6 ms·

Everyone has a super bad feeling about the economy. I think most large companies are going to be announcing back to office then followed by layoffs.

xxs 4y ago
It won't be 2007-2008 bad, but there will be a recession. First lay offs tend to be the R&D.
- that_guy_iain 4y ago
  I agree I don't think it'll be 2007-2008 bad. I think it'll be worse. Covid, Ukraine, Remote Work, etc are all hammering the economy.
  - itsoktocry 4y ago
    >bad. I think it'll be worse. Different. 2007/08 was a financial crisis, and global banking infrastructure almost imploded. Here we're talking about deglobalization, supply chain issues and, well, a war. What's interesting is that the main problems may not be US focussed, it may happen around the world (although no one will be safe). For example, hard to imagine the Canadian real estate sector isn't going to melt down...
    - myth_drannon 4y ago
      "For example, hard to imagine the Canadian real estate sector isn't going to melt down..." - Oh, how many times did I hear that, but it's wishful thinking. At best it's 20% down
      - achenatx 4y ago
        bear in mind that 20% down is often times losing 100% of your capital due to leverage.
        smnrchrds 4y ago
        20% down means the prices go back to approximately last year's. The only people who lose money would be those who bought in the past year.
    - dzhiurgis 4y ago
      Far from economist, but I kinda agree. Finance is like 6x larger than real economy hence it really rules the world. That said, wonder what's going to happen with cost of living and property market going thru the roof everywhere. Riots? Ain't got time for that when you need to feed yourself.
      - JumpCrisscross 4y ago
        > Finance is like 6x larger than real economy How are you measuring this? By conventional metrics, it's less than 10% [1]. [1] https://fred.stlouisfed.org/series/VAPGDPFI https://fred.stlouisfed.org/series/VAPGDPFI
        dzhiurgis 4y ago
        Unsure - I've heard it over Odd Lots podcast. Could've been sixth?
    - ackbar03 4y ago
      There was a somewhat accepted view after QE that the next crash is going to be worse because of all the money that is being pumped into the system, and I think that logically makes sense. Although I agree we don't have shitty financial instruments this time, but it's still a lot of leverage in the system right? It must have accumulated somewhere? Or did something happen such that it's no longer the case and a danger? Did the economy actually grow into the leverage such that it's no longer a problem?
    - deleted 4y ago
      [deleted]
  - procgen 4y ago
    Is remote work hammering the economy? What effect does it actually have on productivity?
    - massysett 4y ago
      It's keeping a lot of people at home who otherwise would be in downtowns or suburban office districts buying lunch, having clothes drycleaned, stopping in stores, buying gas, etc.
      - numbsafari 4y ago
        Because what the economy needs right now is… more demand?
      - vanillax 4y ago
        This still happens regardless of remote work. People still live in the cities. The city isn't 100% full of remote tech workers. I think there is some assumption that remote work represents the majority, which its not even close.
      - treis 4y ago
        This is a "broken window" fallacy.
        sokoloff 4y ago
