How This Ends • Hacker News Board

Re: How This Ends

#541

Post by greedo » Mon, May 23, 2022, 2:05 AM UTC

lettergram wrote: post #313

matthewaveryusa wrote: post #185

Earlier quoted context omitted.

Genuinely curious : Russia’s GDP is < 10% that of the US or China. What’s up with this fascination with Russia (economically speaking — the humanitarian tragedy they are creating is a different topic)? The only question is if they align with the west or with china —-they’ve already lost as a super power, and their best strategic choice is to become a prized and expensive proxy between the west and china. The thing is…

All GDP is not equal. As an example, Ireland’s GDP was ~1/3 tourism, with covid they lost that GDP. Russia GDP is primarily raw goods, commodities. They also have a decent domestic market for manufactured goods. Look up the global production of wheat, natural gas, oil, etc and look for Russia and Belarus. To put it bluntly, USA GDP is a mix and has everything from commodities to information tech to finance. Russia is…

How anyone can look at how the war is going in Ukraine and think that it's any measure of success for Russia is simply not basing this in reality. Russia has already been decisively defeated in Ukraine. Their success is taking Mariupol is like if the US invaded Tijuana and then got stopped on the way to Ensenada. And what Donbas encirclement? The Russians "started" trying to encircle the Donbas in February. They've had no fundamental improvement in their position in the region since then, in fact, their facing their own issues with their defeat in Kharkiv.

Re: How This Ends

#542

Post by lumost » Mon, May 23, 2022, 2:08 AM UTC

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

It’s worth bearing in mind that the experience of those living through your extreme scenario will vary greatly based on age.

Someone just starting their career benefits from cheap assets, high rates mean down payments will probably be cheaper, stock declines don’t matter if you don’t hold stocks. High inflation means their wages relative to debts such as student loans or first mortgages will increase.

Retirees with fixed incomes might get crushed. These folks were pushed into stocks and alternatives due to low interest, declining assets remove income and high inflation reduces the real value of the income.

There are a lot of people in between who will experience churn. However given the current demographics of the US, having two groups experiencing different versions of the economy will pose political as well as economic challenges.

Re: How This Ends

#543

Post by lumost » Mon, May 23, 2022, 2:11 AM UTC

pas wrote: post #539

nl wrote: post #520

Earlier quoted context omitted.

US 10 year bond rates are 3.1%. The one time in history they have gone beyond 10% it took 2 years to go from 7.32% in Sep 1977 to reach 10% in October 1979, and then peak at 15% in 1981. It's not impossible bonds will reach 10% again. But it seems unlikely, and it seems safe to think it would take 3+ years to get there. https://www.macrotrends.net/2016/10-year-treasury-bond-rate-...

OP probably meant corporate bonds? (otherwise I also think it's just wildly unrealistic)

OP may have speculated on outlook for the next decade, it’s possible that interest rates rise and inflation remains. This would be the case if inflation is not a domestic phenomena land is instead driven by war, china, and tariffs.

Re: How This Ends

#544

Post by lazide » Mon, May 23, 2022, 2:14 AM UTC

PaulDavisThe1st wrote: post #522

lazide wrote: post #510

Earlier quoted context omitted.

The only reason there is a housing shortage is because there is an excess of jobs and money in that place. Which is changing. Houses in sunnyvale went from 750k-1m and impossible to find one for sale to 350k (yes really!) and on the market for years around ‘08.

> "an excess of jobs and money in that place" Nope. For one thing, there's the largest generation of the 20th century at peak retirement, cashing out of family houses that have gained huge amounts of value, and looking to move to amenity-rich locations. For another thing, the investment industry, short of other options, has started buying houses to rent them (short or long term), squeezing supply and driving up price…

All of the effects you name are only happening because of inflated values driven by cheap money. Literally every, single, one of them.

Re: How This Ends

#545

Post by lettergram » Mon, May 23, 2022, 2:15 AM UTC

greedo wrote: post #541

lettergram wrote: post #313

Earlier quoted context omitted.

