5 ms·

There is so much excess money floating in the economy at the moment. Its insane. People emboldened by market and housing gains have to been spending ridiculou

There is so much excess money floating in the economy at the moment. Its insane. People emboldened by market and housing gains have to been spending ridiculous amounts of money like there is no tomorrow. Layoffs have been limited to tech.

alephnerd 3y ago
> Layoffs have been limited to tech And in all honesty, good. Tech Bros (myself included) needed to be cut to size. There was a lot of hubris by my peers in the 2010s.
- apwell23 3y ago
  . Tech Bros are infact rarely let go first because of their chummy relationship with managmemnt. I know a lot of my colleagues on Visas and families here were laidoff and ppl on visas live with this constant layoff anxiety.
- art-not 3y ago
  I love the lack of sympathy for tech workers across North America or perhaps even globally, when tech hub salaries still don’t allow tech workers to even have a middle class lifestyle. Very few people I know get paid enough to buy a starter home within 2 or 3 hours of where they work. I get paid more than my non tech peers yet still functionally have less spending power than a 25 year old from 30 years ago, despite being a fair bit older than 25
  - apwell23 3y ago
    US middle class cleaved into two groups post pandemic: homeowners at 2% interest rates and everyone else. Its the new middleclass have and have nots. You have it pretty good right now if you are a homeowner.
    - infamouscow 3y ago
      This is short sighted. People have been saying similar about the cars purchased in 2021 because they sell for well above asking. As 36-month leases start coming due the prices of those cars is normalizing back to where it should be. All of the boomers that refuse to downsize and plan to die in their homes are going to do the same with the housing market, but in a more spectacular fashion that causes the market to crash.
      - dehrmann 3y ago
        On the boomer front, it's hard to say because it'll play out over 20 years, and there's a genuine supply shortage. There's also a chance a lot of their kids take the house over and sell something less desirable.
    - dehrmann 3y ago
      In theory, those homes should start going down in value once people start selling because you can buy less home for a $2,000 per month mortgage payment. The market's weird right now because a lot of people with low interest rates can't afford to sell and buy something comparable.
      - refulgentis 3y ago
        I agree: but given that, it's hard to imagine what would bend the market towards selling.
      - selimthegrim 3y ago
        Depending on the region of the country, a lot of people with low interest rates might be handcuffed by skyrocketing insurance from finding buyers
    - ethbr1 3y ago
      The US middle class has always been divided into homeowners and non-homeowners.
    - jorvi 3y ago
  - Domenic_S 3y ago
    > I get paid more than my non tech peers yet still functionally have less spending power than a 25 year old from 30 years ago This seems like some non-generic case specific to your situation and not representative of the average experience. The median income in 1994 for over-25-year-olds (men only!) was $25,465 [0], women was less than half of that. Let's go with the figure for men for the sake of discussion. $25,465 in 1994 is the buying power of $55k today [1]. $55k is the 56th percentile [2], so right where we'd expect it to be. --- 1994: median home price $142,200 [3], interest rate 30-year fixed: 8.38% [4] Principal balance $113,760 @ 8.38%, payment (P&I): $865, or 3.4% of annual income --- 2024: median home price $384,500 [5], interest rate 30-year fixed: 7% [6] Principal balance $307,600 @ 7%, payment (P&I): $2,046, 3.7% of annual income --- Opinion incoming: I think there are 2 things that make 'today' seem more expensive than 'back then': implacable consumerism, and the natural change of places over time (ie, gentrification & co). w/r/t consumerism, the load on both 'necessary' and discretionary spending has increased big-time - people were not generally paying for broadband, smartphones, gaming consoles, home espresso machines, soundbars, portable speakers, media players, printers/copiers/scanners, I could go on forever. Look around you and count how many things straight-up didn't exist in 1994 (or were reserved for the ultrawealthy or for business). We could do without them today, but it would feel really bad, as if we're not participating in society or making use of its advancement. w/r/t gentrification, many places today are more desirable than they used to be, and their increase in price is a function of demand rather than of inflation, so it feels like the economics of living got away from people who weren't already bought in. But it's not that "everything" got so much more expensive, it's that, for example, Akron OH used to be more expensive than San Jose (!!) because farming was the center of industry. Now the world changed and what used to be a pretty rural town full of fruit trees is the most expensive metro in the country. It's not because "houses got more expensive" per se, it's that the world changed. [0] https://nces.ed.gov/programs/digest/d96/d96t376.asp https://nces.ed.gov/programs/digest/d96/d96t376.asp [1] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25%2C465&year1=199401&year2=202402 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25%2C465&year1... [2] https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/ [3] https://www.huduser.gov/periodicals/ushmc/winter2001/histdat08.htm https://www.huduser.gov/periodicals/ushmc/winter2001/histdat... [4] https://www.mpamag.com/us/mortgage-industry/guides/historical-mortgage-rates-in-the-usa-highest-high-and-lowest-lows/433237#:~:text=The%20highest%20mortgage%20rate%20in%20the%20last%2030%20years%20was,%25%2C%20according%20to%20Freddie%20Mac https://www.mpamag.com/us/mortgage-industry/guides/historica.... [5] https://www.bankrate.com/real-estate/existing-home-sales/ https://www.bankrate.com/real-estate/existing-home-sales/ [6] https://www.bankrate.com/mortgages/mortgage-interest-rates-forecast/ https://www.bankrate.com/mortgages/mortgage-interest-rates-f...
  - alephnerd 3y ago
    > I love the lack of sympathy for tech workers across North America or perhaps even globally, when tech hub salaries still don’t allow tech workers to even have a middle class lifestyle Do you have empathy for IBs, PEs, and other members of High Finance? The difference in TC between High Finance and the equivalent roles in Tech are not that significant. Goldman Sach's IB Analysts starting salaries at the SF office were $90k with minimal bonuses in 2020. These same people could have worked at Google or Microsoft (and most of them legitimately had that option) The overlap between Big Finance and Big Tech is massive, just like the overlap between random engineer and random corpdev drone in Dallas or KC.
