361–370 of 698 posts
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RPI is down because of inflation though, not because of a decline in GDP, increase in unemployment etc. So yes, uncharted territory but not necessarily on the recession continent.
RPI is adjusted for inflation, no?
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…
> there is a risk free alternative to stocks Really? 2.5% bonds in a 7% inflation environment is an attractive bargain? This part didn’t compute: > Bonds will be wrecked […] because it's actually a really good deal to buy bonds when they yield north of 10% (if we get there).
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.
Let's face it. The FRB cannot stop busts. The real reason for the FRB is so the federal government can inflate the currency.
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I motice that you left out real estate from your analysis. RE is interesting because it's both an asset as well as something you can use. So if there's general inflation, it's got both upward pressure (because it's an alternative to rent from a consumer standpoint) and downward pressure (because bonds are an alternative to RE from an investment standpoint).
Aside from the leverage issues other point out in RE, you have to consider the political risk. How safe do you feel that a piece of paper saying that plot of land is yours will hold up when there's a raging mob threatening politicians to do something about homelessness/housing prices/AirBnB/Asset managers holding all the properties? The political risk in the West is at Emerging Markets levels. We've seen G7 nations d…
The truth is under capitalism everyone cannot be a Capitalist. Please, I need you to think deeply about that last sentence. It’s not as simplistic as it sounds.
Until we treat housing as a cost and not an investment none of this will end.
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Think about who the current generation voted for. When politicians are voted in because of their fiscally irresponsible proposals, who is really to blame? People are voting themselves money out of the treasury. This is the result.
Except the previous government gave out a lot more money. Massive tax cuts, votes secured by giving over $40bn to farmers who were negatively impacted by a pointless and thoughtless trade war with China, and most of the COVID aid was given by the previous administration (although they did delay it because the previous President was insisting his name should be on a check that would be physically mailed to everyone).
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…
I think a lot of people calling for a great crash will be disappointed this time around.
Global economic problems were not caused by COVID19; it was just a convenient opportunity deflect blame away from more fundamental issues. One of the main real problems is that a decade of near 0% interest rates had led to money printing on such a scale that certain activities which would otherwise not have been profitable were able to be profitable (in nominal fiat terms)... But while these activities were reaping h…
If the value of fiat-denomiated savings is being diluted, then how exactly are elites cashing out?
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I don’t think anyone argues that work from home allows for self beneficial gains. Really you’re just saying the quiet part out loud ;)
Well the other quiet part that executives don't say out loud often is that if the job can be done from home, then it can be done from Mexico, India, or Eastern Europe as well which is where that job is now. To be fair, that was happening before even the pandemic, and I was mentally half checked out too. Now I work in healthcare which has a bit more of a US centric moat to it.
Or heading to. Yea, I largely agree. But I fired two people during pandemic from not-exactly-wfh, so I’m perhaps a little biased.
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This has all happened before. In 1998 Greenspan cut rates due to the Asian financial crisis and worries over Y2K which blew up the dot com bubble. Then they slashed rates down to nearly ZIRP and held them low which blew up the housing and finance bubbles that deflated in 2008. None of this started in 2008. What is different this time is the wage inflation and the unionization drives that we're seeing. The Fed is like…
> I would be worried that this downturn looks more like a depression than a recession. Why? There's an easy way out of depressions / recessions. NIRP and QE Infinity part III.
NIRP sure sounds better than "war", which is another commonly used method.
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I think this is probably the most useful wisdom for the average person: > do not invest money you need within 5-10 years and do not make rash decisions; it is better to ride this train down and then hopefully back up than jump randomly. Gaming the market successfully requires a ton of skill and knowledge, and even then you are not guaranteed success. Most people are better off focusing on asset-class diversification…
Right; so my plan of having 60% of my wealth tied up in unvested stocks in a single company is really coming to fruition!