        I think it's not the broken windows fallacy when it increases many remote workers' savings rate. That's different from the parable of paying a glazier for the window instead of a tailor for a suit, but rather having less money circulating in the economy when 20 days a month, I don't burn $5 of gasoline, eat a $2 lunch instead of a $15 lunch, and wear sweat pants instead of office clothes. That could be $3000 of spending reduction for me that isn't replaced with $3000 of other consumption, but rather a significant portion of it goes into savings/investments.
        ProjectArcturis 4y ago
  - mtoner23 4y ago
    Worse??? where have you been the past 2 years
- mbesto 4y ago
  Says who? For tech companies, S&M is usually first to go. You don't need your growth engine during recessions, you need profit. https://tomtunguz.com/sales-marketing-spend-model/ https://tomtunguz.com/sales-marketing-spend-model/
- markus_zhang 4y ago
  I think it's going to be 2001 bad best and 1939 bad worst :/
- PheonixPharts 4y ago
  > It won't be 2007-2008 bad It will be far worse since we're still in the unresolved credit bubble that created that crash. We never actually solved the core problems that created that crisis. What we're seeing now is the beginning of what we have avoided for over a decade, and narrowly dodged during the pandemic, start to finally unravel. Is it just bias from such a long, fun ride that tech has had that make people unable to see this? Back in 2019 there were plenty of people deeply worried about our credit system and the fragility of our global economy. Our actions to avoid catastrophe in 2020 only allowed the issue to become worse. We've been living in a fantasy economy so long people have started to believe that nothing is real (just a few days ago there was a post claiming that "natural resources" don't exist and everything is fantasy). But a variety of factors are coming together that so that we'll see the revenge of reality. I don't think it's going to be pretty.
  - VirusNewbie 4y ago
    Yet not one of the doomers can articulate how a financial meltdown will happen with cascading failures. 2008 was a feedback loop of house values falling which caused banks to fail which caused people to liquidate housing supply which lowered values. What happens this time?
    - PheonixPharts 4y ago
      > What happens this time? Unless you're deep in the financial industry you couldn't have possibly known the details of what was coming in 2008 in 2007. However you easily could tell, if you were paying attention, that something wasn't right in 2007. Plenty of analysts and economists much smarter and more informed than me have been worried about the massive credit bubble we're in and the consequences of that popping. While I agree, it would be far more interesting to know exactly what is going to cause the system to snap, it doesn't mean that observations that something is deeply wrong and we are very likely in for a lot of trouble are invalid "doomerism". Additionally, what's your evidence that this will be less severe than 2008?
pfraze 4y ago
I was much more nervous about the long running policy of cheap capital to be honest. I’m glad for a correction before it goes too long.
- rvz 4y ago
  Precisely this. We've been looking at too many startups raising money constantly and still have not been making any money. We'll now see who will survive this correction, no matter how long it takes.
tootie 4y ago
BLS issued job numbers today and May was still very strong. 390K new jobs, participation rate is up and unemployment rate steady at 3.6%. We're in a bizarre situation where labor is in such short supply that eliminating millions of jobs would just bring us to parity and not lead to a spike in unemployment. It would at least relieve upward pressure on wages and possibly put downward pressure.
seydor 4y ago
Isn't it easier to lay off people remotely?

