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

“A Mild Recession”

thereformedbroker.com

Post reply on HN
Print view View original

81–90 of 117 posts

Re: “A Mild Recession”

#81

Post by SketchySeaBeast »

Rury wrote: post #80
SketchySeaBeast wrote: post #40

Earlier quoted context omitted.

That may be the case, doing a bit of research here I see some numbers where if you slice only the America market passive investors are near parity of even a minor majority - but the question still remains, has that fundamentally changed the market composition? I wonder if it'll make it more stable because the passive investors aren't as inclined to randomly shift money around or pull it out. Even if they are inclined…

If all investment activity was passive investment, there would be no pricing mechanism left in the market. If everyone just equally invested in everything, there'd be no discrepancy between stocks. Complete scam businesses would given value equally to businesses which actually do create value. So, yes, passive investing helps stabilize the entire market to trade in tandem, but too much is a danger to the health & sta…

But that's not how the passive investing works - it's predicated off of curated indexes, so people are still making decisions. And there's not equal weighting in everything. What you're worried about isn't the current situation and it makes no sense that it ever would be.

Re: “A Mild Recession”

#82

Post by danaris »

s1artibartfast wrote: post #76
danaris wrote: post #59

Earlier quoted context omitted.

From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…

>the root of the problem is that we let the very wealthy soak up all the economic gains Not that I like it, but my understanding is the exact opposite. Inflation is going up because workers are finally getting some of the economic gains. The wealthy can gain tremendous amounts of money on paper, but it doesn't impact inflation because they aren't spending it. For example, a trillionaire isn't buying a trillion dollar…

The reasons for current inflation seem to be complex.

I'm willing to believe part of the reason is higher wages, as it does seem that there have been some (fairly minor) real gains over the past several months.

But it's also quite clear that the increased oil prices are affecting the prices of goods and services across the board.

And I've seen a number of reports of companies posting record profits and raising prices—which indicates that they're not raising prices because they have to, but because "oh, it's inflation, we have no choice" is a convenient cover for them to increase their margins.

More importantly, the concern at hand is recessions, not inflation, and the comment I replied to was specifically noting the fact that there had been several significant recessions in recent years. It was the apparent fragility of our economy recently that I was attributing to the drastically increased income inequality, not inflation specifically.

Re: “A Mild Recession”

#83

Post by worker_person »

seanmcdirmid wrote: post #50
atlgator wrote: post #29

Earlier quoted context omitted.

They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. T…

They really don’t have much of a choice. None of those issues can be solved in the near term, and many of them were setup 10-15 years ago. Both parties have been irresponsible when it comes to spending, interest rates, and inflation. We should have been tightening up on interest rates and taxes during boom times so we could loosen during bust times, but it’s just been loosen loosen loosen since 2001 or so. No one is…

Gas prices are from day 1 decisions of the current president. The real fun will be when strategic reserve runs out.

https://www.washingtonpost.com/business/energy/the-us-is-dep...

Re: “A Mild Recession”

#84

Post by throwaway5959 »

SketchySeaBeast wrote: post #71
aluminaient wrote: post #58

Earlier quoted context omitted.

this fairytale may help you sleep at night. But 100 years is almost no history at all, i hope you can appreciate that.

I don't know if expanding our understanding beyond that is useful. If we looked at historical trends we'd all be looking at ways to hoard tea and salt.

I love that this comment lines up with your username. Yarrrr!!!

Re: “A Mild Recession”

#85

Post by Rury »

SketchySeaBeast wrote: post #81
Rury wrote: post #80

Earlier quoted context omitted.

If all investment activity was passive investment, there would be no pricing mechanism left in the market. If everyone just equally invested in everything, there'd be no discrepancy between stocks. Complete scam businesses would given value equally to businesses which actually do create value. So, yes, passive investing helps stabilize the entire market to trade in tandem, but too much is a danger to the health & sta…

But that's not how the passive investing works - it's predicated off of curated indexes, so people are still making decisions. And there's not equal weighting in everything. What you're worried about isn't the current situation and it makes no sense that it ever would be.

Unless weighting is done by business fundamentals, it still enables misallocation of capital. Many curated indexes and decisions are based on market cap, liquidity, public float, sector classification - all hardly fundamental.

