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hypnophant posted:it’s not obvious what SVB could have done differently once interest rates started climbing and a big chunk of their asset book was suddenly underwater. Liquidated some of those assets once the fed clearly signaled they were going to raise rates a lot, eaten a small loss, and used those funds to buy assets whose value is positively correlated with the interest rate? You know, like, been bankers? Done their job?
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May 4, 2023 19:01
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LanceHunter posted:I feel like we need some new term to describe a kind of anti-stagflation. In the same way that term was coined to try and capture the seemingly-paradoxical economic state of a slow economy with high inflation, we need something to capture this state of the economy running super-hot in terms of full (or near-full) employment and rising wages that isn't getting knocked back by rising interest rates. The "radiator economy?" Part of the problem is Keynesian economics was developed under a heavy manufacturing economy where capital investment drove productivity through purchases of PPE but in a switch to an information/service economy there’s less need for large capital investment to drive growth.
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May 5, 2023 16:14
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Leperflesh posted:Oh, for sure, and I think most of us agree that the inflation was and perhaps still is being driven by supply shortages, not (or not only) by demand, which is why rising rates is predicted to have less of an impact. But wage growth lagging price growth probably will, IMO, in that at some point there will be a new equilibrium between supply and demand that fixes prices in place. No? No, the primary driver is corporations raising prices to raise profits and blame supply chain issues, and now we’re seeing knock on effects of that, and other systemic factors like rising wage inequality hitting limits that change behavior on ways that move the economy outside “normal” behavior.
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May 5, 2023 19:34
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LanceHunter posted:The entire "greedflation" narrative took off among the Jacobin crowd Because CEOs were openly admitting it during earnings calls is “the reason” and because those self same companies are then posting record profits.
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May 5, 2023 21:31
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No! Guarantee.
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May 16, 2023 02:48
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Hadlock posted:This was a good read, lots of supporting graphs It's good at first but then there's a doozy Make a distinction between A) the gradual erosion of fiat in favor of harder assets like BTC, gold, and real estate, Oh yeah, harder assets. Yes. I see. Suddenly the ritual nears completion. The gather acolytes chant. Fiat Fiat Fiat The demons appears Cash for Gold it roars. I mean the first 2/3rds are useful anyway.
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May 17, 2023 00:14
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MickeyFinn posted:You aren’t getting a raise that even keeps up with inflation this year, but you can bring your dog in to poo poo everywhere on Fridays. There was a dog in my 2nd round panel interview for a leadership role last week.
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May 20, 2023 08:08
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Maybe they’ll do the trillion dollar coin thing that one seemed fun.
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May 24, 2023 15:11
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Cyrano4747 posted:Eh, the $20B the IRS is loosing isn't nothing, and my understanding is that it was specifically earmarked to help with their staffing woes. It's not the end of the world, but that agency is flailing and really needs to be properly funded. Giving the IRS funding to go after rich people is massively revenue positive. Like giving the IRS $1 means they collect like $9 in otherwise lost tax revenue. Separately I heard that blocking student loan forgiveness was part of the proposal from McCarthy, though I'm not sure how that works with the Supreme court case where I'm pretty confident they will find some tortured way to block it.
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May 29, 2023 18:44
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Baddog posted:Crazy, those are nice hotels. But I guess it's all a function of how much debt they were running (apparently a lot). Most commercial real estate is highly leveraged. CRE financing and how it works is why you drive by buildings with tons of empty offices with above market rates per sq/foot. Tbh it’s a bit doomer but I could see how CRE essentially collapsing due to more wfh and fully remote jobs could cascade into a recession as CRE gets downgraded and lenders try to liquidate pricing will drop meaning even more lenders will want the loans off their books. Especially in a rising rate environment where the original loans are negotiated at like 1.5-2% they could become “toxic assets” if they are forced to mark them to market.
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Jun 6, 2023 03:07
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ultrafilter posted:CLO vs CDO has a pretty high-level overview. The tl;dr is that there are some minor differences beyond the underlying securities, but they're both securitized bundles of loans (and CLOs maybe aren't as closely tied to commercial mortgages as I originally remembered). But in terms of how investors can get mired in good-looking crappy debt and what could happen if they do, the two classes of securities are pretty similar. If you read a few of those articles it’s eerily similar to pre 2008. They make a big point of the fact that CLOs don’t use credit default swaps (cds) except synthetic CLOs can include cds. And they really focus on leverage cds and derivatives and claim that’s what drove losses in CDOs during 2008. And that’s just… a lie. The problem was in the underlying asset, and eventually in that smart firms realized they could profit off of CDOs failing. And they’re claiming that oh those initial loans get rated by analysts so… I’m really baffled the SEC continues to allow secularization like this. I mean I guess not baffled just frustrated and angry.
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Jun 7, 2023 00:14
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Yeah someone broke into my truck yesterday and tried to steal it, if I report it it will only be to get insurance.
