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U.S. economy shrank at a 1.4% annual rate in the first quarter

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Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#261

Post by namelessoracle »

mupuff1234 wrote: post #95
taylodl wrote: post #55

The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. The inflation we're seeing isn't a result of a hot economy needing to be kept in check, it's the fact that 40% of China's production is on lockdown and just about every product made, regardless of where it's made, is relying on part(s) coming from China. Supply is constrained and therefore prices are rising. Likewise, supp…

I'm pretty sure that's why they waited so long to raise interests, as they thought supply chain issue would be resolved and all will come back to normal. Although that doesn't really explain the inflation of asset values.

Supply chain issues can explain assert values rising. People/groups put money into assets instead of goods.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#262

Post by MuffinFlavored »

mensetmanusman wrote: post #140

It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…

I have a friend who is obsessed with the notion that, despite tons of evidence otherwise, corporations have gone soft, employees have too much leverage (he's a successful business owner, shocker), and work from home is terrible for nationwide productivity.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#263

Post by ac29 »

coldtea wrote: post #154
mensetmanusman wrote: post #140

It’s always good to remind people that: GDP ~= Population * Productivity If your population growth flat-lines (which it did last year), productivity has to compensate. Can productivity compensate if the average age is getting older (people tend to be less productive after a certain median age)? One reason investing in index funds makes sense is the underlying assumption that global population growth keeps increasing…

> I’m super interested in what investing looks like in 50-100 years as the population starts collapsing In most countries the population has already started collapsing

A solid majority of countries are still experiencing population growth, and among those shrinking, the magnitude is small - the largest population decrease (in a non tiny island nation) is in Latvia, which is shrinking around 1% a year. Hardly a collapse.

https://en.wikipedia.org/wiki/List_of_countries_by_populatio...

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#264

Post by namelessoracle »

lkxijlewlf wrote: post #166
taylodl wrote: post #55

The fact the Fed is even contemplating a rate hike tells me they're misreading what's going on. The inflation we're seeing isn't a result of a hot economy needing to be kept in check, it's the fact that 40% of China's production is on lockdown and just about every product made, regardless of where it's made, is relying on part(s) coming from China. Supply is constrained and therefore prices are rising. Likewise, supp…

Some of it is from greed. Inflation is 8.5% but almost all the major food producers have raised prices by ~15%.

Some of this could be trickle down effects no?

If inflation is 8.5 percent and the seed company raises prices by 9 percent (rounding up cause they arent really sure what inflation actually is), the fertilizer company goes up 9 percent, the tractor parts goes up even more (cause supply chain shortages), and the harvest contractors rates have to go up 9 percent, and the distribution that gets the harvest to the producer goes up 9 percent, what does the final price look like? Has there been analysis like that?

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#265

Post by throwaway4good »

radford-neal wrote: post #171
throwaway4good wrote: post #54

Given that the economy grew 6.9% previous quarter, over the past two quarters, the US economy is growing at an annual rate of 5.5% - which is very high.

If you average 6.9% and -1.4% (which is close to being a valid procedure, since the numbers are fairly small), you get 2.75%, not 5.5%.

You are right - those numbers should be averaged together; 2.75% is still high though.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#266

Post by codefreeordie »

Balero wrote: post #255
codefreeordie wrote: post #161

Earlier quoted context omitted.

Maybe in your neck of the woods. I had a solid weeklong period here where no store within 15 miles had any fresh dairy products, meats, produce other than herbs, or bulk grains (flour, rice, pasta, etc).

Out of interest, where were you? Just to flesh out my experience. In the UK we defiantly had some things missing from shelves, but it would be running out of strawberry cereal bars and having to have raspberry ones instead. Aside from some short term (about 2 weeks) issues with everyone buying all the loo roll, there wasn't anything that couldn't be replaced.

Not where you would think: so cal. Now, it wasn't this bad everywhere in so cal -- for whatever reason certain areas got way more wrecked than others. I was still able to get food during this whole time, just not by going to a market within 15 miles of my house. This was clearly a distribution shortage not a real food shortage.

I drove about 35 miles to my parents' neighborhood and everything looked picked-over, but there was plenty of food. For example, I wanted pasta and sauce. I found pasta and sauce, but had to get a weird pasta shape and a more unusual/fancy sauce to find something in stock. That trip, I found some version of everything I needed, except that rice and flour could not be had. I wanted some produce, and I found some. Lettuce was gone, so were bananas and oranges, but I was able to get enough things that I felt comfortable I would still eat. Meat was a bigger challenge -- the regular market had only hamburger and bacon left (but the Costco in my parents' neighborhood still had plenty of all of the expensive meats and were only out-of-stock on the affordable stuff. If you wanted $20+/lb prime ribeye steaks, for example, they had plenty. Not huge mountains like usual, but plenty)

And restaurants (that didn't close) were fine at that time even in my neighborhood (they ran low at a different time, when local markets were fine). My local pizza place did a bigger business selling ziploc bags of flour, plastic beverage cups of milk and cream, and to-go containers full of eggs and butter than they did pizza delivery for a solid two months. (and commercial tissues and TP by the roll). These ingredients were all readily obtainable in commercial-sized units from commercial suppliers.