All GDP is not equal. As an example, Ireland’s GDP was ~1/3 tourism, with covid they lost that GDP. Russia GDP is primarily raw goods, commodities. They also have a decent domestic market for manufactured goods. Look up the global production of wheat, natural gas, oil, etc and look for Russia and Belarus. To put it bluntly, USA GDP is a mix and has everything from commodities to information tech to finance. Russia is…

How anyone can look at how the war is going in Ukraine and think that it's any measure of success for Russia is simply not basing this in reality. Russia has already been decisively defeated in Ukraine. Their success is taking Mariupol is like if the US invaded Tijuana and then got stopped on the way to Ensenada. And what Donbas encirclement? The Russians "started" trying to encircle the Donbas in February. They've h…

> Russia has already been decisively defeated in Ukraine.

Ugh, then the war would be over.

I think the media creates a large set of biases. Recall, much of the media around this is banned. Here are some channels / people I’d recommend for various insights:

- Military and Foreign Affairs network (former American tank operator) https://m.youtube.com/watch?v=DH6i0fJHLHw

- The Duran (two Greeks, former attorneys and part of ambassador families) https://rumble.com/c/theduran

- Patrick Lancaster (crowd funded American journalist embedded with DPK militia) https://m.youtube.com/c/PatrickLancasterNewsToday

- obviously the CNN, MSNBC, and other three letter news agencies

There’s others, but those are some decent alternatives to get a general idea what’s going on.

Re: How This Ends

#546

Post by greedo » Mon, May 23, 2022, 2:17 AM UTC

lettergram wrote: post #484

axiosgunnar wrote: post #471

Earlier quoted context omitted.

> I see Russia winning on all fronts tbh. I do not, and anyone else not trying to be contrarian and edgy on the back's of a humanitarian catastrophe does not either. Russia's goal was a blitzkrieg surprise win, measured in hours, taking over the capital and the government, before the West could even muster up sanctions. They have failed abysmally at that, and capturing a few towns in Eastern Ukraine (just a little bi…

> do not, and anyone else not trying to be contrarian and edgy on the back's of a humanitarian catastrophe does not either. Russia's goal was a blitzkrieg surprise win, measured in hours, taking over the capital and the government, before the West could even muster up sanctions. Where does that assumption come from? No Russian source has ever said that. The only sources I’ve seen were the US propaganda arm. Putin sai…

To say your "facts" are in error is to say water is wet.

Russian started the war with roughly 100 BTGs. These have roughly 1k troops when fully equipped (as you would expect before the start of hostilities). They've added another 10-15 BTGs to replace the 45 or so that have been attritted by Ukrainian forces. So no, they didn't expect to conquer Ukraine with 50K troops, but closer to twice that.

RuAF also tried to decapitate Ukraine by seizing Hostomel with airborne troops, and then rushing Kiev with troops located very closely in Belarus. You don't commit airborne troops like this when you don't have a)strategic surprise, b) tactical surprise, c) air supremacy. Russia expected a quick coup de main, and when the VdV got wrecked in Hostomel, they lost the war.

Since the invasion in February, Ukraine has recovered most of the territory they lost in the north. In the south, the RuAF has made minimal gains past the lines of the 2014 conflict.

You believe that Ukraine has lost most of their military assets? They currently have more tanks than when the war started, due to how many they've captured from Russia. Not to mention what has been contributed by NATO (Poland/Czechia etc.). They still have a well functioning and effective air force that has prevented the Russian air force from exerting control over the battlefield. They even managed to sink the flagship of the Black Sea Fleet.

Russia has lost over 30k dead, and roughly 3x that as WIA. Over 1000 tanks. Over 350 aircraft (counting helicopters). Thousands of BMPs, MTLBs, BMDs, artillery, trucks, all destroyed. The RuAF has culminated.

All Russia has achieved is shelling indiscriminately. They haven't shown the ability to hold terrain, to resupply their troops, to prevent the Ukrainians from doing anything they want. They couldn't even reduce Mariupol's garrison for three months.

Russia's military, outside of it's nukes is a Potemkin affair.

