It’s mostly a demand shock, not a supply shock, and it’s everywhere • Hacker News Board

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

#161

Post by paul7986 » Tue, Nov 09, 2021, 4:19 AM UTC

baggy_trough wrote: post #124

paul7986 wrote: post #58

Earlier quoted context omitted.

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.

Paying workers a higher hourly wage to tipping them a lot more I believe is the good, fair and right thing to do. Reward those who are out there working the low level jobs most affected by the worker shortage.

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

#162

Post by medvezhenok » Tue, Nov 09, 2021, 4:21 AM UTC

RC_ITR wrote: post #54

bezalmighty wrote: post #48

Earlier quoted context omitted.

In the macro economic sense, fiat money isn't 'used up' or 'locked away' when you buy something like crypto, it's transferred from your account to someone else's bank account. Worse, it goes through the process of fractional reserve banking and multiplies about ~10x after changing hands repeatedly.

The trickiest question in business that noone seems to get right: Q: How much money flows into "X" market? A: None, money flows THROUGH markets.

Yes, although you could argue that money that was transferred from a checking account to a brokerage account has « flowed into » a market, at least for the time it takes to settle any trades and for the counter party to withdraw theirs (since it will not be used for consumption)

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

#163

Post by danjayh » Tue, Nov 09, 2021, 4:23 AM UTC

adriand wrote: post #95

seemaze wrote: post #42

Earlier quoted context omitted.

"Governments transferred a massive amount of cash to households, more than offsetting lost income from COVID." I don't understand this calculation either. It does not fit my own experience, or anyone else I know.

Likewise. I mean I do seem to have more money than before but almost none of it came via government transfers. I think we got $800 for our kids because they were schooled from home for a year or whatever. The rest is just not having things to spend it on, primarily eating out and travel. I certainly agree that huge numbers of people here in Canada benefited from government money to replace lost wages but they were ma…

Wealthy? No. Flush with rapidly devaluing cash? Yes. A family of 5 with with 2 parents and 3 kids under 6 years old got a total of $19,300 (counting the monthly child credit payments), provided they didn't go over any of the arbitrary income thresholds.

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

#164

Post by medvezhenok » Tue, Nov 09, 2021, 4:24 AM UTC

garmaine wrote: post #141

nine_zeros wrote: post #27

Earlier quoted context omitted.

This is not even a joke. Crypto has absolutely helped absorb the inflation.

For every person buying crypto there is someone selling.

Yes, but the marginal propensity to consume matters here. If it’s an average person buying Bitcoin from a millionaire (or many such average people), it acts as a liquidity sink (since the millionaire has lower marginal propensity for consumption)

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

#165

Post by redis_mlc » Tue, Nov 09, 2021, 4:28 AM UTC

I've heard it expressed as, "This is not a supply chain, it's a supply line." meaning the US is not receiving components to build with or assemble, but finished goods to consume.

It's a sign of weakness.

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

#166

Post by kevinmchugh » Tue, Nov 09, 2021, 4:29 AM UTC

RC_ITR wrote: post #85

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…

What everyone is going to have a real hard time wrapping their head around for the next few years: We built a highly efficient economy for a set of behaviors. A shock happened that caused a lot people to change their behaviors (probably for a long time, since they've had 2 years of 'practice'). Our economy, which was built for those old behaviors (living in cities, riding public transit, eating at restaurants, travel…

Didn't more Americans already live in suburbs then cities before covid? What percent of Americans were regular public transit riders?

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

#167

Post by EEMac » Tue, Nov 09, 2021, 4:30 AM UTC

asdff wrote: post #106

ClumsyPilot wrote: post #67

Earlier quoted context omitted.

Corporations and capital class had huge piles if cash, that douubled while real Economy stuttered during the pandemic. Noone is talking about the fact that share price and real estate is inflating. But for once there is pressure on wages, and suddenly people are running for the hills

5 year SPY chart is hillarious. Covid was seemingly a blip only a tad bigger than the blip in december 2018, we've been right back into the bull market trend for like a year now. The positive slope from march 20 2020 alone to today has just been insane, just a straight line up with hardly any deviation. So amazingly bullish. Fear doesn't exist in the markets anymore, we've seemed to have abandoned it. Just buy your l…

The 1920s have something to say about markets that climb without reference to underlying production.

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

#168

Post by PaulDavisThe1st » Tue, Nov 09, 2021, 4:31 AM UTC

rsj_hn wrote: post #153

RC_ITR wrote: post #85

Earlier quoted context omitted.

What everyone is going to have a real hard time wrapping their head around for the next few years: We built a highly efficient economy for a set of behaviors. A shock happened that caused a lot people to change their behaviors (probably for a long time, since they've had 2 years of 'practice'). Our economy, which was built for those old behaviors (living in cities, riding public transit, eating at restaurants, travel…

> Natural gas extremely expensive? Let me introduce you to renewables, which btw are getting better and better every year. Shutting down a natural gas pipeline that people depend upon just before winter, and then lecturing them about solar panels is not a good look. Artificially increasing the price of natural gas causes famines, it causes food and fertilizer to be more expensive, and it makes it hard for people to h…

The Michigan pipeline shutdown has been discussed for most of this year; back in May the MI governor began her attempts to shut it down by revoking easements issued to the operator.

It's not honest to characterize what has been happening in the last few weeks as a last minute action by the administration "just before winter".

It's also not honest to focus exclusively on the costs of the pipeline being shutdown without also considering the potential costs of it staying open. I'm entirely open to someone presenting the case that the costs of shutdown vastly outweigh even the worst projected cost of it remaining open, but if you're going to present that case, do it while being aware that there are people (including the MI governor and various Indian tribes) who don't agree with this assessment.

MI voted for Biden in 2020, its US HoR representation is split evenly between both parties, and both US Senators are Democrats. If you're suggesting that those in favor of carbon credits and higher gas taxes might lose representation if this pipeline is closed, maybe make that case more explicitly.

Also, it's not unambiguously clear that winning battleground states like Michigan is synonymous with winning Michigan, nor that it's necessarily required at all given the steady drifts of some red states into the purply-blue zone.

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

#169

Post by EEMac » Tue, Nov 09, 2021, 4:32 AM UTC

asdff wrote: post #135

Jensson wrote: post #25

Earlier quoted context omitted.

USA never stopped consuming, they just import more and more. Trade balance is even more negative now than before the great depression, there should be a correction happening real soon: https://tradingeconomics.com/united-states/balance-of-trade

We can't afford not to import goods. The cost of manufacturing in the U.S. are too high relative to other parts of the world. Can't do anything about that on our end of the deal short of tarriffing ourselves into total economic isolation and being forced to produce everything nationally.

That would be terrible. /s

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

#170

Post by edmundsauto » Tue, Nov 09, 2021, 4:32 AM UTC

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…

Looking for “why” is often a path to becoming more fragile and/or frustrated.

I do a lot of split tests (a/b testing). People always want to know why a treatment worked. I believe this is human nature.

However, the answer to any specific situation is generally unknowable. I may have only changed one color and gotten way different results, but there could be a billion or a trillion situation dependent factors that cause the situation to happen. It is pure chaos.

But our brains latch onto our cognitive biases to scaffold a reason, such as “because people find blue more reassuring than red.”

This is not generalizable, but more importantly: it probably doesn’t matter in order to resolve the decision that was the reason for the test.

Since then, I have accepted that seeking the “why” is generally a fools errand, unless you are doing pure science in a controlled, closed-input system.

That’s the beauty of not asking why. It’s a competitive advantage.