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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

#441

Post by prawn »

tsywke44 wrote: post #258
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…

Remote work. Hundreds of millions of well-off middle class people gained 2 hours of extra time and energy per day from not having to commute. Thats equivalent to a population boom.

And that puts more people at home looking at their surroundings thinking about how it might make sense to upgrade. "Well, I'll be looking at this place another 7+ hours a day." Which then puts demand on various hardware supplies and tradespeople.

In our case, with the real estate market so hot, it makes sense to upgrade. Selling and buying a house has a stamp duty here of $50k on a $1m house, meaning it's fairly easy to justify $50k on internal renovations (updating bathrooms, flooring, etc) rather than upping and moving.

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

#442

Post by UncleMeat »

leereeves wrote: post #425
UncleMeat wrote: post #362

Earlier quoted context omitted.

Climate change is indeed a justice problem and we should optimize for justice rather than just raw temperature management. There are "solutions" that cause more injustice by denying efficient energy to the global poor. But the wealthy people who make this argument tend to argue for total inaction rather than a justice-focused approach where they sacrifice greatly in order to permit the global poor to have access to e…

It's difficult to believe the working class in America should bear the sacrifice when the richest people in the world just flew their private jets to a lavish climate conference thousands of miles from home to discuss how much the working class should sacrifice. Any sacrifice that is called for should start at the top.

Cool. I think you'll find that a large number of climate activists are very on board with pretty extreme policies pulling from the rich. The people calling it "superstition" tend to be people who don't support high taxes on the wealthy.

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

#443

Post by leereeves »

UncleMeat wrote: post #442
leereeves wrote: post #425

Earlier quoted context omitted.

It's difficult to believe the working class in America should bear the sacrifice when the richest people in the world just flew their private jets to a lavish climate conference thousands of miles from home to discuss how much the working class should sacrifice. Any sacrifice that is called for should start at the top.

Cool. I think you'll find that a large number of climate activists are very on board with pretty extreme policies pulling from the rich. The people calling it "superstition" tend to be people who don't support high taxes on the wealthy.

That may be true at the grassroots level, but I've never seen it materialize at the policy level.

Perhaps I've missed something. Could you cite an example of an actual (not merely theoretical) climate policy that pulls from the rich without hurting the working class?

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

#444

Post by asdff »

Jensson wrote: post #185
asdff wrote: post #135

Earlier quoted context omitted.

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.

But you can't just import goods without exporting anything forever, at some point USA needs to start to deliver value back to the rest of the world. Note that the trade balance includes services like ads etc, that is the entire thing.

We export plenty of things. We import tomatoes out of season from south america and sell them american milk.

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

#445

Post by asdff »

ev1 wrote: post #202
asdff wrote: post #109

Earlier quoted context omitted.

Nitpick but nothing grinds my gears more than people using niche acronyms without first defining them in long form, especially when its something like MP3 that's going to give you a million hits of the wrong result when you try and search for a definition.

In all fairness, the intended readership of that blog would know it. It's like handing a random technical Go or Rust post to a strictly-business non-technical person.

Even in my highly technical field we still define acronyms when they first appear in a manuscript, since while everyone works in the field maybe not everyone works in this specific niche and is familiar with all the jargon. Editors or reviewers will want to see it defined in long form. It's really just lazy writing to not do it.

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

#446

Post by asdff »

Jensson wrote: post #211
asdff wrote: post #194

Earlier quoted context omitted.

If anything the great depression supported this thesis of stocks always going up, and you can safely forget sweating the actual underlying economics. If you held through the crash or bought at the bottom you'd obviously be doing fine. Look at this chart (1). Seem familiar? Looks a lot like the great recession or March 2020 to me: a big plunge that took headlines followed by an unstoppable bull trend, in this case one…

USA losing its status as the world leader might change that trend though. Before the pandemic it could be a few decades away, but now? Possibly within even just a few years, if that happens I wouldn't want to be among those having my savings in American stocks.

Where would you even put your money? There is no alternative. The NYSE and the NASDAQ have a combined market cap of 50 trillion dollars. The next largest exchange, In Shangai, has a market cap of 7 trillion. Euronext is also 7 trillion. JPX is 6.7 trillion. It's clear the world is parking their money here. They aren't going to put it elsewhere. We are the global marketplace.

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

#447

Post by asdff »

wing-_-nuts wrote: post #406
EEMac wrote: post #167

Earlier quoted context omitted.

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

My good man, stock prices have reached a permanently high plateau!

They have been saying this every single year since 2010. If you bought into that mentality you'd be broke. If you ignored it you'd be up hundreds of percentage points today.

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

#448

Post by nostrebored »

jaggs wrote: post #434
irthomasthomas wrote: post #318

Earlier quoted context omitted.

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 Rom…

The IPCC does not make predictions. Never has, never will. The whole point, which real climate scientists repeat as nauseum, is we can never know absolutes because of the huge number of variables and timeframes. So what they do instead is provide scenarios. And each scenario has a series of weightings or probabilities. The summaries spell these out in rough terms, the full reports go into intricate detail and sources…

Thousands of researchers making predictions with ever shifting probabilities is what you call unfalsifiable.

The predictions we’re talking about play out over decades. The sources cite other predictions. It’s a feedback loop of assumptions and peer review from people who you know already share the same assumptions.

Climate science is much more akin to sociology than a hard science.

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

#449

Post by asdff »

300bps wrote: post #343
asdff wrote: post #197

Earlier quoted context omitted.

Not everyone is a homeowner and on top of that not every homeowner has refinanced their home during covid. I don't think people are borrowing money to buy toilet paper or a golf club. How do lower rates for corporate loans affect behavior that's at the consumer level? I'm trying to understand this relationship better.

Picture two scenarios: Scenario 1: Fed buys $20 billion of corporate bonds per month from Microsoft. Scenario 2: Fed does not buy $20 billion of corporate bonds per month from Microsoft. Consider all other things being equal, in the first scenario Microsoft's borrowing costs are drastically reduced. This means that Microsoft has more money. This means that Microsoft is able to hire more people, that the people that w…

But do we see this trend, that companies are using these corporate bonds to hire more staff or raise wages vs just buying more of their own stock?

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

#450

Post by asdff »

perpetualpatzer wrote: post #336
asdff wrote: post #196

Earlier quoted context omitted.

People are borrowing money to buy toilet paper and golf clubs? I think you are missing some details in the path from mortgage bonds -> your average consumer buying average consumer goods. I'm not being cynical or anything, I'd just like to understand this relationship a bit better.

I think it's less taking a loan to buy golf clubs and more "feeling less financially stretched makes people more willing to spend money." Example: Joe just had a kid and was going to buy a house in a good school district no matter the cost. With a higher mortgage rates, he'd have wound up house poor for a few years. With today's rates, he has a comfortable savings rate. Since he's not scrimping, he decides this month…

My understanding with housing is that is nearly always costs the same amount no matter what mortgage rate is, so in times of high rates list price is lower, times of low rates list price is higher, and adjusted for inflation the ultimate montly payment of mortgage+interest remains about the same. Seems like if you bought today you'd have to cough up a huge down payment vs when rates were higher, and its this initial costs from things like down payment and paying pmi that makes people initially house poor.
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