Economics and current events, no-tweet, no-tiktok: you posted a damn advertisement

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Economics and current events, no-tweet, no-tiktok: you posted a damn advertisement

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

I think a key issue here is that the large uninsured depositors at SVB have been portrayed to be these poor innocent babes who only wanted a checking account. Can Roku not afford risk managers that can evaluate a banks balance sheet? Doesn't seem like these companies were complaining when they were getting savings yield on their millions in deposits or white glove banking services from SVB like preferred access to low-rate lending.

To me the takeaway is maybe we need to divide the fractional banking system into two regulatory regimes. One in which large depositors keep payroll reserves in banks funded by low-risk financing sources such as fees or short duration treasury bonds but accept little/no yield on holdings, and another where deposits generate yield but accept that comes with risk. Backstopping the whole system with blanket FDIC insurance seems crazy. We shouldn't be treating large deposits funding payroll the same as those that are seeking yield.

And if you want loving yield, you accept the loving risk. Banks can compete in this regime and large depositors can decide how to allocate their cash piles. Picking and choosing which banks win, and writing them blank checks, is the worst of all possible worlds, it's anti-competitive crony-ism. We need competition in the banking sector and unfortunately right now every bank smaller then SVB should be quaking in their boots

hobbez fucked around with this message at 01:51 on Mar 18, 2023

# ¿ Mar 18, 2023 01:39

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# ¿ May 18, 2024 13:02

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Jamie Dimon is trying to cobble together another rescue of first republic bank today. FRB is down ~90% from only a month ago.

Starting to question if the extreme rescue packages, both private and public, we've seen so far are going to stabilize the banking system sufficiently. Not only in the short term, but on a long term enough basis for the Fed to continue to do the hard and destabilizing work of fighting inflation.

Too much smoke, just feels like there have to be more fires out there

# ¿ Mar 20, 2023 18:26

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Hadlock posted:

Goldman predicting a 5-20% drop in home prices over the next 12 months

Paywall'd...

quote:

Developed economies across much of the world are still passing through home price corrections. At least that�s according to an article published this week by researchers at Goldman Sachs.

The article titled �Why the global housing market has further to slide,� argues that spiked mortgage rates will keep housing markets in countries like New Zealand, Canada, and the United States in correction-mode through much of the year.

�Higher mortgage rates are taking their toll on housing markets around the world, and sales and prices will likely remain under pressure this year in most G10 economies,� wrote Goldman Sachs economists. �After a surge in housing activity during the pandemic, home sales pulled back sharply in the second half of 2022, when rate hikes enacted by central banks caused mortgage rates to spike in most developed market economies. A contraction in housing starts, sales and prices has persisted this year and shows little sign of stopping.�

However, this home price correction won�t be even. Home prices in countries like New Zealand and Canada have fallen 16.2% and 15.8%, respectively, since their 2022 peak. While national home prices in the U.S. are down just 2.7% from their summer 2022 peak.

Unlike borrowers in countries like Canada, U.S. borrowers usually get fixed mortgage rates. That means they�re more insulated from mortgage rate shocks and less likely to list their homes because of sudden financial distress. That lack of supply, in theory, limits the downside in the U.S.

�Housing market tightness�as measured by the scant supply of homes available for sale�is having a large influence in many markets and should limit the downside of house prices to some extent,� wrote Goldman researchers.

By the time home prices bottom out, Goldman Sachs economists expect countries like New Zealand and Canada to be down 19%. While Goldman researchers predict U.S. home prices�which are currently down 2.7% from their 2022 peak�will see a peak-to-trough decline of just 5%.

On one hand, a 5% peak-to-trough decline would mark the second biggest U.S. home price correction of the Post-WWII era. On the other, that would be a drop in the bucket compared to the 26% peak-to-trough decline between 2007 and 2012.

"The team anticipates relatively tame [U.S.] home price declines there, on the order of 5%, owing mainly to its extremely low vacancy rate," wrote Goldman researchers.

Not to mention, if U.S. home prices do indeed fall 5% from the 2022 peak, national home prices in the country would still be up 34.1% from March 2020 levels.

There is one wild card: The economists say distress in the global banking sector could lead to tighter lending standards and cancel out tailwinds created by future declines in mortgage rates.

