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The Pandemic Boom Goes Bust

therossreport.substack.com

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Re: The Pandemic Boom Goes Bust

#111

Post by onlyrealcuzzo »

galangalalgol wrote: post #93
lvl100 wrote: post #70

Earlier quoted context omitted.

Agreed. We desperately need a few large scale public projects. But the country (US) is so divided that no one’s going to agree to anything that selectively benefits one region over another.

Our large scale public projects always seem to end up being villified due to massive overuns, nepotism, embezzlement, and at best mismanagement. It typically benefits one small area too. If we want public opinion to change on these efforts, we need to change the track record to build trust for bigger and bigger projects.

It's hard to argue that the space program was only good for Florida.

Or that the Manhattan Project was only good for New Mexico and Washington.

Re: The Pandemic Boom Goes Bust

#112

Post by onlyrealcuzzo »

pjc50 wrote: post #104
onlyrealcuzzo wrote: post #67

Earlier quoted context omitted.

My problem is - there are sooooo many things that need done in this country. I am not sure why everyone thinks it is cruel and unusual punishment to ask people to do some of those things that need done (burying power lines in cities, as one example) in exchange for money. Why is it so barbaric to give people a job? Theoretically, there are plenty of low-skilled workers that could've been trained to do needed skilled…

Lack of state capacity, really: there is no way that level of labor mobilization could have happened, and people would have screamed about it every step of the way. The US absolutely hates anything that looks like government expansion, unless it has camo on it. I suppose it could have been the 1037th Non-Combat Plumber Division and everyone would have been fine with that.

This isn't far fetched.

Militaries in other countries are evolving to do more public works and less defense / offense.

A lot of the infrastructure to facilitate it (the hiring, training, coordination, etc) is there.

Re: The Pandemic Boom Goes Bust

#113

Post by lamontcg »

pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

> driven partly by a newly-tight labour market in which people can actually negotiate incomes upward

This is the big point I think the title article is missing. And I think its going to take some time for the bubble to pop, they tend to be self-sustaining, but it may shift its focus off of Peloton and the winners early in the pandemic. I wouldn't bet against TSLA right now.

There's likely to be another boom later this year as Omicron goes away (even if we get another wave later) driven by positive emotions. Right now all the animal spirits are maximally negative and they're pretty poised for a reversal.

The Fed also won't act sharply enough to spike unemployment this year.

Re: The Pandemic Boom Goes Bust

#114

Post by mgh2 »

You can't generalize speculation or growth stocks with value stocks. Cut out meme stocks or recently IPO companies, for they skew the data for an overall economy analysis.

On Apple, if you compare a 1 month (from new year's heights) market correction with major direct or indirect competitors (quick sampling) before their earnings: Microsoft, AMD, NVidia, Amazon, Netflix showed 15-30% decline, while Apple was only -10%, S&P500 -9%. This downturn was mainly based on [unfounded] fear sentiment outlook (bear/short speculation by media): supply chain disruptions, fed hikes, Ukraine war. More on this below.

After earnings, Apple was ~+10pts or -5%, while S&P -7.5% on 1 month avg. Because Apple is diversified (and successful) in so many present (and future) industries, you can prob. treat it as a better indicator/peg for the US economy - if you don't want to be involved with "blood money" stocks inside popular ETFs (Meta, J&J, etc.) No wonder Buffett holds Apple as a majority stake in his portfolio (~49%).

If you want to see how unfounded the fears above are and how those newly printed dollars will eventually flow into the system/economy (and not just "disappear"), take a look at these sources:

[1a] P/E ratio: 1st peak caused on 2007 caused by 1st iPhone announcement and later decrease caused by mortgage crises or earnings increase? https://www.macrotrends.net/stocks/charts/AAPL/apple/pe-rati...

[1b] The fed printed money for the 2008 crisis and lowered int. rates to nearly zero (though less scale), 2nd P/E peak now (dejavu?). Notice the marked crisis periods. https://fred.stlouisfed.org/series/M2

[2a] Interest hikes: Fed plans 3-4 till 2023, but will not top 2% (media estimates). Gov likely not rise it too much like the 1980s, since we are still recovering from the pandemic.

See the 2016-2020 hike? This could have been affected by Trump's corporate tax reform, but the stock market went on a parabolic rise since then https://tradingeconomics.com/united-states/interest-rate

[2b] Historical effect on hikes https://www.forbes.com/sites/kristinmckenna/2022/01/24/how-d...

[3] Historical effect on wars https://www.investopedia.com/solving-the-war-puzzle-4780889

Fearmongering has been used in the last crisis to sell gold, this time is crypto.

