The Viral Economy

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stessier
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Re: The Viral Economy

Post by stessier »

malchior wrote: Fri Jan 20, 2023 6:43 pm
Zarathud wrote: Fri Jan 20, 2023 5:09 pm Business leaders are looking to assign blame as the economy remains weak and challenging.
This has been the weird part of current story telling. The economy grew at an estimated real 3.7% in 2022. That's a fine performance by any measure. Corporate profits are at 10 year highs. Yet we keep hearing about the economy being weak or actually in a recession despite having no indicators it's happening generally. It's very strange.
Companies can play games with finances for several quarters. Factories are slower and the tech layoffs should be a red flag.
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Re: The Viral Economy

Post by malchior »

stessier wrote: Sat Jan 21, 2023 5:45 am
malchior wrote: Fri Jan 20, 2023 6:43 pm
Zarathud wrote: Fri Jan 20, 2023 5:09 pm Business leaders are looking to assign blame as the economy remains weak and challenging.
This has been the weird part of current story telling. The economy grew at an estimated real 3.7% in 2022. That's a fine performance by any measure. Corporate profits are at 10 year highs. Yet we keep hearing about the economy being weak or actually in a recession despite having no indicators it's happening generally. It's very strange.
Companies can play games with finances for several quarters.
True but still GDP is measured by multiple sources and came in stronger than expected. It's subject to adjustment but it's hard to imagine it'd go from 3.7% to anywhere near a level matching the pessimism we are seeing. It is a little hard to square at the moment.
Factories are slower
This is the strongest leading indicator of a slowdown. But it's one of the only ones. It is a decently strong indicator so it should be taken as a warning but we're still seeing strong hiring which somewhat offsets it.
tech layoffs should be a red flag.
I think it's a weak indicator. The focused coverage makes it sound both bigger and more pervasive than it actually is. The layoffs have been modest there (usually ~5% of employees). Importantly Amazon, Salesforce, Google, and Microsoft all signaled the same thing - they hired too strongly during the pandemic (especially Q3 2020 through 2021).

Anyway, if I was to generalize it, this is the chattering pundit class at work. We have an extraordinarily consolidated media universe now and they all follow herd. With the Fed offering more expensive money than we have seen in a long it isn't crazy for the herd to argue RECESSION as a storyline. That does increase the chance of it happening if people clamp down on spend at scale but the correlation being reporting and people actually listening typically is a little weak.

FWIW this isn't an argument against recession. I'm more saying that people out there arguing that people shouldn't automatically leap to 'we're in one' (which is almost certainly wrong) or businesses should be panicking. In fact, what we're seeing is hardly panic at all outside the big city officials/real estate duopoly who are dealing with probably one of the biggest urban realignments in 50 years. Still demand hasn't fallen off a cliff. We only saw slight slow downs at end of year but household accounts are still pretty robust. This isn't at moment looking like the typical downturn if it happens.

The biggest risk we probably face are the idiots in Congress. If they force a sharp cut to government spending then we'll see them commit to the same mistake they made post-2008 where they damaged recovery with weak spend and then a poorly timed rescission.
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Re: The Viral Economy

Post by Zarathud »

IT and marketing are easy to cut when controlling costs to preserve profit. Both are investments in growth, and increased costs of capital have real consequences.

When the House fucks up the US dollar over the debt ceiling and cuts spending, that uncertainty is going to further increase borrowing costs and scare businesses into further retreat. We need stability not chaos goblins.
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Re: The Viral Economy

Post by LordMortis »

Zarathud wrote: Sat Jan 21, 2023 10:28 am IT and marketing are easy to cut when controlling costs to preserve profit. Both are investments in growth, and increased costs of capital have real consequences.

When the House fucks up the US dollar over the debt ceiling and cuts spending, that uncertainty is going to further increase borrowing costs and scare businesses into further retreat. We need stability not chaos goblins.
IT definitely (and administrative departments, in general). IT is a necessary evil until it isn't. When I worked, IT was first on the chopping block and "re-envisioning" for every cost cutting cycle. IT doesn't translate to new business and you only see how it is value added after you cut it. I can only imagine the migration to XaaS in IT over the last 10+ years is going to absolutely destroy a lot of IT businesses that overcharged to make X into long term recurring charge instead of a purchase. As scale backs happen, a lot of businesses are going to decide IT Subscription service X can no longer be justified.

