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https://www.ft.com/content/62b70a23-ed5b-4cb2-b760-76aa9cc31180quote:EU finance ministers have bowed to German pressure for tough debt-reduction rules, as part of a deal to phase in a sweeping overhaul of the union’s budget framework. This is why there was so much furor in the EU over both bidennomics and the worries that the EU is falling behind the US. Europe seems completely unable to escape austerity. With the seeming success of big fiscal policy in the US to achieve the golden path of a soft landing, the european inability to do proper fiscal policy seems like a massive handicap in the modern global economy.
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Dec 20, 2023 20:02
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I think I understand why: germany especially, and also france etc. do not like to bail out the poorer EU members with their citizens' taxpayer money. The US does this too, of course, california and new york bail out poor states with enormous movements of taxpayer money from rich states to poor ones, but changing that is politically impossible whereas germany correctly sees it as something they can force. But boy is it self destructive because boy does austerity not work lol
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Dec 20, 2023 20:30
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I remember a decade or two ago, back when the idea of Brexit was unthinkable, that some EU-proponents argued that the UK leaving would actually be good for the union. They blamed the UK for the dumber economic decisions the EU made, and that without the anchor of London around their necks the EU would be free to pursue a more liberal agenda and become the powerhouse it was meant to be. Welp, turns out instead what we got was the Franco-Prussian All-Austerity Extravaganza.
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Dec 20, 2023 21:25
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Leperflesh posted:I think I understand why: germany especially, and also france etc. do not like to bail out the poorer EU members with their citizens' taxpayer money. The US does this too, of course, california and new york bail out poor states with enormous movements of taxpayer money from rich states to poor ones, but changing that is politically impossible whereas germany correctly sees it as something they can force. The flip side of this is, Germany with the deutschmark would never have had the export success it saw over the last two decades (and which is now smoke and ash, but regardless). Germany is wealthy today because it is in a currency union with Italy and Greece, not in spite of those countries.
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Dec 21, 2023 01:13
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hypnophant posted:The flip side of this is, Germany with the deutschmark would never have had the export success it saw over the last two decades (and which is now smoke and ash, but regardless). Germany is wealthy today because it is in a currency union with Italy and Greece, not in spite of those countries. There are a lot of problems with Germany and their heavy durable goods net export economy acting like every other EU country should run the same. They literally can’t, if France reproduced Germany’s economy, or other EU nations then Germany wouldn’t be able to sell all that stuff and their balance of trade would fall etc.. It’s urealistic and somewhat hypocritical really.
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Dec 21, 2023 01:36
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pseudanonymous posted:It’s urealistic and somewhat hypocritical really. I more or less always assumed that every major power in the EU knows the whole thing is just a means to eventually create weak US-style labor markets and a race to the bottom in wages/organization after they can kill off their own highly-paid labor through import of lower-cost free-movement workforces, plus preventing other nations from having protections against their more-developed export economies. Bonus points if you can blame the less-developed economies for the financial woes you inflict upon them in the process. But I am also an eternal pessimist/cynic.
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Dec 21, 2023 04:43
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Sundae posted:I more or less always assumed that every major power in the EU knows the whole thing is just a means to eventually create weak US-style labor markets and a race to the bottom in wages/organization after they can kill off their own highly-paid labor through import of lower-cost free-movement workforces [...] That assumption seems to be based more on racism/xenophobia than actual data, though. One of the things that really hobbled labor in the US was the anti-immigrant position of a lot of the major unions in the country in the later half of the 20th century, and the resurgence we've seen in the 21st century has been lead primarily by unions like the SEIU that have a larger share of immigrants among their membership.
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Dec 21, 2023 05:03
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LanceHunter posted:That assumption seems to be based more on racism/xenophobia than actual data, though. One of the things that really hobbled labor in the US was the anti-immigrant position of a lot of the major unions in the country in the later half of the 20th century, and the resurgence we've seen in the 21st century has been lead primarily by unions like the SEIU that have a larger share of immigrants among their membership. Fair enough; thanks for that. Probably channeling a good bit of my parents/grandparents in my post.
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Dec 21, 2023 05:20
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Sundae posted:Fair enough; thanks for that. Probably channeling a good bit of my parents/grandparents in my post. Yeah, it's definitely one of those positions that would appear progressive and pro-labor at first glance (hell, Bernie Sanders was pretty anti-immigration during his first presidential campaign), but is ultimately reactionary and harmful to labor. Free movement for capital without free movement of labor is the worst-case scenario for labor, because it puts labor at an inherent structural disadvantage. And at this point there's no way to put the globalization cat back in the bag. Even with the new trade barriers that have gone up in many places, technological advancement alone means it is still easier for businesses to work internationally now than at any other point in history.
