9 ms·

The QT Timebomb

70 points by hnburnsy 5y ago

recursivedoubts 5y ago
Keynes was right: he's dead. Unfortunately for us, we are not.
- boppo1 5y ago
  Elaborate?
  - pjfin123 5y ago
    Keynes advocated government borrowing and spending during a recession to cushion the decrease in aggregate demand. Critics of this deficit spending claim that the market should in the long run correct itself to which Keynes famously responded "In the long run we're all dead." The U.S. government did this type of deficit spending in 2020-2021 printing and spending a large amount of money/debt which moved future spending to the present.
CRConrad 5y ago
Oh. That was not at all what I expected from the title... I thought it would be about either the new QML compiler, or the desktop-advertising library. (Though the domain should of course have been a giveaway. Didn't notice that at first.)
- throwanem 5y ago
  I figured it was something about cardiac health, where the "Q-T interval" between two EKG landmarks is an important diagnostic indicator. I also didn't pay much attention to the domain.
- wizzledonker 5y ago
  You aren't the only one haha, I work with Qt every day and this was my first thought.
- deleted 5y ago
  [deleted]
sys_64738 5y ago
Phew. I can't be the only person who worried there was an issue with the QT toolkit. This is something less important.
- danuker 5y ago
  I'd argue it's more important, since the interest rate impacts future cash flow valuations, and therefore people's wealth.
  - jslaby 5y ago
    We can say both are equally important and divide our worry by 50%
- malkia 5y ago
  It's Qt :) - lol, me too though, but seeing QT I thought it was QuickTime TBH (... not really ...)
  - Geezus-42 5y ago
    I though Quik Trip...
    - peterburkimsher 5y ago
      Naming things :) "There are 2 hard problems in computer science: cache invalidation, naming things, and off-by-1 errors." https://martinfowler.com/bliki/TwoHardThings.html https://martinfowler.com/bliki/TwoHardThings.html Some choose short variable names that they can type fast (this might be correlated with vi programmers). Others choose long variable names that are more descriptive (this might be correlated with emacs programers). Personally I chose the latter, because copy-paste is easy, and ambiguity can be confusing. But ambiguities are great fun for making puns and dadjokes. u = qtπ
- BearOso 5y ago
  Me, too. I expected it to be regarding the discontinuing of open source support for old QT “LTS” versions. Fits the title.
danuker 5y ago
Interest rates going up means future cash flow becomes less attractive compared to current cash. This lowers the price of stocks and bonds. The US Gov can't afford to pay more on its debt, so I bet the rates will be driven back down eventually by the Fed, and the USD inflationary debasement will continue (and prices will resume going up). Failing this would lead the US to insolvency and a hard default, instead of the soft inflationary one.
- cjensen 5y ago
  Your comment contains a lot of info that is not the consensus view of economists and businessmen. Yes, interest rates going up lowers the price of bonds because "interest rates up" is mathematically equivalent to "bonds are cheaper." The notion that changes in interest rates, which generally correlate with inflation, would alter the price of stocks is not obvious to me. Not sure what mechanism you would propose that would cause that to happen. The US Government has the right to print USD. The notion that they could someday be unable to pay USD-denominated debts is therefore obviously wrong. Also, it is very much in the interests of exporters like China that USD remain strong, and they will likely just add the newly-minted USD to their USD reserves. When proposing financial disasters, you can take these same types of fears and make them more plausible. E.g. propose that the US Government will overspend, weaken the dollar, cause the dollar to lose status as a reserve currency, and force future US debt to be denominated in something other than USD. Or propose that a sudden increase in inflation might cause effective salaries to decline or be uncertain, leading to a decline in consumer confidence and a recession. Inflation uncertainty worries me the most. But I don't think there are any nightmare scenarios coming soon.
  - stillicidious 5y ago
    > The notion that changes in interest rates, which generally correlate with inflation, would alter the price of stocks is not obvious to me. Not sure what mechanism you would propose that would cause that to happen. Higher rates -> reduced accessibility of personal credit -> lower spending -> lower corporate revenue -> higher cost of borrowing -> higher cost of debt service -> lower profits -> stock price Rates act as a global parameter that impacts performance of companies differently, with the consensus understanding that it impacts debt-fuelled (or what we now usually call growth) companies the most.
mikewarot 5y ago
If this isn't handled right, all of us in the US will have to face the consequences of no longer being the world's reserve currency, and the failure of the petrodollar. In the long run, that would also mean the end of the American Empire. and all the defense spending that goes with it. Unlike the Great Depression, this time we don't have the worlds largest supply of oil, the biggest manufacturing base, or anywhere near reasonably competent Governance to ride out the consequences of the ensuing crash. You'll look back on the plague years, and remember them as the calm before the storm.
- echelon 5y ago
  How would we handle this right? How much of a knife's edge is this, and how do we protect ourselves?
  - mikewarot 5y ago
    I'm not an economist, a lot of mismanagement and kicking the can down the road is about to unwind. The folks at the top don't seem to realize how thin the veneer of civilization really is. They finally gave in to Roosevelt, and he saved their ass in the 1930s. I doubt this time will prove as lucky. The standard advice, pay off all debts, have some cash on hand, stock up on food, fuel, toilet paper. Make friends with your neighbors. Have skills that will be in demand, like being able to fix things.
    - pbourke 5y ago
      > pay off all debts Why would you pay off your debt if you thought civilization was going to collapse?
