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

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LanceHunter: Nov 12, 2016; Beautiful People Club

Strong Sauce posted:

Meh, not sure how tweets encourage doomscrolling. Tweets are easier, especially since it has the direct clipped video. Exact video is much clearer than articles. Having these rules just seems weird to me. And just seems to derail it more talking about these restrictions.

And quoting is just citing where I found it. I could have easily just taken the tweet but doesn't seem kosher to me.

Anyways I'll bow out now.

Tweets encourage doomscrolling because tweets are such small tidbits of information that it is extremely easy to build false narratives just using lots and lots of short clips and small quotes that can be devoid of context. (For example, see how LibsofTikTok has used Twitter to convince thousands of morons that doctors are trying to force kids to be trans or how public school teachers will happily give their students porn or whatever.) And while it can be easy to recognize this pattern when done by rear end in a top hat conservatives and Bitcoin maximalists and other people whose positions are far removed from your own, a lot of folks don't recognize this same pattern when done by accounts like Doomberg or others who share some of their politics.

# ¿ Mar 17, 2023 14:13

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# ¿ May 22, 2024 17:32

LanceHunter: Nov 12, 2016; Beautiful People Club

Anyways, given the developments we've just heard about First Republic, I think it's interesting to see Levine's take on them from yesterday...

"Matt Levine posted:

SVB�s current share price is a mystery � the stock hasn�t traded since Thursday � but it is probably zero. The deal was launched with a stock price of $267.83, it was about to price at $95, but then the lawyers decided it couldn�t price without revealing more details about the bank run, which would presumably lead to a much lower price. The next day, the value of the stock was zero.

How does the next troubled regional bank capital raise go? First Republic�s stock closed at $123.22 two weeks ago and $31.16 yesterday. It lost about $17 billion of market capitalization in two weeks. If JPMorgan calls you up and says �we are trying to get a couple billion dollars of capital into First Republic, are you in,� at what price are you in? The bid-ask seems wide:

1. If they get a deal done at $20, or $25, or some other reasonable-ish price, then the buyers will probably do well? I mean, not investing advice, and what do I know, but basically this stock is trading at pretty depressed prices because of worries about the bank going under. If they raise two yards of capital, those fears will be allayed, and the stock might rip back up. You could multiply your investment in a week.
2. If they don�t get a deal done, I am sorry, but the very highly publicized recent precedent is that the stock goes to zero in a day.

So First Republic�s pitch to investors is �if you buy the stock at $25 it will go to $50 in short order, so buy it at $25,� and the investors� response might reasonably be �if we don�t buy the stock at $25 it will go to zero in short order, so we�ll buy it for $1,� and that�s not very helpful.

Meanwhile Bloomberg reports:

"Bloomberg posted:
The nation�s biggest banks are close to agreeing upon a plan to deposit about $30 billion with First Republic Bank in an effort orchestrated by the US government to stabilize the battered California lender, according to people with knowledge of the matter.

Banks including JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., Wells Fargo & Co., Morgan Stanley, U.S. Bancorp, Truist Financial Corp. and PNC Financial Services Group Inc. are part of the discussions, said the people, asking not to be identified because the talks are private.

The biggest banks, including JPMorgan, Bank of America and Citigroup, would contribute $5 billion of deposits each, with smaller banks kicking in smaller amounts, the people said. Details of the rescue, which are still being worked out, may be announced as soon as Thursday afternoon, the people said. Drafts of an announcement are being shared at banks and across federal agencies, the people said.

The traditional approach � SVB�s apparent approach � is that you solve your capital problems, and that calms depositors and prevents the bank run. A reasonable thing to think! But it didn�t work for SVB, so First Republic might as well reverse the order. Fix the run � by getting a ton of deposits from other banks � and then go out and raise capital. With less of a threat of imminent disaster, maybe stock investors will be more willing to pay up.

# ¿ Mar 17, 2023 14:25

LanceHunter: Nov 12, 2016; Beautiful People Club

thekeeshman posted:

It seems to me the issue is that the gov and financial system is having to make moves to calm things in the short term but hasn't had the ability or willingness or time to figure out what those moves mean in the long term. As the clip pointed out, there's a special assessment on all banks now, big or small, to ensure that the bailout insurance system is solvent, but that insurance only applies to big depositors if they are at systemically important banks. At least based on current actions and Yellen's testimony. If this remains the case, any large depositor would be negligent in staying at a small bank.

So long term what's the fix? Pass more bank regs and declare that you won't be bailing anyone out again in the future? That's what everyone said after 2008 and here we are again. Raise the FDIC limit so it covers millions or tens of millions per account rather than hundreds of thousands? Might keep small businesses and institutions safe at small banks, I'm guessing most sufficiently large organizations use bigger banks anyway but I could be wrong.

I mean, the main fix would just be having FDIC insurance cover all deposits with no limit. This is entirely possible solution, it's not very desirable for the banks because they don't want to pay the extra amount for their FDIC insurance premiums under such a system.

# ¿ Mar 17, 2023 17:48

LanceHunter: Nov 12, 2016; Beautiful People Club

drk posted:

FDIC rates are already tiered by risk: https://www.fdic.gov/deposit/insurance/assessments/proposed.html

Its not clear that this actually is effective in getting banks to take less risk, but its there.

At this point FDIC (and other fed actions) basically mean that deposits in effect have unlimited coverage. The only difference that would come from making it official is that 1) there would be a reduced anxiety and 2) banks would have to actually pay out higher premiums for the higher coverage.

