What I am curious about is if the unrealized gains tax will lead to more and more company boards being run by massive retirement / hedge funds such as black rock. All these companies will then be essentially forced to the ROE / share price over all model as all the BlackRock's of the world care about is share value because that's what their customers want from them. When that scenario is combined with a massive economic shock, what happens?
What caused all the supply chain bottlenecks?
151–160 of 690 posts
Re: What caused all the supply chain bottlenecks?
#152Earlier quoted context omitted.
> I don't know if a slight price increase in graphics cards is the key issue to worry about at this point. The price increase in graphics cards isn't related to this. GMs trouble selling cars because they don't have enough chips to finish off the cars is a problem related to the pandemic and planning like the posts on Twitter note. The lack of new cars available has driven up prices on used cars. This is all supply c…
> The US has now outsourced most of the production of goods to places in other countries. I think that is the point (or one of the points): it's not just logistics and spare capacity - it's a much more complex set of issues. This isn't something accounting practices or "less greed" would solve, as seems to be implied in the Twitter thread. Would you have voted for a party that spent $1b annually on mask manufacturing…
Use the stockpile to sell / provide such masks to the VA, Military, and other government organizations on a FIFO basis so the stock is never stale. For stock that can not be moved quickly enough donate it to other countries that may need it.
Re: What caused all the supply chain bottlenecks?
#153What's the deal with writing 20+ consecutive tweets instead of a blog post and tweeting the link to the blog post?
Worse, 20+ tweets that don't provide any more nuance than the original tweet, so this literally could have been one tweet
Re: What caused all the supply chain bottlenecks?
#154Anyone who has played Factorio knows that "just in time" is far superior to actually holding reserves. If you buffer things up, you don't know where the problems in your production are.
People are saying "why didn't we buffer up more" ? Well, there we go. Play Factorio. You'll see just how bad buffers are in a simulated factory.
Re: What caused all the supply chain bottlenecks?
#155He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…
Yep, the capital owning class just doesn't care if their businesses go into shock because they already have their cash in hand. They'll never go back to pre-ROE days because they'd have to live with less money and worse less control. While they still have personal reserves in the billions they can decide the fate of their ventures but if say 20% of their current cash was on the balance sheets of corporations with boa…
> Yep, the capital owning class just doesn't care if their businesses go into shock because they already have their cash in hand.
What if there was inflation?
Re: What caused all the supply chain bottlenecks?
#156Earlier quoted context omitted.
I think his statement is that founder (and family) led businesses are the only businesses capable of building the shock absorbers necessary to weather hundred-year storms; not that they always will. By comparison, committee-appointed CEOs rarely, if ever, will, because they cannot.
It's not that they cannot. They don't have an incentive to do it. If I'm being paid for my performance while I'm a CEO, why would I spend money today (and hurt my performance today) to fix a problem that MIGHT affect the company in 20 years
It just that it is more likely that founders genuinely care about their baby, so they have more incentive to make the company more resilient to long term risks. I don't think this is an absurd claim. It's not that every founder is the same, there are founders who behave just like most CEOs.
Re: What caused all the supply chain bottlenecks?
#157Earlier quoted context omitted.
To be fair, once a century refers to average, it is by no means a guarantee that it will be a century before the next crisis.
To be even more fair, there's absolutely no reason to think these types of events are independent; there's good reason to believe they're positively correlated. This means once one happens the chances of it happening again soon are greater than before it happened. (But if you're lucky and it doesn't happen again the chances decrease further, giving you an average of 100 years between them again.)
I can believe a pandemic might cause a global economic catastrophe on par with the Great Depression or the Great Recession, but I my imagination isn’t giving me any ideas how the latter might cause the former?
Re: What caused all the supply chain bottlenecks?
#158No, no, no!
Stockpiling is not a solution to a bottleneck!
In the grand scheme of things, having a couple weeks of extra inventory on hand will not help you weather a 100 year storm. But it will increase waste - inventory that you have to throw away when there are defects or when they become obsolete.
Imagine trying to predict the run on lumber, and the solution was to have kept a bunch of lumber sitting in yards rotting waiting for the off-chance that there was a sudden unexpected demand. The proposal that we should have been shipping over more of everything, building giant strategic stockpiles across the country of everything, and then tossing out 10-15% of everything from storage loss is bonkers.
Just In Time manufacturing reduces waste and improves quality across the board. And stockpiling only hides your bottlenecks!
Re: What caused all the supply chain bottlenecks?
#159He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…
I’m not sure this is the case. The problem is that RoE is a metric that can be gamed for short term gains while incurring long term risks. This is more likely to be an issue with short term career-oriented leadership. Founders are more likely to have a concern for the long-term success of the business. Simply put, founders are not the people sacrificing their own companies’ long term success in exchange for enhancing…
JIT works nicely in isolation--when everyone relies on it is when it starts to break down. It basically offloads the responsibility of forecasting your inventory needs to the supplier, who has absolutely no knowledge of your inventory needs.
Re: What caused all the supply chain bottlenecks?
#160Earlier quoted context omitted.
The obsession with RoE is really just a major form of efficiency. Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. People writing articles like this forget that it's not just Wall Street, but competitors who created the huge pressures for adopting JIT inventory systems. There's also the consumer. Are you willi…
> Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. It didn’t help but I think that’s more of a symptom of building shoddy products: part of why inventory backed up is that Detroit was producing cars which simply weren’t as good. Toyota didn’t have a shortage of demand, and neither did Saturn. If you make shodd…
There's an entire book (I've read it) about this called "The Machine That Changed The World" published in the early 90's. It goes into great depth as to the issues that were plaguing GM/Ford etc. The excess inventory was absolutely not driven by too little demand. It was simply inefficiency in the manufacturing process and inability to rapidly reconfigure the shop floor or reallocate labor towards bottlenecks.
The book is a deep, academic examination of the roots of lean production, and is a must read for any engineer who wants to get the Agile cultists to shut up and go away. I'm a hardcore believer in the ACTUAL Agile philosophy, which is rooted in lean, and I despise the cult of clerics that have risen up around it and turned it into management consulting BS. That book helps to know real agile from consultant billing hours agile.