I wonder how this will affect Universities (and many other actual government services), which are growing administrative costs nearly as exponentially as tech businesses would have you believe they are growing.
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Re: The Viral Economy

Post by malchior »

Zarathud wrote: Sat Jan 21, 2023 10:28 am IT and marketing are easy to cut when controlling costs to preserve profit. Both are investments in growth, and increased costs of capital have real consequences.
IT isn't necessarily an investment in growth solely. The biggest trend right now by far IMO is digitalization which is about using IT to drive operational efficiency and cost savings. This is happening even in traditional banging out widgets manufacturing. The digitalization transformations have made IT a valued partner with the business. In fact, this IMO has lead to a trend where companies are driving up their cyber risk as they plow money into digitalization which has direct business relevance, which introduces complex systems, and they often end up underfunding cybersecurity in the meantime. And this too commonly ends up with them talking to people like me after a ransomware gangs have hit them. I only mention this because businesses that try to cut costs here face real perils that manifest more than people realize (it's a goddamn plague right now) and often force reinvestment even if they aren't seeking growth.
When the House fucks up the US dollar over the debt ceiling and cuts spending, that uncertainty is going to further increase borrowing costs and scare businesses into further retreat. We need stability not chaos goblins.
This is why I think they are the big risk. Recessions come and go but this shit? It's like idiotic lightning from the sky.

LordMortis wrote:IT definitely (and administrative departments, in general). IT is a necessary evil until it isn't. When I worked, IT was first on the chopping block and "re-envisioning" for every cost cutting cycle.
I consult heavily in the IT/cyber space and this is not the norm. The opposite is generally a much bigger problem. Many businesses have challenges staffing IT. Businesses will use layoffs to trim off underperformers but it's typically very limited. I spend a decent chunk of many cybersecurity maturity assessments talking to executives about how they have not aligned labor w/ process needs. It then often goes into discussions about how they'll need to go to service providers because the folks they need are impossible to hire.
IT doesn't translate to new business and you only see how it is value added after you cut it.
Eh. I've seen inside something like 100 Fortune 500 size companies (some are private) over the last 10 years. This definitely happens but it is a pretty small percentage of companies. If you work in one it blows bigly but it's not the norm. This is seen typically in smaller companies or in non-consolidated industries.
I can only imagine the migration to XaaS in IT over the last 10+ years is going to absolutely destroy a lot of IT businesses that overcharged to make X into long term recurring charge instead of a purchase. As scale backs happen, a lot of businesses are going to decide IT Subscription service X can no longer be justified.
I highly doubt it. I can't imagine any business wanting to say get rid of Office365 to bring email back on premises. Overwhelmingly and with good reason they trade out some CapEx vs. OpEx opportunities for relative price stability and all around risk reduction. They don't need to hire or maintain staff to run anything they are able to successfully outsource and the non-IaaS offerings are typically responsible for delivering security. It's a no brainer.
I wonder how this will affect Universities (and many other actual government services), which are growing administrative costs nearly as exponentially as tech businesses would have you believe they are growing.
What's fun there is that education and government often pay bottom quartile salaries in IT. It's hard for Cloud/SaaS to break in and it's hard for the Universities to hire talent that help them dig out of their messes. They have a heavy lean to semi-permanently fucked.
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Re: The Viral Economy

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First thing I could find with CNBC and SaaS. The guy who runs MS disagrees with you.

https://www.cnbc.com/2023/01/18/microso ... oyees.html
Nadella reiterated trends in the business climate that he has described in recent months.

“As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” he wrote. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one.”

Earlier this month Nadella had indicated the company might have to institute changes.

“I think for us as a global company, we’re not going to be immune from what’s happening in the macro,” he said in an interview with CNBC-TV18. “We will have to also get our own sort of operational focus on making sure our expenses are in line with our revenue growth.”
He is in line with Alpahabet, Amazon, etc...

First thing I could find on CNBC with Cloud Spend

https://www.cnbc.com/2023/01/19/for-the ... nding.html
That’s according to Nikesh Arora, the CEO of cybersecurity company Palo Alto Networks, interviewed on Monday by CNBC at Davos.

″[Companies] are not imaging a draconian outcome for their own spending, their own budgets, and in that context,” Arora told CNBC’s Sara Eisen at Davos 2023.

More scrutiny of tech budgets, though, led by the CFO, is occurring, and that is a significant change from recent times during which the approach has tilted closer to a “blank check” for tech line items.

