[XBoxBoy]

[quote=deadzone]
Regarding flight risk for your senior people, why is this all of a sudden an issue? Are there really less people in the labor force for your industry than before Covid? [/quote]
I can’t really speak for Coronita, but in my industry (video games) there seems to be a big increase in demand. During the pandemic people stayed home and played games and this boosted sales and now the industry is awash in profits so is trying to create lots of new games. Thus a much higher demand for people who have the experience creating games.

[XBoxBoy]

[quote=barnaby33]Because remote work generally increases supply of labor. [/quote]

Nope, don’t agree. Remote work can increase the size of the labor pool available to a company, but that does not change the overall number of workers in the global work force. Overall the total number of people in the global workforce does not decrease simply due to remote work. If you want to look at it only from the point of view of US companies, then that’s a different thing. This discussion sprung up because of this comment:
[quote=deadzone]If all jobs could be done remotely, then clearly wages would go way down in the long run. [/quote]

If all jobs could be done remotely then the only work force would be the global workforce. There would be no increase (or decrease) in the supply of labor. (And thus you wouldn’t expect a change in the cost of labor)

You could argue, (and I would agree) that with the globalization that started in the 60’s the size of the workforce available to US companies grew significantly over the next few decades as they moved manufacturing and other operations overseas. But at this point in time, I think that expansion has pretty much run its course.

On a more local scale, as more companies adjust to remote work, companies in areas that have very high wages (silicon valley for example) may find the supply of people they are willing to consider will increase thus allowing them to decrease wages. But conversely in areas that have lower wages (think Raleigh NC) the number of available workers will decrease because some of the workers in that area will now be working for Silicon Valley companies and companies in Raleigh will need to increase wages to compete. All in all it should balance itself out, not cause a universal drop in wages.

[XBoxBoy]

[quote=The-Shoveler]The Buffet indicator (useful maybe, maybe not, everything’s out of whack IMO)

https://www.longtermtrends.net/market-cap-to-gdp-the-buffett-indicator/

In a world where nothings allowed to crash.[/quote]

The problem with this measure is that the percentage of companies that are publicly traded has gone up over the years. 30 years ago big investment banks, like Goldman Sachs, were LLCs and not traded. I’m sure other companies that were private went public as well. So the numerator of this indicator went up without adjusting the denominator causing the indicator to skew.

(Not sure the change in the percent of companies that have gone public that previously would have been private is enough to justify the rise, but it’s certainly a consideration)

[XBoxBoy]

[quote=deadzone]If all jobs could be done remotely, then clearly wages would go way down in the long run.[/quote]

I don’t see any reason to believe this. If all jobs could be done remotely wages would go down in some areas and up in others. Not sure why you would think wages would go down simply because they could be done remotely.

Also, if all jobs could be done remotely, in the long run the cost of living in different areas would probably equalize much more than currently. Some areas that would be more desirable due to weather, or beauty of surroundings might be more expensive. But there would be no benefit to living bunched together in high tech areas like Silicon Valley. And currently the thing that makes most places expensive is being near high paying jobs.

[XBoxBoy]

[quote=barnaby33]Remote work leads to salary compression. If you can speak English and work vaguely US hours, then you’re my new competition.[/quote]

But I wonder how true this is. Coronita is reporting that he’s got to pay higher wages then ever. Personally, I’m hearing from way more recruiters than ever. Maybe it totally depends on what your skill set it, but so far I’m not seeing signs of wage compression.

I’m not sure what data would be reliable for proving or disproving wage compression.

[XBoxBoy]

[quote=Coronita]More all time highs[/quote]
And despite a good jobs report, bond prices go up causing lower interest rates.

[XBoxBoy]

[quote=carlsbadworker]Sean Gotcher, a Las Vegas real estate agent, offered a conspiracy theory that iBuyer companies are manipulating the market by intentionally overpaying for some homes in order to sell others that they’ve already bought in nearby areas for a higher price.[/quote]

As always, I would stay away from conspiracy theories. Zillow is losing money on the houses they’ve bought and are now trying to sell. Simple foolishness on the part of a large company is all there is to see here.

Here’s an example of their efforts, bought for 790k, now listed for sale at 741k
https://www.zillow.com/homedetails/1538-Missouri-St-APT-C-San-Diego-CA-92109/70597152_zpid/

Personally, I’m glad to see them exit the market and I hope other big companies learn from their mistakes. Buying and selling homes at a profit isn’t as easy as it sounds on those reality shows.

[XBoxBoy]

[quote=carlsbadworker][quote=XBoxBoy][quote=gzz]The big underlying cause of declining rates is demographic. [/quote]
I think your certainty that the lack of inflation and the inevitability of low rates is something you should rethink.[/quote]

I don’t think gzz said anything about lack of inflation. His prediction is about rate, which is about oversupply for saving v.s. market demand for those saving.

If I understand him correctly. He is saying that demographic change creates more savings and the rich also has excessive saving, that they will accept however low returns due to these excessive savings that there’re not enough market demand for it (e.g. lower corporate investment demand).

The logic is sound to me.[/quote]

Okay, fair enough. Allow me to revise my last sentence to say, “I think your certainty that the inevitability of low rates is something you should rethink”.

While I don’t think gzz’s premise about increased demand is wrong I think it will get overwhelmed by the policies of central banks. Sure, the amount of savings might be growing, and that extra demand for bonds would cause lower rates. But when central banks buy trillions of dollars of bonds that’s a much bigger impact. And central banks can only do that because inflation is so low.

