5 ms·

This is going to be a repeat of 2000, not 2008. There's seemingly no contagion and no secular stagnation. This is just unwinding of the cheap money era that flo

by tootie 4y ago

This is going to be a repeat of 2000, not 2008. There's seemingly no contagion and no secular stagnation. This is just unwinding of the cheap money era that flowed overwhelmingly into SV. You'll see a cooling off of red hot compensation, a lot of failed startups that no one ever understood and the ongoing crypto crash. This may end up being enough to trigger a mild recession.

swalsh 4y ago
" mild recession" If we're lucky
- mywittyname 4y ago
  We're like 2.5 years into one at this point and some people still don't acknowledge it. A lot of people just keep saying "we're heading into one." It's likely this one will pass long before people come to a general consensus on whether or not one really happened.
  - kevstev 4y ago
    If this is a recession, its not one I am feeling. 2008, the .com bust, those were recessions that everyone felt acutely. Unemployment is still at record lows. If the GDP dial isn't where people would like it to be then fine, but overall jobs are plentiful and no one I know is scared like they have been during the previous recessions.
  - erehweb 4y ago
    The U.S. unemployment rate was 3.7% in October, and GDP was up 2.6% annualized in 2022Q3. Why do you say we're in a recession?
fortran77 4y ago
We didn't have inflation like this in 2000. I'm old enough to remember the 70s
- songeater 4y ago
  There was a lot of commodity-inflation in the early 2000s, the second biggest rise in commodity prices after the 1970s[1]. Unlike the 70s (supply shock), this was primarily a demand-pull out of China/Asia, so the net impact to the economy was much more positive. [1] https://www.investing.com/indices/bloomberg-commodity https://www.investing.com/indices/bloomberg-commodity
- staticman2 4y ago
  The 5 year breakeven inflation rate today is 2.61% Since Treasury Inflation Protected Securities didn't exist in the 70s we can't compare, but the market thinks inflation is not going to continue like it did in the 70s.
boringg 4y ago
Global macro is very different. This is going to be different from both.
solumunus 4y ago
Mild recession? How are you not understanding the global macro set up right now? Europe will see a ~10 year recession, possibly the worst ever. America may fare better but there's no way you're getting away with a "mild" recession.
- alangibson 4y ago
  We're definitely bracing for impact around here. Where do you get 10 years from though?
  - jamespo 4y ago
    Source: he made it up
- hylaride 4y ago
  Predicting the future is hard, but the labour market is still extremely tight, boomers are leaving the workforce due to retirement, and there will probably be (attempts at) on-shoring as the west tries to decouple from China. Europe will probably get its energy sorted in the medium term with LNG, and they're going to need to build a lot of damn nukes, but I don't think it'll be 10 years.
- staticman2 4y ago
  How do you not understand that you have a contrarian take on the economy?
Aunche 4y ago
Software engineering is far more saturated than it was in 2000 and 2008. In 2008, Amazon, Apple, and Google all had a seemingly endless room to grow. The iPhone, Android, AWS, and video steaming were still in their infancy. There's nothing like that right now. There are definitely a lot of exciting innovations in ML and VR, but I think it will be a while before these technologies find a mainstream consumer use case.
- magic_hamster 4y ago
  In 2000 some people still worked with paper rolodex. We need to keep things in perspective. The world changed massively in the last 20 years, everything is software and software is almost everything. There are a lot of contributing factors to this economy which are unrelated to the actual demand and value of software. There will not be an oversaturation of software engineering for a while to come. If memory serves, Meta is cutting a lot of non tech jobs. Engineers might lose their jobs if entire projects are scrapped, but maybe a different position will be offered to them. I hope that everyone is looking at Twitter and learning what not do: no company wants to beg some engineers to come back after being too quick to pull the trigger.
- matwood 4y ago
  Outside of big tech, every single company has been struggling to hire. Companies hate to admit it, but every company is a software company now.
- whydat_whodat 4y ago
  "Software engineering is far more saturated" What country are you referring to? I'm in the US-- the market here seems quite strong according to the BLS: US Bureau of Labor Statistics-- Here are two examples, followed by the general IT occupation growth description: - Software Developers, Quality Assurance Analysts, and Testers --> Job Outlook, 2021-31 25% (Much faster than average) https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm https://www.bls.gov/ooh/computer-and-information-technology/... - Information Security Analysts --> Job Outlook, 2021-31 35% (Much faster than average) https://www.bls.gov/ooh/computer-and-information-technology/home.htm https://www.bls.gov/ooh/computer-and-information-technology/... "Overall employment in computer and information technology occupations is --> projected to grow 15 percent from 2021 to 2031, much faster than the average for all occupations" https://www.bls.gov/ooh/computer-and-information-technology/information-security-analysts.htm https://www.bls.gov/ooh/computer-and-information-technology/...