Re: “A Mild Recession”

#86

Post by worker_person »

nh23423fefe wrote: post #3

I actually feel really prepared for this one. 2007 made me nervous, but not this one. I feel secure in my employment and I finally have a real emergency fund even if I lose my job. I'm not optimistic about long term though. The infinite growth delusion seems like it will break in my lifetime, retirement is scary

It's a cycle. We are reliving what happened under Carter now. A pro growth (low taxes, low regulation) president will come into power in 2 years.

We will have a decade or two of amazing growth.

People will forget basic economic principles again, raise taxes and regulations over spend like crazy and then it will fall apart again.

Re: “A Mild Recession”

#87

Post by s1artibartfast »

danaris wrote: post #82
s1artibartfast wrote: post #76

Earlier quoted context omitted.

>the root of the problem is that we let the very wealthy soak up all the economic gains Not that I like it, but my understanding is the exact opposite. Inflation is going up because workers are finally getting some of the economic gains. The wealthy can gain tremendous amounts of money on paper, but it doesn't impact inflation because they aren't spending it. For example, a trillionaire isn't buying a trillion dollar…

The reasons for current inflation seem to be complex. I'm willing to believe part of the reason is higher wages, as it does seem that there have been some (fairly minor) real gains over the past several months. But it's also quite clear that the increased oil prices are affecting the prices of goods and services across the board. And I've seen a number of reports of companies posting record profits and raising prices…

>I've seen a number of reports of companies posting record profits and raising prices—which indicates that they're not raising prices because they have to

You are thinking about this only from the profit side. The entire reason this can happen is because customers are willing and capable to pay more. Cost were never limiting the price because companies were making a profit before too!

If you are selling steak, you raise your prices until customers stop buying. You don't stop at X profit margin. Prices go up because customers are willing and able to spend more.

If you're saying they're using inflation as a cover and lying, I totally agree. But waiting for an excuse isn't what was stopping them before.

>More importantly, the concern at hand is recessions, not inflation

You can't separate the two. Recession is GDP loss after adjusting for inflation. The U.S. GDP without inflation is still increasing. Without inflation there would be no recession

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

Re: “A Mild Recession”

#88

Post by s1artibartfast »

worker_person wrote: post #86
nh23423fefe wrote: post #3

I actually feel really prepared for this one. 2007 made me nervous, but not this one. I feel secure in my employment and I finally have a real emergency fund even if I lose my job. I'm not optimistic about long term though. The infinite growth delusion seems like it will break in my lifetime, retirement is scary

It's a cycle. We are reliving what happened under Carter now. A pro growth (low taxes, low regulation) president will come into power in 2 years. We will have a decade or two of amazing growth. People will forget basic economic principles again, raise taxes and regulations over spend like crazy and then it will fall apart again.

Hopefully the next prez has a mind for more spending controls and wiser investment than the last few.

You don't need austerity, but you need to make sure there are returns on investment opposed to just throwing money at problems and seeing what sticks. Because unfortunately, money always sticks

Re: “A Mild Recession”

#89

Post by SketchySeaBeast »

Rury wrote: post #85
SketchySeaBeast wrote: post #81

Earlier quoted context omitted.

But that's not how the passive investing works - it's predicated off of curated indexes, so people are still making decisions. And there's not equal weighting in everything. What you're worried about isn't the current situation and it makes no sense that it ever would be.

Unless weighting is done by business fundamentals, it still enables misallocation of capital. Many curated indexes and decisions are based on market cap, liquidity, public float, sector classification - all hardly fundamental.

> Unless weighting is done by business fundamentals, it still enables misallocation of capital.

Is it your assertion that without index funds this would be occurring? We just saw deliberate decisions to buy companies like TSLA and GME that stronly argue against that.

Re: “A Mild Recession”

#90

Post by s1artibartfast »

pwinnski wrote: post #55
mrcheesebreeze wrote: post #20

Earlier quoted context omitted.

thats why if you have reserve funds they need to not be in us banks, they can close down and go out of business in a recession. Take physical wealth and move somewhere else if a really bad one happens.

That is not true, though? Or rather, banks can indeed shut down, but that's what the Federal Deposit Insurance Corporation is for. The FDIC insures up to $250,000 per customer, per bank. So there is not much safer place to keep emergency funds than a US bank.

That doesn't help much if the cost of bread is more than $250,000
Post reply on HN