Re: How This Ends

#547

Post by pas » Mon, May 23, 2022, 2:17 AM UTC

polynomial wrote: post #351

fny wrote: post #24

I'm going to explain what has happened so far. What happens next entirely depends on how inflation continues and the feds reaction. 1. We had zero percent interest rates. This causes the value of assets with cash flows out into the future (think speculative tech, Tesla) to accelerate. 2. We had massive herding in megacap tech. These valuations are high in part because for a decade you would not have beat the index wi…

> Bonds will be wrecked, stocks will be wrecked, cash is wrecked, even gold I'm sorry to be that person, but what sort of effect if any might that have on crypto markets?

people withdraw into conservative assets (relative to what they have their future outgoing cashflows, ie. if they have to pay for food in dollars, they'll hold dollars to minimize risk of exchange rate shifts)

and to cause a dam burst it's enough for a trickle of retail investors to start doing this. and .. bam. you saw the last few weeks. (as others notice that there's less and less chance of making money they also withdraw to minimize risk)

Re: How This Ends

#548

Post by innagadadavida » Mon, May 23, 2022, 2:21 AM UTC

FollowingTheDao wrote: post #364

tenpies wrote: post #214

Earlier quoted context omitted.

Aside from the leverage issues other point out in RE, you have to consider the political risk. How safe do you feel that a piece of paper saying that plot of land is yours will hold up when there's a raging mob threatening politicians to do something about homelessness/housing prices/AirBnB/Asset managers holding all the properties? The political risk in the West is at Emerging Markets levels. We've seen G7 nations d…

I can’t tell you how much I hope they crack down on people owning multiple houses. It’s just criminal. Not only do they own two houses but instead of renting it at market rate they put it on Airbnb an inflated price three or four fold. The truth is under capitalism everyone cannot be a Capitalist. Please, I need you to think deeply about that last sentence. It’s not as simplistic as it sounds. Until we treat housing…

As per some recent estimates SF commercial vacancy is over 2M sqft - this roughly translates to 2000 full apartments - more if we build dorm-rooms. We have a similar situation in other parts of CA. Is there any reason why we cannot solve homelessness by re-zoning these to temporarily to house them? Post COVID, people returning to office will be fewer. In addition if there is a recession, there will be fewer companies as well.

Re: How This Ends

#549

Post by lumost » Mon, May 23, 2022, 2:21 AM UTC

zarzavat wrote: post #532

BigBubbleButt wrote: post #500

Earlier quoted context omitted.

Honestly, that's really not that important for what I was saying, because we're talking about the Fed. The Federal Reserve can choose to fight inflation or it can choose to inflate assets, and that lies on a spectrum. The "why" of inflation isn't nearly as important as the severity of it. If inflation is at 10% you're not going to debate it before doing something about it - that just allows the situation to fester in…

Inflation is still going up because there’s a war between Ukraine and Russia. This has caused food and energy prices to skyrocket. The Fed can raise rates to 69% but it’s still not going to cause (say) the grain in Odessa to make its way to people’s stomachs. Is a certain amount of rate increase justified? Yes, you don’t want an inflation spiral to develop. Beyond that, we are going to have to live with a certain amo…

If it was just one item you would expect that consumers would cut back elsewhere. Instead we see that they can demand more wages, and companies can demand higher prices even if they are decoupled from wheat.

The latter is only possible if there is too much money in the system, the signal about wheat production gets lost. As the feds money printer doesn’t work evenly, those who are closer to it get more money. I can only speculate that eventually, like any corruption, the effect is to diminish productivity in the real economy in favor of a special class.

Re: How This Ends

#550

Post by pas » Mon, May 23, 2022, 2:24 AM UTC

mister_tee wrote: post #395

lamontcg wrote: post #334

Earlier quoted context omitted.

This has all happened before. In 1998 Greenspan cut rates due to the Asian financial crisis and worries over Y2K which blew up the dot com bubble. Then they slashed rates down to nearly ZIRP and held them low which blew up the housing and finance bubbles that deflated in 2008. None of this started in 2008. What is different this time is the wage inflation and the unionization drives that we're seeing. The Fed is like…

Not a direct response to the parent post but it had the most keywords in common with my question: >The Fed is likely to hike rates much more aggressively [...] I agree, and they're about to start letting the balance sheet run off too, though at half the rate they accumulated. My question for the wonks here: will it be difficult or expensive to hold rates above, even say, 5% for very long if needed? US national debt i…

one interesting argument: https://fullstackeconomics.com/sorry-deficit-hawks/ (though central banks can dictate rates anyway)