renaudg 4y ago
I was around in 2000. It had the failed startups but it didn't have inflation, war, and a pandemic. Long Covid alone is going to hamper any economic recovery. It's a mass disabling event. The sooner we recognize this and start tackling it, the better : https://www.wsj.com/articles/covid-workforce-absenteeism-productivity-economy-labor-11667831493 https://www.wsj.com/articles/covid-workforce-absenteeism-pro...
deleted 4y ago
[deleted]
tsunamifury 4y ago
CMBSs held by shadow banks with quarterly markdown accounting — with valuations linked to commercial leases.
hindsightbias 4y ago
You'd almost think cities and metropolitan areas are being thoughtful when avoiding the demands from those following the latest gold rush. But surely, that would be an unpopular opinion around here.
trashtester 4y ago
It really depends on the Fed and the overall market. I would say the economy is at a much greater risk now than in 2000, for these reasons: We have several fundamental inflation factors - The population is aging. A huge number of boomers are exiting the workforce every year. - Unlike in Japan, this cohort of people are likely to keep spending into their retirement, including a huge spending on healthcare. - This time, we don't have China to absorb the inflation. China is in the same situation. Also, most jobs that could be easily exported already have been. With the tech sector being a bit of an exception. - The prices for all sorts of jobs being done by people in their 60's will go up. This goes for everything from hairdressers and plumbers to accountants and lawyers. This will cause pressure on the salaries for these jobs, raising costs. - Decades of low interest rates have created a massive amount of cash (and cash-equivalent "value") in the system. As investments go down, more will find its way to consumption, driving prices up. - During the Covid lockdowns, many countries discovered that plenty of goods were becoming scarce or unavailable. Local production facilities are being built for anything from face masks and respirators to integrated circuits both in the US and Europe. Trade barriers and subsidies are used to support this. Local production will be more expensive than 1-2 huge plants able to serve the globe. - Covid also led to a mentality change, where employee loyalty to employers took a big hit. Employees (especially blue collared ones that can't WFH) that got laid off during Covid will be more likely to switch jobs more often, driving salaries and costs up. On top of this, the war in Ukraine adds these factors: - Food, energy and fuel, as well as many minerals are scarce, driving up the prices of everything. - Such items are added to the list of goods western countries want to produce for themselves. And in the case of food, places that experience famine may switch back to food production over cash crops over a longer term, as well. - Western countries have started rebuilding their arms industries, sucking capital and labor from other sectors. All-in-all, these factors lay the foundations for an inflationary pressure that could exceed the 1970's. As central banks attempt to counter this by continuing to raise rates, we get the following problems. - Anyone with a variable or expiring interest rate will have their standard of living going down from interest payments AND inflation. - Huge swaths of people will demand that raises keep up with inflation. Groups with skills that see increased demand will get such raises, and possibly more. - In other sectors, employers will not have the income to raise compensation at the same rate. Employees in these sectors will become increasingly unhappy. - People will start unionizing at a greater rate than before. Especially in Europe, but also in the US. - Most likely, we will see large numbers of massive labor market conflicts, with strikes followed by lock-outs. - Tensions between countries is also likely to rise (though the war in Ukraine may mitigate that a bit, for as long as it lasts) - These conflicts will damage the supply side of the economy further, leading to even more inflation and a deeper stagflation, in a vicious circle. In all of this, this is bad for any business without a significant positive cash flow, including much of internet "tech". Military "tech", on the other hand, may see a huge boom, and the same may come for anyone able to contribute within manufacturing or construction (such as through robotics/AI).
jollyllama 4y ago
People act like there were no layoffs between 2010 and 2000 but there were plenty, if you were in the wrong company and/or the wrong sector. IBM comes to mind. There were still CEOs out there trimming the fat while everyone else was getting high on the hype. If you had exposure to this, you're ready, at least emotionally, for what's going on now. If you didn't, you're probably shellshocked right now. Don't worry, you'll get used to it.

