrote: post #62
xxpor wrote: post #18

Earlier quoted context omitted.

Because people believe in the FDIC, not that there won't ever be a bank run.

The FDIC couldn’t handle a run on every bank. If people thought there would be a massive run, they’d rush to withdraw their money despite the FDIC. So it’s really both: belief in the FDIC’s ability to handle small runs gives people the belief that there won’t be big ones.

I'm curious how people envision a bank run looking in the era of digital banking. You already can't get much cash from a bank in good times because hardly anyone uses cash anymore for large purchases. Presumably Venmo, Visa et al will work just fine.

Re: The U.S. just had the most Q1 layoffs in a decade

#168

Post by mywittyname »

bb2018 wrote: post #17
pascalxus wrote: post #13

And yet, markets are nearly at all time highs. I'd like to see a breakdown of who's buying stocks/equities. EDIT: I know earnings are high, but much of our growth over the last 20 years has been during 2-4% GDP deficit. I don't think that's been priced into the markets. Markets may be assuming that the deficit party will continue.

The unemployment rate is the lowest it has been in 50 years. That stat isn't perfect but it is still that the number of people with jobs is about as high as it has ever been.

Right, it's rarely this low and unemployment goes up very, very quickly. I didn't do any hard analysis, but it seems to go down at an average of about 0.5 point per month, while it goes up at like 3.0-3.5 points per month.

When unemployment goes up 0.3 points in a month, often continues at that rate for months, sometimes for up to a year. So 4 months of poor performance can undo two years of employment gains, but the poor performance can go on for a year.

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