101–110 of 161 posts
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The fact that the most common inflation numbers (AFAIK) don't include real estate makes them worthless.
Shelter (rent and "owners' equivalent of rent") are included in the CPI.
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Well... in this situation, individuals are also going to be failing because of the government. Therefore...
Therefore they should be compensated too, and they are going to be. They get unemployment benefits and Federal money. The income tax due date was moved out, and many states have allowed people to stop paying rent and prevented evictions. There will probably be more help for people in the next relief bill the government passes. People aren't being helped enough, but neither are businesses. On the plus side, helping bu…
If you want to put strings on the help to businesses (that they have to take care of their people if they get the help), I'm fine with that. If you want instead to just help the employees, and give the businesses a vacation on paying rent, utilities, and taxes, I'm fine with that, too. (But then you have to figure out how to help the landlords and utility companies. The landlords you can give a vacation on their mortgages, but then you have to help the mortgage holders...)
The statement about the lack of inflation from QE and other stimulus programs from 2008 is pretty questionable. There's been little inflation as measured using usual consumer price indices, but the construction of those indices is typically fairly focused on consumer goods and underweights the assets that rich people tend to invest in (stocks, real estate, bonds, etc). The QE and stimulus programs from 2008 were sign…
We're about to find out what global QE to infinity does. I'd expect more events like the recent boom in stock prices in spite of massive global unemployment and the wave of unrest nicknamed the Arab spring which came after 2008 and had origins in economic disruption. Revolutions often come after the unbearable has passed. Even if we quickly overcome the virus the global economic impact of the lockdown and QE will be…
If you really believe that, you should be buying stocks now.
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Every HN thread on economics has a bunch of comments like these that are earnestly misinformed about economics. When commenting on something outside of your wheelhouse, please recall Socrates from the Apology: "I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed the…
I never said that P/E ratios in the US are "too high". I said that they've been higher in recent years than in past history. This is, as you said, because the amount of money chasing investment opportunities is increasing. I agree that the reasons for this are complex, but one significant reason that the amount of money chasing investment opportunities is increasing is central bank stimulus (not just in the US, but w…
The statement about the lack of inflation from QE and other stimulus programs from 2008 is pretty questionable. There's been little inflation as measured using usual consumer price indices, but the construction of those indices is typically fairly focused on consumer goods and underweights the assets that rich people tend to invest in (stocks, real estate, bonds, etc). The QE and stimulus programs from 2008 were sign…
Every HN thread on economics has a bunch of comments like these that are earnestly misinformed about economics. When commenting on something outside of your wheelhouse, please recall Socrates from the Apology: "I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed the…
Economics is a weird discipline where everyone becomes an expert on it at age 15. I've even seen people confidently expound on economics when it's clear they don't even understand the difference between revenue and profit.
In contrast, nobody is willing to argue with a physicist unless they are at least as educated in physics as their counterpart is.
It's really a shame that although we live in a market economy, there is no attempt whatsoever in K-12 to explain how markets, business, and accounting work. A high school graduate is unlikely to even grasp what compound interest is.
Well, not really: bailouts punish people and business who incurred costs to operate in a way that would allow them to pause their economic activity for months (cancellable supply/rent/employment contracts, cash reserves, etc.), and favors those who did not do so. In general, a society where it is possible to pause all economic activity at any time is going to be much more robust than one that doesn't, and is going to…
Storage requires economic activity though. Storing frozen food requires an economy to generate electricity and maintain power lines. Storing dry goods requires electricity to process those goods into something useful or a fossil fuel supply chain or a wood cutting insustry. Also, food production requires year round economic activity. Pausing for one week would mean mass starvation even if everyone had food stores. Pe…
Earlier quoted context omitted.
Every HN thread on economics has a bunch of comments like these that are earnestly misinformed about economics. When commenting on something outside of your wheelhouse, please recall Socrates from the Apology: "I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed the…
you can't make such a grandiose condemnation of "earnest misinformation" and then not make perfectly defensible arguemnts, lest you make the exact same mistake you condemn. p/e ratios at historical highs is a statement that they've disconnected from their fundamentals, i.e., the price of a share of a company is (often much) more than the expected present value of all future cash flow for that share. that there are no…
Are you shorting those assets?
Edit: is this not a fair question? Putting one's own money on the line is a reasonable test of what one's convictions are. For example, I'm optimistic about the market, and have put my money where my mouth is. Of course, that doesn't mean I'm right, but I have a level of confidence that I am.
Earlier quoted context omitted.
Every HN thread on economics has a bunch of comments like these that are earnestly misinformed about economics. When commenting on something outside of your wheelhouse, please recall Socrates from the Apology: "I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought that they also knew all sorts of high matters, and this defect in them overshadowed the…
I never said that P/E ratios in the US are "too high". I said that they've been higher in recent years than in past history. This is, as you said, because the amount of money chasing investment opportunities is increasing. I agree that the reasons for this are complex, but one significant reason that the amount of money chasing investment opportunities is increasing is central bank stimulus (not just in the US, but w…
To be fair, that wasn't the only option. There was the debate in 2007/08 about how much of the stimulus should be monetary vs handouts directly to taxpayers vs infrastructure. There's some who believe that the "infrastructure" portion was too small of the pie, hence the stomach for things like "Infrastructure Week" from Trump or "Green New Deal" from the left wing of the Democrats.
Well, not really: bailouts punish people and business who incurred costs to operate in a way that would allow them to pause their economic activity for months (cancellable supply/rent/employment contracts, cash reserves, etc.), and favors those who did not do so. In general, a society where it is possible to pause all economic activity at any time is going to be much more robust than one that doesn't, and is going to…
Unregulated markets encourage firms to engage in a sort of recklessness arms race. And IMO that’s one of the reasons why we need strong non-market-based safety nets for this type of disruption.