“I have said it and will repeat myself … repetition doesn’t spoil the prayer,” Arora said. “The reemergence of the CFO. For many years in this hyper-growth environment, people were spending quickly to drive growth and CFOs were having to call them and say ‘why are you spending so much money?’ Now everything is going through CFO review, which means it is taking longer. We’ve talked about this in the past, which means you have to get ahead of it sooner.”

Arora said cybersecurity, his firm’s niche, is in the best spot. He’s talking his book, but according to a Citi survey of chief information officers, he is also correct. The Citi CIO Survey released on January 12, forecasts a slower growth rate for tech spending — well below the Covid peak and below the historical average, and down from Citi’s last forecast in the Fall — but still representing a modest rate of growth.
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Re: The Viral Economy

Post by malchior »

LordMortis wrote: Sat Jan 21, 2023 12:11 pm First thing I could find with CNBC and SaaS. The guy who runs MS disagrees with you.
His quote doesn't disagree with my point at all. He is saying business is soft and they are seeing businesses targeting spend. That is a very different idea than: IT is first on the chopping block, they'll abandon those services, or that IT os undervalued in today's business. It'll however drive MS and GOOG and AWS type services to build value stories and might drive cost competitiveness which will bolster the IT value story long-term.
“I have said it and will repeat myself … repetition doesn’t spoil the prayer,” Arora said. “The reemergence of the CFO. For many years in this hyper-growth environment, people were spending quickly to drive growth and CFOs were having to call them and say ‘why are you spending so much money?’ Now everything is going through CFO review, which means it is taking longer. We’ve talked about this in the past, which means you have to get ahead of it sooner.”
I totally agree with this assessment. Cost cutting is on the agenda. The CFO is the traffic cop right now but IT has a cost cutting story in many businesses right now.

On top there is a critical risk reduction story there as well. We just had high level meetings post assessment where we first had to convince a CFO to make spend. We then went on to make that argument to a public company's board and answered questions. We helped justify hiring in the wake of multiple data breaches at their company.

My larger point though is that IT isn't necessarily going to be first on the chopping block because there are macro trends that are bolstering IT. That doesn't mean business isn't soft but it'll be tougher to cut those functions. One you would then have to justify scale back on opportunities to cut cost and two they then become targets for fraud. And for the negligent child - long-term strategic thinking - the well-run companies are looking to be well-positioned to snatch opportunities on the other side even if a storm comes.
Arora said cybersecurity, his firm’s niche, is in the best spot. He’s talking his book, but according to a Citi survey of chief information officers, he is also correct. The Citi CIO Survey released on January 12, forecasts a slower growth rate for tech spending — well below the Covid peak and below the historical average, and down from Citi’s last forecast in the Fall — but still representing a modest rate of growth.
Exactly! In line with what I was saying. Cybersecurity in particular is extremely hard to cut. Most places have underrun cybersecurity spend and like Mike Tyson said, “Everyone has a plan until they get punched in the mouth.” I'll again say most people have no reckoning of the scale of what is happening out there. It feels like we have a bottomless incident response pool that leads to work to help companies deal with the fallout. It's constant. (Edit) We have seen a surge of incidents since the war in Ukraine began. There is a growing body of evidence that the sanctions regime has state-sponsored cybergangs ramping up efforts on that front.
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Re: The Viral Economy

Post by noxiousdog »

Layoffs are often a good excuse to get rid of weak performing employees/divisions. My company, as far as my boss or I can remember, have never had anyone fired for under performance. But every 5-7 years when the layoffs come around, it's not hard to guess who will be leaving.
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Re: The Viral Economy

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malchior wrote: Sat Jan 21, 2023 12:34 pm His quote doesn't disagree with my point at all. He is saying business is soft and they are seeing businesses targeting spend. That is a very different idea than: IT is first on the chopping block, they'll abandon those services, or that IT os undervalued in today's business. It'll however drive MS and GOOG and AWS type services to build value stories and might drive cost competitiveness which will bolster the IT value story long-term.
Right. I'm seeing this from my perspective as well. We are seeing customers that have gone into O365 and Azure not look to bring things back on prem, but look to rationalize their spending. In some cases they have put cost containment second to their digital migration strategy, but now they are looking at assessing their cloud spend to make sure they are spending money in the right place. This cost cutting is pushing one of my customers to accelerate their cloud migration so they can get out from under their datacenter overhead.
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Re: The Viral Economy