      - mikewarot 5y ago
        If civilization collapses, 7 billion people will die, at least. The economy contracting 90% is a possibility, and if your income goes to zero, you don't want to lose what you have left because of a loan you didn't think you'd actually have to pay off.
im_down_w_otp 5y ago
The weird thing to me that I've been seeing is VCs harping on inflation as a consequence of what they view as loose monetary policy with zero apparent sense of irony that the truly massive explosion of VC over the last 10 years is entirely because of not just all the top-end liquidity that's been frothing all over the place since QE began back in the 2008 financial crisis, but _also_ the fact that the net-negative interest rates on stable long-term investments effectively create whole new categories of LPs for VCs to chase that previously couldn't/wouldn't touch the VC ecosystem with a 10-foot pole. Talk about looking a gift horse in the mouth. Or, perhaps biting the hand that feeds you? I dunno, I'm sure there's an appropriate colloquialism. If QTmageddon is coming (something I personally think is a mistake since it seems like price inflation is being principally driven by supply shock dynamics, but I digress), then the first reckoning in the financial markets is almost certainly going to be VC. The risk profile makes absolutely no sense without a cheap money market.
- echelon 5y ago
  Are VC money and investments going to dry up? What's the timeline on this?
  - im_down_w_otp 5y ago
    Dry up? I don't think so. You'd see a change in the level of risk aversion (so doing more deals in companies that have been de-risked more) and probably quite a lot of consolidation where the massive increase in the sheer number of small & mid-tier players would contract significantly. In terms of timeline? No idea. Hopefully sometime after we need to raise our next round of financing. ;-)
    - zozbot234 5y ago
      Isn't that exactly what 'VC money drying up' looks like practically? What am I missing?
dvdhnt 5y ago
If rates are going to rise, is it better to hold cash and use loans for purchases such as land, or is it better to pay cash up front now and invest the cash in money market funds or other financial instruments?
- wing-_-nuts 5y ago
  Honestly it's kind of a wash. Yes, rates are dirt cheap right now. Basically every asset out there is priced (high!) with this in mind. If rates were to rise, asset prices must naturally come down as people can afford to borrow less. If you don't have an emergency fund, now is the time to build one. Breaking inflation is a painful process that will eventually lead to a bad recession. Things will get worse before they get better.
  - astrange 5y ago
    Reducing inflation by raising interest rates is indeed painful because it basically works by making everyone unemployed so they can't ask for raises. This is, as you can see, a bad idea and a violation of the Fed dual mandate, which they for once aren't ignoring.
    - seanmcdirmid 5y ago
      Reducing inflation by raising interest rates makes money more expensive, which hurts those that need to borrow it and benefits those that can lend it. Higher rates also make assets cheaper to buy as less leverage can be brought to bear in bidding. Anyways, the fed should have raised rates when the economy was good (and not just good because money was cheaper), so they could reduce them when the economy was bad. These days, we are all just addicted to cheap money and all fiscal discipline has been thrown out the window (cut rates in bad times and good!).
      - astrange 5y ago
        The economy hasn't been good anytime recently until 2019 or so. Unemployment consistently improved over time far past any mainline economists predicted, especially the Larry Summers types who ran the 2010 recovery. Maybe they should've lowered the rates then so they could raise it later - they certainly didn't do enough stimulus. There are weak models behind all of this at best; "cheap money and fiscal discipline" isn't even a model, just moralizing, but the actual arguments about fiscal policy use things like "potential output", which has assumptions like "the economy will overheat if black people have under 10% unemployment". https://stayathomemacro.substack.com/p/racism-skews-our-beliefs-about-whats https://stayathomemacro.substack.com/p/racism-skews-our-beli... As for current inflation, it's not yet enough to ruin the Fed's decades long record of undershooting the 2% target, but it is caused by an ongoing natural disaster and not money printing. So to fix it, you can try fixing the natural disaster…
naveen99 5y ago
Unemployment rate is meaningless in the face of labor participation rates that swing by 10’s of percentage points. us average person is so rich, they can deleverage their labor, retire early etc. no amount of qe or qt will make a dent if people decide they want to relax for a while. When everyone else is deleveraging their labor, it’s time for people willing to work to reap the rewards.
- anm89 5y ago
  Yeah this is a great point that gets missed a lot.
- rufus_foreman 5y ago
  The US labor force participation rate does not swing by 10's of percentage points. During the pandemic it fell from a little over 63% to a little over 60%. Over the long term, it was above 58% in the 1950's and topped out around 67% in the early 2000's. Median net worth in the US is $120,000, which includes home equity. You can't retire early on that.
  - naveen99 5y ago
    Men have gone from 87% to 67%, while women have gone from 33% to 57% since 1950 [1]. Mean net worth in the us is $1 million by 50years of age. A lot of people could retire 10 years earlier if they really wanted to. I agree that these numbers don’t turn on a dime, but people can definitely change their effort dedicated to labor. 1. https://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002
    - rufus_foreman 5y ago
      The largest football stadium in the US holds around 108,000 people. If Bill Gates and 107,999 minimum wage workers attend a game there, the mean net worth is over 1.2 million dollars. How many of them are retiring at 50? Median net worth is what you want here not mean, right? Median net worth at age 50 is around $150,000, also, I think, including home equity. Still not going to be retiring early.

