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It’s mostly a demand shock, not a supply shock, and it’s everywhere

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Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#121

Post by hooande »

paul7986 wrote: post #58
sdenton4 wrote: post #38

Earlier quoted context omitted.

Because the obvious response to insufficient supply is to make more stuff, thereby growing the overall real economy. Yes, it's a lagging function. But it's frankly insane to insist that today's transient supply chain issues mean that people need to be paid less than a living wage in general... It's similar to the old argument over slavery. Yes, removing slavery causes large realignments in the economic system. But ov…

Hmmm but I didn't say anything about wages which I'm very happy to pay more and do now .. tipping more then 20 percent, tipping sub makers at Jersey mikes and happy to pay up to $30 for a burger fries and drink at five guys. Going out to eat with a friend or a date is now a $60 to $100 affair at Applebees or places like it with tip. All good to me!

not necessarily disagreeing with you, but odd that you think your tip at applebee's is an argument against a basic income

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#122

Post by asdff »

formercoder wrote: post #17
lisper wrote: post #5

It's a plausible theory, but it doesn't explain the long queues of container ships waiting to be unloaded.

Demand shocks would manifest themselves as bottlenecks in different places along the supply chain as supply attempted to catch up.

That's not whats observed at the ports. Relative to before the pandemic in LA, container tonnage is down, container volume is down, cargo value down, the number of vessels serviced is down, as well as revenue all down. By all accounts the port just seems to be working at a reduced capacity than even before the pandemic, rather than moving a larger amount of goods than what was 'normal' and struggling to keep up with increased demand. Seems they just can't keep up the numbers seen under normal demand at least at the port of LA.

https://www.portoflosangeles.org/business/statistics/facts-a...

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#123

Post by ODILON_SATER »

jolux wrote: post #91

Just a warning that this is an article by a hedge fund expressing a view of our current inflationary period that I would argue is heterodox among the economic mainstream. I suggest reading Paul Krugman and Claudia Sahm for dovish views, or Adam Ozimek for a more critical view. In particular, the idea that “inflation expectations” can perpetuate inflation via a self-fulfilling prophecy effect has been called into ques…

Claudia Sahm? Krugman? I rather listen to the hedge fund guys, at least they have skin in the game, don't they? Claudia Sahm is extremely partisan, and so is Krugman. You know it's going to be bad when we are starting to hear from the media that inflation is actually a good thing --because people have more disposable income to spend on things. First, it was just a blip, then they told us it would go away in half a year, now it is here to stay --but it is a good thing, see?

The reality is that the explosive demand, alongside with a lagging supply can lead to an inflationary pressure not seen since the 1970s. At least in the 70s the information technology revolution was just around the corner. Right now, it feels like the supply issue cannot be remedied or solved because of heavy regulations and a stagnant productivity.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#124

Post by baggy_trough »

paul7986 wrote: post #58
sdenton4 wrote: post #38

Earlier quoted context omitted.

Because the obvious response to insufficient supply is to make more stuff, thereby growing the overall real economy. Yes, it's a lagging function. But it's frankly insane to insist that today's transient supply chain issues mean that people need to be paid less than a living wage in general... It's similar to the old argument over slavery. Yes, removing slavery causes large realignments in the economic system. But ov…

Hmmm but I didn't say anything about wages which I'm very happy to pay more and do now .. tipping more then 20 percent, tipping sub makers at Jersey mikes and happy to pay up to $30 for a burger fries and drink at five guys. Going out to eat with a friend or a date is now a $60 to $100 affair at Applebees or places like it with tip. All good to me!

Strange definition of good.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#125

Post by gruez »

asdff wrote: post #112
yokem55 wrote: post #88

Earlier quoted context omitted.

So what housing cost metric should be looked at? The cost for a retiree living in their paid off home? The mortgage payment for brand new homeowner with minimal down? The cost to split an apartment for 2 people? What objective measure should be used?

All of them? The government has this data already it just needs to be aggregated by someone motivated.

