What really makes me concerned is what the after effects are going to look like. What happens to housing prices after this is all over? When people realize their impulsive buys were a mistake. When foreclosures and evictions sweep the country. We are in this strange period where people are not yet feeling the extent of the potential economic impact, and I fear for what will happen in two or three years.
Why is it an absolute given that the economy is definitely going to flop? As the days pass I'm convinced more and more that the general economy (and the 1 or 2% of people who are directly benefited by it) will do just fine, even though the majority of the population is jobless and moneyless. This will finally lay bare that the contribution from the majority of the working population is quite optional for the GDP or any measure of economic productivity, and push comes to shove, the institutions (factories, offices) will start realising they can maintain or even increase productivity without involving the majority of the population in the process. Hence the people who have the money now (and are hence in positions that don't necessarily get lost in this process) are likely to continue prospering, while the people who are losing jobs and houses are never going to get them replaced.
The reason Apple's share price is booming is because "consumers" are buying their products so their earnings were great. Many of them probably spending printed stimulus money. Same for Amazon.
There is really no magic here except the illusion of unlimited money through quantitative easing.
The QE is the only thing holding things together, if that stops, everyone is going down the same drain to poop town.
Edit: I should also mention many investors are probably putting a lot of money into Apple as it's seen as a safe haven for equities right now.
Apple earnings haven't really improved much in the past 5 years. Their EBITDA is essentially flat. They just buy back their shares aggressively and have a ton of cash. Also a lot of big holders (like Buffett) that aren't going to just drop the stock, so there is a limited supply with people chasing it.
Small businesses are getting killed because the government deemed most of them "non-essential" so big boxes and eCommerce were the only things available, so of course Amazon, Walmart, Target, etc are all doing incredibly well. Their small competition was killed off. This pandemic has definitely worsened the transfer of wealth from the small hands to the large hands, and it's 100% the government's fault.
side question , but do you happen to have any resources explaining what could be the limit to unlimited QE and what precise series of event will be triggered when that limit is reached ( knowing that everyone is doing the same at the moment, from us to eu to cn).
Like the other poster mentioned, we don't really know.
I'm not an economist, just an interested investor and from my understanding, using QE on this scale is just an easy short term solution to a longer term, hard problem.
Printing money like this has never really been done before on this scale, but the fear is that "printing money" like this will potentially lead to very bad debt and hyperinflation inflation crisis (maybe already started).
The limitations of QE aren't entirely known, but will be known as more money is printed and money becomes more worthless.
Will having a lot of "monopoly money" in circulation be a problem? Time will tell; however there have been many examples where hyper inflation has caused economies to fail, such as Venezuela recently and the Roman Empire in the past.
The US Federal Reserve should probably be careful with their actions because they wouldn't be the first country to run into dire issues doing this.
What I fear is, the people at the top of the US are blinded by greed and the desire to be reelected and aren't concerned about the lessons of history.
QE isn't really the same as direct money printing. Most of the money seems to find its way into financial markets rather than directly into peoples pockets. So people will see their retirement accounts or stock holdings doing OK and maybe even cash some in to spend, or at a minimum make them feel comfortable with their current level of expenditure.
But we've had QE for over a decade in various amounts and it didn't lead to inflation, unless there's direct monetisation (the fed prints money and gives it to the government to spend in an unlimited fashion) I'm not sure why the situation would change.
Inflation has been most focused in assets and investments. The government has gone at great lengths not to count these in their inflation measures, but all that QE going into stocks and housing bidding wars can’t be a good thing in the long term.
have you seen what is happening in healthcare? Do you have kids in college? Have you tried to buy a residence in a large urban area like seattle, nyc, miami?
Have seen what is happening to food package sizes ij most american supermarkets? Do you know the increasing rate of us retirees is no longer flocking to fl, but abroad? Do you realize that it is no longer possible for a working class family to sustain itself with 1 breadwinner? Do you wonder why?
Just because tech , internet, and freight efficiencies are keeping in check in some sectors of the economy doesnt mean there is no inflation.
We are heading into the lost decades of japan
Welcome to salaryman life , where you live in a shoebox amd expect no asset accumulation for the rest of your life
I tend to believe Ray Dalio's theory about the long term debt cycle but we will see how it pans out. If the oracle of Omaha is still of any value it also signals tough times ahead
This. There is an election coming up, and (not trying to get political here, but) it is likely that a shift in power will occur. The current administration is trying to prop things up just long enough to set up a huge crash just after they lose power. It’s a fake recovery.