EDIT:
(Also, it looks like we made it less than a page before the brigading started...)

# ¿ Mar 17, 2023 18:39

LanceHunter: Nov 12, 2016; Beautiful People Club

pmchem posted:

I think there are legal hurdles in making any sort of unlimited FDIC coverage "official". I'm sure it will come up on weekend talk shows.

Whether or not the FDIC could do it entirely as a regulatory change or if they would need a law passed is an interesting question. If it did come down to passing a law, then the whole thing is likely off the table. Small-to-mid-sized banks have car dealership-levels of political influence, in that they are often one of the biggest concerns that any individual congressional representative will have in their district. And, of course, those are the banks that would least like their FDIC premiums to go up.

# ¿ Mar 17, 2023 19:11

LanceHunter: Nov 12, 2016; Beautiful People Club

I've heard some compelling arguments for the Fed offering checking and savings accounts (in particular, that they then have a more direct lever for cooling demand by just increasing the interest rates in those accounts, causing more people to want to spend less and save more). One big issue with that is trying to find a way to make this available without causing massive runs on all the other banks as people pulled their money and put it into the new Fed accounts.

# ¿ Mar 17, 2023 20:56

LanceHunter: Nov 12, 2016; Beautiful People Club

Federal Reserve raises benchmark rate by 0.25 point despite bank turmoil (non-paywall link)

quote:

The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, moving forward with its fight against high inflation despite concern that its rate hikes may be fueling instability in the banking system.

Financial markets expected the move, which brings the Fed�s base policy rate to between 4.75 and 5 percent.
The central bank is also facing questions about its regulatory oversight of Silicon Valley Bank, as Washington tries to figure out whether the government could have prevented the turmoil in the banking sector.

�There is risk for the Fed here,� Tim Duy, a Fed expert at the University of Oregon and chief economist at SGH Macro Advisors, wrote in an analyst note. �If the Fed hikes, it must be reasonably confident that regulators have ringfenced the banking problems. If the Fed hikes rates and bank failures multiply, the political fallout will be intense.�

# ¿ Mar 22, 2023 19:05

LanceHunter: Nov 12, 2016; Beautiful People Club

Borscht posted:

Wait the fed said today that his target for I location is just 2%. That seems incredibly low.

The Fed's inflation target has been 2% for decades. It has low inflation/steady prices as part of its responsibilities, and it hit upon 2% as the official number that meets that definition a while back. It became official policy in 2012.

quote:

The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee reaffirms its judgment that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve's statutory mandate. The Committee judges that longer-term inflation expectations that are well anchored at 2 percent foster price stability and moderate long-term interest rates and enhance the Committee's ability to promote maximum employment in the face of significant economic disturbances. In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.

Monetary policy actions tend to influence economic activity, employment, and prices with a lag. In setting monetary policy, the Committee seeks over time to mitigate shortfalls of employment from the Committee's assessment of its maximum level and deviations of inflation from its longer-run goal. Moreover, sustainably achieving maximum employment and price stability depends on a stable financial system. Therefore, the Committee's policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee's goals.

They also have a helpful guide that shows the difference in their original 2012 statement and the revised edition they put out in 2020.

EDIT:

Here's another interesting read, on the New Zealand inflation-targeting policies in the 1990s that ended up making 2% the defacto "right" amount of inflation in the minds of most economists.

LanceHunter fucked around with this message at 01:56 on Mar 23, 2023

# ¿ Mar 23, 2023 01:53

LanceHunter: Nov 12, 2016; Beautiful People Club

Leperflesh posted:

Regardless, in addition to covid deaths there's a far larger number of people who have or had long-term health effects from lingering covid that didn't die and many of them have had to leave the workforce. This does not get much press.

And when you remove people from the workforce, unemployment goes down. Fewer workers for the same number of jobs does that. That's how that works.

e. people on long-term disability aren't counted as "unemployed" fyi

True, but they are counted against the labor force participation rate, and that number has been rising steadily and is only about 0.8% lower than it was pre-pandemic.

https://fred.stlouisfed.org/series/CIVPART

It has been a bit low compared to the post-1970s trend, but that has been the case since the mid-2010s as the boomers retire.

EDIT: Another interesting chart is the US Working Age Population, which did take a dip during the pandemic but has now fully recovered and it at a historical high.

https://fred.stlouisfed.org/series/LFWA64TTUSM647S

I think the "too few workers" thesis doesn't really hold up to the data. I do think that there are still some kinks being worked out due to workers relocating, shifts in demand, and more experienced workers being replaced by less experienced ones who are still settling into their roles. But that alone isn't enough to cover the entire inflation story. There was a lot of really stupid money out there in the days of effectively-0% interest, and while increasing interest rates have shrank the dumb money pool, the fact that things like crypto haven't completely collapsed means that there's still too much of it out there.

LanceHunter fucked around with this message at 17:35 on Mar 23, 2023

# ¿ Mar 23, 2023 17:21

LanceHunter: Nov 12, 2016; Beautiful People Club

I think all of the excess mortality discussion doesn't actually explain the inflation story, though. As the charts previously posted show, we have an all-time high number of working age adults in the US and labor force participation is nearly as high as it was pre-pandemic. Also, increased demand has definitely been a factor in this current wave of inflation, and there is no way that a rise in excess deaths could be responsible for that (since, you know, dead people aren't know for buying things).