How do you combine them into one number, in a way that isn't "cooked"? Proposing we mash up all data ever into one figure, without detailing how, is useless

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#126

Post by xadhominemx »

nbardy wrote: post #104
danhak wrote: post #90

Earlier quoted context omitted.

That is a really good point. I also have a pet theory that CPI understates the cost of housing due to people who are pushed out of entering the market altogether (e.g. homelessness rising, people living with parents longer) Sort of the same way some people say unemployment figures understate the true number by ignoring discouraged workers / people who have stopped looking altogether. I have a hunch there are many dis…

You should take a look at Pia Maloney and Eric Weinstein work. CPI is broken because it doesn't factor in a "change in taste or prefence" CPI treats individuals as a giant unmovimg population mean. To counter they change to use vector fields.

Of course preference is included in CPI. Weightings are adjusted periodically as consumer spending patterns shift, and price elasticity is explicitly factored on a quarterly basis in chained cpi

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#127

Post by Gigachad »

grayfaced wrote: post #101
Guthur wrote: post #96

Earlier quoted context omitted.

I just don't get why everyone maintains JIT manufacturing is bad, it's one of the many reasons we can have such reasonably low cost goods, its efficient.

Efficiency at a trade-off of resiliency. If you're talking about discretionary purchases, you probably value efficiency over resiliency. If you're talking agriculture, we should value resiliency over efficiency.

So we have benefited from decades of cheap consumer electronics and now people had to wait 10 months to get their playstation at RRP so their proposal is to build double the number of playstations for decades and landfill half of them so in the extremely rare case, they will have just enough.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#128

Post by xadhominemx »

arthur5005 wrote: post #68

What this doesn’t really address is the why? Yeah there’s more money floating around, so perhaps more people want to spend it, but why? Most people aren’t getting materially more stuff or even need that much more stuff, consumption’s already god damn conspicuous. Maybe everyone can afford a jet ski all of a sudden? No, the stims didn’t really do /that/ kind of wealth expansion. To me, this still looks like the bullwh…

Overall expenditures are still pretty close to pre-covid trend. Stimulus prevented aggregate expenditures from falling below trend, as they have in previous economic shocks. What’s happened is people have shifted spend from services (particularly healthcare and travel) to goods.

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#129

Post by tubby12345 »

ODILON_SATER wrote: post #123
jolux wrote: post #91

Just a warning that this is an article by a hedge fund expressing a view of our current inflationary period that I would argue is heterodox among the economic mainstream. I suggest reading Paul Krugman and Claudia Sahm for dovish views, or Adam Ozimek for a more critical view. In particular, the idea that “inflation expectations” can perpetuate inflation via a self-fulfilling prophecy effect has been called into ques…

Claudia Sahm? Krugman? I rather listen to the hedge fund guys, at least they have skin in the game, don't they? Claudia Sahm is extremely partisan, and so is Krugman. You know it's going to be bad when we are starting to hear from the media that inflation is actually a good thing --because people have more disposable income to spend on things. First, it was just a blip, then they told us it would go away in half a ye…

>I rather listen to the hedge fund guys, at least they have skin in the game, don't they

Haven't you ever heard of "talking your book"?

Re: It’s mostly a demand shock, not a supply shock, and it’s everywhere

#130

Post by Ozzie_osman »

human wrote: post #100
arthurcolle wrote: post #10

Earlier quoted context omitted.

Thank god we have crypto & NFTs to help people use all this free cash

It doesn’t work like that though. If I buy BTC at 60k then someone is selling BTC at the same price. The fiat is just moving from one account to the next. The people getting cash-rich from crypto are either spending it (on lambos) or putting it back into the stock market.

It's a little more complicated than that.

You buy 1 BTC from me for 60k. Now let's say I want to buy BTC again, but you want to sell it for 120k, so now I buy 0.5 BTC from you for 60k, and if everyone agrees that 120k should be the fair price, we've just bid up the market cap and value of BTC without really increasing the fiat.

Now imagine that with different crypto, stocks, other financial instruments, real estate, etc etc and in different combinations and with margin and derivatives and what not.

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