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What if your entire worldview was just because of near-zero interest rates?

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Re: What if your entire worldview was just because of near-zero interest rates?

#231

> The 2010s were a decade that “disrupted everything but resolved nothing,” as Andy Beckett wrote, and I tend to agree. These kinds of sentiments are great for drawing attention and might be true on a macro level, but I do not agree at all. Although there is currently a lot of nonsense going around, there are also great things going on if you look carefully. For example, I think that electric cars do have their probl…

I don't think TFA meant "resolved nothing" as a literal nothing, and they meant in a more general sense of the world, not just seen from the tech point of view.

Sure, we made cool things in tech during this era, but was it worthwhile on a global scale, on a social level, in an economic sense? That is debatable.

It is nonsensical to say that the creation of the SSD or Github has created a more fair society. Apples and oranges.

Re: What if your entire worldview was just because of near-zero interest rates?

#232

Earlier quoted context omitted.

It has skewed the labor market to an insane degree. So much talent went into idiotic pursuits, and away from anything that had to do with public service.

My wife's uncles is one of the top doctors in his field in the country, and was the head of department in the country's top medical university. He makes less money than me, even though I'm 35 years younger and my "skills" include some basic coding, some marketing, and some understanding of social media. Whereas this man has spent nearly 50 years in the medical field and has treated multiple presidents. None of the st…

Modern money doesn't equal to importance of work or amount of experience or how much avg. people understand about low interest etc.

Here is your reality check, more fair society would only possible without monetary policies dictated by banks, top rich and powerful. They and their smart people/companies are only in the society to take more cut from you workers, globally. What you say is just utopia, and IMPOSSIBLE.

Btw I like reading fairy tales as a comments here.

Here it's simplify explained (not serious obv) https://www.youtube.com/watch?v=2sEbe9gveN4

Re: What if your entire worldview was just because of near-zero interest rates?

#233

Print more and dump on the world strategy will end in the near future since big countries are planning to ditch trade in dollars. Funnily monster that the west created is about to eat it alive.

When the GFC happened, there's also a lot of people claiming that it's the end of the dollar hegemony.

Re: What if your entire worldview was just because of near-zero interest rates?

#234

Earlier quoted context omitted.

My wife's uncles is one of the top doctors in his field in the country, and was the head of department in the country's top medical university. He makes less money than me, even though I'm 35 years younger and my "skills" include some basic coding, some marketing, and some understanding of social media. Whereas this man has spent nearly 50 years in the medical field and has treated multiple presidents. None of the st…

Crazy. Salaries by prof. tell that SEs earn around 140k avg meanwhile meds. are around 300 easily I think youre just looking at tiny group of SEs

I’m based out of India. Doctors from top colleges after a decade of effort in their 20s start off at around Rs. 80,000-100,00 per month (many even lower in smaller towns)

Starting salaries for 21-22 year old engineers from top colleges is approximately Rs 120,00-200,000 per month. By the time they hit their 30s, their salaries usually balloon to Rs 350,000-500,000 per month.

Doctors don’t catch up until they’re well into their 40s - an age at which many engineers from top colleges start retiring.

There is no real difference in the difficulty of getting into a top engineering program vs medical school.

It wasn’t always this wonky, but it has become increasingly wonkier every year as tech valuations have gone beyond sanity.

Re: What if your entire worldview was just because of near-zero interest rates?

#235

Earlier quoted context omitted.

Well just keep desperately importing people from other countries, unlike Japan and Co. Or, for the other side of the political spectrum, ban abortions/birth control.

Banning abortions/birth control has already been tried by Romania. It was the inspiration for the book The Handmaid's Tale. In Romania today, banning abortions/birth control would be a political death sentence due to peoples' memories of the results the last time it was tried.

>memories of the results the last time it was tried.

What happened?

Re: What if your entire worldview was just because of near-zero interest rates?

#236

> "What if your entire worldview was just because of near-zero interest rates?" Worldviews typically include who we are, why we're here, what purpose (if any) we have in life, etc. It seems strange to me that someone's worldview could be thoroughly based on interest rates.

Hailing from a country with a weak currency and high, volatile interest rates I'd say this environment produces a certain disgust towards borrowing money.

This is further reinforced by past, ultimately disastrous attempts at going around the problem of high interest rates, like taking a mortgage indexed to CHF.

And it's only going to get worse now that interest rates ballooned to values unseen for a decade in a span of months.

Re: What if your entire worldview was just because of near-zero interest rates?