by tootie 4y ago

swalsh 4y ago

" mild recession" If we're lucky

mywittyname 4y ago
We're like 2.5 years into one at this point and some people still don't acknowledge it. A lot of people just keep saying "we're heading into one." It's likely this one will pass long before people come to a general consensus on whether or not one really happened.
- kevstev 4y ago
  If this is a recession, its not one I am feeling. 2008, the .com bust, those were recessions that everyone felt acutely. Unemployment is still at record lows. If the GDP dial isn't where people would like it to be then fine, but overall jobs are plentiful and no one I know is scared like they have been during the previous recessions.
- erehweb 4y ago
  The U.S. unemployment rate was 3.7% in October, and GDP was up 2.6% annualized in 2022Q3. Why do you say we're in a recession?

fortran77 4y ago

We didn't have inflation like this in 2000. I'm old enough to remember the 70s

songeater 4y ago
There was a lot of commodity-inflation in the early 2000s, the second biggest rise in commodity prices after the 1970s[1]. Unlike the 70s (supply shock), this was primarily a demand-pull out of China/Asia, so the net impact to the economy was much more positive. [1] https://www.investing.com/indices/bloomberg-commodity https://www.investing.com/indices/bloomberg-commodity
staticman2 4y ago
The 5 year breakeven inflation rate today is 2.61% Since Treasury Inflation Protected Securities didn't exist in the 70s we can't compare, but the market thinks inflation is not going to continue like it did in the 70s.

boringg 4y ago

Global macro is very different. This is going to be different from both.

solumunus 4y ago

Mild recession? How are you not understanding the global macro set up right now? Europe will see a ~10 year recession, possibly the worst ever. America may fare better but there's no way you're getting away with a "mild" recession.

alangibson 4y ago
We're definitely bracing for impact around here. Where do you get 10 years from though?
- jamespo 4y ago
  Source: he made it up
hylaride 4y ago
Predicting the future is hard, but the labour market is still extremely tight, boomers are leaving the workforce due to retirement, and there will probably be (attempts at) on-shoring as the west tries to decouple from China. Europe will probably get its energy sorted in the medium term with LNG, and they're going to need to build a lot of damn nukes, but I don't think it'll be 10 years.
staticman2 4y ago
How do you not understand that you have a contrarian take on the economy?

Aunche 4y ago

Software engineering is far more saturated than it was in 2000 and 2008. In 2008, Amazon, Apple, and Google all had a seemingly endless room to grow. The iPhone, Android, AWS, and video steaming were still in their infancy. There's nothing like that right now. There are definitely a lot of exciting innovations in ML and VR, but I think it will be a while before these technologies find a mainstream consumer use case.

magic_hamster 4y ago
In 2000 some people still worked with paper rolodex. We need to keep things in perspective. The world changed massively in the last 20 years, everything is software and software is almost everything. There are a lot of contributing factors to this economy which are unrelated to the actual demand and value of software. There will not be an oversaturation of software engineering for a while to come. If memory serves, Meta is cutting a lot of non tech jobs. Engineers might lose their jobs if entire projects are scrapped, but maybe a different position will be offered to them. I hope that everyone is looking at Twitter and learning what not do: no company wants to beg some engineers to come back after being too quick to pull the trigger.
matwood 4y ago
Outside of big tech, every single company has been struggling to hire. Companies hate to admit it, but every company is a software company now.
whydat_whodat 4y ago
"Software engineering is far more saturated" What country are you referring to? I'm in the US-- the market here seems quite strong according to the BLS: US Bureau of Labor Statistics-- Here are two examples, followed by the general IT occupation growth description: - Software Developers, Quality Assurance Analysts, and Testers --> Job Outlook, 2021-31 25% (Much faster than average) https://www.bls.gov/ooh/computer-and-information-technology/software-developers.htm https://www.bls.gov/ooh/computer-and-information-technology/... - Information Security Analysts --> Job Outlook, 2021-31 35% (Much faster than average) https://www.bls.gov/ooh/computer-and-information-technology/home.htm https://www.bls.gov/ooh/computer-and-information-technology/... "Overall employment in computer and information technology occupations is --> projected to grow 15 percent from 2021 to 2031, much faster than the average for all occupations" https://www.bls.gov/ooh/computer-and-information-technology/information-security-analysts.htm https://www.bls.gov/ooh/computer-and-information-technology/...

