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

bridgewater.com

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

#311

Post by throaway46546 »

consp wrote: post #300
throaway46546 wrote: post #299

Earlier quoted context omitted.

>Some lockdown policies directly affect your 'need for stuff' I think this was the root cause of the toilet paper shortage. People who normally spend a large portion of the day at the office were now spending that time at home. There was a popular viral video at the time of a man driving around on a forklift in a warehouse full of toilet paper laughing about the shortage, but it was all commercial toilet paper not wh…

After the panic buy I've never seen a toilet paper shortage anymore. I therefore doubt your theory of correlation. Maybe it was so in the us but it definitely does not correlate for everyone.

It took forever for it to get back to normal here. There was limited TP available after the initial panic, but it took months to get anything decent on the shelves. I was ordering it online for a while.

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

#312

Post by multjoy »

throaway46546 wrote: post #299
ajsnigrutin wrote: post #281

Earlier quoted context omitted.

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

>Some lockdown policies directly affect your 'need for stuff' I think this was the root cause of the toilet paper shortage. People who normally spend a large portion of the day at the office were now spending that time at home. There was a popular viral video at the time of a man driving around on a forklift in a warehouse full of toilet paper laughing about the shortage, but it was all commercial toilet paper not wh…

The root cause is that toilet paper is bulky and the stores simply didn’t carry as much of it as (say) tinned goods.

It didn’t take a big demand increase to start seeing gaps in shelves, and once that happened a degree of panic took hold and even though there was plenty in stock in warehouses, it wasn’t able to be distributed fast enough.

The difficulty is that the big supermarkets have got their supply chain down to a fine art and it only takes a small fraction of people to start buying an extra here and an extra there for it to start having an impact and they then have to struggle to keep up.

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

#313

Post by stuaxo »

"governments transferred a massive amount of money to households".

This isn't true in the UK, yet the article mentions a lack of truck drivers here - that's more likely to be due to Brexit and then not wanting to come back after being treated badly last winter.

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

#314

Post by e-master »

watwut wrote: post #297
ajsnigrutin wrote: post #281

Earlier quoted context omitted.

Covid lockdowns have a a lot to do with that too. People used to spent their money in restaurants, bars, cinemas, theaters, parties, festivals, massages, hairdressers, and a bunch of other services. If you add lockdowns, many things happen: * people have leftover money, that they instead spend on "things"... and since they're used to using less services, this is also true for some time after the lockdowns * If you're…

I can confirm that lockdowns made our family save a lot more money then usual - despite us buying quite a lot of new stuff do to lifestyle changes.

My experience supports that - on public transit alone our family saved more than 5k USD last year, it would’ve more than made up for any equipment I would’ve had to buy (turned out though that I already had everything needed to work from home).

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

#315

Post by ignasl »

nuerow wrote: post #253
rsj_hn wrote: post #241

Earlier quoted context omitted.

> I'm not sure if you're just expressing your personal concerns over what you believe can hypothetically happen, or whether you're grossly misinformed. So do you have an argument to make, or just a stream of ad hominem followed by smoke and mirrors? You point out that oil and gas prices are high all over the world with a price gap between gas prices in the US and the rest of the world -- because gas is shipped overse…

> So do you have an argument to make (...) I already did. You made an unsubstantiated claim, and I pointed out your personal assertion was wrong and baseless, and provided a time history of gas prices as evidence, including the fact that not so long ago they were over 3 times higher than the current market price. If you have a problem with the facts feel free to point out what exactly leads you to believe that justif…

No, you are wrong.

>the fact that not so long ago they were over 3 times higher

They never were. You can check futures price data here: https://www.investing.com/commodities/natural-gas On top of that you're probably talking about those spikes in 2005 and 2008, but they were short lived and spikes are natural for gas markets because of various circumstances (seasonality, pipeline situation, weather, how full are the reserves etc).

>not so long ago It was 13 years ago! And now it's the highest price since. The reason for such a ridiculously low prices for so long was shale gas extraction. Now US is losing this and more. Because natural gas prices are so sensitive (and react quickly!) to various things - you better hope for warm winter with decisions like these...

Also comparing prices in US and in other countries is intellectually dishonest or you simply don't know how natural gas market works.

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

#316

Post by juanani »

Hol up, so we've been crying supply chain problems for a good few months now, and suddenly the consumers are at fault for overdemand? What did they think was going to happen come Singles day, Black Friday, Christmas? Kinda sounds like they are trying to reduce panic buying so it doesn't over escalate. Thankfully I am ignorant enough to simply enjoy this Phd level of mental gymnastics.

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

#318

Post by irthomasthomas »

throwaway210222 wrote: post #277
nostrebored wrote: post #266

Earlier quoted context omitted.

Your mistake is weighing superstition vs tangible harm. Eliminating fossil fuels will condemn large swathes of the living population to true poverty and kill many more. How do you think things like hospitals in the developing world run? And the infrastructure that lets them be created to begin with? The idea that we should eliminate fossil fuels is truly a privileged take.

> Your mistake is weighing superstition vs tangible harm. Care to share which of the thousands of peer-reviewed papers on the Intergovernmental Panel on Climate Change's website, you have: a) read b) understood c) found errors in d) brought to the world's attention? 500, 10, 1, ? I thought not. And yes, of course it sucks - no one wants this. You seem to think the unpleasantness of the diagnosis and remedy gives you…

The IPCC has been making dire predictions now for 3 decades. Can you point to any that came true?

Off the top of my head I know that

1. Glacier park was to vanish by 2020. Its still there, barely changed, some glaciers shrank, others grew.

2. Sea level didn't rise as expected.

3 Polar bears are strong, and are not on the endangered list.

4. Temperatures did not rise as much as expected. We are still way below the Roman and Bronze age warm periods.

5. Damage from weather has increased in America, but that is a result of a policy to rebuild, instead of abandoning areas prone to bad weather. Increasing the probability of being damaged by bad weather. Actual weather severity has not changed much.

6. In school, I was made to feel terrified of desertification. The opposite happened, the deserts retreated. The globe is greening.

As I said, that is off the top of my head, but it can all be backed up by data. Or prove me wrong. Can you show me a few ipcc predictions which actually came true? Thanks.

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

#319

Post by locallost »

I did not read too deeply into the article, but there are some things that don't add up.

1) if it's only a demand shock and production of goods is sky high, why are all the goods missing? Apple missed its projections and blamed it on supply issues. Did e.g. TSMC crank the production up, but failed to deliver for Apple? Hard to imagine. So if there's enough goods it implies that e.g. Apple didn't sell as much as expected, but this goes against the argument that there is so much stimulus money.

2) speaking of stimulus, despite the claim that it's a demand shock, the article makes this claim early on: The MP3 response we saw in response to the pandemic more than made up for the incomes lost to widespread shutdowns without making up for the supply that those incomes had been producing.

so which is it? supply or demand shock?

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

#320

Post by simonh »

throwaway4good wrote: post #303

We are doing double or triple ordering of goods not because of end-customer demand but because we fear our suppliers are not able to deliver. Our competitors are doing the same. At aggregate it may look like a “demand shock” due to too loose monetary policies but maybe it is not really what is going on.

That supposes that everyone, in all sectors globally has the resources to double or triple order. The money supply to do that has to come from somewhere though.

If you are right then this is a temporary shock and will subside quickly. If the article is right then this is a systemic problem that will persist for years to come. I suppose we'll see. One indicator to watch is services demand because I wouldn't have thought that would suffer from a 'grab the toilet paper while you can' effect.

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