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The Pandemic Boom Goes Bust

therossreport.substack.com

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Re: The Pandemic Boom Goes Bust

#131

Post by eru »

pjc50 wrote: post #106
eru wrote: post #83

Earlier quoted context omitted.

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.

> Once you paid people to dig holes and cover them again, you can't really get that money back. That doesn't matter though? If someone's unemployed, their labor is wasted, and you can't get it back. The money spent is not destroyed, it re-enters the economy when the workers you gave it to immediately spend it, and comes back to the government when they pay income or sales tax. You can reverse fiscal stimulus by putti…

> The money spent is not destroyed, it re-enters the economy when the workers you gave it to immediately spend it, and comes back to the government when they pay income or sales tax.

Be careful to keep the nominal and the real separate.

Destroying money is great! The Fed can just print more to make up the difference.

Equivalently buying stuff from China, and China hoarding the money they got forever is great, too. You got stuff, and the Chinese only got some database entries.

> If someone's unemployed, their labor is wasted, and you can't get it back.

Yes. (Though the leisure they enjoy isn't necessarily completely worthless. But let's ignore that for now.)

And we find that in general the private sector makes more productive use of people's labour (in real terms). Especially when compared not to the day-to-day running of existing civil servants, but to make-work schemes.

The Fed 'printing' money increases private sector spending and private sector employment.

> You can reverse fiscal stimulus by putting up taxes.

Taxes don't remove the money from the hands of the people you paid to dig the holes and cover them up again.

More importantly: taxes have substantial deadweight losses. Taxes cause real productivity losses.

(Just to be clear: I'm all in favour of financing the government from taxes that have low or zero deadweight losses, like property taxes or land value taxes.)

Selling assets from the central bank balance sheet on the open market has no deadweight losses.

Re: The Pandemic Boom Goes Bust

#132

Post by xref »

thisisnotatest1 wrote: post #74
eru wrote: post #71

Earlier quoted context omitted.

Be careful. There's a big difference in impact of modest inflation like in the US at the moment vs hyperinflation. The Fed handled the monetary side of the pandemic reasonably well. Inflation overshot a bit, yes. But it's far cry compared to when they caused a slowdown in the housing market to become the Great Recession in 2008-ish.

Yes, it's exactly the same but different speeds. People with savings and salaries got a nice 7% wealth tax this year The government, with it's massive 20 trillion dollar debt, got a nice 7% write down on the debt, so they can quickly spend this voucher again in a matter of weeks.

As someone with student loans and a mortgage, I got a 7% write down but a 18% pay bump this year! Hope I get it for several more years to come

Re: The Pandemic Boom Goes Bust

#133

Post by iso1631 »

nebula8804 wrote: post #99
iso1631 wrote: post #64

Earlier quoted context omitted.

> I should have seen what happened to Jeremy Corybn in the UK and treated it as a canary in the coal mine. Brexit was a canary for Trump but that was also ignored Certain groups have used the UK to refine their methods (cambridge analytica etc) to use on the big prize.

Yes but people can be forgiven for not seeing how Brexit would have affected how the US turned out. Something like that had not happened in this current generation's memory. >Certain groups have used the UK to refine their methods (cambridge analytica etc) to use on the big prize. We like to think they are wildly different from each other. Turns out the two countries are still very similar in values and mentality.

Even more so with the internet increasing communication. Social problems from the US have been imported to the UK because of wide spread communication between people on both sides of the pond and a mostly shared language.

Re: The Pandemic Boom Goes Bust

#134

Post by mupuff1234 »

ChuckNorris89 wrote: post #117
lvl100 wrote: post #116

Earlier quoted context omitted.

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

Please correct me on what I said wrong.

Google Cloud has ML\AI offerings. Most of the Google hardware probably utilizes ML in some way. There's also the bets: Waymo, Deepmind etc.

Re: The Pandemic Boom Goes Bust

#135

Post by ChuckNorris89 »

mupuff1234 wrote: post #134
ChuckNorris89 wrote: post #117

Earlier quoted context omitted.

Please correct me on what I said wrong.

Google Cloud has ML\AI offerings. Most of the Google hardware probably utilizes ML in some way. There's also the bets: Waymo, Deepmind etc.

Waymo and Deepmind are currently money sinks for Google constantly running at a loss and only supposed by Google's massive ad-funded war-chest. Same for Facebook's/Meta's endeavors into VR where Quest goggles are sold at a loss to consumer.

Please wake me up when Waymo and Deepening generate any profit on their own, without any funding from the mother ship, that doesn't revolve around ad targeting.

Re: The Pandemic Boom Goes Bust

#136

Post by mupuff1234 »

ChuckNorris89 wrote: post #135
mupuff1234 wrote: post #134

Earlier quoted context omitted.

Google Cloud has ML\AI offerings. Most of the Google hardware probably utilizes ML in some way. There's also the bets: Waymo, Deepmind etc.