The QT Timebomb

70 points by hnburnsy 5y ago

recursivedoubts 5y ago

Keynes was right: he's dead. Unfortunately for us, we are not.

boppo1 5y ago
Elaborate?
- pjfin123 5y ago
  Keynes advocated government borrowing and spending during a recession to cushion the decrease in aggregate demand. Critics of this deficit spending claim that the market should in the long run correct itself to which Keynes famously responded "In the long run we're all dead." The U.S. government did this type of deficit spending in 2020-2021 printing and spending a large amount of money/debt which moved future spending to the present.

CRConrad 5y ago

Oh. That was not at all what I expected from the title... I thought it would be about either the new QML compiler, or the desktop-advertising library. (Though the domain should of course have been a giveaway. Didn't notice that at first.)

throwanem 5y ago
I figured it was something about cardiac health, where the "Q-T interval" between two EKG landmarks is an important diagnostic indicator. I also didn't pay much attention to the domain.
wizzledonker 5y ago
You aren't the only one haha, I work with Qt every day and this was my first thought.
deleted 5y ago
[deleted]

sys_64738 5y ago

Phew. I can't be the only person who worried there was an issue with the QT toolkit. This is something less important.

danuker 5y ago
I'd argue it's more important, since the interest rate impacts future cash flow valuations, and therefore people's wealth.
- jslaby 5y ago
  We can say both are equally important and divide our worry by 50%
malkia 5y ago
It's Qt :) - lol, me too though, but seeing QT I thought it was QuickTime TBH (... not really ...)
- Geezus-42 5y ago
  I though Quik Trip...
  - peterburkimsher 5y ago
    Naming things :) "There are 2 hard problems in computer science: cache invalidation, naming things, and off-by-1 errors." https://martinfowler.com/bliki/TwoHardThings.html https://martinfowler.com/bliki/TwoHardThings.html Some choose short variable names that they can type fast (this might be correlated with vi programmers). Others choose long variable names that are more descriptive (this might be correlated with emacs programers). Personally I chose the latter, because copy-paste is easy, and ambiguity can be confusing. But ambiguities are great fun for making puns and dadjokes. u = qtπ
BearOso 5y ago
Me, too. I expected it to be regarding the discontinuing of open source support for old QT “LTS” versions. Fits the title.