# ¿ Mar 23, 2023 21:50

LanceHunter: Nov 12, 2016; Beautiful People Club

drk posted:

Wow, they weren't kidding about low vacancy rates:

Anyone know what the large increase in vacancy rates was in the years leading up to 2008? People buying homes as investments and leaving them empty?

Most of that was likely supply-side, as there were a poo poo-ton of housing starts up until the first rumblings of the global financial crisis started to hit...

...then once it did hit, housing starts hit their lowest point since they started keeping records in 1959, and (worst of all) they stayed at those record-low levels for 4 years. Of course, the population was continuing to grow during that time. Thus leading to the situation we are in now.

# ¿ Mar 27, 2023 18:30

LanceHunter: Nov 12, 2016; Beautiful People Club

Unless there are major code changes in most cities to allow bedrooms without windows, then a lot of commercial-to-residential conversions won't be economical to pull off.

And yeah, it would kinda suck to have a bedroom with no windows, but that's better than waiting until someone finally puts up the money to tear down a huge tower and replace it. (Especially since the units in the brand-new tower would almost certainly be significantly more expensive than converted units.)

Also, it's not like windows in tower apartments are always that beneficial or even aesthetically pleasing. Look at this video walk-through of a 2/2 in one of the towers in my city. Starting at 0:29 it shows the second bedroom, which has one tiny window in a little divot at the end of the room. And looking out the window, you see how they had to build in a cut-out in the whole building to give that bedroom that tiny, ineffectual window.

https://cdn.realync.com/transcoded-videos-s/8DD64F54-211D-44FE-ADCF-60350AAA2CE3/8DD64F54-211D-44FE-ADCF-60350AAA2CE3mc.mp4

# ¿ Apr 13, 2023 18:25

LanceHunter: Nov 12, 2016; Beautiful People Club

err posted:

The media keeps trying to compare it to the GFC, especially with the banking crisis, but I feel like circumstances are so much different now compared to then. Can someone explain what a "mild" recession would look like?

I think it's hard to conceive of what a mild recession would look like today. Especially when considering the last two "mild" recessions in the US. The post-S&L Crisis recession in the early 90s and the post-DotCom Crash recession of the early 00s. In both cases the overall effect on the economy was mild because it was really just a couple of specific industries that got walloped. If you weren't involved in a Savings & Loan/commercial real estate during the 90s recession or working tech/telecom in the 00s recession then the economy wasn't really bad, just kinda sluggish. If you were involved in those industries during that time, poo poo was dire.

I don't know that I see that same type of pattern repeating again, though. So if we are actually seeing a mild recession, it probably won't look like anything in recent history. That isn't to say that any potential recession wouldn't be mild, more that it will probably be weird and unexpected in how it happens.

One chart I was looking at while thinking about the early 90s recession was this. The average number of weeks that unemployed people had been unemployed each year. It's amazing that we spent over a decade (before the pandemic even hit!) with people unemployed for longer than the absolute peak of the 90s (a time when Gen X was being called "the Slacker Generation" because they were seen as not working enough).

LanceHunter fucked around with this message at 02:42 on Apr 15, 2023

# ¿ Apr 14, 2023 18:43

LanceHunter: Nov 12, 2016; Beautiful People Club

There�s a very compelling piece in The Atlantic by Jean M. Twenge, called The Myth of the Broke Millennial (Apple News link to get around paywall.)

Some interesting selections:

quote:

Impressions of generations tend to form early, and they often get cast in amber. As a scholar of generations, I�m well aware of that. But even I was surprised when I returned to my study of Millennials to look at the generation as it enters middle age.

The surprise was this: Millennials, as a group, are not broke�they are, in fact, thriving economically. That wasn�t true a decade ago, and prosperity within the generation today is not evenly shared. But since the mid-2010s, Millennials on the whole have made a breathtaking financial comeback.

This is terrific news. And yet it�s not all good news, because the belief that Millennials have been excluded from the implicit promises that America makes to its people�a house for most, middle-class security, a better life than your parents had�remains predominant in society and, to go by surveys and the tenor of social media, among Millennials themselves.

That prompts a question with implications for the cultural and political future of the United States, a country premised, to a large extent, on the idea of material progress: What if the American dream is still alive, but no one believes it to be?

quote:

By 2019, households headed by Millennials were making considerably more money than those headed by the Silent Generation, Baby Boomers, and Generation X at the same age, after adjusting for inflation. That year, according to the Current Population Survey, administered by the U.S. Census Bureau, income for the median Millennial household was about $9,000 higher than that of the median Gen X household at the same age, and about $10,000 more than the median Boomer household, in 2019 dollars. The coronavirus pandemic didn�t meaningfully change this story: Household incomes of 25-to-44-year-olds were at historic highs in 2021, the most recent year for which data are available. Median incomes for these households have generally risen since 1967, albeit with some significant dips and plateaus. And like each generation that came before, Millennials have benefited from that upward trend.

quote:

A house is perhaps the most tangible embodiment of the American dream. Millennials� housing woes have featured prominently in media accounts of the generation�s economic (and life) problems. �There should be a Millennial edition of Monopoly where you just walk around the board paying rent, never able to buy anything,� a Twitter comedian who goes by �Mutable Joe� joked in 2016. BuzzFeed ran a story last year on 24 �ways Millennials became homeowners,� filled with decidedly sui generis anecdotes. One described someone who�d been hit by a truck and won a lawsuit, covering their down payment. Short of getting concussed by a semi, the article suggested, Millennials had little chance of becoming homeowners.

