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How This Ends

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Re: How This Ends

#11

Post by simonw »

puranjay wrote: post #8

I wonder how much irreparable damage the lockdowns did to the economy as we knew it before the pandemic. The more subjective aspects of the economy are hard to map - are people motivated enough to work? Do they feel invested enough in the future to work? Have they been burnt out by the yoyo cycle of work/lockdowns? Was their industry severely damaged and they pivoted to other careers? Like there’s a massive pilot sho…

"I really don’t think anyone really sat down and thought through these issues when the lockdowns were announced."

People clearly thought very hard about this. Different parts of the world came to different conclusions about it. Nobody thought that the lockdowns wouldn't cause immense amounts of economical and societal damage.

The calculation was whether they would have a worse impact than letting huge numbers of people die. And huge numbers of people died anyway!

I'd like to learn more about the economic impact of over a million deaths (in the USA). I would expect that to affect communities and industries in very complicated ways as well.

Re: How This Ends

#13

Post by scandox »

omginternets wrote: post #2

I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?

Predictions are rarely useful. A good description of the present sometimes is a help though.

Re: How This Ends

#14

Post by throwaway_1928 »

TekMol wrote: post #10

When governments rise the interest rate, is that the interest rate the government pays when you lend money to the government?

Yes that is called the risk free rate because you assume your government with its magic money printer will always pay you back.

Re: How This Ends

#15

Post by starkd »

puranjay wrote: post #8

I wonder how much irreparable damage the lockdowns did to the economy as we knew it before the pandemic. The more subjective aspects of the economy are hard to map - are people motivated enough to work? Do they feel invested enough in the future to work? Have they been burnt out by the yoyo cycle of work/lockdowns? Was their industry severely damaged and they pivoted to other careers? Like there’s a massive pilot sho…

I fear they have not learned this lesson. Already ramping up fears of monkeypox.

https://www.barrons.com/news/biden-warns-of-potentially-cons...

Re: How This Ends

#17

Post by tomesco »

TekMol wrote: post #10

When governments rise the interest rate, is that the interest rate the government pays when you lend money to the government?

Close. The federal reserve (or any central bank) will lend money to other banks at a rate just below the target rate, and it will borrow from other banks at a rate just above. Because banks can borrow and lend largely risk free at those two rates, banks will transact amongst themselves at a rate in between. This is how the federal reserve makes banks transact at the target rate.

Re: How This Ends

#18

Post by johnNumen »

simonw wrote: post #11
puranjay wrote: post #8

I wonder how much irreparable damage the lockdowns did to the economy as we knew it before the pandemic. The more subjective aspects of the economy are hard to map - are people motivated enough to work? Do they feel invested enough in the future to work? Have they been burnt out by the yoyo cycle of work/lockdowns? Was their industry severely damaged and they pivoted to other careers? Like there’s a massive pilot sho…

"I really don’t think anyone really sat down and thought through these issues when the lockdowns were announced." People clearly thought very hard about this. Different parts of the world came to different conclusions about it. Nobody thought that the lockdowns wouldn't cause immense amounts of economical and societal damage. The calculation was whether they would have a worse impact than letting huge numbers of peop…

Most of those deaths probably had a positive or null effect, since they primarily occurred in the 65+ demographic.

edit: It is interesting to contemplate the possibility that the death of so many seniors exacerbated the inflation problem. That's a lot of assets that were previously tied up in retirement accounts and real estate that suddenly flowed into the hands of middle aged people.

Re: How This Ends

#19

Post by tlb »

omginternets wrote: post #2

I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?

Here it’s entirely about the source. Fred Wilson is an unusually smart and honest investor, and has experienced more market corrections than I have. So I weight his opinion higher than mine.

I also weight his opinion higher than my favorite financial columnists because he’s the man in the arena, and focused on the part of the economy I care about — startups — while columnists have to think about housing prices and other stuff.

Re: How This Ends

#20

Post by starkd »

voisin wrote: post #3
omginternets wrote: post #2

I don’t have any good mental tools to distinguish between useful and useless economic predictions like this. How does HN navigate this kind of thing?

Be wary of anyone making firm statements about the future of anything. This article doesn’t do that. This article is merely drawing similarities with past events and concludes: > First, we need to see the economy slow down and inflation slow down. We need to see stocks bottom out and hang out there for a while. And we need to be patient. None of this is going to happen fast. This seems reasonable. Wait and see based…

The article may be conflating inflation with economic growth though, hoping that inflation comes under control merely by slowing down the economy.
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