I've been thinking along those same lines. Basically feels like we're returning to a form of feudalism, with a rather established aristocracy and nobility already in place.
I'm just waiting for the financially ailing counties to start selling themselves in their totality to corporations and those corporations begin providing employment in exchange for literal cradle-to-grave services.
The seignorialism aspect of feudalism is now absent though: the lord needed peasants to work his lands. This new ruling class doesn't need the labor of the growing unemployed and forgotten class - only their consumption.
The lords need some work done, but they're making sure people earn as little as possible, have zero ties, and no transferable skills. I'm thinking of McJobs; zero-hour contracts, contractors, gig economy work, that kinda thing.
That's the way of it, because automation makes things cost less, but only the things that get automated. But if things cost less then you can pay people less. So what happens is that all the money goes to the places with artificial scarcity.
We don't have meaningful scarcity anymore, not for the essentials anyway. There is a finite amount of land but not a finite amount of housing units, because you can build arbitrarily many of them on top of each other. We can produce more food than people have any need to eat and producers then spend rather a lot of money convincing them to buy more than that. Medicine is only genuinely scarce to the extent that it's limited by labor availability, which means labor should move there and drive down the price unless something is constraining it.
But if you can make something like housing or medicine artificially scarce, you can suck all the surplus out of everybody's paycheck. And that's the problem.
Can you name one industry where labor is truly no longer needed, where it once was (in recent times)?
Maybe an example of a person who makes a large some of money through having zero employees where they used to have many and where those people were replaced with automation and completely obsoleted.
Not challenging you, I'm just interested in your theory.
Pocket calculators. Paper calendars. Film cameras and film development labs. Alarm clocks. Analog telephones, one for every room. Pens and paper and correction fluid and typewriters and typewriter ribbons and typewriter repair service, as physical things that required labor to exist.
A phone/computer replaces all of those, but it's one product instead of hundreds. It doesn't take anywhere near the labor to produce as all of those things once did.
I would say IT is an industry that made itself, as well as other industries greatly reduce the number of employees.
Not quite zero employees but numbers were reduced greatly, ie accounting. Example: accounting, before you needed a team of accountants for a mid level enterprise, not sometimes even one is sufficient.
> Because I'm constantly gobsmacked by inefficiencies and companies that have too many people involved in achieving simple goals?
That is also true, by no means I am implying that. There is a lot of inefficiency in many companies, but at the same time what took X people in the past now takes X-Y people for many sectors, ie accounting.
Another good example is website creation and development for Small-Medium Enterprise. In the 90-s/2000s you had to pay someone to create a website for you, where now there are countless website builders, some of which are really great.
> Here’s the thing: from where I live, the world has drifted away. We aren’t precarious, we’re unnecessary. The money has gone to the top. The wages have gone to the top. The recovery has gone to the top. And what’s worst of all, everybody who matters seems basically pretty okay with that. The new bright sparks, cheerfully referred to as “Young Gods” believe themselves to be the honest winners in a new invent-or-die economy, and are busily planning to escape into space or acquire superpowers, and instead of worrying about this, the talking heads on TV tell you its all a good thing- don’t worry, the recession’s over and everything’s better now, and technology is TOTES AMAZEBALLS!
> even though the majority of the population is jobless and moneyless
Unemployment is high, but much lower than the initial surge from coronavirus. It's likely we're still seeing significant hour/shift reduction, but as lockdown measures relax that will mostly let up or those workers will shift to different fields.
We are seeing things shift away from brick and mortars, but that isn't new just accelerated. It seems like ecommerce is eating everyones lunch now.
That’s easy - the ones with the money. If the wealth divides, so will the product offferings from those companies. A bit of an inconvenient truth for many of us.
So that implies that when companies keep the same revenue, their offering will become more expensive (Nobody needs 5 iPhones).
This also implies that the ones that are able to buy an iPhone, will pay significantly more for it. Which will make the ones that can afford it even more narrow.
There is something wrong with the reasoning that losing a big part of the market has no influence on companies and consumers that are still able to afford things. This impacts everyone, there is no question about that. Maybe some more than others, but everyone will feel it.