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Jun 16, 2023 21:46
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Torquemada posted:I arrive in this thread looking for information about reducing inflation. Wikipedia has remarkably little to say apart from 'central bank adjusts the interest rate', could someone point me in the right direction to something a little more detailed. I'm not stupid, but neither do I have a degree in economics. It’s incredibly complex on one hand. On the other if inputs rise, companies raise prices. Generally the most expensive input is labor. When unemployment goes down the cost to hire more labor goes up (fundamental/supply demand). So generally the fed looks at the unemployment rate as the primary driver of inflation. All this assumes that all firms are price takers, that is they are forced to go the market for labor and accept the market price for labor. Lol if you believe that.
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Jun 18, 2023 17:08
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Lockback posted:EU in general is decades behind the US, and any attempt to modernize would take probably most of a decade by itself, longer than I'd be willing to bet this demand can sustain. This is, well not sabre rattling, rattling the box the sabre came in? It's making noise to get ahead of the ugliness when they cut the checks for military hardware while cutting back on social programs. Isn’t the f-35 billions of dollars over cost, so much they are developing a new jet?
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Jun 20, 2023 05:45
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Hadlock posted:https://jalopnik.com/new-car-buyers-now-pay-over-1000-per-month-1850606581 These debts are small amounts and lucrative, but risky, maybe if we group and package them into bundles we could get them off our books by selling to investors looking for a return.
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Jul 6, 2023 06:40
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Doctor Malaver posted:I just watched The Big Short again and I have some questions... I hope it's OK to post them here. It's a fictionalized version based on some real events with a lot of dramatic license taken to try to exemplify the consequences of something like, and the lack of consequences for certain actors. I will dig in to #4 because it's the point of the movie. CDOs are essentially a way of taking a bunch of assets, in this case loans, and grouping them together. The nature of this asset is essentially a series of cash flows, going into the future, collateralized by a home. They are bets in the sense that when you invest in one you expect the value of the series of cash flows you receive in return to be worth more than what you paid. Synthetic CDOs include other, more complex assets such as swaps and options. Pre-2008 they also came to include credit default swaps, which were essentially unlicensed and unregulated insurance against the failure of CDOs amongst other things. The typical investor in CDOs were institutional investors, pension funds and things like that, which had cash now from payments from the company, but were responsible for making payments in the future. Managers of such funds attempt to grow the fund faster than the outgoing cashlows that will be required in the future. The accounting for this is really nuts btw, some of the hardest stuff i've done, since you have assets and liabilities based on projections and everything is getting regularly updated by estimates and actuarial tables. In any case, the real underlying problem was that banks were making loans that they would not have been willing to make themselves if they had to hold the mortgage. Instead they originated the loan and then rapidly sold it to a financial institution (such as Lehman Brothers) who would package it together with other mortgages (or other financial products). Both the banks and the financial institutions and the ratings agencies failed to do their jobs and properly account for the risk. The securitization process allowed the actual risk of the underlying product, i.e. a mortgage to be hidden from the ultimate holder of the investment. The appetite for these CDOs helped drive banks to offer riskier and riskier mortgages, which again, were mortgages they would not have been willing to underwrite if they were going to hold them on their books. One underlying assumption was that the homes would always appreciate in value. Always. No matter what. The models, even complex ones like monte carlo simulations, simply did not test what happened if the appreciation of homes went below 0%, i.e. negative growth in value. There are other, more complex causes, the growth in the global pool of idle money in the 90s due to computers driving productivity gains which were not passed down to workers and growth in China and other asian economies, Alan Greenspans failures as fed chairmen, instructions to Fannie Mae and Freddie Mac. The real problem isn't so much bets, its that the actual nature of the bet was withheld from the person buying the bet, in a way that to me makes it obvious people should've been bankrupted and jailed, and in general instead they got slaps on the wrist at best. pseudanonymous fucked around with this message at 17:08 on Jul 9, 2023 |
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Jul 9, 2023 17:05
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hypnophant posted:D: I’m Moody’s. A group of investment banks and GSEs have come to me asking me to rate these CDOs they’ve come up with for subprime mortgages. I’ll have to survey a ton of regional banks to try to understand the subprime mortgage market. I’ll get as much data on historical trends as I can and run simulations to try to understand how the value of this new product will evolve. I’ll look at default rates, home prices, unemployment… Notably, I can’t look at scenarios that have never happened before, like what happens if there is suddenly an order of magnitude more money going out into subprime loans. Will there be new, even riskier buyers? will they have the same characteristics as those in the historical data? I’m just going to assume they will. I strongly disagree that they can't examine the possibility of scenarios that have never happened before. I'm not saying they do, but they could. Also while the median home price has pretty much historically always increased in this country, there have been times when in an isolated market they fell. It's kind of a cop out to say home prices never went down, because obviously in dying towns and such they do fall, have fallen historically. Moody's, S&P etc.. the ratings agencies do not do a good job, much like auditors, because they are not incentivized to do a good job. They are incentivized to not do a good job.
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Jul 10, 2023 06:04
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All of this applies to public companies and audits fyi. I’ve watched poo poo in real time over email as a company flip flops accounting treatment with a big 4 audit partner based on the impact to EPS.