    - ylee 3y ago
      >Goldman Sach's IB Analysts starting salaries at the SF office were $90k with minimal bonuses in 2020. These same people could have worked at Google or Microsoft (and most of them legitimately had that option) When I graduated from Columbia in 1999, I interviewed and got offers at various tech startups, but entry-level jobs on the "PM track" for those without a CS/engineering degree didn't formally exist at the likes of Microsoft or Yahoo as far as I know. I had a technical background, but was almost entirely self-taught, and had no interest in writing code for money anyway. <https://news.ycombinator.com/item?id=36027171 https://news.ycombinator.com/item?id=36027171> Of my offers I chose Goldman, where I worked with tech companies. Thank goodness for that; I got to participate in the dotcom bubble without being directly swept up in its popping, and saw the Valley immediately post-bubble collapse. <https://news.ycombinator.com/item?id=34726735 https://news.ycombinator.com/item?id=34726735> My GS starting salary was 40K. During that first year, because of the dotcom bubble, Goldman raised the salary to $55/65/75K for first/second/third-year analysts, and my end-of-year bonus in 2000 was close to 100% of salary. Then the full effect of the recession/market crash hit and the 2001 bonus was, well, much smaller.
      - alephnerd 3y ago
        > the 2001 bonus was, well, much smaller Exactly! The bonus plays a massive role in Analyst compensation, and during 2020-present, the bonus was slashed severely due to a lack of late stage dealflow. The work hours at GS and JPM were still as crappy as before, but the bonuses were trash when factoring stock and bonus compensation their peers were getting. A bunch of my mentees made the switch to PM, SWE, VC analyst, or Founding explicitly because of that.
- spencerflem 3y ago
  A word in support of this I've also seen a pretty stunning lack of empathy from tech workers who unquestionably have it better than almost any other working class (non-owner/shareholder) groups. I'm not saying that its great that tech workers are being laid off, but I get the schadenfreude other would have after a decade of being told that the solution to their problems is to "skill up" and learn to code. The real problem is of course the system that prioritizes wealth flowing from workers to owners and we should all be aligned in this.
  - jprete 3y ago
    The GP paints with a very broad brush. Probably the vast majority of tech workers know there's a problem but don't know how to solve it.
    - spencerflem 3y ago
      Oh I agree, but for a lot of people techies are part of the problem itself. Gentrification is real, and the companies themselves are not seen as helpful either. And when techies do donate, they're often to pie in the sky stuff like AI alignment , or the giant long now clock , that comes off as out of touch at best. I know for a fact that there's plenty of kind empathetic tech workers but I'm sure there are kind lawyers too and they don't have a lovely broad strokes reputation either
      - alephnerd 3y ago
        ^^^ this.
- robotburrito 3y ago
  Most of the "tech bros" and "SaaS sisters" I know came from working class means. They might make six figures, but still can't afford a home.
Solvency 3y ago
> People emboldened by market and housing gains have to been spending ridiculous amounts of money like there is no tomorrow what are you basing this claim on? the fact that airbnb bookings are up for a rare celestial event? here is where all of my ridiculous amounts of money is going towards: $6/gal gas in california, ever-increasing property taxes, ever-increasing insurance premiums, $399 "surgery" charges at an ENT simply because they looked up my nose for half a second, insanely expensive annual car registration charges, etc.
- dfxm12 3y ago
  Seriously. For all we know, these are relatively local people who had to settle for this cheap "vacation" instead of a more expensive/longer trip further away... Relatively few people own stocks & home ownership has tapered off & isn't back to its pre pandemic highs... Maybe these things show the people that were doing well are still doing well, but we knew that already.
  - nickpp 3y ago
    > Relatively few people own stocks 61% of Americans, says Gallup [1]. Not sure if this includes those indirectly owning stocks, through pension funds. [1] https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx https://news.gallup.com/poll/266807/percentage-americans-own...
haunter 3y ago
Wish this "so much excess money" was evenly distributed
ericmcer 3y ago
Controlling inflation will hopefully be the main discussion around the next election, I am tired of watching the political theater around small side-issues and then paying $8 for milk and $6 for peanut butter. Why is our labor becoming worth less in real goods? Why is life expectancy decreasing? Can politicians address issues that affect every single person every day? I make good money in tech but it still feels like more than 4k/mo (in California) is what you need just to cover rent and basics (car, internet, phone, groceries, etc.). I have no idea how people working minimum wage jobs are surviving.
- 2OEH8eoCRo0 3y ago
  So you want deflation?
  - nradov 3y ago
    Some deflation, at least in basic commodities and energy, would probably be a long-term net positive for the US economy.
  - throwitaway222 3y ago
    Of course. Everyone does.
    - NovemberWhiskey 3y ago
      The Japanese, who actually had it, didn't seem to think it was so great.
      - throwitaway222 3y ago
        not true: https://foreignpolicy.com/2024/01/15/japan-economy-inflation-deflation/ https://foreignpolicy.com/2024/01/15/japan-economy-inflation...
        NovemberWhiskey 3y ago
SoftTalker 3y ago
Or, in inflationary times, people are spending their money today because it will be worth less tomorrow.
switch007 3y ago
Yup. Larger properties round here are going for £50-150k above last sale price (last sales being 4-6 years). It's madness.
- voisin 3y ago
  In areas of Canada (Toronto and Vancouver vicinities), housing prices were increasing at $80k per MONTH. To only have your house increase by 50-150k over 4-6 years would be better than even the podunk unincorporated villages hours from any economic centre.
  - switch007 3y ago
    Appreciate the context. But the figures I quoted are huge sums for the average working person round here (we're closer to a "podunk village" than e.g. Toronto + Vancouver metro areas), as I'm sure $80k/month is to Canadians. They represent real problems for most people who live here. They can't be dismissed because a large metro area in Canada has seen even higher inflated prices
acchow 3y ago
People refinanced their mortgages at 2.5% in 2022. Suddenly their monthly payments fell significantly and they have more money to spend every month