danuker 5y ago

Interest rates going up means future cash flow becomes less attractive compared to current cash. This lowers the price of stocks and bonds. The US Gov can't afford to pay more on its debt, so I bet the rates will be driven back down eventually by the Fed, and the USD inflationary debasement will continue (and prices will resume going up). Failing this would lead the US to insolvency and a hard default, instead of the soft inflationary one.

cjensen 5y ago
Your comment contains a lot of info that is not the consensus view of economists and businessmen. Yes, interest rates going up lowers the price of bonds because "interest rates up" is mathematically equivalent to "bonds are cheaper." The notion that changes in interest rates, which generally correlate with inflation, would alter the price of stocks is not obvious to me. Not sure what mechanism you would propose that would cause that to happen. The US Government has the right to print USD. The notion that they could someday be unable to pay USD-denominated debts is therefore obviously wrong. Also, it is very much in the interests of exporters like China that USD remain strong, and they will likely just add the newly-minted USD to their USD reserves. When proposing financial disasters, you can take these same types of fears and make them more plausible. E.g. propose that the US Government will overspend, weaken the dollar, cause the dollar to lose status as a reserve currency, and force future US debt to be denominated in something other than USD. Or propose that a sudden increase in inflation might cause effective salaries to decline or be uncertain, leading to a decline in consumer confidence and a recession. Inflation uncertainty worries me the most. But I don't think there are any nightmare scenarios coming soon.
- stillicidious 5y ago
  > The notion that changes in interest rates, which generally correlate with inflation, would alter the price of stocks is not obvious to me. Not sure what mechanism you would propose that would cause that to happen. Higher rates -> reduced accessibility of personal credit -> lower spending -> lower corporate revenue -> higher cost of borrowing -> higher cost of debt service -> lower profits -> stock price Rates act as a global parameter that impacts performance of companies differently, with the consensus understanding that it impacts debt-fuelled (or what we now usually call growth) companies the most.

mikewarot 5y ago

If this isn't handled right, all of us in the US will have to face the consequences of no longer being the world's reserve currency, and the failure of the petrodollar. In the long run, that would also mean the end of the American Empire. and all the defense spending that goes with it. Unlike the Great Depression, this time we don't have the worlds largest supply of oil, the biggest manufacturing base, or anywhere near reasonably competent Governance to ride out the consequences of the ensuing crash. You'll look back on the plague years, and remember them as the calm before the storm.

echelon 5y ago
How would we handle this right? How much of a knife's edge is this, and how do we protect ourselves?
- mikewarot 5y ago
  I'm not an economist, a lot of mismanagement and kicking the can down the road is about to unwind. The folks at the top don't seem to realize how thin the veneer of civilization really is. They finally gave in to Roosevelt, and he saved their ass in the 1930s. I doubt this time will prove as lucky. The standard advice, pay off all debts, have some cash on hand, stock up on food, fuel, toilet paper. Make friends with your neighbors. Have skills that will be in demand, like being able to fix things.
  - pbourke 5y ago
    > pay off all debts Why would you pay off your debt if you thought civilization was going to collapse?
    - mikewarot 5y ago
      If civilization collapses, 7 billion people will die, at least. The economy contracting 90% is a possibility, and if your income goes to zero, you don't want to lose what you have left because of a loan you didn't think you'd actually have to pay off.

im_down_w_otp 5y ago

The weird thing to me that I've been seeing is VCs harping on inflation as a consequence of what they view as loose monetary policy with zero apparent sense of irony that the truly massive explosion of VC over the last 10 years is entirely because of not just all the top-end liquidity that's been frothing all over the place since QE began back in the 2008 financial crisis, but _also_ the fact that the net-negative interest rates on stable long-term investments effectively create whole new categories of LPs for VCs to chase that previously couldn't/wouldn't touch the VC ecosystem with a 10-foot pole. Talk about looking a gift horse in the mouth. Or, perhaps biting the hand that feeds you? I dunno, I'm sure there's an appropriate colloquialism. If QTmageddon is coming (something I personally think is a mistake since it seems like price inflation is being principally driven by supply shock dynamics, but I digress), then the first reckoning in the financial markets is almost certainly going to be VC. The risk profile makes absolutely no sense without a cheap money market.