Still, I produced some (really bad) footage of completely empty markets, and, as a pretty rich guy in a pretty rich area, felt worried about whether I would be able to keep eating for the first time in my life. (I'll never again not keep at least a few shelves' worth of food in the house at all times)

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#267

Post by incomingpain »

pjc50 wrote: post #49

Always wondering exactly what people mean when they talk of "civil unrest", and who and how will it start. Do the various riots in 2020 America or the Jan 6 storming of the capitol count? On the other hand, Elon Musk Twitter purchase: $44bn. There's plenty of money out there still. I think it's unlikely that merely raising rates will do anything, for two reasons: firstly there's a real need to do some fiscal policy a…

I haven't been able to comment on HN since my controversial post which mentions civil unrest. No doubt your comment is related? I'll eventually be able to post this response.

>Always wondering exactly what people mean when they talk of "civil unrest", and who and how will it start. Do the various riots in 2020 America or the Jan 6 storming of the capitol count?

For sure those count. Racial civil unrest, riots, and insurrections are contemporarily happening. https://en.wikipedia.org/wiki/2020%E2%80%932022_United_State...

https://en.wikipedia.org/wiki/Capitol_Hill_Occupied_Protest

https://en.wikipedia.org/wiki/2021_United_States_Capitol_att...

It doesn't take a crystal ball to predict this will continue. Occupy wallstreet and teaparty stuff started 10 years ago and the USA hasn't really stopped since. We can go into reasoning or causes but that's not important.

The bigger reality is what's next. We have some pretty seriously bad economic numbers going down. High inflation, strong possibility of a recession, very probably food security issues.

When you mix civil unrest and riots with hunger. It's going to be bad. A civil war isn't inevitable, though if i'm predicting correctly, it wont be democrat vs republican or north vs south.

>I think it's unlikely that merely raising rates will do anything, for two reasons: firstly there's a real need to do some fiscal policy as well, and secondly this inflation is being driven by real shortages not just the bidding up of goods. Chip shortages, fossil fuel shortages due to cutting Russia off the world market, food shortages, and the war in Europe's sixth-largest country destroying a lot of production capacity. Not to mention ongoing COVID costs.

May 4th, I'm expecting a huge rate increase. Probably headed well over 1% and nothing you or I say matters. Supply vs demand inflation is certainly debatable but won't change their course of action.

Something we should seriously be looking into is massive seeding effort for lakes. Get tons of fish growing this year. Get fishing boats out into the oceans pulling fish in. Major culling and harvesting of sharks.

Effectively the plan would be to produce significant more food than necessary and proactively deal with consequences like overfishing.

By eliminating this problem, we may eliminate the possibility of the unrest/riots becoming something more.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#268

Post by sublatio »

adventured wrote: post #258
dragonwriter wrote: post #206

Earlier quoted context omitted.

GDP per Capita is not a good measure of societal well-being either, since it doesn't reflect distribution of anything, just aggregate production.

It's an excellent measure of the typical societal well-being in fact. On average there is a strong correlation between the two globally and there has been during the entire post WW2 era at the least. It is the rare outlier that doesn't see a correlation between societal well-being and GDP per capita. Shall we stroll down the list of high GDP nations? Surely it's unnecessary, as we all know the names. Oh ok let's do i…

> There are no great societal paradises where the GDP per capita is ~$500-$5,000.

Ok, not paradise, but a counterpoint I can think of might be Bhutan at around $3,200.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#269

Post by colinmhayes »

adam_arthur wrote: post #248
colinmhayes wrote: post #83

Earlier quoted context omitted.

Also due to the fact that we stopped building new homes after 08. If supply keeps up with rising demand prices don't change.

Housing units per capita is at an all time high. Housing units per working age person is at an all time high, by far. Housing units per household is at year 2000 levels and in line with history. Check the data, it's all on FRED What you're repeating is common conversational talking points spread as fact. It is true that building slowed in the 2010s, but housing was overbuilt in the 2000s too which neutralizes that. A…

Japanese property values are reasonable because their zoning is decided at the national level and local residents have next to 0 power to stop people from building things in properly zoned areas.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#270

Post by adam_arthur »

colinmhayes wrote: post #269
adam_arthur wrote: post #248

Earlier quoted context omitted.

Housing units per capita is at an all time high. Housing units per working age person is at an all time high, by far. Housing units per household is at year 2000 levels and in line with history. Check the data, it's all on FRED What you're repeating is common conversational talking points spread as fact. It is true that building slowed in the 2010s, but housing was overbuilt in the 2000s too which neutralizes that. A…

Japanese property values are reasonable because their zoning is decided at the national level and local residents have next to 0 power to stop people from building things in properly zoned areas.

That's a big reason too, but also because their population is declining.

https://www.google.com/search?q=japanese+population+growth+r...

What do you think happens to housing units per capita as population levels decline?

The US and China are on the same path, just some years behind. We can ignore demographics for the next handful of years, but it will become very impactful on a 10+ year time horizon. China will deal with the inverted population pyramid sooner than us, so it will be interesting to see if that affects their GDP surpassing the US.

Anyway, the property sector will be super interesting in 50 years, when everything is overbuilt relative to population size. I imagine eventually rents will naturally become deflationary

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