3 ms·

TLDR: it’s way too early to start comparing this to 2000/2008. You’re right that stuff is slow. We’re so new into this round of the market that it’s best to be

by ianai 4y ago

TLDR: it’s way too early to start comparing this to 2000/2008. You’re right that stuff is slow. We’re so new into this round of the market that it’s best to be humble. We haven’t yet seen anything like assets becoming illiquid/worthless and threatening leveraged asset values at a market wide level. Ie something like a domino effect. We’re seeing more of a “marginal effect” where at higher interest rates cap rates are trending opposite of the past many years. This should stay on the business development side so long as “not enough” leverage was set with an adjustable rate. That’s what hurt a lot of assets and people in 2008-mortgage rates went up on the ARMs and thus monthly mortgage payments. Having said that, 2000 and 2008 had market driven revisions downward. 2008 was particularly bad because suddenly highly leveraged assets had to be marked to market. So many assets had their values pinned to irrational assumptions of the underlying assets that many trillions of debt were headed for default. As an aside, the economy is in a fragile place. Meat processing and infant formula got concentrated so far that shutting down individual plants takes out the supply of those goods. The economy right now is just about dominated by market concentration-and unions are at historical lows of importance. That is a factor that leads to inefficiency (at best) and fragility/deadweight at worst. Look at how long Intel told people they didn’t need multiple cores. Edit-A targeted attack on TSMC could wipe out the worlds semi supply and send us back decades. Quarantines and lockdowns can wipe out the worlds TP supply, cellphones, everything produced almost exclusively in China. Exit2-the attacks on Ukraine either have stopped the (vast majority of the?) worlds supply of neon gas. Etc

01100011 4y ago
Neon is actually easily replaced. It's everywhere in the atmosphere. I believe the steel production in Ukraine was just the most economical place to collect it. Much more important are food, energy and fertilizer disruptions. Right now we have fairly high fuel prices (not adjusting for inflation, IIRC) and China is coming out of lockdown so expect energy prices to go even higher. I agree that the world hinges on Taiwan right now. It may be that the illegal(in China) foreign investments of China's ruling class and military leaders are the only thing truly restraining a takeover. Time will tell. Not even Intel can handle a Taiwanese invasion due to the lack of support chips. Putin caught Europe in an energy checkmate and China seems to have the work in a semiconductor check. These are dangerous times. I am slightly amused by folks who talk about market technicals while ignoring the elephants in the room. We may be witnessing the formation of a new world order that we are simply unprepared for. The US is actually in a decent position, having geography and natural resources on our side. Life may be difficult for our allies later this year, however.
- vineyardmike 4y ago
  > Neon is actually easily replaced. It's everywhere in the atmosphere. Except its not easy to build new supply in the short term. > I agree that the world hinges on Taiwan right now. Taiwan is safe unless Biden slips and says something too aggressive. China needs chips just like the US and they're stuck with the same sources. They won't take it over so long as their takeover destroys the fabs. The US the EU and CN are all trying to build domestic chip supply. While it probably won't be top-tier, it should be "of this decade" in quality. Thats enough to keep the economy alive in US and CN even if its setback. > Putin caught Europe in an energy checkmate And the Russian oil will sell to developing non-western nations that didn't embargo russia. It will be cheaper and maybe a boom to those nations. This will free up supply in western-compliant oil producers, which will help the EU, but again, it does take years to build that infra. > China seems to have the work in a semiconductor check.... We may be witnessing the formation of a new world order that we are simply unprepared for. I think china is the most un-prepared. China had the ultimate check-mate since no one would exist without their manufacturing ability. Their continued lock-downs are forcing companies to move around their supply chains to avoid interruption. Even apple, their crown jewel, is starting to expand. Meanwhile the only thing keeping the Chinese population compliant is a growing middle class and quality of life. If Chinese exports slip, it may trigger unrest. A trump-style trade way may help push china to the edge and we may see more ever-grande esque failures that anger the population. > I am slightly amused by folks who talk about market technicals while ignoring the elephants in the room. Because you can't put the elephant in your 401K.
  - mellavora 4y ago
    > Meanwhile the only thing keeping the Chinese population compliant is a growing middle class and quality of life. I keep hearing stories about some pretty deep discontent in China, because they no longer see a growing quality of life. see "lie flat" movement https://www.insider.com/disenchanted-chinese-youth-join-a-mass-movement-to-lie-flat-2021-6 https://www.insider.com/disenchanted-chinese-youth-join-a-ma... or "we are the last generation" https://globalvoices.org/2022/05/16/the-most-desperate-response-to-the-covid-19-lockdown-in-china-we-are-the-last-generation/ https://globalvoices.org/2022/05/16/the-most-desperate-respo... note: links are the first results, you can probably find better sources.