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Dec 21, 2023 21:57
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LanceHunter posted:And at this point there's no way to put the globalization cat back in the bag. Even with the new trade barriers that have gone up in many places, technological advancement alone means it is still easier for businesses to work internationally now than at any other point in history. In the senior programmer thread it's almost a trope of "We're hiring offshore contractor programmers" and the response is "good luck surviving the first round of layoffs"
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Dec 21, 2023 22:23
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Eyes Only posted:To say that margins are the reason for inflation is in direct contradiction with the fact that margins are roughly in line with 2018 levels (when inflation was minimal), margins increased steadily during the 2008-2020 post GFC era (again, low inflation) and corporate profits/margins peaked shortly after inflation became a thing but have since dropped, indicating that corporations are in fact having to pay more to provide their products, which should be obvious since wages are up. Wouldn’t the most likely explanation be that there was a literal gently caress ton of money printed, and not the 99% getting a slight increase in walking around money? Durable good shrank, as production was diminished due to the lockdowns, and the money supply was massively increased.
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Dec 22, 2023 05:58
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QE was a big part of it, yeah. And supply shocks. For a clearer answer post a screen cap of the Fed household savings rate and total savings amounts I think people initially paid off credit card debt with the money, then yeah started buying stuff. With interest rates so high credit card debt has been creeping up in recent months
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Dec 22, 2023 06:52
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https://www.ft.com/content/d8d07ed4-d13b-49f2-b3ab-ffcb073a434e "A comprehensive round-up of all the 2024 investment outlook reports" available via free account. also at https://archive.ph/sOe5K links to pages/PDFs for all sorts of global financial firms' 2024 economic and market outlooks. which look the craziest?
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Dec 22, 2023 17:17
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Fedwatch guessing 75% chance of rate drop in March https://www.investors.com/news/economy/federal-reserve-key-inflation-rate-just-hit-2-percent-sp-500-rallies-as-rate-cut-odds-grow/ 
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Dec 22, 2023 17:40
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Hadlock posted:Fedwatch guessing 75% chance of rate drop in March We won! Too late to buy bonds?
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Dec 22, 2023 18:30
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I think that's an aggressive prediction but I guess we'll see.
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Dec 22, 2023 19:29
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As of yesterday it showed markets putting 97% odds of at least 5 cuts in 2024.
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Dec 22, 2023 19:33
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former NY fed prez bill dudley called 2024 rate cuts like 3 months ago for the same primary reason that's being cited today: if inflation comes down (and it has), then keeping fed funds steady is effectively increasing the restriction on the economy because the real rate of interest will be higher. so the fed will cut to manage the real rates and level of restriction that provides, not because the nominal rate is something they balk at. multiple 2024 cuts 100% locked in (barring force majeure), just a matter of when
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Dec 22, 2023 19:37
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w.s. journal posted:The personal consumption expenditures price index fell 0.1% in November from the previous month, the first decline since April 2020. It was up 2.6% on the year. feds gotta cut  good money market rates (though rates seem likely to remain well above 0% for at least a couple years)
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Dec 22, 2023 20:02
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 I put the 2024 stock picking low/high guessing game up in the https://forums.somethingawful.com/showthread.php?threadid=4018317&userid=0&perpage=40&pagenumber=56#post536703820
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Dec 22, 2023 21:06
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there's always been this implicit assumption that the feds mandate for full employment and stable prices are at odds with each other, but if inflation continues to track towards 2% with a fairly tight labor market there's gonna have to be a lot of academic ink spilled trying to figure out exactly what the gently caress happened over the last two years
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Dec 22, 2023 21:42
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The best thing I’ve read on the topic so far is from Noah Smith, who didn’t have an answer as much as a series of four possibilities. https://www.noahpinion.blog/p/how-did-the-us-achieve-a-soft-landing
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Dec 22, 2023 22:19
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GhostofJohnMuir posted:there's always been this implicit assumption that the feds mandate for full employment and stable prices are at odds with each other, but if inflation continues to track towards 2% with a fairly tight labor market there's gonna have to be a lot of academic ink spilled trying to figure out exactly what the gently caress happened over the last two years Isn't it obvious? Baby Boomers are finally exiting the work force. and because the birth rate has dropped and immigration is frowned upon in the US, there is literally not enough person(s) to be able to take up the work. Still a lot of consumer demand from the boomers, and commercial and industrial demand. But not enough labor to make up the gap. Like taking a big turd to the toliet. SPLOOSH. Now the market wants to eat something and can't find enough food.