xxs 4y ago

It won't be 2007-2008 bad, but there will be a recession. First lay offs tend to be the R&D.

that_guy_iain 4y ago
I agree I don't think it'll be 2007-2008 bad. I think it'll be worse. Covid, Ukraine, Remote Work, etc are all hammering the economy.
- itsoktocry 4y ago
  >bad. I think it'll be worse. Different. 2007/08 was a financial crisis, and global banking infrastructure almost imploded. Here we're talking about deglobalization, supply chain issues and, well, a war. What's interesting is that the main problems may not be US focussed, it may happen around the world (although no one will be safe). For example, hard to imagine the Canadian real estate sector isn't going to melt down...
  - myth_drannon 4y ago
    "For example, hard to imagine the Canadian real estate sector isn't going to melt down..." - Oh, how many times did I hear that, but it's wishful thinking. At best it's 20% down
    - achenatx 4y ago
      bear in mind that 20% down is often times losing 100% of your capital due to leverage.
      - smnrchrds 4y ago
        20% down means the prices go back to approximately last year's. The only people who lose money would be those who bought in the past year.
  - dzhiurgis 4y ago
    Far from economist, but I kinda agree. Finance is like 6x larger than real economy hence it really rules the world. That said, wonder what's going to happen with cost of living and property market going thru the roof everywhere. Riots? Ain't got time for that when you need to feed yourself.
    - JumpCrisscross 4y ago
      > Finance is like 6x larger than real economy How are you measuring this? By conventional metrics, it's less than 10% [1]. [1] https://fred.stlouisfed.org/series/VAPGDPFI https://fred.stlouisfed.org/series/VAPGDPFI
      - dzhiurgis 4y ago
        Unsure - I've heard it over Odd Lots podcast. Could've been sixth?
  - ackbar03 4y ago
    There was a somewhat accepted view after QE that the next crash is going to be worse because of all the money that is being pumped into the system, and I think that logically makes sense. Although I agree we don't have shitty financial instruments this time, but it's still a lot of leverage in the system right? It must have accumulated somewhere? Or did something happen such that it's no longer the case and a danger? Did the economy actually grow into the leverage such that it's no longer a problem?
  - deleted 4y ago
    [deleted]
- procgen 4y ago
  Is remote work hammering the economy? What effect does it actually have on productivity?
  - massysett 4y ago
    It's keeping a lot of people at home who otherwise would be in downtowns or suburban office districts buying lunch, having clothes drycleaned, stopping in stores, buying gas, etc.
    - numbsafari 4y ago
      Because what the economy needs right now is… more demand?
    - vanillax 4y ago
      This still happens regardless of remote work. People still live in the cities. The city isn't 100% full of remote tech workers. I think there is some assumption that remote work represents the majority, which its not even close.
    - treis 4y ago
      This is a "broken window" fallacy.
      - sokoloff 4y ago
        I think it's not the broken windows fallacy when it increases many remote workers' savings rate. That's different from the parable of paying a glazier for the window instead of a tailor for a suit, but rather having less money circulating in the economy when 20 days a month, I don't burn $5 of gasoline, eat a $2 lunch instead of a $15 lunch, and wear sweat pants instead of office clothes. That could be $3000 of spending reduction for me that isn't replaced with $3000 of other consumption, but rather a significant portion of it goes into savings/investments.
        ProjectArcturis 4y ago
- mtoner23 4y ago
  Worse??? where have you been the past 2 years
mbesto 4y ago
Says who? For tech companies, S&M is usually first to go. You don't need your growth engine during recessions, you need profit. https://tomtunguz.com/sales-marketing-spend-model/ https://tomtunguz.com/sales-marketing-spend-model/
markus_zhang 4y ago
I think it's going to be 2001 bad best and 1939 bad worst :/
PheonixPharts 4y ago
> It won't be 2007-2008 bad It will be far worse since we're still in the unresolved credit bubble that created that crash. We never actually solved the core problems that created that crisis. What we're seeing now is the beginning of what we have avoided for over a decade, and narrowly dodged during the pandemic, start to finally unravel. Is it just bias from such a long, fun ride that tech has had that make people unable to see this? Back in 2019 there were plenty of people deeply worried about our credit system and the fragility of our global economy. Our actions to avoid catastrophe in 2020 only allowed the issue to become worse. We've been living in a fantasy economy so long people have started to believe that nothing is real (just a few days ago there was a post claiming that "natural resources" don't exist and everything is fantasy). But a variety of factors are coming together that so that we'll see the revenge of reality. I don't think it's going to be pretty.
- VirusNewbie 4y ago
  Yet not one of the doomers can articulate how a financial meltdown will happen with cascading failures. 2008 was a feedback loop of house values falling which caused banks to fail which caused people to liquidate housing supply which lowered values. What happens this time?
  - PheonixPharts 4y ago
    > What happens this time? Unless you're deep in the financial industry you couldn't have possibly known the details of what was coming in 2008 in 2007. However you easily could tell, if you were paying attention, that something wasn't right in 2007. Plenty of analysts and economists much smarter and more informed than me have been worried about the massive credit bubble we're in and the consequences of that popping. While I agree, it would be far more interesting to know exactly what is going to cause the system to snap, it doesn't mean that observations that something is deeply wrong and we are very likely in for a lot of trouble are invalid "doomerism". Additionally, what's your evidence that this will be less severe than 2008?

pfraze 4y ago

I was much more nervous about the long running policy of cheap capital to be honest. I’m glad for a correction before it goes too long.

rvz 4y ago
Precisely this. We've been looking at too many startups raising money constantly and still have not been making any money. We'll now see who will survive this correction, no matter how long it takes.

tootie 4y ago

BLS issued job numbers today and May was still very strong. 390K new jobs, participation rate is up and unemployment rate steady at 3.6%. We're in a bizarre situation where labor is in such short supply that eliminating millions of jobs would just bring us to parity and not lead to a spike in unemployment. It would at least relieve upward pressure on wages and possibly put downward pressure.

seydor 4y ago

Isn't it easier to lay off people remotely?