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I think today's earnings announcements underline that if we aren't in a recession yet, we soon will be.
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Re: The Viral Economy

Post by malchior »

stessier wrote: Tue Jan 24, 2023 2:03 pm I think today's earnings announcements underline that if we aren't in a recession yet, we soon will be.
We'll see. S&P Q4 net profit is currently running 11.4% vs expected 11.9%. That hardly screams downturn. This is the problem with overfitting on the news cycle. There are some companies saying they aren't even soft such as J&J announced guidance above expectations for the year though they can be a bit countercyclical or GE saying they are seeing solid demand while committing to a layoff at an underperforming division. I see this as a bit of a continuation of the muddy story we have seen over the last 2-3 years where people are pessimistic but economic data is relatively solid.

Edit: The idea we are currently in a recession seems super unlikely. We'll be getting GDP data later in the week. The concensus is that real GDP is between +1.5-2.5%. Which is a relatively normal read.
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Re: The Viral Economy

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And with sheer contrarian willpower, did Malchior of the OO beat back a looming recession that most of the world feared was nigh upon them.
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Re: The Viral Economy

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Carpet_pissr wrote: Wed Jan 25, 2023 3:56 pm And with sheer contrarian willpower, did Malchior of the OO beat back a looming recession that most of the world feared was nigh upon them.
Lol. Still we've been hearing talk of recession for 2.5 years now. It's bound to happen sometime anyhow. We're definitely trending negatively in certain areas/indicators. But in others we aren't. It's mixed. That's all I've been saying. It isn't some certainty and I think we're about to get news that'll tell us we weren't anywhere near a recession in Q4. But we'll see what the data holds.
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Re: The Viral Economy

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Re: The Viral Economy

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malchior wrote: Wed Jan 25, 2023 4:01 pm
Carpet_pissr wrote: Wed Jan 25, 2023 3:56 pm And with sheer contrarian willpower, did Malchior of the OO beat back a looming recession that most of the world feared was nigh upon them.
Lol. Still we've been hearing talk of recession for 2.5 years now. It's bound to happen sometime anyhow. We're definitely trending negatively in certain areas/indicators. But in others we aren't. It's mixed. That's all I've been saying. It isn't some certainty and I think we're about to get news that'll tell us we weren't anywhere near a recession in Q4. But we'll see what the data holds.
I’m not really pushing back on your pushing back (if anything I tend to overestimate the power of critical thinking).

Just keep in mind that consumer/investor confidence is a thing…an often irrational thing powerful enough to trigger unnecessary (or at least premature) recessions.

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Re: The Viral Economy

Post by malchior »

True. What's interesting there is that Consumer Confidence fell well below the levels it reached during the 2020 COVID *shutdowns* and bottomed out in mid-2022 (mostly due to cost of living issues). It is actually trending up right now. That's why I keep talking about muddy. All the leading/lagging indicators? They are all over the place yet we keep hearing a single clear message from the very consolidated media. It's just strange how sure folks are about something that is probabilistic.
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Re: The Viral Economy

Post by malchior »

Don't call it a recession...yet. Real GDP came in at +2.9% in Q4 which was above expectations and we are seeing the lowest unemployment headline rate in a generation. FWIW I think it's strange that the media is focused on tech layoffs when our number one problem is probably broadly labor participation (which is still declining). Our economy appears to be constrained by labor shortages above all things.

Data complete with Deathwatch worthy headline - U.S. GDP rose 2.9% in the fourth quarter, more than expected even as recession fears loom. This wouldn't even indicate mixed on its own. It would indicate a healthy economy. Still other indicators are still showing weakness.
The U.S. economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead.

Fourth-quarter gross domestic product, the sum of all goods and services produced for the October-to-December period, rose at a 2.9% annualized pace, the Commerce Department reported Thursday. Economists surveyed by Dow Jones had expected a reading of 2.8%.

The growth rate was slightly slower than the 3.2% pace in the third quarter.

Stock market futures rose following the report while Treasury yields were mostly higher as well.

Consumer spending, which accounts for about 68% of GDP, increased 2.1% for the period, down slightly from 2.3% in the previous period but still positive.