"Recent financial turmoil has increased uncertainty for the housing outlook as ongoing pressures could cause smaller banks to tighten lending standards, despite declines in long-term yields," wrote Goldman Sachs economists.

Goldman researchers expect weakened housing activity, coupled with declining home prices, to be an economic drag.

"Higher borrowing costs for homebuyers have weighed heavily on housing affordability and the full impact likely hasn�t been felt yet... The timing of the impact isn�t uniform across the world; differences in mortgage markets across countries can speed or slow the impact. Countries with higher shares of fixed-rate mortgages, for example, tend to experience delayed rate impacts," wrote Goldman researchers.

Between the first quarter and fourth quarter of 2022, U.S. private residential fixed investment (i.e. housing GDP) fell 12.3%. But weakness in the housing sector hasn't triggered a recession.

"The housing declines around the globe are going according to plan... The strong housing market response to rate hikes has helped slow overall growth below trend without causing a recession or triggering a rise in delinquencies in most major economies," the economists wrote.

U.S. prices only falling off by 5%, peak to trough. Pretty astounding given how absurd the peak was. I guess that's what you get when people are rushing to borrow mortgages of 500k+ at 2.5% rates. That cheap, lended money is locked into the system and the housing supply shortage ain't going anywhere any time soon.

hobbez fucked around with this message at 17:53 on Mar 27, 2023

# ¿ Mar 27, 2023 17:51

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

hypnophant posted:

man there are like three whole forums just for doomposting

I was hoping this thread is more about commenting on the state of things, making projections, and just kind of pseudo-academically observing. Naturally there�s a lot to be concerned about with the economy, but discussing that isn�t inherently doom-posting

I don�t think we�ll see cheers for BLOOD here, at least

# ¿ Mar 27, 2023 19:58

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

De-dollarization seems overhyped. I think it�s a long term concern, but a very long term one.

Especially when you consider the Chinese peg their currency to the dollar. The idea of the Yuan being a threat to the primacy of the dollar is laughable in that context, let them allow their currency to float freely and see how much appetite there is for Yuan then

Edit: I mean yeah the second of those two aier articles basically says �yea we wrote an article about de-dollarization but it probably wont actually happen because USD is so systematically integrated and has highly optimized markets so don�t worry about it. Maybe don�t weaponize SWIFT tho or other countries could get mad�

It�s a doomer pipe dream. And any problems with the USD or the American fiscal situation needs to be weighed against the state of other countries economic houses, which face similar or greater troubles then our own

hobbez fucked around with this message at 16:46 on Apr 22, 2023

# ¿ Apr 22, 2023 16:35

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Hadlock posted:

Oh, so I just looked at the wiki page for the nonprofit that published the first two articles I linked. They are a conservative think tank. I just assumed "American institute for economic research" was an arm of an economics peer reviewed journal. The opposite really

https://en.m.wikipedia.org/wiki/American_Institute_for_Economic_Research

As if we aren�t already alert to your neocon shilling, hadlock

# ¿ Apr 23, 2023 02:49

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Leperflesh posted:

that article is paywalled; are these seasonally-adjusted numbers? Because if not, well, price rises in May as compared to the winter don't necessarily translate to a recovery in prices "this year".

In my area, Denver metro, nominal prices from March to April appreciated about 2.5%.

6% off the highs of Spring/Summer 2022 but those were real goldrush highs.

There's just no inventory.

# ¿ May 4, 2023 21:01

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Leperflesh posted:

What CEOs are openly admitting is that they are able to raise prices due to scarcity and that their costs have not actually risen to match, so they're generating profits.

This is not the same thing as CEOs suddenly realizing in 2020+ that they could raise prices and generate profits, like that that's a thing. No. It's that in an environment with a supply restriction not based on rising cost of supply provides a new equilibrium of supply & demand, e.g, a higher price that the market will bear, that the companies can sell into, and that generates more profit.

Perhaps the most obvious and clearcut example is oil. Exxon's costs to extract oil did not go up, but the global price of oil went up as supply became restricted. Exxon sold just as much oil, at a higher price, with not particularly higher costs, and therefore loads of money in profits. This is not "causing inflation", it's participating in inflation caused by the loss of russia's oil on most of the world's market, plus the loss of a huge amount of shipping capacity during lockdowns, among other factors.