But contrary to that narrative, Millennials� homeownership rates in 2020 were only slightly behind Boomers� and Gen Xers� at the same age: 50 percent of Boomers owned their own home as 25-to-39-year-olds, compared with 48 percent of Millennials, hardly a difference deserving of headlines or social-media memes.

# ¿ Apr 18, 2023 15:37

LanceHunter: Nov 12, 2016; Beautiful People Club

laxbro posted:

Are they comparing HHI? If so then I don't think it is any surprise the dual-income millennial households are outearning their single-income households of older generations.

Individual income is mentioned in the piece as well...

The Atlantic posted:

Household income is only one lens, but individual income shows largely the same thing. Booms and recessions push incomes up and down, but although many media stories have tended to associate Millennials almost exclusively with the latter, they�ve now experienced both, and in a big way: Increases in income since 2014 have been steep.

In this, Millennials trace a pattern similar to the Gen Xers before them. Early Gen Xers, too, entered the job market during a recession, and the generation was subject to dire predictions about its economic future (one 1995 book, Welcome to the Jungle, by Geoffrey T. Holtz, described Gen X as the �Impoverished Generation�). But those predictions didn�t hold up after the economy rebounded later in the �90s. The Great Recession was no doubt a more harrowing experience for young adults than the recession Gen X faced, but the income stagnation that followed it nonetheless lasted only a few years. Over the past half century, the longest period of falling or stagnant wages was from the �70s to the mid-�90s, when Boomers were young workers. My point is not that Millennials should consider themselves fortunate�I don�t believe that�but rather that economic prospects can change greatly as a generation ages, and especially as it reaches its peak earning years.

Also, while there are more dual-income households now than a generation ago, there are also more one-person and single-parent households as well.

# ¿ Apr 18, 2023 20:55

LanceHunter: Nov 12, 2016; Beautiful People Club

golden bubble posted:

Think about how many news articles there are about understanding the "real American." It doesn't matter there's less of them proportionally than there have ever been before. So much of the media still thinks they matter more than other americans. And if a writer fervently believes the average american millennial is a white man with moderate education, that really changes the reporting on millennial economics.

I'd argue that much of the "millennials are permanently economically doomed" pieces aren't from writers who think the average American millennial is a white man with moderate education. Probably the exact opposite. It's coming from highly-educated journalists in places like New York City who are extrapolating their experience (astronomical student loans from j-school, working in a industry where pay has been falling, surrounded by an absolutely insane real estate market) onto the rest of their generation around the country.

Decades from now I think we're going to look back and be able to better recognize just how weird it was for society when the people who are professionally responsible for reporting on the world had their economic situation go from being generally better-than-average to generally worse-than-average. It used to be that, when a local reporter for the Daily WhereverTheFuck newspaper wrote a piece, they were probably making a bit more money than a majority of the people who would eventually read it. Today, when a freelancer churning out content for Vice or Vox or wherever writes something up, it is very likely that they are making less money than the majority of the people who will eventually read that piece.

LanceHunter fucked around with this message at 21:11 on Apr 18, 2023

# ¿ Apr 18, 2023 21:02

LanceHunter: Nov 12, 2016; Beautiful People Club

More details on First Republic.

New York Times posted:

First Republic Bank Lost $102 Billion in Customer Deposits

First Republic Bank, the most imperiled U.S. lender after last month�s banking crisis, on Monday disclosed the grisly details of just how troubled its business has become � and not much else.

In the bank�s highly anticipated first update to investors since entering a free-fall over the past month and a half, its leaders said little. In a conference call to discuss its first quarter results with Wall Street analysts, the bank�s executives offered just 10 minutes of prepared remarks and declined to take questions, leaving investors and the public with few answers about how it would steer out of its malaise.

One thing is certain: The bank, which caters to a well-heeled clientele on the coasts, is hanging on by a thread. During the first quarter, it lost a staggering $102 billion in customer deposits � well over half of the $176 billion it held at the end of last year � not including a temporary $30 billion lifeline it received from the nation�s biggest banks last month.

First Republic reported a quarterly profit of $269 million, down one-third from a year earlier. Its shares fell 15 percent in extended trading following the release of its results.

The bank said that the deposit exodus largely ceased by the last week of March. From March 31 to April 21, the bank said that it lost only 1.7 percent of its deposits and that most of those were related to tax payments by its clients.

So I guess the question here is if we should read this as "over a hundred billion in deposits were withdrawn, they're on their death-bed" or read it as "over a hundred billion in deposits were withdrawn and they managed to survive, so it's looking up from here". (I feel like the NYT headline writer feels pretty strongly in the later, especially because when I got the push notification that read "First Republic Bank Lost $102 Billion..." I thought the story was going to be something significantly more dire.)

LanceHunter fucked around with this message at 22:08 on Apr 24, 2023

# ¿ Apr 24, 2023 22:04

LanceHunter: Nov 12, 2016; Beautiful People Club

NYTimes on the latest fed rate raise...

quote:

What to know about the Fed�s latest move.

Federal Reserve officials raised interest rates by a quarter-point on Wednesday in the tenth straight move in their fight against rapid inflation � but they also opened the door to a possible pause in rate increases.

Central bankers lifted rates to a range of 5 percent to 5.25 percent, a level they have not reached since the summer of 2007. The move capped the fastest series of rate increases since the 1980s, as the central bank led by Chair Jerome H. Powell attempts to slow the economy and weigh down price increases.

Here�s what to know about the central bank�s latest move:

- In their statement announcing the decision, Fed policymakers indicated that they will watch to see whether future rate moves are necessary. That marks a shift in stance: For months, they had assumed that additional increases would be needed. This opens the door to a possible pause in rate increases.