Inflation readings moved considerably lower. The personal consumption expenditures price index increased 3.2%, in line with expectations but down sharply from 4.8% in the third quarter. Excluding food and energy, the chain-weighted index rose 3.9%, down from 4.7%.
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Re: The Viral Economy

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And Wall St continues to yawn.
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Re: The Viral Economy

Post by Octavious »

Larry Kudlow has a big article on Fox saying that we're spiraling into a great depression. So that means the everything is going to be fine based off past experience. :lol:
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Re: The Viral Economy

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Octavious wrote: Thu Jan 26, 2023 10:38 pm Larry Kudlow has a big article on Fox saying that we're spiraling into a great depression. So that means the everything is going to be fine based off past experience. :lol:
I'd love someone to make a bet for him (and Jeremy Grantham if I was so lucky) to not be able to speak about an epic bubble/depression until one happens. We'll never hear from them again.
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Re: The Viral Economy

Post by GreenGoo »

Max Peck wrote: Fri Jan 20, 2023 5:25 pm The federal government is trying to push people back into the office here as well.
Somewhat ironically, I still have my original office (it has sat empty for 3 years), while having one of the most logical jobs for working from home. So I'm going back to the office so I can continue to remotely connect to the servers I support.

Until the treasury board made their one policy for everyone move, it looked like I would be working from home indefinitely.

A couple of things. I'm annoyed about going back to the office for no job/productivity related benefit, but oh well. My bosses are saying 2 days a week, and that means 3 days at home. That's hard to argue against, given 5 days pre-pandemic.

Second, I completely resent the calls for us to return to downtown so that those businesses can survive. I understand and am sympathetic to business owners, however, you are not owed any money from me. To suggest that I be chained to a desk where your business is so you can get my money is obnoxious and entitled.

Lastly, the Citizen (local paper) has been running a near non-stop propaganda campaign to turn public opinion against federal workers and their working from home situation. From hit pieces, to printing only negative opinion pieces, it's just a long running shit storm of unfair criticism and unwarranted opinions, backed by exactly zero data. This more than anything is where my real dismay lies.

So fuck you, the Citizen.

Oh, one more comment. I will be able to use my personal, unshared office OR a more local (to my home) shared office space for my 2 days a week, and I get to choose which one. And if the weather is bad or I have an appointment far from downtown, I can still work from home on any day, completely my choice. The new situation is far superior to the old, pre-pandemic situation. So on the whole, it's a positive thing.

And that's without going into my own personal failings about being introverted and thus rarely leaving my home for 3 years, exercising less, eating too much, etc etc. There have been some downsides to working from home, for me personally.
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Re: The Viral Economy

Post by Smoove_B »

There's quite a few Long Covid articles I'm catching up on from the weekend. Slow news month? Just kidding - people are perhaps starting to notice:
About 1.5 million Americans missed work because of sickness in December. Each month, more than a million people have called out sick for the past three years. About 7% of Americans currently have long Covid, which can affect productivity and ability to work, according to the Centers for Disease Control and Prevention (CDC).

The last time the absentee number dipped below a million Americans was in November 2019.

Last year, the trend accelerated rather than returning to normal. In 2022, workers had the most sickness-related absences of the pandemic, and the highest number since record-keeping began in 1976.

In 2022, the average was 1.58 million per month, for a total of 19 million absences for the year. The largest spike was in January 2022, when 3.6 million people were absent due to illness, about triple the pre-pandemic number for that month.

Parents and caregivers also saw the highest rates of childcare-related absences of the entire pandemic in October 2022 as illnesses surged amid relaxed precautions and lower vaccination rates among children.

Patterns in absenteeism correspond with rises and falls in the spread of Covid. But long Covid is probably contributing to sick leave rates as well.
But how is it impacting the marketplace in the bigger picture?
One analysis in New York found that 71% of long Covid patients who filed for worker’s compensation still had symptoms requiring medical attention or were unable to work completely for at least six months. Two in five returned to work within two months, but still needed medical treatment. Nearly one in five (18%) of claimants with long Covid could not return to work for a year or longer after first getting sick. The majority were under the age of 60.

Workforce participation has dropped by about 500,000 people because of Covid, according to one study that looked over time at workers who were out sick for a week. But the actual number could be higher, because not all workers are able to take time off during their illnesses, Bach said.

“It’s likely that long Covid is keeping somewhere around 500,000 to a million full-time-equivalent workers out of work,” said Katie Bach, a nonresident senior fellow at the Brookings Institution.
More on the numbers:
If long Covid continues to affect 7% of the country, that’s 23 million people at any given time who may require accommodations under laws like the Americans with Disabilities Act.

