It seems like tech and discretionary stocks have gone up and consumer staples stocks have stayed flat gone down in the last few days to month. See VCR and VDC.
Astonishingly strong US jobs report sends stocks wavering
141–150 of 204 posts
Re: Astonishingly strong US jobs report sends stocks wavering
#142Earlier quoted context omitted.
> For Tech that may mean that the focus will shift towards profitability Is it like tech or any other industry has ever focused (directly or indirectly) in something else? Maybe they just realized their superpowers are waning and they can’t keep hiring with obscene salaries indefinitely.
I’m not sure I follow your cynicism: I celebrate ICs making 500k or 1M working for a company in the US instead of making “the same with a PhD in physics as an assembly line worker at Volkswagen”. If an IC delivers 100MM in cost savings for a company because his software scales almost arbitrarily and gets paid highly: that’s a win for the working class population.
Agree, as long as it is sustainable and realistic but this trend of firing people in the tech scene where even companies like Google have been involved, with still huge earnings, makes me doubt about it. And even worst it seems they don’t know either what is going on and if it is the right path.
Re: Astonishingly strong US jobs report sends stocks wavering
#143Earlier quoted context omitted.
Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…
Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class. It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the suppo…
> Inflation benefits people in debt
And weighed by the amount of debt, those are mostly people rich enough to hire specialists for the tedious parts of using some (most) of their assets as collateral for further investment. People living paycheck to paycheck, on maxed out credit cards, those are not the winners of inflation you are looking for.
Re: Astonishingly strong US jobs report sends stocks wavering
#144Earlier quoted context omitted.
> The Fed operates according to the interests of the wealthy. Eh, the Fed is playing business cycle PID controller with the standard economic model that's worked to keep inflation low since the 1970s; having employment above a certain level ("NAIRU") causes a "wage-price spiral", and the side effects of the resulting inflation are deemed worse than those of artificially keeping employment higher than it otherwise mig…
> the side effects of the resulting inflation are deemed worse Deemed worse by whom? People complain about inflation in the 1970s, but just like now a significant part of that was caused the supply chain (OPEC then, Covid now), and in any case US income and wealth inequality are actually much worse now than in the 1970s.
Worse for the average worker who saw their 10% pay raise disappear with 13% inflation.
The 70’s were an absolute dump in terms of the economy. 8% unemployment in ‘75.
Nobody wants to go back to that.
Re: Astonishingly strong US jobs report sends stocks wavering
#145Earlier quoted context omitted.
I'm no economist, but I think it's fair to raise rates slowly after a long slow economic recovery where you're barely seeing any inflation even when markets and jobs are hot. I also think it's fair to raise rates quickly when there's a huge spike in inflation due to at least partly to excess money supply,which does not go away after waiting a few months.
And that's why I'm mixed... I don't really disagree with you either. It's one of the few levers that the fed actually has, and it's a BIG lever with lots of consequences and fallout. Moving it is tricky (and hindsight is always an unfair place to judge from). But it does feel a bit systemically unfair that we're structuring our financial regulations in a manner that seems nearly hellbent on increasing inequality acro…
Yeah, Congress has much better tools to target benefits to the needy.
Re: Astonishingly strong US jobs report sends stocks wavering
#146To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)
Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…
> So, are you assuming/applying everyone more or less has the same contribution or do you want everyone to be paid the same irrespective?
The parent said, "more equal", not equal. There is a big difference between saying that everyone should have the same exact wage versus we should narrow the gap between the highest and the lowest paid people.
And there are plenty of examples of people with massive contributions to society who didn't get paid very well. Van Gogh lived in poverty. Albert Einstein was certainly not poor, but I'd have a hard time believing that his "contribution to society" is less than 1/10000th that of Jeff Bezos. For that matter, my elementary school teachers contributed a lot to society. So do many others. I don't believe that the parent comment is arguing that teachers should make as much as CEOs, they are just saying that the gap shouldn't be so ludicrously large.
Re: Astonishingly strong US jobs report sends stocks wavering
#147Earlier quoted context omitted.
I wasn’t talking about wage inflation. I don’t want to age either. Nobody does.
> I wasn’t talking about wage inflation. But you were, because inflation includes wage inflation. > I don’t want to age either. This is a non sequitur.
Inflation is the cost of goods, it doesnt include wages.
Re: Astonishingly strong US jobs report sends stocks wavering
#148In what kind of world does a strong jobs number, implying a strong economy, sink stock prices?
There is a clear dichotomy between the 'financial' economy, and the actual economy. The pre-eminence of 'Shareholder value' should be relegated to the 20th century, and this century we should focus on making the economy serve society.
Re: Astonishingly strong US jobs report sends stocks wavering
#149Earlier quoted context omitted.
"The shift towards profitability" that made facebook lay off 11,000 people to save 1.5 billion to spend 40 billion on buybacks.
And their stock soared 25% yesterday because of their profitability. Are you trying to prove the point I’m making or just mad at me that I explain capitalism?
I think many people (myself included) see it as a problem that capitalism so clearly works against the interest of the many to benefit the few. We understand why stock buybacks and layoffs increase shareholder value, and therein lies the problem.
Re: Astonishingly strong US jobs report sends stocks wavering
#150Earlier quoted context omitted.
No one is going to write a mortgage for a lower rate than inflation unless they’re crazy (so the gov’t might, but even then not usually!). They’d be signing up to 100% burn their cash doing so. Inflation absolutely impacts mortgage rates, and all other lending.
I totally have a mortgage rate that was lower than inflation at the time because it was sth like 0.7% above market rate for 20 years fixed… Banks don’t care about the real value of money the way normal people do. Borrow 100k, pay 1% interest, buy a piece of stone and sell it for 200k after a couple of decades because of inflation and pay back a banks 100k: they are happy because the math adds up.
well, except the math doesn’t actually add up in that case for anyone ‘real’ including any bank using normal lending sources, as that 100k paid back is now worth far less than 100k back when the loan was written.
The reality is that for a long time the Fed was using QE to buy up mortgage bonds written at nearly arbitrarily low rates. Bonds that no one else would buy/fund because the odds of losing money were too great. They’d been doing so since ‘09 or thereabouts to keep that market liquid.
So they were willingly taking the risk of money destruction, and as the one entity that could do so, that’s pretty good. They’re probably the only one that could really do so without going bankrupt, as they are the only entity that can ‘create’ money arbitrarily in the system.
It’s around 2.6 trln dollars right now [https://fred.stlouisfed.org/series/WSHOMCB]
The vast majority of the banks haven’t been underwriting mortgages themselves for a very long time, and the ones that were had been getting put in scarier and scarier positions because of the Fed’s actions.
Right now, the entire sector is in the process of imploding because the Fed has stopped doing what it was before, and trying to push the markets back to reflect a more realistic cost of money, which of course dries up demand as prices are still based on ‘free cash’ as the benchmark - https://www.bloomberg.com/news/articles/2022-08-19/mortgage-...