Excellent description.

Private corpos charging as much as they can for their product isn�t new.

This is only not the case with monopolies which is� another topic

# ¿ May 6, 2023 04:58

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

err posted:

Can someone explain why U.S home prices rose for the 5th consecutive month in May? Is it because there is no inventory? What would a soft landing/interest rate pause look like on home prices?

Yeah maybe interest rates will eventually start to bite into housing prices but i think rates will have to stay "higher for longer" before that process takes hold, maybe at least another year or two+. AT LEAST. If rates drop anytime in the next couple years i think prices continue to balloon from there

In the short run, it just seems that supply continues to exceed demand.

Impossible to predict, fools errand truly, just depends on what inflation does, far too many extrinsic factors

# ¿ Jul 26, 2023 05:12

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Cyrano4747 posted:

Hypothetically the price of housing should be tied to the interest rate, because as you said at the end of the day the monthly payment is what matters to people. The problem is that prices haven't come down despite rates going up, which means that a house that was $400k at 2.5% is just hilariously unaffordable at 7%. Ignoring insurance and taxes etc, just the raw loan, you're looking at about $1600/mo vs $2700/mo.

There are a lot of different opinions out there about why that decoupling happened - lack of building, increase in cash buyers insensitive to rates, increase in corporations (cash buyers) building rental property portfolios - but at the end of the day whatever the root cause it's a supply problem. Available houses are limited enough that the people competing for them can all afford those higher monthly payments.

Part of the issue with that limited stock is that we have a fuckload of people who bought houses in the last 10 years at very low rates. In the example above, if you have that 2.5% loan there's nothing for you to upgrade to that's even remotely as affordable on a per-month basis as your current mortgage. We're just not going to see that normal churn of people moving to be twenty minutes closer to a new job or to change school districts or upgrade the size of their place when they have their 3rd kid, and that also affects how much supply there is on the market.

Average rates hit 8.5% this week, shits getting ridiculous

I think it�s going to hit prices slowly at first (the phase we�re in presently) and then, perhaps, very quickly

Or just a continuous and prolonged slow sideways/down drift, who knows

# ¿ Sep 29, 2023 22:14

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Hadlock posted:

Until the economy settles into a more stable state I predict the housing supply will stay tight enough to support current price levels but I have nothing to back that up. If you bought your house at the peak of the market in 21/22 at 3% there's no real way to exit without eating a huge loss AND bigger monthly payment right now

In the house buying thread there's a graph that shows the new England housing market and it is just totally flat from like 1990-98

Seems like everyone is resigned to sit on their hands until mid 2024 and wait until the party stops when the Fed loosens the purse strings

I just think at these rate levels the demand side could start to crumple.

Low supply only matters if purchasing power and demand is there

# ¿ Sep 30, 2023 16:01

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Lots of handwaving this problem away itt with hypotheticals like the US suddenly taxing an additional 8% of GDP or doing away with corruption/misappropriation of funds (lol). I really don�t think Subvisual Haze is totally off the map here.

And so what if OECD countries tax GDP at an 8% higher rate than the US. Isn�t that funding single payer healthcare systems and other broad social safety nets? Not just, ya know, servicing debt interest?

MMT is also a pipe dream, there is no free lunch. The Congressional Budget Office expects interest payments to make up 6.7% of GDP by 2053. By that measure, US debt interest payments will become the single biggest federal expenditure by 2051, when it eclipses Social Security.

I don�t know what it means when the US can�t service its debt obligations but I�m not particularly eager to find out either. Are there solutions? Sure. Will they be implemented? That is the hard part and has yet to be seen

# ¿ Oct 7, 2023 03:56

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

pseudanonymous posted:

You're solidly on the side of "economists" who use excel (doesn't float enough integers) badly to build economic models.

https://www.businessinsider.com/reinhart-and-rogoff-admit-excel-blunder-2013-4

It's weird how the people making these kind of claims about deficit borrowing always want to cut social services and are also incompetent. You're in good company.

Also lol that your forecast of the future says the major problem facing the US economy in 30 years is going to be excessive borrowing.