alephnerd 3y ago

> Layoffs have been limited to tech And in all honesty, good. Tech Bros (myself included) needed to be cut to size. There was a lot of hubris by my peers in the 2010s.

apwell23 3y ago
. Tech Bros are infact rarely let go first because of their chummy relationship with managmemnt. I know a lot of my colleagues on Visas and families here were laidoff and ppl on visas live with this constant layoff anxiety.
art-not 3y ago
I love the lack of sympathy for tech workers across North America or perhaps even globally, when tech hub salaries still don’t allow tech workers to even have a middle class lifestyle. Very few people I know get paid enough to buy a starter home within 2 or 3 hours of where they work. I get paid more than my non tech peers yet still functionally have less spending power than a 25 year old from 30 years ago, despite being a fair bit older than 25
- apwell23 3y ago
  US middle class cleaved into two groups post pandemic: homeowners at 2% interest rates and everyone else. Its the new middleclass have and have nots. You have it pretty good right now if you are a homeowner.
  - infamouscow 3y ago
    This is short sighted. People have been saying similar about the cars purchased in 2021 because they sell for well above asking. As 36-month leases start coming due the prices of those cars is normalizing back to where it should be. All of the boomers that refuse to downsize and plan to die in their homes are going to do the same with the housing market, but in a more spectacular fashion that causes the market to crash.
    - dehrmann 3y ago
      On the boomer front, it's hard to say because it'll play out over 20 years, and there's a genuine supply shortage. There's also a chance a lot of their kids take the house over and sell something less desirable.
  - dehrmann 3y ago
    In theory, those homes should start going down in value once people start selling because you can buy less home for a $2,000 per month mortgage payment. The market's weird right now because a lot of people with low interest rates can't afford to sell and buy something comparable.
    - refulgentis 3y ago
      I agree: but given that, it's hard to imagine what would bend the market towards selling.
    - selimthegrim 3y ago
      Depending on the region of the country, a lot of people with low interest rates might be handcuffed by skyrocketing insurance from finding buyers
  - ethbr1 3y ago
    The US middle class has always been divided into homeowners and non-homeowners.
  - jorvi 3y ago
- Domenic_S 3y ago
  > I get paid more than my non tech peers yet still functionally have less spending power than a 25 year old from 30 years ago This seems like some non-generic case specific to your situation and not representative of the average experience. The median income in 1994 for over-25-year-olds (men only!) was $25,465 [0], women was less than half of that. Let's go with the figure for men for the sake of discussion. $25,465 in 1994 is the buying power of $55k today [1]. $55k is the 56th percentile [2], so right where we'd expect it to be. --- 1994: median home price $142,200 [3], interest rate 30-year fixed: 8.38% [4] Principal balance $113,760 @ 8.38%, payment (P&I): $865, or 3.4% of annual income --- 2024: median home price $384,500 [5], interest rate 30-year fixed: 7% [6] Principal balance $307,600 @ 7%, payment (P&I): $2,046, 3.7% of annual income --- Opinion incoming: I think there are 2 things that make 'today' seem more expensive than 'back then': implacable consumerism, and the natural change of places over time (ie, gentrification & co). w/r/t consumerism, the load on both 'necessary' and discretionary spending has increased big-time - people were not generally paying for broadband, smartphones, gaming consoles, home espresso machines, soundbars, portable speakers, media players, printers/copiers/scanners, I could go on forever. Look around you and count how many things straight-up didn't exist in 1994 (or were reserved for the ultrawealthy or for business). We could do without them today, but it would feel really bad, as if we're not participating in society or making use of its advancement. w/r/t gentrification, many places today are more desirable than they used to be, and their increase in price is a function of demand rather than of inflation, so it feels like the economics of living got away from people who weren't already bought in. But it's not that "everything" got so much more expensive, it's that, for example, Akron OH used to be more expensive than San Jose (!!) because farming was the center of industry. Now the world changed and what used to be a pretty rural town full of fruit trees is the most expensive metro in the country. It's not because "houses got more expensive" per se, it's that the world changed. [0] https://nces.ed.gov/programs/digest/d96/d96t376.asp https://nces.ed.gov/programs/digest/d96/d96t376.asp [1] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25%2C465&year1=199401&year2=202402 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25%2C465&year1... [2] https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/ [3] https://www.huduser.gov/periodicals/ushmc/winter2001/histdat08.htm https://www.huduser.gov/periodicals/ushmc/winter2001/histdat... [4] https://www.mpamag.com/us/mortgage-industry/guides/historical-mortgage-rates-in-the-usa-highest-high-and-lowest-lows/433237#:~:text=The%20highest%20mortgage%20rate%20in%20the%20last%2030%20years%20was,%25%2C%20according%20to%20Freddie%20Mac https://www.mpamag.com/us/mortgage-industry/guides/historica.... [5] https://www.bankrate.com/real-estate/existing-home-sales/ https://www.bankrate.com/real-estate/existing-home-sales/ [6] https://www.bankrate.com/mortgages/mortgage-interest-rates-forecast/ https://www.bankrate.com/mortgages/mortgage-interest-rates-f...
- alephnerd 3y ago
  > I love the lack of sympathy for tech workers across North America or perhaps even globally, when tech hub salaries still don’t allow tech workers to even have a middle class lifestyle Do you have empathy for IBs, PEs, and other members of High Finance? The difference in TC between High Finance and the equivalent roles in Tech are not that significant. Goldman Sach's IB Analysts starting salaries at the SF office were $90k with minimal bonuses in 2020. These same people could have worked at Google or Microsoft (and most of them legitimately had that option) The overlap between Big Finance and Big Tech is massive, just like the overlap between random engineer and random corpdev drone in Dallas or KC.
  - ylee 3y ago
    >Goldman Sach's IB Analysts starting salaries at the SF office were $90k with minimal bonuses in 2020. These same people could have worked at Google or Microsoft (and most of them legitimately had that option) When I graduated from Columbia in 1999, I interviewed and got offers at various tech startups, but entry-level jobs on the "PM track" for those without a CS/engineering degree didn't formally exist at the likes of Microsoft or Yahoo as far as I know. I had a technical background, but was almost entirely self-taught, and had no interest in writing code for money anyway. <https://news.ycombinator.com/item?id=36027171 https://news.ycombinator.com/item?id=36027171> Of my offers I chose Goldman, where I worked with tech companies. Thank goodness for that; I got to participate in the dotcom bubble without being directly swept up in its popping, and saw the Valley immediately post-bubble collapse. <https://news.ycombinator.com/item?id=34726735 https://news.ycombinator.com/item?id=34726735> My GS starting salary was 40K. During that first year, because of the dotcom bubble, Goldman raised the salary to $55/65/75K for first/second/third-year analysts, and my end-of-year bonus in 2000 was close to 100% of salary. Then the full effect of the recession/market crash hit and the 2001 bonus was, well, much smaller.
    - alephnerd 3y ago
      > the 2001 bonus was, well, much smaller Exactly! The bonus plays a massive role in Analyst compensation, and during 2020-present, the bonus was slashed severely due to a lack of late stage dealflow. The work hours at GS and JPM were still as crappy as before, but the bonuses were trash when factoring stock and bonus compensation their peers were getting. A bunch of my mentees made the switch to PM, SWE, VC analyst, or Founding explicitly because of that.
spencerflem 3y ago
A word in support of this I've also seen a pretty stunning lack of empathy from tech workers who unquestionably have it better than almost any other working class (non-owner/shareholder) groups. I'm not saying that its great that tech workers are being laid off, but I get the schadenfreude other would have after a decade of being told that the solution to their problems is to "skill up" and learn to code. The real problem is of course the system that prioritizes wealth flowing from workers to owners and we should all be aligned in this.
- jprete 3y ago
  The GP paints with a very broad brush. Probably the vast majority of tech workers know there's a problem but don't know how to solve it.
  - spencerflem 3y ago
    Oh I agree, but for a lot of people techies are part of the problem itself. Gentrification is real, and the companies themselves are not seen as helpful either. And when techies do donate, they're often to pie in the sky stuff like AI alignment , or the giant long now clock , that comes off as out of touch at best. I know for a fact that there's plenty of kind empathetic tech workers but I'm sure there are kind lawyers too and they don't have a lovely broad strokes reputation either
    - alephnerd 3y ago
      ^^^ this.
robotburrito 3y ago
Most of the "tech bros" and "SaaS sisters" I know came from working class means. They might make six figures, but still can't afford a home.