echelon 5y ago
Are VC money and investments going to dry up? What's the timeline on this?
- im_down_w_otp 5y ago
  Dry up? I don't think so. You'd see a change in the level of risk aversion (so doing more deals in companies that have been de-risked more) and probably quite a lot of consolidation where the massive increase in the sheer number of small & mid-tier players would contract significantly. In terms of timeline? No idea. Hopefully sometime after we need to raise our next round of financing. ;-)
  - zozbot234 5y ago
    Isn't that exactly what 'VC money drying up' looks like practically? What am I missing?

dvdhnt 5y ago

If rates are going to rise, is it better to hold cash and use loans for purchases such as land, or is it better to pay cash up front now and invest the cash in money market funds or other financial instruments?

wing-_-nuts 5y ago
Honestly it's kind of a wash. Yes, rates are dirt cheap right now. Basically every asset out there is priced (high!) with this in mind. If rates were to rise, asset prices must naturally come down as people can afford to borrow less. If you don't have an emergency fund, now is the time to build one. Breaking inflation is a painful process that will eventually lead to a bad recession. Things will get worse before they get better.
- astrange 5y ago
  Reducing inflation by raising interest rates is indeed painful because it basically works by making everyone unemployed so they can't ask for raises. This is, as you can see, a bad idea and a violation of the Fed dual mandate, which they for once aren't ignoring.
  - seanmcdirmid 5y ago
    Reducing inflation by raising interest rates makes money more expensive, which hurts those that need to borrow it and benefits those that can lend it. Higher rates also make assets cheaper to buy as less leverage can be brought to bear in bidding. Anyways, the fed should have raised rates when the economy was good (and not just good because money was cheaper), so they could reduce them when the economy was bad. These days, we are all just addicted to cheap money and all fiscal discipline has been thrown out the window (cut rates in bad times and good!).
    - astrange 5y ago
      The economy hasn't been good anytime recently until 2019 or so. Unemployment consistently improved over time far past any mainline economists predicted, especially the Larry Summers types who ran the 2010 recovery. Maybe they should've lowered the rates then so they could raise it later - they certainly didn't do enough stimulus. There are weak models behind all of this at best; "cheap money and fiscal discipline" isn't even a model, just moralizing, but the actual arguments about fiscal policy use things like "potential output", which has assumptions like "the economy will overheat if black people have under 10% unemployment". https://stayathomemacro.substack.com/p/racism-skews-our-beliefs-about-whats https://stayathomemacro.substack.com/p/racism-skews-our-beli... As for current inflation, it's not yet enough to ruin the Fed's decades long record of undershooting the 2% target, but it is caused by an ongoing natural disaster and not money printing. So to fix it, you can try fixing the natural disaster…

naveen99 5y ago

Unemployment rate is meaningless in the face of labor participation rates that swing by 10’s of percentage points. us average person is so rich, they can deleverage their labor, retire early etc. no amount of qe or qt will make a dent if people decide they want to relax for a while. When everyone else is deleveraging their labor, it’s time for people willing to work to reap the rewards.

anm89 5y ago
Yeah this is a great point that gets missed a lot.
rufus_foreman 5y ago
The US labor force participation rate does not swing by 10's of percentage points. During the pandemic it fell from a little over 63% to a little over 60%. Over the long term, it was above 58% in the 1950's and topped out around 67% in the early 2000's. Median net worth in the US is $120,000, which includes home equity. You can't retire early on that.
- naveen99 5y ago
  Men have gone from 87% to 67%, while women have gone from 33% to 57% since 1950 [1]. Mean net worth in the us is $1 million by 50years of age. A lot of people could retire 10 years earlier if they really wanted to. I agree that these numbers don’t turn on a dime, but people can definitely change their effort dedicated to labor. 1. https://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002
  - rufus_foreman 5y ago
    The largest football stadium in the US holds around 108,000 people. If Bill Gates and 107,999 minimum wage workers attend a game there, the mean net worth is over 1.2 million dollars. How many of them are retiring at 50? Median net worth is what you want here not mean, right? Median net worth at age 50 is around $150,000, also, I think, including home equity. Still not going to be retiring early.