You could categorise lots of zero hour contracts and self employed folks as jobless and moneyless. I would say that most people living from paycheck to paychek are moneyless.
The economy as a whole? Probably not, because it's more measured according to the country's whole GDP and stock market instead of personal tragedies like getting evicted or bankrupted.
(disclaimer: not an economist, just a dude in an armchair with an Opinion)
What makes you think these are impulsive buys? As people get older and, especially as they have families, there's always been a tendency to move to the suburbs/exurbs if they weren't there already. The main difference today is that big cities have tended to be attractive to young professionals to a degree that they really weren't 25 years ago.
The pandemic has probably accelerated a migration that would have happened anyway--but arguably slowed down the new grads moving into cities to replace them.
Right. So where suburban homes are ticking up, urban living spaces are going to contract. Then does the contraction (i.e., lower prices and more choice) trigger people to not leave urban areas?
A lot of different factors come into play which I certainly don't claim to be able to predict--and will likely vary by city.
On the one hand, lower prices make urban areas/city cores relatively more attractive for those who want to live there. (I doubt living in the cores of top cities is ever going to be cheap; it wasn't in Manhattan in the 1980s.)
On the other hand, there may well be less need to be in a city for certain jobs. Furthermore, if city services are a mess, crime is up, and a lot of the restaurants and small businesses are closed, urban living may be less attractive.
In April Credit Suisse released their outlook on the real estate market in Switzerland, I think their views can be broadly applied to the US as well though.
"Low mortgage interest rates mean that home ownership is currently cheaper than renting...and would rule out the prospect of a significant increase in defaults... This is due to the low mortgage interest burden seen in recent years, as well as the fact that financing requirements have been tightened on several occasions. Specifically, this means a majority of home owners are unlikely to have any difficulty servicing their mortgage debt in the event of a temporary reduction in their income" (https://www.credit-suisse.com/ch/en/articles/private-banking...).
I think the thesis still holds up for owner-occupied homes. Residential, luxury, and commercial property market is a different story, although it seems that residential has bounced back, not sure about luxury, and commercial has gotten destroyed and is why Amazon is buying it up for cheap.
> When people realize their impulsive buys were a mistake.
I think it's unfair to assume people are panic buying houses. The people I know that have purchased a house in the last six months would have purchased a home regardless of the pandemic. In addition, the threat of inflation is real and having a stable housing cost can help with inflation.
Well the question is also where would you best put your money? As possibly devalued currency or bubble-territory index fund?Building a house requires resources whose price may rise up precipitously in the future, eg. energy, the oil major stopped looking and renewables are not there yet for a long while at our consumption levels...
Difficult to know. Diversifying won’t get max returns but also won’t get max losses. A range of ETF’s (Global markets and bonds), real estate, bitcoin, and cash might be a starting point.
jesus... that is such a negative way of looking at things.
i'm glad that prices and interest rates are finally at a level that people can purchase a home. now hopefully these people have learned from others mistakes in 2007 and only buy a house that they can afford which usually means that your whole MIT payment (mortage + taxes + insursure) never goes above 25% of your monthly net income. things got crazy in 2007 when people were committing 50% or more of the monthly net income to their home payment in hopes that they could flip it in a year or so for a big profit. while this is fine for an investment property that you don't care about getting foreclosed, you never have that mindset with your primary residence.
> while this is fine for an investment property that you don't care about getting foreclosed
No, getting into a risky, speculative, highly leveraged position that takes more than half your monthly income just to service the interest is not a good idea, period.
This was not simply a case of people being otherwise shrewd investors, making only the small mistake of making the object of their speculation their residence.
> Even if you invest at the worst possible times (right before crashes) you’ll come out way far ahead of leaving it in cash.
I don't like this argument, because it seems to imply you would indefinitely leave it in cash. In this hypothetical situation, where a market crash is impending, and individual could invest at the bottom and make significantly higher returns than investing prior to the crash.
This of course goes without saying, "you can't time the market", but it's a bit dishonest to indicate that you can't beat the market here.
I don't think the price differential between San Antonio and Austin housing is high enough to offset the level of talent and appeal that Austin (or even Dallas for that matter) currently provides for the tech scene.
Depends on your vertical. There are a number of O&G related startups. And (oddly) San Antonio rates just behind San Diego and Boston for Medical Device innovation (not software, but still, big tech business)
Not necessarily, many large companies are willing to guide and help an employee determine if something is okay or not to work on. You shouldn't be discouraged for posing the question, and if you are, the employer is not being rational.