- �In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,� the policy-setting Federal Open Market Committee said in its release. The �may� in the statement is a signal that officials are not confident that further moves will absolutely be necessary.

- In his news conference after the rate announcement, Mr. Powell said that �a decision on a pause was not made today.� He added that �we�ll approach that question at the June meeting,� punting the decision on a potential pause for another month.

- Investor bets on where interest rates go from here are tilted toward a pause at the Fed�s next meeting and then lower interest rates later in the year. (Mr. Powell said that cutting interest rates this year was �not in our forecast.�) One calculation put the likelihood that the Fed would hold off changing rates when it meets in June at 80 percent.

- The Fed does not �have an agenda to further consolidate banks,� Mr. Powell said, in response to a question about the seizure and sale of First Republic Bank to JPMorgan Chase, already the country�s largest bank. Mr. Powell said it was a good policy to limit the expansion of the biggest banks, but that exceptions made sense in cases of bank failures. He also said that credit conditions were tightening following the banking turmoil, which could slow the economy.

- Mr. Powell said it was �essential� that the nation�s debt limit is raised in a timely way. �It�s very important that this be done,� he added, noting that the Fed does not give advice to politicians. The consequences for the U.S. economy of a debt default could be dire, he said. �We shouldn�t even be talking about a world in which the U.S. doesn�t pay its bills,� he said.

# ¿ May 3, 2023 20:36

LanceHunter: Nov 12, 2016; Beautiful People Club

LostCosmonaut posted:

Really we should have seen this coming

[url]https://twitter.com/jimcramer/status/1648676815056117761[url]

I enjoy the joke here, but let's remember the thread rules...

# ¿ May 4, 2023 04:55

LanceHunter: Nov 12, 2016; Beautiful People Club

This is a good indicator that Austin's pro-building policy is actually paying dividends, even as we've had to absorb some of the biggest population growth in the country for over a decade. Check out this graph from the Census department...

Three out of the five largest percentage growth cities are in the greater Austin area, and two of them are outright suburbs of Austin. For over a decade now we've been building like crazy, but housing costs were still rising faster-than-average because of the sheer number of people moving here. It resulted in some NIMBY backlash, as people saw these towers going up and also saw their rents rising and decided that the two phenomenon were related. It was hard to explain that the new towers meant those rent raises were lower than they might have been otherwise.

# ¿ May 4, 2023 21:42

LanceHunter: Nov 12, 2016; Beautiful People Club

Here's a non-paywall/gift link to the NYTimes coverage of today's jobs report. Just way too much stuff to all copy over here, but some highlights...

quote:

U.S. employers added 253,000 jobs in April.

The labor market is still defying gravity.

Employers added 253,000 jobs in April, the Labor Department reported Friday, in a reversal of the cooling trend that had marked the first quarter and was expected to continue.

The unemployment rate was 3.4 percent, down from 3.5 percent in March, and matched the level in January, which was the lowest since 1969.

The higher-than-forecast job gain complicates the Federal Reserve�s potential shift toward a pause in interest rate increases. Chair Jerome H. Powell said on Wednesday that the central bank might continue to raise rates if new data showed the economy wasn�t slowing enough to keep prices down.

�Every time we�ve made some employment growth forecast, the labor market has beat expectations,� said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas.

Downward revisions to previous two months altered the spring employment picture meaningfully, subtracting a total of 149,000 jobs. That means the April number is less than the average of 290,000 jobs added over the past six months, but a reacceleration from the 165,000 jobs added in March.

quote:

Wages climb rapidly, defying the Fed�s hopes for a slowdown.

Wage growth picked up in April, good news for American workers but bad news for officials at the Federal Reserve, who have been hoping to see a steady moderation in pay gains as they try to wrestle inflation back under control.

Average hourly earnings climbed by 4.4 percent in the year through April. That compared with 4.3 percent in the previous month, and was more than the 4.2 percent that economists had expected.

The increase in wages compared with the previous month � at 0.5 percent � was the fastest since March 2022.

The hourly earnings measure can bounce around from month to month, so it is possible that the April jump is a blip rather than a reversal in the trend toward cooler wage gains. Even so, the data underscored that the Fed faces a bumpy road as it tries to slow the economy and bring inflation under control.

Doomers in absolute shambles.

# ¿ May 5, 2023 14:20

LanceHunter: Nov 12, 2016; Beautiful People Club

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?"

# ¿ May 5, 2023 15:20

LanceHunter: Nov 12, 2016; Beautiful People Club

LLSix posted:

Maybe something like the-inevitable-consequences-of-a-deeply-dishonest-definition-of-unemployment? Pretending people who haven't been able to find a job for 12 months cease to exist is ridiculous.

I remember a lot of my late teens and early adult hood being full of talking points about each administration shifting the definition of unemployment to make the numbers look better.

This topic came up in the thread before: Trying to hand-wave away the continued fall in unemployment as fake doesn't stand up to scrutiny when labor force participation is just 0.7% lower than it was immediately before the pandemic hit, and basically in-line with the rate for the last ten years.

# ¿ May 5, 2023 18:37

LanceHunter: Nov 12, 2016; Beautiful People Club

Lockback posted:

Corporations have always tried to price their products as high as the market would allow, they never needed excuses. Normally if a company goes too high a competitor can swoop in and take their profit by lowering their margin but having a higher volume. That can't happen now because.... supply chain issues including labor shortages.