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Dec 29, 2023 05:13
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Senor P. posted:Isn't it obvious? like, that's all fine but it doesn't at all explain falling inflation. If companies have to pay workers more due to a worker shortage, workers should have more money to spend, driving prices up via increased demand. Rising wages is inflationary. Falling unemployment drives wages up. Increased demand or reduced supply or both pushes prices up. Nobody can really fully explain why prices would stabilize in an environment of full employment.
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Dec 29, 2023 07:35
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Leperflesh posted:Nobody can really fully explain why prices would stabilize in an environment of full employment. Overseas demand destruction.
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Dec 29, 2023 07:47
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Yeah last I checked, covid murdered everyone's economies. Turkey saw 28% inflation There was a flight to quality and everyone bought dollars. Japan famously liquidated their entire Brazilian reals in favor of buying dollars. Strong dollar gives a lot of buying power Just last page I posted the thing about the EU being in a definitive recession The media doesn't cover it (for some reason, kind of suspicious) but China is still reeling from the evergrande debacle, there are still companies going bankrupt over that, and the real estate market still has a long ways to go to unwind that clusterfuck. China is too rich now and nobody wants to work in factories Europe's economy had to wean itself off Russian gas and oil almost overnight, and most of Eastern Europe really turned up the dial on military spending Meanwhile the US now produces literally one in five barrels of oil, and has been a net exporter of oil since ~2014. Although we did end the embargo with Venezuela to bring their oil and gas production back online to make up for Russia (although maybe as a consequence, Venezuela has decided to annex part of their oil rich neighbor in the last couple weeks)
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Dec 29, 2023 10:13
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expensive dollar wrecks exports and serious natural resources means serious dogshit governance
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Dec 29, 2023 17:27
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Leperflesh posted:like, that's all fine but it doesn't at all explain falling inflation. If companies have to pay workers more due to a worker shortage, workers should have more money to spend, driving prices up via increased demand. 1 in 30 in the US just died. You think that has no impact on aggregate demand?
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Dec 29, 2023 23:10
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pseudanonymous posted:1 in 30 in the US just died. You think that has no impact on aggregate demand? 1 in 30 died of what? COVID? That's false if that's your claim, it's more like 1 in 300+, and many, (most?) were elderly and not driving a lot of demand and had mortality likelihoods that means you quickly "catch up" anyway. That's not a moral stance, purely a "economic impact" stance. COVID had a much much bigger impact on the supply side of things than the demand side.
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Dec 29, 2023 23:23
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pseudanonymous posted:1 in 30 in the US just died. You think that has no impact on aggregate demand? That was not mentioned in the post I replied to, so I don't know why you'd make that assumption. I do think aggregate demand could be affected by covid deaths, especially since they are concentrated in retirees who aren't part of the workforce but still consume stuff. However, they didn't "just die" they mostly died in 2020, so to account for them is not as simple as pointing to falling inflation in 2023 and saying "that's from the deaths". And sick people tend to both miss work and consume more stuff (health care services, specifically) and there are far more people with long covid and covid-related illnesses than there are people who just dropped dead from covid, so factoring covid into today's falling inflation is complex. My point is that I think this: GhostofJohnMuir posted:there's always been this implicit assumption that the feds mandate for full employment and stable prices are at odds with each other, but if inflation continues to track towards 2% with a fairly tight labor market there's gonna have to be a lot of academic ink spilled trying to figure out exactly what the gently caress happened over the last two years is right. The macroeconomics rule of a strong relationship between unemployment and inflation is supposed to more or less overwhelm most other factors, most of the time.
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Dec 29, 2023 23:26
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The number I came up with was about 2% of the population died of covid 2020-summer 2023 My grandfather (94) is on oxygen because of hosed up lungs from covid (twice) I think about half of the "excess deaths" were likely people who would have died from other health issues 2020-2030 so there'll be an absence of deaths in the back half of the decade But yeah the other half of the 2% was working age. Everyone I know got a raise and/or promotion since 2020. A lot of the underemployed in the service industry finally moved into an office job https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm
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Dec 29, 2023 23:36
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Lockback posted:1 in 30 died of what? COVID? That's false if that's your claim, it's more like 1 in 300+, and many, (most?) were elderly and not driving a lot of demand and had mortality likelihoods that means you quickly "catch up" anyway. Mmm, going by excess deaths closer to 1 in 150, and still going. We'll see the new stats soon, but last year I believe it was a new top 3 cause of death for working age Americans, not just retirees. Those old folks spend a lot of dollars btw, heh. My mom was churning through hundreds of thousands a year there at the end. Not even counting what her "providers" were billing medicare. Although dying doesn't seem to prevent many of those people from continuing to bill the government, lol. I agree healthcare doesn't seem to be hurting from losing a ton of their best customers tho. Maybe because everyone else got a lot sicker.