The only case where it might even be a question is if you're directly taking what you are working on during your day job and putting it into a side project, aka stealing their IP.
Other than that, no, your time is your time and unless they are paying you then they have no say as to what you work on no more than they have a say in what you eat for dinner.
I disagree with your first sentence. Say that you work for Amazon, and you start an e-commerce side project that directly impacts the growth of e-commerce outside of the Amazon marketplace. It may be a negligible share of the market, but you are still negatively impacting Amazon's sales. There is a reason that they put conflict of interest in the fine print, and posing the question helps bring more context.
Doesn't always work like that. The non-compete and conflict of interest clauses are narrower than that. In case of Amazon, they sell pretty much everything, to everyone, so you might have a conflict of interest. But if you start an e-commerce store that sell something very specific to very specific market segment than you may not have a conflict. For example, B2B marketplace for oil supply chain industry (Know a guy who does something similar).
Same thing with consulting, a friend works for a consulting company that closes 1M+ projects. He on side make websites for small businesses. Everyone knows at his company, no issues so far.
> but you are still negatively impacting Amazon's sales
It is not the responsibility of a single employee. Even more in a market so ubiquitous as "ecommerce".
The same way, Amazon (and other tech companies) impacts negatively the careers of its employees when it change platforms, frameworks, technologies or do a layoff.
Why should a company hire someone who is potentially going to impact their own revenue? And in rarer cases, a side project that actually generates enough revenue to where the amount of money they are paying you is less than the share you are taking from their revenue.
To your second point, sure, employers hold more power. What is wrong with that? If you don't like it, you can always work somewhere else.
> Why should a company hire someone who is potentially going to impact their own revenue?
Because every software engineer can impact their own revenue the same way.
> To your second point, sure, employers hold more power. What is wrong with that? If you don't like it, you can always work somewhere else.
Don't liking it, I'm supporting my peers in HN that it is not unethical to have a side project and use it as a leverage to not be subject to the humor of your boss. It is also good for the company, as desperate people aren't creative.
As long as the side projects are in no way considered a conflict of interest, I think it should be acceptable. It is sometimes difficult to determine whether or not something is a conflict of interest. The other thing to be careful of is making sure that the additional side project(s) are not burning out the employee, or occasionally eating into their actual time at work.
Is there strong evidence that this will happen anytime soon? I've heard many arguments that claim this wouldn't happen anytime soon, particularly because of the level of difficulty and the required determination.
I don't know the situation in the US, but here in Germany the companies always say "Oh no, we don't have enough computer scientists" and continue to pay low salaries. Many people thought that CS grads were needed and chose it, but they earn average salaries and sometimes even have to fight for the good seats.
Our definition of skill shortage is that there are only 3 applicants for one open position. This means a skill shortage doesn't mean there's no one. It means that there are 3 people hoping for the job, but the companies would love to see as many as they can so they can push the salaries down.
> particularly because of the level of difficulty and the required determination
Maybe my imagination is limited, but I think there's a finite set of things we need until it gets exponentially harder to make big leaps (all industrial nations suffer from this phenomenon in advanced sectors) - basically the law of diminishing marginal returns [1]. And we will continue to improve the developer experience so it gets easier to build computer programs.
This is exactly what they're doing. I think it's irresponsible to manipulate the youth and telling them that everyone should be a programmer. The companies won't feel responsible for all the jobless or unhappy people they've created through lobbying and will blame politics. Man, I seriously hope I'm wrong, but I'm pretty sure I'm not.
I think you are going about this all the wrong way. You seem to think that most people who use positive words are just putting up a facade and using these words for the sake of using them.
Consider the co-worker who acknowledges hard work you do, and appreciates you for your effort. This acknowledgement gives this you a sense of accomplishment, which in turn makes you feel happier and better.
Consider the neighbor who offers help when he notices you have a problem with your car, or gives you advice that helps you solve your problem easier.
Consider the person who recognizes that you have a disability or health defect, and chooses to help you and provide you with positive reinforcement to help you focus on progress and feel better about your situation.
I think the article, and the notion of "positive people," is more than just throwing a word around. It's about people who add weight and meaning to their words through thoughtful consideration and genuine compassion.
