Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How This Ends

avc.com

Post reply on HN
Print view View original

561–570 of 698 posts

Re: How This Ends

#561

Post by PaulDavisThe1st »

lazide wrote: post #544
PaulDavisThe1st wrote: post #522

Earlier quoted context omitted.

> "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.

Sorry, I find this ridiculous.

The boomers heading into retirement situation is a reflection of 40-50 years of economic policy and has no connection with recent "cheap money".

Actual investment in single family and apartment housing is almost entirely tied to its low risk/return ratio compared with (the perception of a lack of) other options for investment at this time. The money sloshing around for investment is as much as function of the effective privatization of retirement funding as anything else.

The short term rental market is in part the perfect expression of how a relativel small number of wealthy individuals can totally distort a market to follow their own preferences, and reflects income/wealth inequality and lack of regulatory enforcement (they're freakin' B&B's people!) as much as anything else.

Cheap money has almost nothing to do with any of them.

Re: How This Ends

#562

Post by YZF »

fny wrote: post #431
soared wrote: post #216

Earlier quoted context omitted.

Unless you’re retiring in the next 10 years, or planning on purchasing a house in the next few years, then just make your emergency fund a little bigger and hold on to your job. Follow your normal financial planning. You’re not going to outplay market trends, and if you’re young/middle aged then it doesn’t matter any way.

Yes it does. If you invested near the dot com peak or the japan peak, you still haven't made your money back. This notion of passive investing that has been pounded into peoples heads for years is complete bullshit and has only worked because there was always someone else ready to pay more for the same asset and because rates were perpetually held low. Some points to consider: (1) You have fewer millennials than baby…

If you went all in on the day the dot com peaked then you more than made your money back. You're up + dividends.

Re: How This Ends

#563

Post by nl »

ceeplusplus wrote: post #509
lupire wrote: post #308

Earlier quoted context omitted.

The only problem with that was not taxing the wealthy to shrink the money supply.

Taxing the wealthy does not shrink the money supply unless you destroy the taxed money (which as we all know, the government will never do). In fact, it's probably inflationary, since most wealthy people have their money invested into assets and therefore that money is not being actively spent, but the government is going to immediately spend it.

It's not inflationary since it just reduces a deficit budget position slightly.

Re: How This Ends

#564

Post by ModernMech »

another_story wrote: post #508
ModernMech wrote: post #324

Earlier quoted context omitted.

> but others were complete wastes of money, e.g. giving checks to families making 6 figures Remember that the cutoff for stimulus was from prior year's taxes. This means you could have been making 6 figures in 2019, and then be making significantly less due to covid job loss or reduction when stimulus was handed out. As a matter of fact, stimulus helped my family greatly even though we made 6 figures in 2019. So foll…

If you're making 6 figures you should have a decent sized emergency fund if you live in an excessively high CoL area, no?

Should is the operative word there. One could be in school for a while deeply in debt for a decade, get a 6 figure job in a high COL area right after graduating, then lose that job due to covid within a year. How would they have a decent sized emergency fund saved up? Why would such a family not be deserving of relief?

Re: How This Ends

#565

Post by killjoywashere »

kortilla wrote: post #524
lazide wrote: post #511

Earlier quoted context omitted.

In another 10 years most of the boomers will be dead.

That’s not how life expectancy works.

You're arguing that those who survived this long will survive more than 10 years. I mean, yes, but

1) food in this economy is still delicious so heart disease is still the cause of 50% of deaths, and

2) humans only have one copy of p53 from each parent, so everyone dies of cancer if Heart disease or doesn't get them first.

Given 1 and 2, the boomers are on their way out. My mom (born 1953) might make it another 20 years, but my dad (born 1945) is living on borrowed time (20 pk-yr history and cancer).

Re: How This Ends

#566

Post by YZF »

vintagedave wrote: post #171
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…

So for non-finance-experts, what should we be doing with our money? Investing in what? Keeping in the bank? It sounds from your comment like there is _nothing_ that won't be devalued, even gold. Is real estate worthwhile? (Note: I am in the EU not US.)

Long term your best bet is still stocks. Stocks naturally resist inflation- when inflation goes up earnings will go up with them. The current P/E is high but it's not insanely high. Sure, stocks can still go down 10% or 20% (or 30% or 40% though less likely) but your cash is also going to get eroded by that much over the next few years and at least you have a productive investment.

Whether real estate is worthwhile depends on your local markets. In some parts of Europe it might be. If you need a place to live, and you think the prices are reasonable (e.g. it's a market that hasn't seen crazy prices due to QE and low rates) and you can afford it then I'd definitely consider keeping in mind that it's also a long term play, not a short term one. If it's purely investment property the calculation is different.

Re: How This Ends

#567

Post by walleeee »

Buttons840 wrote: post #312
vintagedave wrote: post #171

Earlier quoted context omitted.

So for non-finance-experts, what should we be doing with our money? Investing in what? Keeping in the bank? It sounds from your comment like there is _nothing_ that won't be devalued, even gold. Is real estate worthwhile? (Note: I am in the EU not US.)

If all assets are dead, you can spend your assets now to improve yourself or family. If you've been wanting some time to go to school or pursue some other self improvement, maybe spend some assets now to do so. Education and skills are an asset like any other, and can also be devalued though. I wonder how personal skills will fare in the coming years?

> Education and skills are an asset like any other, and can also be devalued though

good point

some skills will fare better or worse than others, the question is which

Re: How This Ends

#568

Post by quickthrower2 »

FollowingTheDao wrote: post #370
thechao wrote: post #343

Earlier quoted context omitted.

Right; so my plan of having 60% of my wealth tied up in unvested stocks in a single company is really coming to fruition!

Oh man, so sorry.

Not really, if they go to zero, then he/she will be in the same situation as most (99.9%) of employees who get no stock.

Re: How This Ends

#569

Post by seanp2k2 »

ethbr0 wrote: post #322
jbay808 wrote: post #184

Earlier quoted context omitted.

RE is highly leveraged (people borrow money to buy it), meaning that it gets hit hard by rising interest rates.

New buying gets hit hard. In the US, fixed rate 30 year mortgages mean that a lot of existing owners are isolated from rates (albeit not from market price devaluations).

Don't forget CA Prop 13 [1]

Boomers all over Silicon Valley are still paying 1976 tax rates on their properties worth $2m+ now. Disneyland is a huge beneficiary[2], but ANY efforts to reform Prop 13, even just for commercial, are met with "slippery slope" arguments from the same boomer homeowners (and PR campaigns funded by real estate groups that benefit from it).

1: https://en.wikipedia.org/wiki/1978_California_Proposition_13

2: https://www.curbed.com/2020/10/prop-15-california-property-t...

Re: How This Ends

#570

Post by fnbr »

credit_guy wrote: post #446
zby wrote: post #409

Earlier quoted context omitted.

If they hike the rates too much then debt servicing would be costly. This is different from 1980, because back then US gov debt was about 30% of GDP and now it is 120% of GDP ( https://fred.stlouisfed.org/series/GFDEGDQ188S#0 ) What are the realistic values here? I have no clue, but a good analysis should cover this.

> If they hike the rates too much then debt servicing would be costly. The Fed doesn't care about the cost of servicing the debt. That's the US Treasury's job. By law, the Fed has the dual mandate to keep both inflation and unemployment low. That's it. Nothing to do with the cost of servicing the Government debt. If the interest on the Government debt becomes too high, nobody will point the finger at the Fed. If howe…

That’s just not true. The Fed will take into consideration all of the consequences of their actions. They’re not going to do whatever they want and put the country in historical depression.
Post reply on HN