PS: This was just a quick analysis, would love to hear from experts.

Re: The Pandemic Boom Goes Bust

#115

Post by bingbingbong »

wowokay wrote: post #107
SamoyedFurFluff wrote: post #54

Earlier quoted context omitted.

I’m confused what you mean by non-productive in this sense. In my country, the vast majority of aid money was in the form of massive “loans” to companies that were later forgiven presumably to avoid them going under/bankrupt.

Non productive would be referring to stimulus checks and child tax credit money in the US, you will hear stories about families making 10-15k and using it for Disney trips, all that did was incentivize not working and paying of people that made the decision to have to many kids. It’s also caused the bottom of he job market to see increased pay while the middle and upper markets get pay decreases in the form on inflat…

Bolstering the bottom of the distribution in advance of inflation/recession seems like an amazing outcome to me.

Re: The Pandemic Boom Goes Bust

#116

Post by lvl100 »

ChuckNorris89 wrote: post #97
lvl100 wrote: post #35

Earlier quoted context omitted.

OK, but you realize you can say that about all the big techs now? Google is not an ad company. It’s really an “AI” company with far more valuable R&D. Same with Facebook. If we are looking at tech companies purely from research assets accrued, I have to say Facebook is a bargain here. And even more so with Google. Tesla on the other hand is more of a marketing company. Their R&D spend does not match all the hype. If…

>Google is not an ad company. It’s really an “AI” company with far more valuable R&D.Same with Facebook. And which AI products do Google and Facebook sell to their customers for revenue? Google and Facebook are ad companies plain and simple and invest into AI R&D to further improve their ad targeting capabilities.

Leads me to think you’ve not paid attention to ML space in the past decade.

Re: The Pandemic Boom Goes Bust

#117

Post by ChuckNorris89 »

lvl100 wrote: post #116
ChuckNorris89 wrote: post #97

Earlier quoted context omitted.

>Google is not an ad company. It’s really an “AI” company with far more valuable R&D.Same with Facebook. And which AI products do Google and Facebook sell to their customers for revenue? Google and Facebook are ad companies plain and simple and invest into AI R&D to further improve their ad targeting capabilities.

Leads me to think you’ve not paid attention to ML space in the past decade.

Please correct me on what I said wrong.

Re: The Pandemic Boom Goes Bust

#118

Post by gg82 »

eru wrote: post #83
thisisnotatest1 wrote: post #76

Earlier quoted context omitted.

Monetary and fiscal are largely equivalent specially when the central bank has the tendency to print money to buy government debt, so public solvency is never an issue

You can easily reverse monetary stimulus: just sell those assets that the central bank bought. You can't really reverse fiscal stimulus. Once you paid people to dig holes and cover them again, you can't really get that money back. Yes, public solvency is not an issue for governments that borrow in their own currency. But that's a separate concern.

> You can easily reverse monetary stimulus: just sell those assets that the central bank bought.

You can do that.... but watch the markets tumble and the interest rates skyrocket... and the politicians and bankers panic!

Re: The Pandemic Boom Goes Bust

#119

Post by thrown_22 »

giantg2 wrote: post #36
thrown_22 wrote: post #19

Earlier quoted context omitted.

>This statement makes no sense: even (most? all?) construction was shut down during (pre-vaccine) 2020 for periods of time to reduce the spread of COVID. At least it was where I was. Yes, and? All it would have taken was to call them vital workers, or whatever the local equivalent was, and they could have kept working. That was a political decision and covid still spread among vital workers. Adding construction would…

"Unless people start getting physically in the way of each other more people on a site means the project gets done faster." Have you worked construction? If they're clueless, then they will slow you down with mistakes and questions/training. Not to mention many parts of construction require skilled trades (electric, plumbing, carpentry, masonry, etc), some of which require licenses.

Yes, being unskilled on a construction site is called being an apprentice. No one complains about having too many apprentices around when they can get you everything you need without you needing to get off the ladder.

Re: The Pandemic Boom Goes Bust

#120

Post by jrochkind1 »

giantg2 wrote: post #43
jrochkind1 wrote: post #31

Earlier quoted context omitted.

I don't think it's actually a conspiracy or plan in that way, but Pelosi, Schumer, and Biden are definitely greatly concerned with discrediting the ideologies and plans of those further to the left than them.

Which ideologies and plans are those?

You're not familiar with the fact that there are people to the left of establishment Democrats? We could start with the Democratic Socialists of America (DSA); India Walton, who won the Democratic primary for mayor of Buffalo; or even the Bernie Sanders campaign. It gets more left from there, beyond electoral campaigns.
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