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There’s Nothing to Do Except Gamble

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Re: There’s Nothing to Do Except Gamble

#361

Post by mariojv »

owenversteeg wrote: post #290
toss1 wrote: post #58

Earlier quoted context omitted.

True And also much of the 'stuff' is here, or converted to services. 25 yrs ago, approx no one had 55"+ tvs, internet connection was a minority, and media eas collections of CDs/Videotapes. Now 'net connections are near-universal, and it is all streaming. Cell phones were just beginning & expensive, now everyone has a powerful computer in their pocket. We don't have two houses, but the ones we have are worth twice as…

It's worth mentioning that houses are not only worth far more, they are also physically much larger while household sizes have gotten smaller. In 1850 households had on average nearly 6 people; in 1890 five, in the 1930s four, in the seventies three - and today, the average household in America has two and a half people. Meanwhile house sizes have almost tripled since the 50s: new single-family homes were an average…

Do you have a source on the housing statistics (people per house, house size, square foot per person)? I'm curious how this trend holds up internationally; maybe a US source would help.

We have problems, but I intuitively agree with this narrative of progress and want to see good data to back it up.

I do wish there were more choice - the ability to buy 1950s-70s grade housing, medical care, etc., for a lower price - but that seems to be becoming rarer.

Re: There’s Nothing to Do Except Gamble

#362

Post by mariojv »

tim333 wrote: post #56
quickthrowman wrote: post #53

Earlier quoted context omitted.

You need to look at velocity of money in conjunction with the money supply to get the true picture: https://fred.stlouisfed.org/series/M2V The tweet you linked leaves out half the story, which is that money velocity is down greatly, thus the increase in money supply hasn’t caused rapid inflation. https://www.stlouisfed.org/on-the-economy/2014/september/wha...

Yeah though what happens when people go out again?

The Fed sells its assets to decrease the USD supply and raises rates. My best guess is a short period of higher inflation and then a correction, but who knows.

Re: There’s Nothing to Do Except Gamble

#363

Post by MichaelMoser123 »

tcbawo wrote: post #8

Money is stored wealth, the ability to buy goods and services in the future. The problem seems to be that we live in a time of societal upheaval. The future of stored wealth becomes cloudier and more uncertain the further you go out in time. So, what is the best place to store wealth? Will my wealth be eroded by inflation? Will the companies I invest in become obsolete by technology or market-manipulating nation stat…

it may be that crypto is seen as a way to mobilize untapped wealth that currently sits in cash (for whatever reason); with cryptocurrencies you have something that is relatively unregulated, so that crypto may mobilise that kind of money.

Re: There’s Nothing to Do Except Gamble

#364

Post by lamontcg »

arcticbull wrote: post #301
lamontcg wrote: post #251

Earlier quoted context omitted.

The problem is that the economy is being driven by rent seeking behavior and cantillion effects. This is great for the elites, but at the same time they can see how the ground is starting to crumble. As "the plebs" start to gamble they're working to blame any future collapse on the irresponsibility of the crowd. Shrinking responsibility for the fact that this is the system that they have lobbied for and created and t…

Do you have any evidence at all for the economy being driven by cantillon effects? That is pretty much fringe economic voodoo.

Housing prices spiraling out of control, bubbles in the stock market and crypto, this crazy V-L recovery we just had out of the covid recession, insane art prices, bubbles in baseball cards, the declining tax burden on the wealthy. The people who are rich and "close to the king" are able to capture all the effects of monetary stimulus. That is leading to asset bubbles and dramatic increases in prices of the things those people throw their money at.

Re: There’s Nothing to Do Except Gamble

#365

Post by owenversteeg »

mariojv wrote: post #361
owenversteeg wrote: post #290

Earlier quoted context omitted.

It's worth mentioning that houses are not only worth far more, they are also physically much larger while household sizes have gotten smaller. In 1850 households had on average nearly 6 people; in 1890 five, in the 1930s four, in the seventies three - and today, the average household in America has two and a half people. Meanwhile house sizes have almost tripled since the 50s: new single-family homes were an average…

Do you have a source on the housing statistics (people per house, house size, square foot per person)? I'm curious how this trend holds up internationally; maybe a US source would help. We have problems, but I intuitively agree with this narrative of progress and want to see good data to back it up. I do wish there were more choice - the ability to buy 1950s-70s grade housing, medical care, etc., for a lower price -…

People per household: https://www.bloomberg.com/news/articles/2020-02-10/the-shrin...

Square foot per household: https://www.newser.com/story/225645/average-size-of-us-homes... (annoyingly, this data comes from the US Census but I can't seem to find it on their site - but it does match up with every other source)

Interesting, semi-related: https://ourworldindata.org/urbanization

Very interesting, about older housing: https://mountainmath.ca/teardowns

From there it's just simple division to see the square foot per person.

> the ability to buy 1950s-70s grade housing, medical care, etc., for a lower price

If you want 50s style housing (aka dated interior and 280 sqft per person) - there are plenty of options. Go on Zillow and limit your price to $75k and you'll see plenty of homes available. 600sqft homes aren't the average, but they certainly still exist. You may think "aha, but you can't find a home in NYC!" - but keep in mind, only 16% of the world lived in urban areas in 1900 (and only 29% in 1950!) If you want an old car, those are cheap too. Old phones, TVs, radios, etc etc are all basically free. Dated medical care is the one thing you obviously can't get.