When did I say I want to cut social services? When did I say it�s �the major problem.�

You�re free to make a counter argument any time, all I see is a list of complete non sequiters

# ¿ Oct 7, 2023 12:25

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

https://budgetmodel.wharton.upenn.e...iscal%20policy.

quote:

We estimate that the U.S. debt held by the public cannot exceed about 200 percent of GDP even under today�s generally favorable market conditions. Larger ratios in countries like Japan, for example, are not relevant for the United States, because Japan has a much larger household saving rate, which more-than absorbs the larger government debt.

Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies.

This time frame is the �best case� scenario for the United States, under markets conditions where participants believe that corrective fiscal actions will happen ahead of time. If, instead, they started to believe otherwise, debt dynamics would make the time window for corrective action even shorter.

Does it make me a "debt hawk" if I am worried that the united states is at increasingly high risk of one day defaulting?

# ¿ Nov 6, 2023 16:38

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

drk posted:

There's no reason for default when the government can print the same money that its debt is denominated in.

The bigger risk is uncontrolled inflation.

Well, yeah, money printing is a bad solution to a bad problem.

Inflating the money supply is not a solution

# ¿ Nov 6, 2023 17:36

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Leperflesh posted:

I do think we will raise taxes and lower spending sooner or later, though, because I expect both politicians and the public to be increasingly alarmed by the size of the national debt compared to GDP.

Right, so, you agree. My concern is we won't. I don't feel reassured by the leadership in Washington. Cut's to spending or tax increases anywhere are both political 3rd rails. When your career exists in 2-4 year election cycles, there's no incentive.

The model referenced in that article isn't well described at all. I can't/won't make an argument for or against it. There's plenty of other evidence the debt is getting out of hand. By 2050, servicing debt interest will be the single largest government expenditure. At some point, this is simply unsustainable.

Hypnophant posted:

https://en.wikipedia.org/wiki/Seigniorage#Seigniorage_as_a_tax

Why not? Inflating your way out of debt is a viable solution for currency sovereigns who don�t trade much, like the us. It doesn�t solve the fiscal deficit of course, but that could easily (not politically easy) be addressed by raising the tax take to the oecd average

Totally debasing the currency in the process? No rational actor would ever want to do business in dollars again. Who would take a loan denominated in dollars when subject to such heinous interest rate risk? Anyone holding dollars would have their lunch eaten. Not to mention, anyone seeing it coming would abandon their dollars immediately. "Hyperinflation" is a gold bug boogieman, but, if you want hyperinflation, this is how you would get it started!

pseudanonymous posted:

The conservative �theory� is always that this will lead to a rampant inflationary cycle but it�s always a projection years away. Strangely the obvious corollaries, cut military spending, raise marginal income tax rates on the wealthy, the best sources of expense reduction and revenue generation with least marginal impact on the overall economy, never follows.

It�s somehow always cut the safety net, and bullshit about a Laffer curve (never empirically demonstrated). The same garbage got touted 10 or so years ago about debt:GDP ratios by country and growth, and it turned out the �economists� were using excel and couldn�t even do that right.

You're talking about politics. It's not really a counter argument at all. From a liberal or leftist perspective, a reason that this issue is so concerning is that the United States is bankrupting itself whilst already having such drastic deficiencies in it's social services.

Lockback posted:

20 years ago the financial/macro problem was the tech bubble proving to not be dependable and unemployment would be rampant in 2023.

20 years before that it was the threat of Japan taking over the US economy.

Maybe so, but I feel that this issue has a higher degree of certainty of becoming problematic then the ones you cited. Calculating interest on a growing deficit is arithmetic. You just do the math and you see where it leads. It's not that nothing can happen that would disrupt this process, but we also have to make decisions on the best available evidence.

Overall I don't really buy that just because the problem is "far away" makes it any less of a problem. It's like people that references the ozone layer in reference to solving climate change. Just because that problem got solved doesn't mean this one will too.

hobbez fucked around with this message at 05:25 on Nov 7, 2023

# ¿ Nov 7, 2023 05:16

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

hypnophant posted:

There�s an ocean between 2% annual inflation and 50% monthly hyperinflation. Plenty of functioning states run 10% or 20% annual inflation and nothing collapses

Are there? What are some examples? I think Argentina would be the historical go-to but their inflation issue is now running away from them.