Like, did you think before companies were keeping prices lower because they just didn't have a good excuse or something?

The entire "greedflation" narrative took off among the Jacobin crowd for the same reason the election fraud narrative took off among the Fox News crowd. It reinforced strongly-held priors ("Trump couldn't lose an election!" / "Rising wages could never cause rising prices!") that had until recently had held basically true (Trump technically won in 2016 and wage increases above the far-below-equilibrium $7.25 an hour legitimately have negligible effects on prices) and upon which were a lot of the more extreme elements had based their wildest fantasies (after Trump won 2020 all the seal indictments Q talked about were going to be opened / the minimum wage should be $33 an hour).

# ¿ May 5, 2023 21:16

LanceHunter: Nov 12, 2016; Beautiful People Club

pmchem posted:

also state capitals for two of the largest states. I�m more that surprised AA didn�t already have a direct flight

The direct flight situation in Austin is very frustrating. Up until 1999 we only had a municipal airport and the vast majority of flights went to other Texas cities (mostly Houston and Dallas) to then connect out. Our current airport opened just two years before 9/11, and it had about the worst possible architecture for handling things afterwards. For example, every single shop/restaurant/cafe/etc was behind the security checkpoint, since they never imagined a world where people without tickets wouldn't be able to go through security to be able to wait for their arrivals.

The airport has been trying its hardest to keep up with the insane amount of growth, but it's been a poo poo-show the entire time.

# ¿ May 9, 2023 15:59

LanceHunter: Nov 12, 2016; Beautiful People Club

Inflation report is out...

New York Times posted:

What to know about the latest inflation report.

Inflation slowed for a 10th straight month in April, a closely watched report on Wednesday showed, good news for American families struggling under the burden of higher costs and for policymakers in Washington as they try to wrangle rapid price increases.

The Consumer Price Index climbed 4.9 percent in April from a year earlier, less than the 5 percent economists in a Bloomberg survey had expected. Inflation has come down notably from a peak just above 9 percent last summer, though it has remained far higher than the 2 percent annual gains that were normal before the pandemic.

After stripping out food and fuel to get a sense of the underlying trend in price increases � what economists call a core measure � consumer prices climbed 5.5 percent from a year earlier, a slight drop from 5.6 percent in the previous reading.

The slowdown in price increases last month came even as gas costs picked up and rent costs continued to climb briskly. New car prices, a measure of the price of medical care and airfares all declined in April, the report showed.

Although inflation has been gradually cooling, it has remained too elevated for policymakers to be comfortable. Much of the slowing in price increases has come as supply chain bottlenecks have cleared up, goods shortages have eased and gas prices have moderated after a surge in summer 2022 that was tied to Russia�s invasion of Ukraine. But underlying trends that could keep inflation persistently high over time have remained intact, including unusually strong wage growth, which could prod companies to try to charge more for products and services.

Yet policymakers also received good news along those lines in Wednesday�s report. The data showed a meaningful slowdown in services prices after stripping out food, energy and housing costs. That measure climbed by 5.2 percent on a yearly basis, down sharply from 5.7 percent in the previous reading.

Policymakers have been watching that trimmed-down measure for a signal of where price increases might go next.

Stock prices jumped after the data was released, a sign that investors interpreted the data as good news for Federal Reserve policymakers.

Fed officials are likely to watch the April inflation report closely. Officials have raised interest rates over the past year at the fastest pace since the 1980s to slow lending and weigh down the economy, but now that rates are above 5 percent, policymakers have signaled that they could pause rate moves as soon as their mid-June meeting. That decision will hinge on incoming economic and financial data, they have said.

Policymakers will receive the consumer price report for May on June 13, the day before their decision, but officials typically give markets at least a hint of what they might do with rates ahead of time. That puts significant attention on the April report.

John C. Williams, the president of the Federal Reserve Bank of New York, told reporters in New York on Tuesday that the Fed�s next decision � on whether to raise rates or pause at the June meeting � would hinge on incoming data.

He said that it had been appropriate for the Fed to raise interest rates through May to try to get them to a restrictive stance, and that now �we�ll adjust policy going forward based on what we see out there.�

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# ¿ May 10, 2023 14:22

LanceHunter: Nov 12, 2016; Beautiful People Club

Also, some discussion on the sources of this inflation...

New York Times posted:

How the drivers of inflation have changed.

Americans have been dealing with rapid inflation for two years, but what�s driving the price increases has evolved.

The data shows that the painful inflation that arose from pandemic disruptions two years ago, and the government�s response to them, was only exacerbated by the war in Ukraine. That combination led to the biggest jump in price increases in half a century. Inflation is now cooling as supply problems clear up and the economy slows, but the road back to normal is still a long and uncertain one.

U.S. inflation today is drastically different from the price increases that first appeared in 2021, driven by stubborn price increases for services like airfare and child care instead of by the cost of goods.

Services costs, which include nonphysical purchases like tutoring and tax preparation, began to climb quickly by late 2021. Because families had more money than usual after months at home and repeated stimulus checks, households were in good spending shape, and landlords, child care providers and restaurants could charge more without losing customers.

The pop in prices over the 24 months that ended in March eroded wage gains, burdened consumers and spurred a Federal Reserve response that has the potential to cause a recession.

Which is most interesting for this graph:

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# ¿ May 10, 2023 14:31

LanceHunter: Nov 12, 2016; Beautiful People Club

street doc posted:

There is no real debate. After decades of consolidation companies had
A) the ability to raise prices
B) an excuse to raise prices

You just can�t deregulate an economy into a few monopolies or duopolies and then be shocked, shocked, when prices go up. Pointing at wage increases by employers as a major cause of inflation is pure gaslighting.

