4 ms·

All those markets do feel a bit frothy, but if a global pandemic wasn’t enough to pop the bubble, I don’t know what would be.

nine_zeros 5y ago
The bubble was popped when stocks dropped like an anchor in March 2020. It's free fall was stopped by printing a lot of money. The question is, if another event happens, will the fed stop the free fall? I bet yes because they only have one tool to address this problem. Which means taking debt is low risk forever because the fed will always print money and save you the trouble of losing your money
- yenwel 5y ago
  the fed already stepped in with money printing before covid was already a thing because of a corporate debt bubble about to burst https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-powell-flags-corporate-debt-surge-some-businesses-may-come-under-severe-financial-strain/?sh=46e95f9f1512 https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-po... (a bit like the subprime mortgage bubble but for corporate debt) Those faulty and badly managed companies got even more free money injected and are even more addicted to near zero interest rates because of covid... Now if inflation becomes to high for consumers the feds have to choose between consumers or once again rescueing those companies when setting interest rates. Neither will turn out good
- timeinput 5y ago
  This is somewhat tongue in cheek, but refinancing a 30 year mortgage and taking out the equity every 5 - 10 years and putting it anywhere else sounds awfully reasonable when the loans are so cheap. It feels *weird*.
yenwel 5y ago
how about physical limitations when oil well's permanently can't restart after stopping because of covid lockdowns and a lot of other reasons (mainly very rich people who became much richer and start looking at commodities at one point to spend their less valuable currency) driving up commodity prices and devaluing currencies pegged to the US dollar. This causes consumers coming under pressure to be able to buy food or shelter since wages are the last thing to rise since inflation is tax on the poor and elderly (see the commodities boom driven by high oil prices and bio fuel crazes preceding the 2008 financial crash and arab spring but at a global scale). Not to mention a lot of baby boomers are retiring burdening all civilized nations (with pensions systems) increasing labor shortages and driving up all prices. TLDR restarting economies hitting limitations and shortages that can't be fixed by printing imaginary money
- adrianN 5y ago
  Oil wells running dry would be good in the medium to long term. It would save us a lot of long term pain if oil and coal magically disappeared.
  - MaxHoppersGhost 5y ago
    Billions would die and a few more billion would be impoverished if oil magically disappeared. If oil wells ran dry in the medium term (10-30 years?) the world be screwed. Petroleum products are so ingrained in every part of your life, most people have no idea.
    - Brian_K_White 5y ago
      You're not wrong, but I think our current level of technology is so basically capable that I think we would actually just adapt pretty quickly, as soon as it becomes .001% economically advantageous to do so. We would do a combination of both consuming less and developing new forms of what we do consume, especially over a 10-30 year term. I don't mean everyone wakes up anfndecides to care for the planet more than whatever they want to do today, I mean once something becomes expensive enough, we'll just stop doing it. We've already done things just this year that would have sounded outlandish and impossible. But it eems in fact very little is actually impossible. The largeness of the numbers doesn't really result in the kind of immovable inertia they imply, for a few different reasons. 1, The huge size of "everything that needs oil" is met by how equally large billions of people are organized into heirarchical structures with magic communication and coordination. Overnight 5 billion people can do something new. 2, All that collossal amount of oil-powered infrastructure is not actually all that long-lived. Ecerything from your toaster to the biggest steel plants to cargo ships to ...everything, it's all actually turning over all the time and nothing ever gets to be 50 years old, just from natural pressure of competition, obsolescense, and simple churn. That means it's really not that remarkable to imagine it all being changed into something else over the course of 30 years, instead of just newer versions of the same things.
  - throwaway3699 5y ago

nine_zeros 5y ago

The bubble was popped when stocks dropped like an anchor in March 2020. It's free fall was stopped by printing a lot of money. The question is, if another event happens, will the fed stop the free fall? I bet yes because they only have one tool to address this problem. Which means taking debt is low risk forever because the fed will always print money and save you the trouble of losing your money

yenwel 5y ago
the fed already stepped in with money printing before covid was already a thing because of a corporate debt bubble about to burst https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-powell-flags-corporate-debt-surge-some-businesses-may-come-under-severe-financial-strain/?sh=46e95f9f1512 https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-po... (a bit like the subprime mortgage bubble but for corporate debt) Those faulty and badly managed companies got even more free money injected and are even more addicted to near zero interest rates because of covid... Now if inflation becomes to high for consumers the feds have to choose between consumers or once again rescueing those companies when setting interest rates. Neither will turn out good
timeinput 5y ago
This is somewhat tongue in cheek, but refinancing a 30 year mortgage and taking out the equity every 5 - 10 years and putting it anywhere else sounds awfully reasonable when the loans are so cheap. It feels *weird*.

yenwel 5y ago

how about physical limitations when oil well's permanently can't restart after stopping because of covid lockdowns and a lot of other reasons (mainly very rich people who became much richer and start looking at commodities at one point to spend their less valuable currency) driving up commodity prices and devaluing currencies pegged to the US dollar. This causes consumers coming under pressure to be able to buy food or shelter since wages are the last thing to rise since inflation is tax on the poor and elderly (see the commodities boom driven by high oil prices and bio fuel crazes preceding the 2008 financial crash and arab spring but at a global scale). Not to mention a lot of baby boomers are retiring burdening all civilized nations (with pensions systems) increasing labor shortages and driving up all prices. TLDR restarting economies hitting limitations and shortages that can't be fixed by printing imaginary money

adrianN 5y ago
Oil wells running dry would be good in the medium to long term. It would save us a lot of long term pain if oil and coal magically disappeared.
- MaxHoppersGhost 5y ago
  Billions would die and a few more billion would be impoverished if oil magically disappeared. If oil wells ran dry in the medium term (10-30 years?) the world be screwed. Petroleum products are so ingrained in every part of your life, most people have no idea.
  - Brian_K_White 5y ago
    You're not wrong, but I think our current level of technology is so basically capable that I think we would actually just adapt pretty quickly, as soon as it becomes .001% economically advantageous to do so. We would do a combination of both consuming less and developing new forms of what we do consume, especially over a 10-30 year term. I don't mean everyone wakes up anfndecides to care for the planet more than whatever they want to do today, I mean once something becomes expensive enough, we'll just stop doing it. We've already done things just this year that would have sounded outlandish and impossible. But it eems in fact very little is actually impossible. The largeness of the numbers doesn't really result in the kind of immovable inertia they imply, for a few different reasons. 1, The huge size of "everything that needs oil" is met by how equally large billions of people are organized into heirarchical structures with magic communication and coordination. Overnight 5 billion people can do something new. 2, All that collossal amount of oil-powered infrastructure is not actually all that long-lived. Ecerything from your toaster to the biggest steel plants to cargo ships to ...everything, it's all actually turning over all the time and nothing ever gets to be 50 years old, just from natural pressure of competition, obsolescense, and simple churn. That means it's really not that remarkable to imagine it all being changed into something else over the course of 30 years, instead of just newer versions of the same things.
- throwaway3699 5y ago