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Jul 11, 2023 00:22
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bob dobbs is dead posted:the feds and states are often pretty decent on this front, its the municipals who are little shits Sort of, one reason a lot of cities don't want to see rapid expansion of housing (aside from rabid Nimbyism) is they understand their infrastructure is insufficient. God knows Portland has streets that were never intended to be arterial just full of cars all day long every day.
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Jul 27, 2023 16:07
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LanceHunter posted:Clearly this means that the BRICS will be the dominant currency union of the 21st (and 22nd) century. Yeah I mean there will have to be so many more BRICS bucks, like for every dollar in the world there will be 100 BRICS bucks
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Aug 13, 2023 19:47
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Hadlock posted:So two questions Fundamentals weren’t he fundamental driver of the inflation. The idea has been debunked repeatedly in this thread. One fundamental that has actually changed is the combination of housing prices and interest rate mean the velocity of housing sale is way down as people can’t afford to buy or sell.
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Aug 28, 2023 17:27
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The wealth concentration and savings pattern is also part of it. It’s not like tons of poor Americans are holding bonds and not savings or HYSAs.
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Aug 30, 2023 00:38
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Subvisual Haze posted:I admire the purity of heart and faith many of you have in the eternal economic growth of America. There's a difference between that and knowing enough economics to know what you're positing is wrong, but thanks for engaging in the fallacy of appealing to motive to make clear how baseless in real knowledge your argument is.
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Oct 6, 2023 23:59
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hobbez posted: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. 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.
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Oct 7, 2023 05:53
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pmchem posted:You can’t possibly be using an index started in 2022 to argue about multi decade trends lol. This is only true if you ignore the rest of what people have to spend money on. Food, energy, transportation, fuel, education, healthcare, taxes, childcare. Your analysis is totally ignoring how affordable these other things are.
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Oct 7, 2023 17:46
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drk posted:There's no reason for default when the government can print the same money that its debt is denominated in. 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.
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Nov 6, 2023 18:25
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hypnophant posted:I do like the idea of attributing all of it to the ACA, in a kind of reverse Laffer curve argument where you increase spending to decrease spending. But turns out, the real world is more complicated than that It’s really not read the Koch brothers own research on having Medicare for all.
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Nov 9, 2023 17:37
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hypnophant posted:link https://letmegooglethat.com/?q=koch+brothers+research+shows+medicare+for+all+savings
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Nov 9, 2023 18:57
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A general purpose AI, not a mere statistical model writ large is probably far more likely to emerge and replace many white collar jobs rather than blue collar, since touching computers and editing spreadsheets doesn’t require interacting with the physical world. But even that is probably not likely to happen in the next 20 or so years.
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Nov 12, 2023 17:50
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Bremen posted:
Freakonomics recently did an episode about how housing the industry has not increased productivity in tandem with other industries, and interviewed various people about why. There’s also the issue of people not wanting to live in rural areas so actual land costs have probably increased steadily over time. Major cities are increasingly dense but infrastructure investment fell off decades ago. The government could help intervene by incentivizing work from home, but here we are.
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Nov 28, 2023 04:21
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bob dobbs is dead posted:staring at the krogers annual reports for 5 mins says the accounting allocates the big delta to merchandising/transportation costs and not the debt service, sg&a or any of that other poo poo GAAP and cost accounting are very different.
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Nov 29, 2023 02:14
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Agronox posted:Weird coincidence that you say this... After Charlie Munger died a few days ago, somebody sent me a commencement speech he made in 1995. He made exactly the point you make here: don't romanticize the local merchants, on the whole, net-net, Walmart ended up being a big positive for a lot of places. That is a hot loving take.
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Dec 2, 2023 00:52
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Lockback posted:Are the algorithms in the room with you right now? Do you have a phone in the room with you right now? A tablet? A pc? A tv? Then yes.
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Dec 12, 2023 04:43
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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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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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Economics and current events: engineer brains quoting Econ 101
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Dec 30, 2023 21:30
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esquilax posted:Nonqualified deferred compensation plans are incredibly common, not just in tech companies and not just in California. I have a hard time imagining congress making sweeping changes barring another Enron level abuse event. Enron was only like 64b dollars, the amount of this bullshit going on every year is probably in excess of that.
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Jan 10, 2024 16:29
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Hadlock posted:Inflation at 3.9% in December; 3.4% less food and fuel The states based laws about this I dunno 15-20 years ago, it’s by jurisdiction. They really only bother with like athletes afaik.
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Jan 12, 2024 19:44
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Please someone let Donald Trump know and he'll flip his poo poo and rant about it for 15 minutes before talking about how a big man came up to him and said Trump had the biggest wettest sandwiches or something. After all, it's US Steel.
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Jan 22, 2024 04:59
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TooMuchAbstraction posted:As a non-expert, I definitely have the impression that in the last 20 years, the amount of money sort of "sloshing around" looking for returns has increased, and separately, high-frequency trading has definitely increased. I feel like both of these contribute to instability in the markets. They're not going to cause market crashes on their own, probably, but they make everything harder to predict. Planet money did an interesting series on the causes of 2008 and one was an increase in the global supply of money seeking a return.
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Mar 8, 2024 04:40
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