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That's really just the Disco Stu Fallacy of economics at play. Assuming that things _will_ get better and passing the buck onto your descendants is madness. Als
by busterarm 6y ago
That's really just the Disco Stu Fallacy of economics at play. Assuming that things _will_ get better and passing the buck onto your descendants is madness. Also how much growth has been stunted by the weight of ancestral spending?
Birth rates are declining and the cost of maintaining our infrastructure is at the point in most high-GDP locations (New York, California, etc) where obligations cannot be met and credit status changes were inevitable _before_ Coronavirus. Look at the insanity New Jersey has gone through with the criminal pilfering of infrastructure/development funds to pay pensions (aka, Christine Todd Whitman should have gone to jail).
We're looking at cascading failures in a complex system. Nobody can see enough of the picture to predict what's next or realize that it's already dead. To assume that we'll right the trend with growth will most likely require either war or (a technical) revolution.
- pavlov 6y agoThe funny thing about the Disco Stu Fallacy is that Stu was right in the long run. Disco music in various forms is immensely popular today. It dominates global streaming charts. Rock is the loser. Stu was just an early adopter facing the through of disillusionment.
- busterarm 6y agoSure, but none of that music is called Disco and his bet was still a losing one. :)
- pavlov 6y agoKylie Minogue released a top-selling album last week that's literally named "Disco".
- busterarm 6y agoHow long do you hold the losing investment from 1976? It took decades for the industry side of Disco music to recover from Disco Demolition Night. Italo and Hi-NRG notwithstanding. The music might have stayed four on the floor but the names and the people all changed. Also Kylie Minogue doesn't set trends, she rides them. Most of us realized Disco was still alive 10 years ago.
- Apocryphon 6y agoPop music, and pop culture in general, seems to operate on a cycle where fashions become vogue again 20-30 years after. Retro gets hip and nostalgia abounds.
- cultus 6y agoBell bottoms still look stupid, though.
- H8crilA 6y agoI think almost nobody wants to believe in the picture that bond yields are painting, because that world with all its ramifications is so far outside of what we consider acceptable or even possible. Kind of like the "Minsky moment". PS. I agree that this is not just a covid problem.
- marvin 6y agoComplete layman's take here, but wouldn't a simpler explanation be that bond yields have been artificially manipulated by central banks for the last 12 years, and that they thus don't truly represent the market's expectations for the future of the larger economy?
- H8crilA 6y agoPeople have always been saying that the bond market is manipulated, that it shouldn't be trusted, etc. It's up to you to interpret the data. I think it is actually remarkably accurate. Yield curve inversions work like a charm to detect slowdowns and recessions (not just in the US), and if you think for a second then a yield curve inversion is exactly what the market should price in if there's an "air pocket" ahead in nominal gdp. Then, there's the story of Japan, which was predicted early on (1995) to be in stagnation for decades. And guess what, over 2 decades later it turns out the JGBs were right! There are times when the bond market is very explicitly manipulated, such as towards the end of WW2 in the US. The country's economy was getting seriously inflationary and rates were pegged at 2% (the rate should have been probably over 10% without the manipulation). Thankfully there was much collective sacrifice and the country managed to win the war in time before its economy imploded. Then the typical post war recession and later the baby boom solved everything. You can detect such situations by things like: wage freezes, rationing, shelves not completely full in shops, large premium on gold bullion particularly small coins, the politicians' talk of "great effort", things like that
- Answerawake 6y agoI'd like to learn more about how to understand all of this. Is there some resource you can point me to so I can begin the journey to have this intuition?
- selimthegrim 6y agoSo I guess Chris Christie can steal money by stretching interpretations and credulity to rebuild the Pulaski Skyway and it's all justified?
- busterarm 6y agoI'm not excluding him. New Jersey finance/politics used to be a success story until the 80s and it's been an unmitigated disaster ever since.