Waymo and Deepmind are currently money sinks for Google constantly running at a loss and only supposed by Google's massive ad-funded war-chest. Same for Facebook's/Meta's endeavors into VR where Quest goggles are sold at a loss to consumer. Please wake me up when Waymo and Deepening generate any profit on their own, without any funding from the mother ship, that doesn't revolve around ad targeting.

Well you didn't ask for profitable businesses, this is just to dispute that AI efforts are only for better ad targeting.

I wouldn't be surprised if Tesla is operating it's AI efforts at a loss as well.

Re: The Pandemic Boom Goes Bust

#137

Post by ChuckNorris89 »

mupuff1234 wrote: post #136
ChuckNorris89 wrote: post #135

Earlier quoted context omitted.

Waymo and Deepmind are currently money sinks for Google constantly running at a loss and only supposed by Google's massive ad-funded war-chest. Same for Facebook's/Meta's endeavors into VR where Quest goggles are sold at a loss to consumer. Please wake me up when Waymo and Deepening generate any profit on their own, without any funding from the mother ship, that doesn't revolve around ad targeting.

Well you didn't ask for profitable businesses, this is just to dispute that AI efforts are only for better ad targeting. I wouldn't be surprised if Tesla is operating it's AI efforts at a loss as well.

Of course I asked for profitable business when I challenged your claim that Google is an AI/ML company. If that business line is not profitable but ad revenue is the main engine that keeps the lights on, then Google is first and foremost an ad company that also happens to fund AI/ML and other endeavors but at a loss.

What generates revenue is what defines a company straight and simple not what they want to call themselves, since they all say their mission is making the world a better place and other such BS.

Re: The Pandemic Boom Goes Bust

#138

Post by onlyrealcuzzo »

galangalalgol wrote: post #128
onlyrealcuzzo wrote: post #111

Earlier quoted context omitted.

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.

You are right to point out that MIC related projects like those helped society. And so did the internet, obviously. But infrastructure projects like the big dig are far more common at various scales across the US. Typically they increase the value of land owned by sponsors or relatives of sponsors of the effort, or hire a series of contractors with relationships to the sponsor.

Considering that the Big Dig was financed on super low interest rates - my understanding mostly in ~2000-2004 dollars (which have turned into $0.5 or less and are headed lower) - it really wasn't THAT bad of a deal.

It'll cost ~$21Bn total with financing - but that goes until 2038: https://www.google.com/amp/s/www.boston.com/uncategorized/no...

That comes out to ~$500M a year - which sounds absurd - but that pretty massively benefits ~500k+ people per year. That's ~$1000 per person per year - which still sounds absurd - until you factor in that half of that will be paid in $0.5 and a quarter of that might be paid in $0.25 or less.

And then when you factor in that that monstrous highway is gone forever, and Boston will likely be around much longer than another ~20 years - it honestly doesn't sound like a bad deal.

NYC's second avenue subway - at ~$3Bn per stop - if each stop increases ridership by ~30k people - which generates ~$48M per year in revenue, which is theoretically ~30% less than the ongoing maintenance cost (https://media4.manhattan-institute.org/sites/default/files/f...) - is pretty similar.

IIUC - currently MTA runs at loss of about $7 per month per resident. That seems like an absolute bargain even for people who don't take the train. The reduction in traffic and cars should be worth way more than that to most people in NYC.

Re: The Pandemic Boom Goes Bust

#139

Post by mupuff1234 »

ChuckNorris89 wrote: post #137
mupuff1234 wrote: post #136

Earlier quoted context omitted.

Well you didn't ask for profitable businesses, this is just to dispute that AI efforts are only for better ad targeting. I wouldn't be surprised if Tesla is operating it's AI efforts at a loss as well.

Of course I asked for profitable business when I challenged your claim that Google is an AI/ML company. If that business line is not profitable but ad revenue is the main engine that keeps the lights on, then Google is first and foremost an ad company that also happens to fund AI/ML and other endeavors but at a loss. What generates revenue is what defines a company straight and simple not what they want to call thems…

So what makes Tesla not a car company? most of it's revenue is selling cars, no?

Re: The Pandemic Boom Goes Bust

#140

Post by dr_turducken »

MisterSandman wrote: post #26
boboche wrote: post #15

Stopped reading at “tesla is a car company”. When I read that, it shows how little research has been done and not trusting anything else. Hate and downvote all you want, anyone who did basic research on the company, IP, and execution knows how bad that narrative will age. Its not about loving or hating Elon, its simple business. While the P/E compression during a recession is completely normal, and yes, Tesla is over…

I agree with everything else you said except your first sentence. Saying that Tesla is a car company isn't untrue and there's no reason for you to have such a visceral reaction to it. Tesla has made no indication that they'd ever license their self-driving or sensor tech to others. Pretty much every other project Tesla has suggested is vaporware. The one and only thing they'll successfully produce and launch, possibl…

Not sure if this was before he tweeted. But Elon literally tweeted within the last few days that he will license FSD to other companies.
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