#237

The folks reading this are going to get the wrong message. They are going to believe that rising interest rates will magically make it so that the most highly valued companies are the ones that produce the most societal good. This may start to happen more to a certain extent, but it's a totally false assumption. The most valuable companies before and after this era of low interest rates were and continue to be monopo…

> That's what Warren Buffet invests in (Davita Dialysis, Exxon, Apple, rail lines ---> all monopolies). That's what Peter Thiel tries to invest in (Zero to One). That's what successful Y Combinator companies ultimately strive to become.

Buffett invests in companies with a durable competitive advantage which is also often called a "moat". A monopoly is a situation where there is no competition. As a counterexample, although I agree that Coca-Cola has unfair advantages, such as brand name and economies of scale, over new competitors, they do not have a monopoly.

> The most valuable companies before and after this era of low interest rates were and continue to be monopolies.

That's not necessarily true. The most valuable companies, that is, the companies with the highest valuations are those which make the most money. Or, as Joel Greenblatt puts it: "Price follows earnings." If you want to buy a barn which very likely earns 10 mln per year for now until 2032, then a fair price would be at least 10 x 10 million discounted for the fact that money today is worth more than money tomorrow. Then, after 10 years you still own a farm and any extra income that is produced by it. Of course, this value fluctuates a lot depending on all kinds of factors, but this is generally the process that value investors use to determine the fair value. In the long run, it works as you can see when looking at the net worth of value investors such as Buffett. The only thing that a monopoly "does" is that it makes it easier to predict what the future earnings are going to be.

What is typically the case after bubbles is that people take actual earnings into account again. During speculative bubbles, it is very hard to buy things based on reasonable future earnings calculations. The price is driven purely by speculation. What historically has happened after bubbles is that prices become more reasonable again. That's why big companies with unreasonable valuations such as Tesla and Cloudflare have gone down respectively 55% and 62% in price in this year while big companies with more reasonable valuations such as Macy's, Citigroup, or JPMorgan have gone down only 20%.

> Societal value creation is not the same as value creation to shareholders. The latter can be achieved by the former, but the former is not a requirement for the latter.

Agreed. Capitalism is a ruthless and terrible system, but better than the alternatives.

> On the flip side of things, lowering wages for software engineers is going to enable many institutions and companies that do not operate as tech monopolies or startups to start to get some of the benefits of skilled software engineers!

Agreed!

Re: What if your entire worldview was just because of near-zero interest rates?

#238
post #200
post #189

Earlier quoted context omitted.

No it's not. Crocodile tears about how unfair it is for her to make so little instead of paying her more is virtue signaling. Dems have being in power in CA forever voting for them is not going to change maids wage.

The problem is thinking blue or red are the answer to this problem. Their current iteration is the leading reason why we are in this situation now.

Nope they are a reflection of their voters e.g. "us". As long as majority regardless of side continues to vote for amorphous virtue signalling unprincipled politicians the things will stay as they are.

Re: What if your entire worldview was just because of near-zero interest rates?

#239

I'm old enough to remember in university economics class, the professor would joke about how financial media would closely watch press conferences that Alan Greenspan would give after FOMC meetings, down to watching the thickness of the briefcase to guess as to whether the fed funds rate (which determines interest rates) would increase or decrease. I am happy rates have risen, and I hope they stay at a sane level mor…

Can you point me in the direction of something that explains the mechanics of how the FFR determines (prior to market sentiment) the rest of the yield curve? I know they do, but most explainers stop at that.

Re: What if your entire worldview was just because of near-zero interest rates?

#240
post #232

Earlier quoted context omitted.

My wife's uncles is one of the top doctors in his field in the country, and was the head of department in the country's top medical university. He makes less money than me, even though I'm 35 years younger and my "skills" include some basic coding, some marketing, and some understanding of social media. Whereas this man has spent nearly 50 years in the medical field and has treated multiple presidents. None of the st…

Modern money doesn't equal to importance of work or amount of experience or how much avg. people understand about low interest etc. Here is your reality check, more fair society would only possible without monetary policies dictated by banks, top rich and powerful. They and their smart people/companies are only in the society to take more cut from you workers, globally. What you say is just utopia, and IMPOSSIBLE. Bt…

The idea that some other monetary system would magically equal importance of work or amount of experience (usually promoted on the right by extremely wealthy people deeply invested in gold and on the left by people that imagine themselves running the Politburo) is the even bigger fairy tale though...
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