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

Astonishingly strong US jobs report sends stocks wavering

cnn.com

Post reply on HN
Print view View original

151–160 of 204 posts

Re: Astonishingly strong US jobs report sends stocks wavering

#151

Post by lapcat »

netfortius wrote: post #130
Loughla wrote: post #21

Earlier quoted context omitted.

Not interest rates, but tanking stocks and investments absolutely will change that. If my retirement investments lose 50% of their value, I'll have to go back to work.

I can't believe how fewer people see that side! It's good for the working folks to get competitive wages, but what are you doing with the troves of people who had to embark in the 401k/IRA/etc. "trains"? Are they expected to get back to work in their 60s/70s/80s, to make up for inflation and purchasing power

That's supposed to be what Social Security is for.

Though arguably the retirement age is too low now for increasing human lifespans. (OTOH the pandemic cut into that somewhat.)

Re: Astonishingly strong US jobs report sends stocks wavering

#152

Post by bluefirebrand »

bjourne wrote: post #99
kspacewalk2 wrote: post #82

Earlier quoted context omitted.

Inflation (but not hyperinflation) benefits people in debt, and hurts people with savings. Is having savings nowadays considered intrinsically less moral or something? Inflation targeting of, say, 2%, is the balance that takes into account the sometimes competing interests of all these groups (savers, borrowers, wage earners, people who live off investments, etc). Deviation into either direction causes long-term stru…

Yes, savings are "intrinsically less moral" as savings are money not being used. And since wealth accumulates itself the more savings the more income inequality. It is intrinsically immoral that the wealth controlled by two dozen Western families is larger than the wealth of three billion people.

> It is intrinsically immoral that the wealth controlled by two dozen Western families is larger than the wealth of three billion people.

I think many people would agree.

But there's a huge difference between people who are sitting like dragons on hoards of money, and your average person saving money for emergencies, for retirement, for a home down payment, for vacations, whatever else.

Most people are not behaving immorally by saving money. Some people who are absolutely hoarding money absolutely are behaving immorally.

Re: Astonishingly strong US jobs report sends stocks wavering

#153

Post by lazide »

refurb wrote: post #127
luckylion wrote: post #113

Earlier quoted context omitted.

So the standard mortgage rate is agreed on as "official inflation rate + x%"?

No, but lenders demand interest in excess of inflation. Inflation can be transitory, so just because its 7% now doesnt mean a 10 year bond has to be more. And the mortgage interest rate is set by the bond market, because thats who funds mortgages in the end (see Fannie and Freddie).

FYI, while the Fed was doing QE, they were buying almost all mortgage bonds. That was a core part of the program. It’s in the trillions.

So yes, what you’re describing is true - but it has been extremely distorted for a very long time, intentionally.

[https://fred.stlouisfed.org/series/WSHOMCB]

[https://www.cbo.gov/system/files/2022-09/57519-balance-sheet...]

Re: Astonishingly strong US jobs report sends stocks wavering

#154

Post by lapcat »

refurb wrote: post #147
lapcat wrote: post #73

Earlier quoted context omitted.

> 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.

But obviously labor costs are a big part of the costs of goods, and the Fed has specifically cited wage inflation as a contributor to goods inflation and aims to reduce wage inflation by raising interest rates.

Re: Astonishingly strong US jobs report sends stocks wavering

#155

Post by troad »

jacknews wrote: post #148

In 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.

> In 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 we should focus on making the economy serve society.

Low unemployment means wage inflation (as companies compete for scarce labor), which means more inflation in general, which raises the odds that the Fed - which is currently fighting very hard to try to constrain inflation, as the law requires it to do - will have to raise interest rates. This is good in the long run, in that inflation is very bad (and particularly bad for poorer households), but in the short run it hits stock prices because company borrowing will become more expensive, and there's some risk of over-correcting the economy into a recession.

I wish people making political points about economic news would at least try to understand the economic news first.

Re: Astonishingly strong US jobs report sends stocks wavering

#156

Post by [deleted] »

techdmn wrote: post #3

To 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.)

[deleted]

Re: Astonishingly strong US jobs report sends stocks wavering

#157

Post by harimau777 »

refurb wrote: post #136
harimau777 wrote: post #93

Earlier quoted context omitted.

In my experience, service sector working class people generally have no savings due to low wages and high cost of housing. I think it's not that people view saving as immoral; rather they view it as a class indicator. It appears that if the lower class starts seeing wage increases, then our economy falls apart and/or the Fed steps in to stop it. That suggests that our economy is broken with respect to the lower class…

No, what happens is wage pressure translates into higher input costs and higher prices thus fueling inflation. And that hurts low wage workers because any wage increase gets eaten up by inflation and cycle continues. If we were in a low inflation environment then the fed wouldnt be concerned about low unemployment and rising wages at all.

I don't think that's different than what I said. Wages started increasing and the economy started to fall apart prompting the Fed to step in. That means that the system is broken. There is no way for the lower class to get ahead. If they make higher wages then prices will simply increase so that they aren't actually ahead.

Re: Astonishingly strong US jobs report sends stocks wavering

#158

Post by harimau777 »

looping__lui wrote: post #114
GAN_Game wrote: post #95

Earlier quoted context omitted.

> But to me personally: I am grown up enough to not care how many Porsches my neighbor has. How does this matter? When something I made is sold at a company, used raw materials are rebought, but then left over is the wealth I created. A portion goes to me in wages, a portion is mailed off in dividend checks to the heir who is expropriating my surplus time. It matters because the heir is expropriating surplus labor ti…

Then you have either negotiated your share in value creation poorly or your skills are easily sourced. Irrespective of that you are assuming happiness is just associated to absolute monetary wealth - which I disagree with. If basic resources and needs are catered for and the rest is spent on luxury goods or extravagant lifestyles - how would I care? If you want to still play that game, just travel and ask yourself wh…

Vanishingly few people are arguing for complete equality of outcome. As long as everyone[1] has a reasonable quality of life and inequality isn't so great that the wealthy can flout the rules that apply to everyone else, then I don't think that most people, even on the left, would have a problem. However, that's not what America currently has.

[1] I'm using "everyone" metaphorically here. No system is going to have literally no one who falls through the cracks.

Re: Astonishingly strong US jobs report sends stocks wavering

#159

Post by jacknews »

troad wrote: post #155
jacknews wrote: post #148

In 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.

> In 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 we should focus on making the economy serve society. Low unemployment means wage inflation (as companies compete for scarce labor), which means more inf…

You've provided an explanation (which I'm also completely familiar with) but not a rationale.

What is really happening is that corporate profits are set to be squeezed (slightly) by rising costs, both labor and capital, and so that provides a reason why stock prices go down.

But it doesn't answer the actual question, of why everything going great should be a bad thing.

Re: Astonishingly strong US jobs report sends stocks wavering

#160

Post by looping__lui »

lazide wrote: post #150
looping__lui wrote: post #134

Earlier quoted context omitted.

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 grea…

Thats the problem. The FEDs gave the banks the money for free. And we gave it to them for free as well because we didn’t get any savings on our accounts… Those who borrowed money and bought assets literally took a tiny little bite from everybodys savings account every year..
Post reply on HN