But as long as we are talking about wage inflation, we�re not talking about monopolies.

Yes, the highly monopolistic, corporatized industry of *checks notes* day care centers are only raising prices because of corporate greed and not at all because of rising labor costs.

# ¿ May 10, 2023 15:10

LanceHunter: Nov 12, 2016; Beautiful People Club

One advantage of being at full/near-full employment: Job satisfaction is rising.

Wall Street Journal posted:

Workers Are Happier Than They�ve Been in Decades

Labor shortages and shifting expectations lead to improvement for millions, survey shows

Job satisfaction hit a 36-year high in 2022, reflecting two effects of the tight pandemic labor market: The quality of jobs improved as wages and work flexibility increased, and workers moved into positions that were a better fit.

Last year, 62.3% of U.S. workers said they were satisfied with their jobs, according to new data from the Conference Board, up from 60.2% in 2021 and 56.8% in 2020. The business-research organization polled workers on 26 aspects of work, and found that people were most content with their commutes, their co-workers, the physical environment of their workplace and job security.

Among the happiest workers: people who voluntarily switched jobs during the pandemic and individuals working in hybrid roles with a mix of in-person and remote work. Men�s satisfaction was higher than women�s in every component, especially in areas such as leave policies, bonus plans, promotions, communication and organizational culture.

The survey of 1,680 workers was conducted in November, before a spate of layoffs at high-profile companies and rising worries about a potential recession. While unemployment remains low, a recent decline in job openings suggests that workers have fewer options and might be feeling more anxious about their job security, said Selcuk Eren, a senior economist at the Conference Board.

Highlighted the one catch in there. That said, the full survey report is here and it is worth a look. In particular, this chart is a beauty...

(Also, as an aside - where are people hosting images now that imgur has hosed off? I'm just attaching things but obviously that is pretty limited.)

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# ¿ May 11, 2023 15:45

LanceHunter: Nov 12, 2016; Beautiful People Club

St. Louis Fed president James Bullard gave an interesting presentation on how monetary and fiscal policy affected inflation. (That link is to the press release. This is to the presentation PDF.)

James Bullard posted:

The Monetary-Fiscal Response

Think of the pandemic as a global war that induced large-scale deficit spending combined with accommodative monetary policy, Bullard suggested.

�The spirit of the macroeconomic policy response to the pandemic was to err on the side of too much rather than too little,� he said. �This could be thought of as risking a high-inflation regime, as the monetary authority did not attempt to offset the inflationary impulse unleashed by the fiscal authority.�

The deficit spending was used for transfer payments to disrupted workers and businesses, which shows up as a sharp increase in personal saving relative to trend, Bullard explained. Meanwhile, the monetary policy reaction to the pandemic was to lower the policy rate sharply, accommodating the deficit spending.

�In macroeconomic historical context, this combination of policies often leads to substantial inflation,� he said.

The Switch to Disinflationary Policy

According to economic literature, what is now required is a switch back to the pre-pandemic monetary-fiscal regime that featured inflation near target, Bullard said, asking �is such a switch occurring?�

The effects of the fiscal stimulus have been fading, he said, and personal saving is now below the pre-pandemic trend line. Although excess savings are diminishing, more than $400 billion of excess savings remain.

[...]
The Prospects for Disinflation

Discussing disinflation, Bullard said that so far, core personal consumption expenditures (PCE) inflation has declined only modestly from the peak levels observed last year.

�However, an encouraging sign that the switch to pre-pandemic fiscal-monetary policy is working comes from market-based inflation expectations,� he said. �These expectations were near 2% in the first quarter of 2021, before any inflation had appeared or was widely expected. After moving higher in the last two years, these expectations have now returned to levels consistent with 2% inflation.�

This chart in particular paints a hell of a picture...

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# ¿ May 13, 2023 05:17

LanceHunter: Nov 12, 2016; Beautiful People Club

SpartanIvy posted:

I think the 1,400 number may be of all inventory which includes a lot of older homes which trend way smaller.

I don't think so, because...

GlyphGryph posted:

If I recall correctly from last time I dug through the numbers, we were down from 40% of new housing construction being in the started home size range (<1400 sq ft) to about 5% in the late 2010s. I do wonder what those numbers look like now.

# ¿ May 17, 2023 20:58

LanceHunter: Nov 12, 2016; Beautiful People Club

LLSix posted:

Does that mean that commuting costs each employee more than $4,600 a year? Because they seem to be claiming that's how much they spend at city business, so add on gas, vehicle maintenance and other transportation costs to start getting close to how much people save by working from home?

That math only works if you assume that the person who is now working from home is spending $0 on things like lunch, drinks after work, etc. Companies like DoorDash are thriving now because they are picking up a lot of this spending that would otherwise go to urban businesses.

Commuting costs are entirely separate, and while there are places that claim the average cost is much higher (like this article claiming the average cost is $8466 a year), if you break down the numbers you see that the majority of their calculation ($5,190 of the $8,466) relies on opportunity cost from lost time rather than actual money spent on gas/vehicle maintenance/etc.

# ¿ May 19, 2023 08:54

LanceHunter: Nov 12, 2016; Beautiful People Club

street doc posted:

https://www.axios.com/2023/05/18/once-a-fringe-theory-greedflation-gets-its-due

For some extremely tenuous definition of "gets its due". Aside from being a barely coherent list of bullet points, even the article's own summary is just the biggest wet fart...

quote:

The bottom line: Though there's nothing like consensus on the topic, "the discussion has widened," Claudia Sahm, a former Fed economist, tells Axios.