Looking up the list of countries that run 10%+ inflation, it's not exactly a whose-who of economic prosperity.

quote:

Venezuela 9586% 14291% 12/19
Zimbabwe 676% 540% 03/20
South Sudan 36.4% 69% 01/20
Sudan 71.4% 64.28% 02/20
Argentina 46.9% 50.3% 03/20
Liberia 30.55% 30.9% Oct/19
Iran 22% 25% 03/20
Ethiopia 22.6% 21.8% 03/20
Angola 19.62% 18.74% 03/20
Haiti 19.5% 18.6% 08/19
Uzbekistan 14.5% 17.5% 12/19
Zambia 14% 13.9% 03/20
Sierra Leone 13.6% 13.89% 01/20
Rwanda 13.1% 13.5% 03/20
Turkey 11.86% 12.37% 03/20
Nigeria 12.26% 12.2% 03/20
Pakistan 10.74% 12.03% 03/20
Malawi 9.8% 11% 03/20

Hypnophant posted:

sure, the dollar would probably lose its status as the global reserve

It is kind of mind boggling that you hand wave this away as if it's NBD. This would be an extraordinarily inflationary event.

Most of the other counter arguments ITT are essentially "you just want to cut services" but unfortunately that doesn't really address the point. I will watch the "austerity myth" vid.

hobbez fucked around with this message at 02:47 on Nov 11, 2023

# ¿ Nov 11, 2023 02:40

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Agronox posted:

Inflation coming in pretty cool:

Headline CPI up 0.0%
Core up 0.2%

Eating more crow all the time. A year ago I thought the soft landing was impossible. Looking more and more likely all the time

# ¿ Nov 14, 2023 16:44

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

As someone preparing to sell/buy their home, I am LOVING this bond rally

# ¿ Dec 6, 2023 17:58

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

sticky sticky

NO TWEETS

hobbez fucked around with this message at 16:24 on Feb 13, 2024

# ¿ Feb 13, 2024 16:14

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

pmchem posted:

no tweets, and pics of full tweets are equivalent to tweets.

you got until i bother to pull up a browser to edit that into a link or quote some other source

My bad. I don�t really get that rule but my bad.

Wall Street Journal posted:

The Labor Department reported Tuesday that consumer prices rose 3.1% in January from a year earlier, versus a December gain of 3.4%. That marked the lowest reading since June.

Core prices, which exclude food and energy items in an effort to better track inflation�s underlying trend, were up 3.9%. That was equal to December�s gain, which was the lowest since mid-2021.

From a month earlier, overall prices were up 0.3%, and core prices were up 0.4%�larger gains than economists expected.

# ¿ Feb 13, 2024 16:26

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

mrmcd posted:

I'm probably an idiot who doesn't understand large numbers but this market reaction seems excessive for a CPI that's like 25 bps higher than what a bunch of Harvard professors guessed it would be.

Annualized, a .2% monthly miss on CPI is equivalent to an additional 2.4% increase in prices. It�s not a small miss.

Right now markets are shifting back from May to June for a first rate hike. I fear even that may be optimistic.

# ¿ Feb 13, 2024 16:33

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Bremen posted:

Do you mean a rate drop, or are people expecting more hikes?

No that is the market estimated timing of the first rate cut. If the fed has to go back into rate hiking mode, lookout!

# ¿ Feb 13, 2024 16:44

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Lockback posted:

The market isn't a single rational being. It's a big move but that might be because there's a ton of people making small moves. The miss isn't awful if its just this month but there's reasons to think it won't be just this month.

Rates are not coming down anytime soon though. Thats what I had suspected but now I'm pretty certain of it.

This is how I feel. It�s gonna be a long, slow process. The economy is too hot, unless something breaks out of nowhere.

Also a 1% decline is a big move? Pssshhh

# ¿ Feb 13, 2024 17:09

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# ¿ May 18, 2024 13:02

hobbez: Mar 1, 2012; Don't care. Just do not care. We win, you lose. You do though, you seem to care very much

I'm going to go ride my mountain bike, later nerds.

Four rate cuts this year? I�m starting to seriously doubt we will see that many, or even any at all. The data is all going the other way.

# ¿ Apr 5, 2024 13:52

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Economics and current events, no-tweet, no-tiktok: you posted a damn advertisement