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Dec 29, 2023 23:43
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Bar Ran Dun posted:Overseas demand destruction. this makes some sense, especially the decrease in global demand for commodities which has driven total cpi below core cpi, but i guess i would find it mildly surprising that overseas demand could fall enough to bring inflation steadily down while seeing barely any slackening in the domestic labor market. Senor P. posted:Isn't it obvious? that explains the historically tight labor market, but in a classical macroeconomics 101 lesson this would be a textbook case of an inflationary environment
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Dec 30, 2023 05:30
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GhostofJohnMuir posted:this makes some sense, especially the decrease in global demand for commodities which has driven total cpi below core cpi, but i guess i would find it mildly surprising that overseas demand could fall enough to bring inflation steadily down while seeing barely any slackening in the domestic labor market. Add the supply chain crisis and the reaction of a new trend of supply chains starting to move to be more regional and in country rather than global. Add the pandemics effects on the labor pool, regarding child care, elder care, retirement, death. Add the effects of the IRA and CHIPs acts.
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Dec 30, 2023 05:34
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Bar Ran Dun posted:Add the supply chain crisis and the reaction of a new trend of supply chains starting to move to be more regional and in country rather than global. all of these factors are inflationary. Supply shortages are inflationary. Labor shortages are inflationary. Fiscal spending is inflationary. Nevertheless there is disinflation. The things you and Sr. P have brought up are not explanatory, they instead increase the need for explanation.
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Dec 30, 2023 05:46
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Bar Ran Dun posted:Supply chains starting to move to be more regional and in country rather than global. I think a lot of people might think that China is the US' largest trading partner, but it isn't: both Canada and Mexico do more trade with the US.
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Dec 30, 2023 05:50
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hypnophant posted:all of these factors are inflationary. Supply shortages are inflationary. Labor shortages are inflationary. Fiscal spending is inflationary. Nevertheless there is disinflation. The things you and Sr. P have brought up are not explanatory, they instead increase the need for explanation. All these factors also increase demand for labor within the United States! The move from a more global world to a move regional world starts to move production back on shore (or to Canada /Mexico) and reducing it where it had been occurring overseas. Other countries have to match our federal reserve moves, but that causes the demand destruction our Fed intended to cause here, in those countries. The long running feed back loop driving off shoring production for decades is beginning to reverse for the United States, becausev the supply chain crisis happened. Increased international tensions particularly in shipping (like the recent Red Sea diversions ) are going to increase this trend. These also tend to affect Europe Asia trade far more than US Asia trade or US Europe trade.
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Dec 30, 2023 05:59
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drk posted:I think a lot of people might think that China is the US' largest trading partner, but it isn't: both Canada and Mexico do more trade with the US. Yep it’s still a big deal though. The rather vulgar metaphor I’ve been using is that we are up to the elbow up each other’s rear end. They can’t really replace our grain (and they tried during the trade war) and we can really replace things like CATL batteries or Rare earths metals. But each country is going to try. The thing people don’t get is that a lot of trade occurs within the supply chain now. Disruptions affect that type of trade more than they do trade in finished goods. What would have been best for the world would have been to get even closer.
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Dec 30, 2023 06:05
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GhostofJohnMuir posted:that explains the historically tight labor market, but in a classical macroeconomics 101 lesson this would be a textbook case of an inflationary environment Sorry am I posting in the wrong reality again? God damnit Is this the reality where Hillary was president and covid was just SARS3 and contained to the island nation of Hong Kong (again) In my home reality we had 10% inflation over three years, more like 30% inflation for housing and food, after a decade of sub 2% inflation
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Dec 30, 2023 06:22
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Bar Ran Dun posted:All these factors also increase demand for labor within the United States! Fiscal spending, sure, but supply shortages should decrease labor demand and labor shortages work on the other side of the equation entirely. Other countries very much do not have to match fed moves; it’s true that the ECB and BoE have chosen fairly similar policies but the BoJ, let alone the PBoC, are doing quite different things. I don’t really understand what point you’re trying to make about a feed back loop, but globalization has been petering off as far back as 2010, and has little to do with the pandemic supply chain problems. Insofar as there’s been a measurable response to that it seems to be to diversify global suppliers rather than onshore; think new factories in Southeast Asia or India rather than Mexico or Wyoming, though I haven’t seen any academic papers on changing trade patterns yet. Hadlock posted:Sorry am I posting in the wrong reality again? God damnit Not quite! Inflation peaked at 8% last June, and has since fallen back to 2%. The price index since January 2021 has risen from 262 to 307, a change of 17% or about 6% a year. I mean things aren’t all that rosy here either but your home reality sounds noticeably worse hypnophant fucked around with this message at 06:33 on Dec 30, 2023 |
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Dec 30, 2023 06:26
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