# ¿ May 23, 2023 16:18

LanceHunter: Nov 12, 2016; Beautiful People Club

GhostofJohnMuir posted:

yeah i've seen a fair number of republican house members publicly stating that they don't trust yellen's x-date and think there's either more time or more extreme extraordinary measures like preferential coupon payments that can be done. probably biden gives before this is an issue, but i worry that familiarity breeds carelessness. one of these days we're going to accidently dance off this cliff even though almost no one actually wants to

If Yellen had come out and said "We cannot legally send the June 1 social security checks if the debt ceiling has not been raised before that date", it would properly light a fire under people's asses.

Familiarity breeding carelessness definitely seems to be the big issue here. I think Biden was relying on the markets and the business community to properly freak out and starting to push their weight around. Unfortunately, too many people are convinced that it will never happen and so there is no freak out.

# ¿ May 25, 2023 19:06

LanceHunter: Nov 12, 2016; Beautiful People Club

An interesting possibility I've heard, and easily the sloppiest possible solution (outside of the actual global nukes-are-flying economic crash), is that people holding US debt sue for damages. They would very clearly have standing and motivation to do so. Then the courts can decide if the debt ceiling violates the 14th amendment (it definitely does) and can order Treasury to keep selling debt to make its payments.

# ¿ May 26, 2023 15:55

LanceHunter: Nov 12, 2016; Beautiful People Club

ultrafilter posted:

It's not a matter of whether the debt ceiling violates the constitution, though. It's a matter of whether the current SCOTUS will say that.

I guess it depends on how many T-Bills are in Harlan Crow's portfolio...

# ¿ May 26, 2023 16:45

LanceHunter: Nov 12, 2016; Beautiful People Club

May jobs report is out...

The New York Times posted:

U.S. employers added 339,000 jobs in May.

Job growth jumped in May, reaffirming the labor market�s vigor despite a swirl of economic headwinds.

U.S. employers added 339,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, an increase from a revised total of 294,000 in April.

The strong figures emerged from a survey of employers. A separate component of the report, based on a survey of households, yielded a somewhat dissonant picture.

That data showed a rise in the unemployment rate to 3.7 percent, from 3.4 percent, and a decrease of 310,000 in the number of people employed, as participation in the labor force was little changed.

In a sign that the pressure to entice workers with pay increases is easing, wage growth slowed slightly in May, with average hourly earnings increasing 0.3 percent from April, and 4.3 percent over the year.

Still, the hiring numbers suggest that employers remain eager for workers even in the face of high interest rates and economic uncertainty. Many are still bringing on employees to meet steady consumer demand, especially for services. And rather than lay off workers � which would signal deeper cracks in the labor market � a large swath of companies have been content to limit their head count through attrition.

An open question is whether employers can continue to rebuff economic challenges � and for how long.

�While overall the jobs market performance has been surprisingly strong, I think the labor market can�t defy the gravity of Fed rate hikes forever,� said Sarah House, an economist at Wells Fargo.

The report complicates the picture for Federal Reserve, which has been raising interest rates for more than a year to temper the labor market and rein in price increases. Fed officials have indicated that the jobs report will be an important factor as they decide whether to raise interest rates again. Their next meeting is June 13 and 14.

Looming over the report is the debt ceiling deal, which the Senate passed on Thursday, though economists largely expect the spending caps and cuts to have only marginal impact on the labor market going forward.

# ¿ Jun 2, 2023 14:24

LanceHunter: Nov 12, 2016; Beautiful People Club

Very brief piece at Bloomberg where Marc Rowan of Apollo is coining the term "non-recession recession" to describe the coming time of a strong main economy while the financial sector takes a loving bath. I still prefer Matt Yglesias's term for it, "the liquidation of the rentier".

# ¿ Jun 7, 2023 17:06

LanceHunter: Nov 12, 2016; Beautiful People Club

I think that San Francisco in particular is going to be a more extreme example of this effect, so they probably shouldn't be taken as the exemplar of what is coming for everyone. They're basically being hoisted on their own petard here, being hurt by the fact that their economy is so heavily tech-focused (when that was what made them so rich for the last few decades).

# ¿ Jun 8, 2023 20:10

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# ¿ May 22, 2024 17:32

LanceHunter: Nov 12, 2016; Beautiful People Club

Hadlock posted:

I'm curious, an old roommate of mine was an EE from turkey working at a semiconductor company and send most of his paycheck home for his dad to buy properties in Istanbul. Before he moved out he said he had something like 10 properties. World bank inflation calculator says that since he and I had that conversation about a decade ago, inflation has gone up 595%

If turkey has effectively 100% inflation since January 2020, does that mean his $1000 usd/mo mortgage is now $500 usd/month, or do countries with a history of high inflation have clauses in their mortgage contracts that modify the payment amount of some sort? $1000/mo with 600% inflation is something like $166/mo?

I looked into buying property internationally and noted that in many countries it's customary to pay a minimum of 33% down, I'm guessing due to this kind of instability

Wasn't it earlier in this thread were a lot of people were discussing how fixed-rate mortgages were pretty rare outside the US? I'd assume that the bank resolves this by adjusting the interest rate to match/beat inflation when the interest rate on the mortgage adjusts.

# ¿ Jun 14, 2023 20:56

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

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