“But there isn’t a lot of clarity about what is a reasonable accommodation” under the law when it comes to Covid and long Covid, Burns said.
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Re: The Viral Economy

Post by Daehawk »

When it costs whoever it costs more to do nothing than to do something then they will do something until it costs less to do nothing again.
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Re: The Viral Economy

Post by Kurth »

In very moderated and non-hyperbolic terms, the Wall Street Journal is telling me that The U.S. Consumer Is Starting to Freak Out.
The engine of the U.S. economy—consumer spending—is starting to sputter.

Retail purchases have fallen in three of the past four months. Spending on services, including rent, haircuts and the bulk of bills, was flat in December, after adjusting for inflation, the worst monthly reading in nearly a year. Sales of existing homes in the U.S. fell last year to their lowest level since 2014 as mortgage rates rose. The auto industry posted its worst sales year in more than a decade.

It’s a stark turnaround from the second half of 2020, when Americans lifted the economy out of a pandemic downturn, helping the U.S. avoid what many economists worried would be a prolonged slump. Consumers snapped up exercise bikes, televisions and laptop computers for schoolchildren during lockdowns. When restrictions were lifted, they rushed back to their favorite restaurants and travel destinations.

And they kept spending, helped by government stimulus, flush savings accounts and cheap credit, even as inflation picked up. Faced with four-decade-high inflation last year, Americans outspent it. Through most of 2022, consumer spending growth exceeded price increases by about 2 percentage points.

Now the forces that helped keep spending high are unwinding, while inflation remains elevated. The share of monthly income Americans set aside for savings was 3.4% in December, down from 7.5% a year earlier and from a record high in April 2020. Credit-card interest rates have been rising, and Federal Reserve officials have signaled that they plan an additional quarter-percentage point increase to the central bank’s benchmark rate this week. That would bring the rate to between 4.5% and 4.75%, from near zero at the start of last year.
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Re: The Viral Economy

Post by gilraen »

People spent way too much money on luxury items because "I'm so tired of being cooped up at home, I'm going on a European vacation that I can't afford but what the heck!" Rent and utilities' increases outpaced inflation in many parts of the country so people had to spend more on things they couldn't control or cut. Meanwhile they are watching Fox News that's telling them how the economy is in the toilet because reasons. Yeah, no shit the consumer is starting to freak out.
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Re: The Viral Economy

Post by malchior »

This is a little mysterious because...check out the aggregate data for consumer spend below. The above in WSJ feels a bit like cherry picking to me. Just to be clear the economic outlook is still muddy but I'm just saying the aggregate data doesn't show what they say. The "issues" they point out could be just normal variations in spend based on market prices. For example, mortgages are more expensive so folks are spending money elsewhere. Like free markets do.

Image
gilraen wrote: Tue Jan 31, 2023 9:40 pm People spent way too much money on luxury items because "I'm so tired of being cooped up at home, I'm going on a European vacation that I can't afford but what the heck!" Rent and utilities' increases outpaced inflation in many parts of the country so people had to spend more on things they couldn't control or cut. Meanwhile they are watching Fox News that's telling them how the economy is in the toilet because reasons. Yeah, no shit the consumer is starting to freak out.
Despite being told to freak out...the data doesn't appear to show them actually freaking out. Weird right?

Edit: Also the savings rate falling to 3.4%? That's probably part of a normalizing trend that overshot a bit. The economy ran with an unusually high savings rate throughout the pandemic. It was likely going to come down sometime (but even then after looking at the trend as below - it doesn't tell the story they say it does). The holidays seem like as natural a time as any for people to spend. Also, I have to note that inflation has fallen significantly in the last quarter. The whole thing from top to bottom is just ... shoddy analysis but you do you WSJ.

Edit 2: Just because I can't let this go. Look at this graph and tell me the WSJ author isn't potentially misinterpreting the data.

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Re: The Viral Economy

Post by Octavious »

We got too uppity with getting more money and working from home. The job market will take a hit because it has to take a hit to put things back in order. Next up is the austerity measures... It's going to be fun!
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Re: The Viral Economy

Post by malchior »

The austerity stuff is the big worry for me and the debt ceiling shenanigans that come along with it. We're now seeing in the UK what sustained austerity does to an advanced economy. They are seeing drastic declines in services and standard of living right now. Their health system was so underfunded that the estimates are coming in that 2 thousand died in December alone from healthcare underinvestment. It's grim there. We have to learn from their example. But we probably won't and instead see it as a failure of national healthcare.