by ianai 4y ago

01100011 4y ago

Neon is actually easily replaced. It's everywhere in the atmosphere. I believe the steel production in Ukraine was just the most economical place to collect it. Much more important are food, energy and fertilizer disruptions. Right now we have fairly high fuel prices (not adjusting for inflation, IIRC) and China is coming out of lockdown so expect energy prices to go even higher. I agree that the world hinges on Taiwan right now. It may be that the illegal(in China) foreign investments of China's ruling class and military leaders are the only thing truly restraining a takeover. Time will tell. Not even Intel can handle a Taiwanese invasion due to the lack of support chips. Putin caught Europe in an energy checkmate and China seems to have the work in a semiconductor check. These are dangerous times. I am slightly amused by folks who talk about market technicals while ignoring the elephants in the room. We may be witnessing the formation of a new world order that we are simply unprepared for. The US is actually in a decent position, having geography and natural resources on our side. Life may be difficult for our allies later this year, however.

vineyardmike 4y ago
> Neon is actually easily replaced. It's everywhere in the atmosphere. Except its not easy to build new supply in the short term. > I agree that the world hinges on Taiwan right now. Taiwan is safe unless Biden slips and says something too aggressive. China needs chips just like the US and they're stuck with the same sources. They won't take it over so long as their takeover destroys the fabs. The US the EU and CN are all trying to build domestic chip supply. While it probably won't be top-tier, it should be "of this decade" in quality. Thats enough to keep the economy alive in US and CN even if its setback. > Putin caught Europe in an energy checkmate And the Russian oil will sell to developing non-western nations that didn't embargo russia. It will be cheaper and maybe a boom to those nations. This will free up supply in western-compliant oil producers, which will help the EU, but again, it does take years to build that infra. > China seems to have the work in a semiconductor check.... We may be witnessing the formation of a new world order that we are simply unprepared for. I think china is the most un-prepared. China had the ultimate check-mate since no one would exist without their manufacturing ability. Their continued lock-downs are forcing companies to move around their supply chains to avoid interruption. Even apple, their crown jewel, is starting to expand. Meanwhile the only thing keeping the Chinese population compliant is a growing middle class and quality of life. If Chinese exports slip, it may trigger unrest. A trump-style trade way may help push china to the edge and we may see more ever-grande esque failures that anger the population. > I am slightly amused by folks who talk about market technicals while ignoring the elephants in the room. Because you can't put the elephant in your 401K.
- mellavora 4y ago
  > Meanwhile the only thing keeping the Chinese population compliant is a growing middle class and quality of life. I keep hearing stories about some pretty deep discontent in China, because they no longer see a growing quality of life. see "lie flat" movement https://www.insider.com/disenchanted-chinese-youth-join-a-mass-movement-to-lie-flat-2021-6 https://www.insider.com/disenchanted-chinese-youth-join-a-ma... or "we are the last generation" https://globalvoices.org/2022/05/16/the-most-desperate-response-to-the-covid-19-lockdown-in-china-we-are-the-last-generation/ https://globalvoices.org/2022/05/16/the-most-desperate-respo... note: links are the first results, you can probably find better sources.