Rolling US Economy Into The Shitbin Thread

apparently the US is below replacement level as well (not as extremely - US is at 1.87 and China is 1.60) but i'm guessing high levels of immigration probably help our rate. ot but can u guess which western country has the highest replacement level in the world?

i haven't read many theories for the chinese slowdown -- is it attributable to their demographic crisis plus their aggressive expansion now self-correcting?

― Mordy, Friday, January 15, 2016 4:15 PM (14 minutes ago) Bookmark Flag Post Permalink

housing bubble

but like that's a pretty unique problem to build a ton of cities and then not have ppl to move in. unless like the argument is that a chinese economic meltdown would def drag down the rest of the world into another recession but is that a reasonable expectation?

imo: no

I mean if it's bad enough I'm sure it could. Maybe a better question for the world recession poll thread than the us toilet economy thread

my black swan candidate is china too.. not only a housing bubble but an infrastructure bubble that propped up their growth rate - building a shit ton of defective crap nobody has any use for

so many swans, so little time

https://49.media.tumblr.com/34116b28018224117bfb28d379b3a41f/tumblr_n4f9wxKYqi1rdutw3o1_400.gif

https://www.youtube.com/watch?v=BQz6K0aWWiY

we could probably afford to spend more on our infrastructure than we already do

understatement of the decade?

people will look back at this time of sluggish demand, high unemployment, creaking public services and eight years of interest-free loans and wonder what was stopping us. an opportunity - and a generation of actual real people - squandered permanently on an altar of deficit ideology. public debt as a percentage of gdp has been average/normal for years now, even after we all bailed out the banks. for fuck's sake it's basically criminal what's happening.

Another respected economist who think the stock market needs to chill out:

http://blogs.piie.com/realtime/?p=5341

Blanchard OTM

I don't think so, that's far too simple an answer to be satisfying.

I don't believe in "herding" per se in the US stock market -- it's far too dominated by large, sophisticated players for any kind of prolonged or sustained herding imo.

OB's on twitter! https://twitter.com/ojblanchard1

I don't believe in "herding" per se in the US stock market -- it's far too dominated by large, sophisticated players for any kind of prolonged or sustained herding imo.

― on entre O.K. on sort K.O. (man alive), Sunday, January 17, 2016 9:41 PM Bookmark Flag Post Permalink

but "large, sophisticated players" still don't know what the hell will happen any more than etrade babies, that's how equity markets work

yeah but large institutional investors don't just say "Oh shit, the stock market is going down, something must be going on, fuck, let's sell"

Do they not? I have no idea how large institutional investors do things. Isn't a lot of their money in the day to day market like everyone else's?

Their decision-making process is a little more complex.

More complex, I mean, than just "Oh I don't know what's going on but if everyone else is panicking it must be something bad"

right -- the process is "do we think everyone else's panic will keep going on" and if so then yeah bail. or rather it depends on the player. that's the case for "large, sophisticated players" and hedge funds and etc.

like the thing happening _is_ everyone else's panic -- the market moves mainly on expectations of future market movement.

in fact one of the things the flash crash showed is that when things start to buckle, the "market makers" who "provide liquidity" by lots of small hft trades throughout the day, they all bail first because its just safer for them to sit it out.

and when that happens, then everything else plummets much more quickly because it loses a sort of basic support.

No matter how sophisticated the investor is, I think there comes a point when they just want to stop the pain. Very few have the stamina and conviction of the Michael Burry character in the Big Short, who was a few years early on the shorting subprime call and had to ride out large losses and investors trying to redeem. On the other hand, I'm sympathetic to the argument that the market collectively can be smarter than the individuals who make it up. Stocks were pretty richly valued before this correction, and I think there's a decent case to be made that they're just adjusting to the fact that growth is going to be slow for the next few years, rather than anticipating a major recession.

had some interesting convos with Wall Street girls and guys last night. they didn't seem too panicky about what's going on. at the end of the day, I guess that going short (when everybody else is doing so too) is a less profitable strategy than "buying the dip" and these guys know it.

they're not playing with their money

the least insane person to have predicted the last crisis: "the economy is also not about to fall into another recession"

http://www.huffingtonpost.com/dean-baker/wall-street-rocks_b_9013386.html

I like him, and I do like that take on things.

it's basically every liberal and/or progressive person's take on things for the last six years - DeLong, Krugman, Atrios etc etc

but the WPA was the worst thing that ever happened to our country so let's just cut some programs and raise rates or something

no one knows where the demand is supposed to come from, is the ridiculous part. we replaced a tech boom with a housing boom with another tech boom with another housing boom. let's just keep going, it's working so awesomely!!!

i'm just glad the sequester is still holding firm

thanks to the Internets of Everythings we will soon be able to combine the tech boom WITH the housing boom
with HFT we'll be able to just have robots reinsuring the mortgages on the robot houses built by robots - for robots! shazam infinite growth

deficit been going up yall should be celebrating

also just words but booms are good, bubbles are bad. most booms aren't bubbles http://www.nber.org/digest/jan16/w21693.html

'boom' in the sense of 'boom and bust' so yes i meant 'bubble' FINE

click that link i posted and read the first like 100 words or just look at this picture; not every boom goes bust and very few busts wipe out the gains of the boom

http://www.nber.org/digest/jan16/Bubbles.jpg

is that graph about the stock market?

yeah

obviously i agree with krugman and baker, but it's been a long time since 2008. even krugman subtly shifted from 'we need stimulus NOW' to 'we did need stimulus then'

we need stimulus whenever demand is depressed and money is cheap, sheesh krugman keep up

contractionary monetary and fiscal policies are still contractionary though
it seems fairly clear that austerity is pretty useless and again, many many many opportunities exist for investment in infrastructure and in stability i.e. moar social security

for example how the hell is the DC metro having to consider a fare increase to cover costs? DC metro should be planning new lines and adding fancy new rolling stock, and Amtrak should be averaging 100mph between here and Boston, shit is ridiculous

fiscal policy isn't contractionary right now, last budget blew a gasket in the deficit (including some good stuff like extending eitc). contractionary isn't just not-stimulus you have to like, contract. i suspect demand is still depressed but the further and further out we go the harder it is to separate long term and short term.

the argument about whethr or not to invest in infrastructure is a combo of cyclical (do it when it's cheap and other resources are underutilized) and more long term cost-benefit stuff. seems obvious to me that now and last five years is an extremely good time, and it's super frustrating.

there was a nice NYT piece on this before the holidays: http://www.nytimes.com/2015/12/18/business/dealbook/a-missed-opportunity-of-ultra-cheap-money.html

Unemployment filings were at a 6-month high last week.

sssshhhhhhhhhhhhhhhh

http://fortune.com/silicon-valley-tech-ipo-market/

been trying to follow alphaville's discussion of capital-flows reversing but its pretty impenetrable to me.

who are these frightful people good god

lol

https://twitter.com/ObsoleteDogma/status/691452952939204608

tee hee

https://www.google.com/finance?q=NYSE%3ADATA%2C+NYSE%3ALNKD&ei=sde0VvKAOcnBe-iwiZAN

weird - is that just a coincidence?

i feel like it's two not amazing earnings reports plus the SV bubble

Yeah looks like a lot of big tech stocks are taking sizeable hits today -- FB, TWTR, YELP, although nothing close to that.

http://www.theguardian.com/business/2016/feb/10/deutsche-bank-germany-financial-colossus-stumbles

ah don't worry they'll be fine

https://twitter.com/ddayen/status/697431928551526400