No, if you want to party like it's nineteen (forty) nine, go ahead. Live without a car (the majority of households had no car in the 40s) - you can get around by bike if you're lucky, and if you're in a car-centric area you can ride along with your coworkers, family and friends, or hitchhike, as people did. Your small housing will be very inexpensive. Your old-fashioned diet will consist of staples like flour, potatoes, milk, bread etc that have gotten extremely cheap relative to your income. Costs that would have been a solid chunk of your budget in the 40s (new clothing, for example) have gotten so cheap as to be almost unrecognizable.

I say this all as someone who did live a life of consuming very little for several years. If you do want to live in a smaller space, not have a car, and simply consume less (water/electricity/money/resources) it is certainly possible, even in our modern world. Give it a shot! You'll be surprised.

Re: There’s Nothing to Do Except Gamble

#366

Post by RhodoGSA »

aabhay wrote: post #347
Tenoke wrote: post #272

Earlier quoted context omitted.

If the market is reasonably efficient there'd be no room for arbitrage in the first place.

That’s why it feels so unequal. The arbitrage doesn’t come from market inefficiency, it comes from regulation/government, ingrained asymmetries, and consumer ‘dumb’ money

arbitrage comes from walled gardens.

Re: There’s Nothing to Do Except Gamble

#367

Post by Animats »

heartbeats wrote: post #342
Animats wrote: post #193

The NFT thing is interesting. Some things to note: - It's inherent in NFTs that they are thinly traded. If each thing is unique, there is no overall market price. Price quotes are anecdotal. There are "indexes" which list prices for transactions, but that doesn't mean you can sell at that price. - Liquidity is very limited. This works like collectables. Try to unload a million dollars worth of Beanie Babies. It may p…

The Commodity Futures Trading Commission does not regulate commodities, only commodity futures (and swaps, and options, and other derivatives).

That is not entirely correct.[1] The CFTC has authority to investigate frauds which affect commodity markets in which futures trading exists, and they have used this with regard to Bitcoin. "Examples of Prohibited Activities: Price manipulation of a virtual currency traded in interstate commerce.", writes the CFTC.

One could, for example, trade some art object at a grossly inflated price between two parties that are secretly cooperating. That's a "wash sale". Do that in a US-traded stock, and the SEC will go after you. Do that in a US-traded commodity, and the CFTC will go after you. Do that in a NFC, and you're probably legal. This is very convenient.

[1] https://www.cftc.gov/sites/default/files/idc/groups/public/%...

Re: There’s Nothing to Do Except Gamble

#368

Post by arcticbull »

lamontcg wrote: post #364
arcticbull wrote: post #301

Earlier quoted context omitted.

Do you have any evidence at all for the economy being driven by cantillon effects? That is pretty much fringe economic voodoo.

Housing prices spiraling out of control, bubbles in the stock market and crypto, this crazy V-L recovery we just had out of the covid recession, insane art prices, bubbles in baseball cards, the declining tax burden on the wealthy. The people who are rich and "close to the king" are able to capture all the effects of monetary stimulus. That is leading to asset bubbles and dramatic increases in prices of the things th…

> Housing prices spiraling out of control

Housing prices on average across the US, on an inflation adjusted basis cost the same exact amount per square foot as they did in the 1970s. They're twice as big now. And in areas where they are more expensive, it's driven by cities refusing to allow new construction to match demand. Simply a supply and demand issue, and a zoning issue.

Why do you think the others are specifically because people "close to the king" are able to capture all the effects? That's the part you haven't proven.

Re: There’s Nothing to Do Except Gamble

#369

Post by XorNot »

jasode wrote: post #111
XorNot wrote: post #94

Earlier quoted context omitted.

Ray Dalio at no point in his life ever believed he should be keeping his wealth in "cash". It has been basic economic knowledge that cash is a terrible place to keep large idle piles of wealth, and that it has to be invested to not depreciate. This is not new information, this is literally by design as a product of the Fed's 2% inflation target. US treasuries have always been a last resort investment, because the ret…

>Ray Dalio at no point in his life ever believed he should be keeping his wealth in "cash". I'm not saying that. His recent "cash is trash" was talking about staying away from investments like US government bonds because of negative yields and money printing: https://www.youtube.com/watch?v=tZyWVxGXPHo&t=24s (Because in the past, reasonable people did believe that buying and holding US Treasuries was a semi-decent wa…

I'm not dismissing the idea that "some" investors believe that, I'm dismissing the idea that they're a big enough group to matter in anyway. Or that they're likely to believe it for very long over looking at how much USD they think they'll cash out for. And if they were looking for a stable store of value, an asset under enormous speculation is a terrible choice.

The real estate comparison is also irrelevant: unlike any other asset, cryptocurrency doesn't do anything useful.

Re: There’s Nothing to Do Except Gamble

#370

Post by andrepd »

> If you were going to choose a moment when money became unstuck in the popular imagination — when it stopped being entirely serious and started being, at least a little, funny — you could do worse than an interview that then–Federal Reserve chair Ben Bernanke gave to 60 Minutes in 2009. Asked if the money the Fed was injecting into banks in the wake of the global financial crisis was “taxpayer money,” Bernanke shook his head and grinned sheepishly. “To lend to a bank,” he said, “we simply use the computer to mark up the size of the account that they have with the Fed.”

> given the global financial crisis and the Fed’s “using a computer to mark up the size of the account,” money had been reanimated from the suspension of settled policy consensus.

Was this the moment when the author discovered fractional/no reserve banking? This and other things he says betray a lack of expertise about finance and economics (not to mention history). How is he writing a money column then?

> Maybe the Marxists would finally figure out how to abolish the value form? (Don’t hold your breath.)

????

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