Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How This Ends

avc.com

Post reply on HN
Print view View original

101–110 of 698 posts

Re: How This Ends

#101

Post by riku_iki »

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?

People who bought houses will be fine, since they secured low interest loans, and will hesitate to sell because won't get good interest on next loan.

This will cause low supply -> high prices -> people who didn't buy are very screwed: they will face high prices together with high interest.

Re: How This Ends

#102

Post by riku_iki »

freediver wrote: post #84
staticman2 wrote: post #61

Earlier quoted context omitted.

You are comparing treasury rates a bond will pay out over the next 10 years with inflation over the last year. This is apples and oranges.

You are right, inflation may get worse ;)

there should be factors which drive it. For last year such factors are:

- increased min wage

- supply chain disruptions

- China lockdowns: less goods on the market -> higher prices

- increased price on commodities and energy

All of this already included into current good prices, so there should be something more to push farther inflation.

Re: How This Ends

#103

Post by FollowingTheDao »

PaulDavisThe1st wrote: post #63

I have a real problem with pieces like this that define "recession" in terms of abstract measurements of bits of the economy. Real recessions are about actual people and their lives, and although there's a definite correlation between the sorts of measures cited here and people's lives, it's much weaker than the article implies. We have very low unemployment right now, and most the features of a people-affecting rece…

"The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

Like another comment said, recessions hit the ordinary folks last. But their stress is already evident. Employment numbers can turn on a dime. as can retail sales.

But real personal income is down.

https://fred.stlouisfed.org/series/RPI

We are in uncharted territory here and anyone not acting so is foolish.

Re: How This Ends

#104

Post by Vaslo »

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…

While your points are very solid, the first point may be overweighted. I can see why some naive in stocks may weight lower on lower rates, i can tell you as someone in corp finance we never adjusted our risk rates (weighted average cost of capital) below 12% (which is what they have been 5-7 years ago. These types of downturns are modeled in. Yes there are some cowboys that aggressively drop these rates, but it’s very risky. We are seeing some folks suffer now because of this and more soon for sure.

Re: How This Ends

#105

Post by zht »

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…

not to mention the millions of people who basically cannot work anymore because they've be irreparably damaged by COVID...

Re: How This Ends

#106

Post by ItsMonkk »

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?

The value of the house goes up. The value of the land gets wrecked.

If you are living in SF, this is bad. If you are living in the middle of nowhere, this is good for you.

Re: How This Ends

#107

Post by rhexs »

riku_iki wrote: post #101
throwaway_1928 wrote: post #85

Earlier quoted context omitted.

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

People who bought houses will be fine, since they secured low interest loans, and will hesitate to sell because won't get good interest on next loan. This will cause low supply -> high prices -> people who didn't buy are very screwed: they will face high prices together with high interest.

It depends on a recession and how bad it is. Even if you're locked into a low mortgage, if you lose your job, can't pay, and due to rising interest rates are now underwater 500K on a mortgage, nothing good happens.

Like it or not there's a lot of chaff to cut in software engineering. How many of these SaaS businesses can survive, and how many engineers bought nice homes with massive salaries that might go poof?

Re: How This Ends

#108

Post by hotpotamus »

newman8r wrote: post #76
closedloop129 wrote: post #27

Earlier quoted context omitted.

>I wonder how much irreparable damage the lockdowns did to the economy as we knew it before the pandemic. You can also look at it the other way round: The lockdown forced companies to establish home office, something that was overdue for up to 20 years. This can enhance the economy much more in the long run than it harmed during the last two years. Maybe the productivity gains are big enough that they outweigh the am…

Is WFH actually more productive? I've heard conflicting reports, but haven't seen any data.

I was very productive over 2 years working from home. I actually managed to complete a few home construction projects while answering a few slack questions from my phone once in awhile.

Re: How This Ends

#109

Post by shrimp_emoji »

throwaway_1928 wrote: post #89
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.

Monkeypox is just getting started. Hang in there. https://www.washingtonpost.com/politics/2022/05/22/biden-mon...

No airborne spread.

Transmitted through sex.

We're safe as houses. :p

Re: How This Ends

#110

Post by riku_iki »

rhexs wrote: post #107
riku_iki wrote: post #101

Earlier quoted context omitted.

People who bought houses will be fine, since they secured low interest loans, and will hesitate to sell because won't get good interest on next loan. This will cause low supply -> high prices -> people who didn't buy are very screwed: they will face high prices together with high interest.

It depends on a recession and how bad it is. Even if you're locked into a low mortgage, if you lose your job, can't pay, and due to rising interest rates are now underwater 500K on a mortgage, nothing good happens. Like it or not there's a lot of chaff to cut in software engineering. How many of these SaaS businesses can survive, and how many engineers bought nice homes with massive salaries that might go poof?

> are now underwater 500K on a mortgage

it will be very small fraction of homeowners: those who bought in in last 2-3 years. All others will be significantly over water, and may take equity loans instead of selling houses to preserve low mortgage interest rates.

Post reply on HN