Back home, someone could certainly argue some course between current spend and a lesser amount but it can't be this reflexive push we're seeing that is based on nonsense household economics. Or that is designed to increase inequality and also shift more power into Wall Street's hands.
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Re: The Viral Economy

Post by Kurth »

malchior wrote: Wed Feb 01, 2023 11:30 am The austerity stuff is the big worry for me and the debt ceiling shenanigans that come along with it. We're now seeing in the UK what sustained austerity does to an advanced economy. They are seeing drastic declines in services and standard of living right now. Their health system was so underfunded that the estimates are coming in that 2 thousand died in December alone from healthcare underinvestment. It's grim there. We have to learn from their example. But we probably won't and instead see it as a failure of national healthcare.

Back home, someone could certainly argue some course between current spend and a lesser amount but it can't be this reflexive push we're seeing that is based on nonsense household economics. Or that is designed to increase inequality and also shift more power into Wall Street's hands.
My sister-in-law has lived in the UK for the past 20 years or so. The stories she tells about trying to get a doctor’s appointment with a specialist of any sort definitely paint the national healthcare system over there as a failure. Given how underfunded that system has been, it’s amazing it’s doing as well as it is. But isn’t that a fundamental problem of nationalized healthcare? People are essentially putting the funding of their own healthcare in the hands of the government. If you trust the government to do a good job, great. But if not . . .
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Re: The Viral Economy

Post by Isgrimnur »

Kurth wrote: Wed Feb 01, 2023 11:51 am People are essentially putting the funding of their own healthcare in the hands of the government.
Electing the fox to manage the budget of the henhouse.
It's almost as if people are the problem.
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Re: The Viral Economy

Post by gbasden »

Isgrimnur wrote: Wed Feb 01, 2023 12:14 pm
Kurth wrote: Wed Feb 01, 2023 11:51 am People are essentially putting the funding of their own healthcare in the hands of the government.
Electing the fox to manage the budget of the henhouse.
Nationalized health care makes a lot of sense when you have two responsible parties that both want the best outcomes. It falls apart when one of the parties would rather destroy it than make it work.
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Re: The Viral Economy

Post by Octavious »

Feds are deadset on a hard landing. Quarter point and they expect to keep increasing it. They will only stop went the job market is sufficiently punished. Awesome.
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Re: The Viral Economy

Post by malchior »

Kurth wrote: Wed Feb 01, 2023 11:51 amMy sister-in-law has lived in the UK for the past 20 years or so. The stories she tells about trying to get a doctor’s appointment with a specialist of any sort definitely paint the national healthcare system over there as a failure. Given how underfunded that system has been, it’s amazing it’s doing as well as it is. But isn’t that a fundamental problem of nationalized healthcare? People are essentially putting the funding of their own healthcare in the hands of the government. If you trust the government to do a good job, great. But if not . . .
It depends. It's not that simple. We could consider that most nationalized health care systems are well-run. In the abstract at least politicians are accountable to their constituents. In our model of the non-Medicare/Medicaid alternative we end up fighting with practically unaccountable bureaucrats at private healthcare providers.

In any case, it is hard to watch this as something clearly broke in UK politics during the financial crisis and they essentially went on an austerity bender despite every non-shitty economist of note telling them they were playing with fire. Now they've made doing business incredibly hard (Brexit!) and are shrinking their economy. They are on a road to perhaps a Japan-like lost decade (if they haven't already had one).
Octavious wrote: Wed Feb 01, 2023 4:35 pm Feds are deadset on a hard landing. Quarter point and they expect to keep increasing it. They will only stop went the job market is sufficiently punished. Awesome.
I don't think this is the right read. The read I'd take is that the Fed is actually backing off from hikes a tad faster than they originally signaled. A fundamental problem they face is maintaining some credibility on inflation. They said early and often they'd be maintaining or hiking through at least Q2-Q3 2023. They are attempting to set expectations on the cost of capital. If they decided to back off too quickly it might have outsized effects on economic activity.
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Re: The Viral Economy

Post by Octavious »

Ah that's good that I misunderstood. I thought people were hoping they would stop entirely.
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Re: The Viral Economy

Post by malchior »

That doesn't mean they won't still induce a 'hard landing' or whatever folks what to call it. They watch a few indicators and one key metric the Employer Cost Index -- aka salaries/benefits to us mere mortals -- is quickly returning to trend at the moment. It's another interesting piece of the mixed muddle we're seeing. This one probably got them to back off the most.
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