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Sea Change (2022)
- fjarlq 3y agoThis was written December 13, 2022.
- 4ndrewl 3y agoThis explains the explosion in AI related products.
- ethn 3y agoWhy?
- 4ndrewl 3y agoLess risky to invest in ostensibly interest-rate backed investments (think he characterises it as fomo -> fear of loss). Time running out to realise the prior 2-5 year investments in the VC funded space - all the other biggies are busted flushes ( NFTs, self-driving cars, crypto), AI last one remaining. Future investment is heading towards safer seas (which proxy rates), rather than riskier, 9 in 10 will fail startups.
- nanna 3y agoThis should have "investment" in the title, or something to that effect.
- hristov 3y agoThis is a self contradictory writeup but it is a self-contradiction I hear from a lot of investors. It goes something like this (1) the low interest rate environment of 2009-2021 was great for humanity, and (2) I really hope it does not repeat. Well I for one agree with (1) but I do hope it repeats. And it is very possible that it does. Actually, if you look at leading indicators, i.e., upstream prices, it looks like inflation will be receding. Oil and natural gas prices are way down year on year. Steel, aluminum and lithium prices are significantly lower year over year. Copper and iron ore are about flat. Coal is significantly lower. If you look at food staples - wheat, corn and soybeans are all down year over year. Furthermore transportation costs have fallen significantly across the board. Furthermore, if you look a little bit downstream, China factory gate prices are in serious deflation, falling 4.6% yoy in May. Considering what a big exporter China is, these lower prices will wash over the entire world in the months to come as cheap Chinese goods are shipped around the world (utilizing lower shipping rates). So the situation currently is that deflation is happening upstream but downstream, when the finished product gets to the consumer, inflation happens. This is not unusual as everyone tries to keep prices up to pad their margins. How quickly this trend is reversed depends on how competitive the economy is. Unfortunately we have been discovering that after a lot of mergers, the US economy is not as competitive as we previously believed. But hopefully it will happen soon and downstream prices will fall to reflect lower upstream prices. It has always happened historically. We, as consumers, can help this process along by searching out good deals and rewarding companies that are willing to lower their prices with our business. So I do not see this necessarily as a continuing period of high inflation. Of course things can change, but it is very annoying how everyone in the business press writes under the assumption that inflation and interest rates will be high for a long period of time. (Interestingly enough, when you look at the bond markets, where people bet with their money instead of their mouths, the bets are for inflation and interest rates to recede). When you think about it, the low interest rate environment for 2009-2021 was caused by a large underlying factor. Humanity has gotten much better at making larger and larger amounts of stuff. Maybe because of technology, globalization or the free exchange of information of the internet, but it is happening. And guess what, it is continuing to happen.
- eep_social 3y agoI don’t agree that the article presents the low interest rate environment as “good for humanity” though clearly that’s your conclusion.