My premise is that without the deflationary forces of globalization and automation, central banks would not have been able to drive interest rates so low. While I fully agree that an increased rate of saving (whether from demographics or other forces) would cause lower interest rates, I do not see that as the principle driver of low rates.

Worth considering, if gzz’s premise is correct then we should be able to find data to back up the claim that between demographics and income inequality the rate of savings has been going up. (And that’s what is causing low rates) I don’t have that data, but a quick google gets me this:
https://data.worldbank.org/indicator/NY.GNS.ICTR.ZS
The data displayed there shows an increase in savings rate relative to GDP but not a substantial increase. And the last decade is mostly flat. Perhaps there is better data out there, but without solid data, I’m going to continue to question gzz’s premise that the big underlying cause of declining rates is demographic. To me both globalization and automation are likely to be causing a bigger impact.

[XBoxBoy]

[quote=gzz]The big underlying cause of declining rates is demographic. [/quote]

I’m not sure I buy this statement at all. I’ve felt for a long time the main cause of declining rates is that the federal reserve (and other central banks) have followed a loose money policy because they can. And why can they? Two main reasons:

1) Globalization has destroyed workers ability to demand higher wages. In the 1950’s and 1960’s American workers were able to demand pay at a certain level. But with globalization, we brought a couple billion more workers into the workforce, generating an oversupply of workers. (Particularly factory workers) This has held wages down and greatly reduced costs of labor, which otherwise would have been passed on into higher prices.

2) Automation. Increased automation has also greatly reduced the cost of labor, and allowed for the cheaper production of goods. Just like globalization, this is a very deflationary force.

I would put demographics a distant third to these two issues.

Which begs the question, could these trends change? I have no crystal ball, so I won’t make a prediction about what they will do, but only what they could do.

Globalization could be reaching the end of it’s deflationary run. At this point lots of agrarian poor have moved to the cities and are now trying to make their way into the consumer class. As they buy more stuff, (with their wages) that could turn the tide. (Maybe)

Automation: A lot harder to know. I would have thought by now we would have already seen a lot of deflation due to automation. But hasn’t happened on the scale I expected 10 years ago. We still don’t have driver less cars, delivery vans, or taxis. Maybe someday. There’s always been a debate in economics about whether automation would displace enough workers so that we didn’t have jobs for people. I used to think that was going to happen. Now, I’m not so sure. Maybe the side that says, “don’t worry, people will just find different, even better jobs” is correct. (Or maybe not, who’s to say)

Regardless of my uncertainty about the two above trends, I think your certainty that the lack of inflation and the inevitability of low rates is something you should rethink.

[XBoxBoy]

[quote=sdrealtor]

House in question just closed for $2M. Just wow[/quote]

More than double what it sold for in 2017! And $305k more than asking. I guess someone really wanted that house!

[XBoxBoy]

[quote=teaboy]I want them to admit they have missold me the wrong windows which are not to code (San Diego fire code.) And then use this as a reason for full refund. [/quote]

It’s probably going to be hard to get them to admit that they messed up. But you might be able to go to your local building department and get them to confirm or deny that you do need fire zone rated windows. If the building dept. confirms that you need fire zone windows that will strengthen your case more than an email from the salesman.

[XBoxBoy]

[quote=sdduuuude]Are you still interested in an answer to this ?[/quote]

I can’t speak for the OP, but I’m always interested to hear about what prices people are able to get for construction.

[XBoxBoy]

[quote=teaboy]
However, the reality is that most of the voting proletariat actually lean more “socially conservative, fiscally liberal.”

tb[/quote]

Maybe, but it seems to me the problem is that all politicians have to have big money donors, and consequently they have to do what they can to get a return on investment for their donors. There are no fiscally conservative politicians any more. (If there ever were?) Sure they pretend to be fiscally conservative, make speeches about how the budget is out of hand, etc. But regardless of who is in power the debt goes up. And at this point I don’t think you can say the difference is Republicans cut taxes, and Democrats tend to spend. Instead it’s whoever is in power tries to spend as much as they can, and whoever isn’t in power flails around crying about irresponsible behavior by the other party. It’s all pretty ludicrous but it is what it is.

[XBoxBoy]

Not too surprisingly, these two bills are starting to have blowback.
[Quote]Opponents of the two bills and similar measures have already begun an effort to put an initiative on the November 2022 ballot that could negate them. The Californians for Community Planning Initiative would amend the California Constitution “to make zoning and land use local affairs and bring a halt to the centralized zoning and land-use directives coming out of Sacramento,” according to its website.[/Quote]

I would guess that a proposition like that would pass. There will be strong support from anyone with libertarian inklings, as well as support from any who fear that low income housing will be built next door.

I’m starting to think SB9 and SB10 are going to backfire on the politicians that created and supported them.

[XBoxBoy]

[quote=teaboy]
This general (partisan) direction of Truthiness & losing trust in media institutions worries me more that most ills of the US today, since I have trouble envisioning how it unwinds itself..
[/quote]

I agree that this is a huge issue. Combine it with a growing view that elites (anyone well educated) is not to be trusted and that science is not to be trusted and you have a recipe for ignorance and superstition. (So much for the ideals of the enlightenment.) Combine this with a distrust for government and the institutions that allow us to have a democracy, and it gets pretty scary.

I know that many of us like to talk about the evils of government, but it’s important to remember that without government there would be lawlessness and criminal gangs running things. Not a better choice to be honest.

[Author]

Posts