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How This Ends

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Re: How This Ends

#91

Post by 88913527 »

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…

Is there actually a major pilot shortage? Can I not book a flight and get anywhere in the continental US and be there in 24 hours from now? I suppose I'm asking, in what ways is the shortage presenting in a way practically visible to the consumer?

Re: How This Ends

#92

Post by ChrisMarshallNY »

FollowingTheDao wrote: post #88
natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

You can do both! Live needing little, be humble, spontaneous, help your friends and family! Let go!

This.

Re: How This Ends

#93

Post by gitfan86 »

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

This sounds a bit like doom and gloom. While I don't disagree, it is important to look at AMZN after the dot com bubble burst. Traders fled, but people who believed in the company did very well.

Re: How This Ends

#94

Post by don_neufeld »

throwaway_1928 wrote: post #85
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold What will happen to the housing market?

Expect a steep drop.

Leverage is much more expensive (from sub 3% mortgages, we already have 5%+ rates), which means buyers can afford less, plus significant withdrawal of “cash” buyers from the market who were really just borrowing against their (now much smaller) equity positions.

I wouldn’t want to be in a forced sale position anytime soon.

Re: How This Ends

#95

Post by hn_throwaway_99 »

natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

Do you really though? If you are a long term investor, just picking a couple of core asset classes and then rebalancing regularly (rebalancing is key because it is an automatic way of selling thing when prices are higher and buying when they are lower), and never paying attention to the news, it's a winning strategy.

Re: How This Ends

#96

Post by zhdc1 »

throwaway_1928 wrote: post #85
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold What will happen to the housing market?

Anything from nothing to a small correction.

Mortgage payments set a ceiling on how high property prices can rise. However, people seem to be willing to spend more on mortgage payments than they probably should, so it’s likely that this ceiling hadn’t been reached yet.

The other factor is simple supply and demand. A large factor in 2008 was a large inventory of housing that came on the market. As far as I’m aware, there is no current corollary in the US now.

Re: How This Ends

#97

Post by 300bps »

natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

There are lots of people who have not paid much attention to these “macro events” you speak of and it has not impacted them in any meaningful way.

Covid came closest to impacting my life. But I got the Pfizer shot as early as I was legally able, same thing with a booster and pretty much have just gone about my life as usual for most of the pandemic while never getting Covid.

The rest of it going on - I just don’t even pay attention to it.

Re: How This Ends

#98

Post by steveBK123 »

Long term demographics shifting older and growth shifting lower has driven interest rates down since as long as most of the posters here have been alive.

We have hit an inflection point where interest rates are being raised as a tool to fight generational highs in inflation. This is the usual tool the central banks use in such a scenario. The resulting slowdown in markets and economy is the usual result. How smooth the slow down is to prevent overheating is always the risk they take.

What is in question is how effective this will be if a lot of the inflation was simply pent up COVID demand, supply chain constraints (China shutdowns), car makers getting caught flat footed while transitioning to EVs but unable to secure battery&chip supplies, and war induced energy price spikes. Some of these things will be resolved by demand dropping due to interest rates rising, many will not. For some things this will cause double pain - cost of money is higher and energy prices remain high due to war.

So we are probably in for 6-24 months of pain, with 12-18 months being the 90% scenario. Another question is if the clock started ticking in November when tech peaked or January when the broader market peaked.

Another question is the amount Wall St vs Main St, is this just going to be a market drawdown or a wider economic recession. So far what we've seen is GDP/unemployment have not really reflected the same bearish picture (yet).

GFC was more of a broader economic collapse story versus DotCom collapse which was more sector & market specific..

So now would be a good time to hunker down, manage your personal&company burn rates, and maybe be an opportunistic buyer or investor if you see specific opportunities.

Re: How This Ends

#99

Post by Spooky23 »

natly wrote: post #71

Getting really annoying to have to keep track of macro events affecting my life year after year instead of just being able to live a normal peaceful life.

Agreed. Unfortunately, we’ve inherited the mess that our parents and grandparents left for us.

Re: How This Ends

#100

Post by nemo44x »

throwaway_1928 wrote: post #85
fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold What will happen to the housing market?

It’s all a function of interest rates. We are seeing prices stabilize now after a couple years of meteoric rises. If interest rates really climb for an extended time then home values will fall.
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