renaudg 4y ago

I was around in 2000. It had the failed startups but it didn't have inflation, war, and a pandemic. Long Covid alone is going to hamper any economic recovery. It's a mass disabling event. The sooner we recognize this and start tackling it, the better : https://www.wsj.com/articles/covid-workforce-absenteeism-productivity-economy-labor-11667831493 https://www.wsj.com/articles/covid-workforce-absenteeism-pro...

deleted 4y ago

[deleted]

tsunamifury 4y ago

CMBSs held by shadow banks with quarterly markdown accounting — with valuations linked to commercial leases.

hindsightbias 4y ago

You'd almost think cities and metropolitan areas are being thoughtful when avoiding the demands from those following the latest gold rush. But surely, that would be an unpopular opinion around here.

trashtester 4y ago

It really depends on the Fed and the overall market. I would say the economy is at a much greater risk now than in 2000, for these reasons: We have several fundamental inflation factors - The population is aging. A huge number of boomers are exiting the workforce every year. - Unlike in Japan, this cohort of people are likely to keep spending into their retirement, including a huge spending on healthcare. - This time, we don't have China to absorb the inflation. China is in the same situation. Also, most jobs that could be easily exported already have been. With the tech sector being a bit of an exception. - The prices for all sorts of jobs being done by people in their 60's will go up. This goes for everything from hairdressers and plumbers to accountants and lawyers. This will cause pressure on the salaries for these jobs, raising costs. - Decades of low interest rates have created a massive amount of cash (and cash-equivalent "value") in the system. As investments go down, more will find its way to consumption, driving prices up. - During the Covid lockdowns, many countries discovered that plenty of goods were becoming scarce or unavailable. Local production facilities are being built for anything from face masks and respirators to integrated circuits both in the US and Europe. Trade barriers and subsidies are used to support this. Local production will be more expensive than 1-2 huge plants able to serve the globe. - Covid also led to a mentality change, where employee loyalty to employers took a big hit. Employees (especially blue collared ones that can't WFH) that got laid off during Covid will be more likely to switch jobs more often, driving salaries and costs up. On top of this, the war in Ukraine adds these factors: - Food, energy and fuel, as well as many minerals are scarce, driving up the prices of everything. - Such items are added to the list of goods western countries want to produce for themselves. And in the case of food, places that experience famine may switch back to food production over cash crops over a longer term, as well. - Western countries have started rebuilding their arms industries, sucking capital and labor from other sectors. All-in-all, these factors lay the foundations for an inflationary pressure that could exceed the 1970's. As central banks attempt to counter this by continuing to raise rates, we get the following problems. - Anyone with a variable or expiring interest rate will have their standard of living going down from interest payments AND inflation. - Huge swaths of people will demand that raises keep up with inflation. Groups with skills that see increased demand will get such raises, and possibly more. - In other sectors, employers will not have the income to raise compensation at the same rate. Employees in these sectors will become increasingly unhappy. - People will start unionizing at a greater rate than before. Especially in Europe, but also in the US. - Most likely, we will see large numbers of massive labor market conflicts, with strikes followed by lock-outs. - Tensions between countries is also likely to rise (though the war in Ukraine may mitigate that a bit, for as long as it lasts) - These conflicts will damage the supply side of the economy further, leading to even more inflation and a deeper stagflation, in a vicious circle. In all of this, this is bad for any business without a significant positive cash flow, including much of internet "tech". Military "tech", on the other hand, may see a huge boom, and the same may come for anyone able to contribute within manufacturing or construction (such as through robotics/AI).

jollyllama 4y ago

People act like there were no layoffs between 2010 and 2000 but there were plenty, if you were in the wrong company and/or the wrong sector. IBM comes to mind. There were still CEOs out there trimming the fat while everyone else was getting high on the hype. If you had exposure to this, you're ready, at least emotionally, for what's going on now. If you didn't, you're probably shellshocked right now. Don't worry, you'll get used to it.