Solvency 3y ago

> People emboldened by market and housing gains have to been spending ridiculous amounts of money like there is no tomorrow what are you basing this claim on? the fact that airbnb bookings are up for a rare celestial event? here is where all of my ridiculous amounts of money is going towards: $6/gal gas in california, ever-increasing property taxes, ever-increasing insurance premiums, $399 "surgery" charges at an ENT simply because they looked up my nose for half a second, insanely expensive annual car registration charges, etc.

dfxm12 3y ago
Seriously. For all we know, these are relatively local people who had to settle for this cheap "vacation" instead of a more expensive/longer trip further away... Relatively few people own stocks & home ownership has tapered off & isn't back to its pre pandemic highs... Maybe these things show the people that were doing well are still doing well, but we knew that already.
- nickpp 3y ago
  > Relatively few people own stocks 61% of Americans, says Gallup [1]. Not sure if this includes those indirectly owning stocks, through pension funds. [1] https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx https://news.gallup.com/poll/266807/percentage-americans-own...

haunter 3y ago

Wish this "so much excess money" was evenly distributed

ericmcer 3y ago

Controlling inflation will hopefully be the main discussion around the next election, I am tired of watching the political theater around small side-issues and then paying $8 for milk and $6 for peanut butter. Why is our labor becoming worth less in real goods? Why is life expectancy decreasing? Can politicians address issues that affect every single person every day? I make good money in tech but it still feels like more than 4k/mo (in California) is what you need just to cover rent and basics (car, internet, phone, groceries, etc.). I have no idea how people working minimum wage jobs are surviving.

2OEH8eoCRo0 3y ago
So you want deflation?
- nradov 3y ago
  Some deflation, at least in basic commodities and energy, would probably be a long-term net positive for the US economy.
- throwitaway222 3y ago
  Of course. Everyone does.
  - NovemberWhiskey 3y ago
    The Japanese, who actually had it, didn't seem to think it was so great.
    - throwitaway222 3y ago
      not true: https://foreignpolicy.com/2024/01/15/japan-economy-inflation-deflation/ https://foreignpolicy.com/2024/01/15/japan-economy-inflation...
      - NovemberWhiskey 3y ago

SoftTalker 3y ago

Or, in inflationary times, people are spending their money today because it will be worth less tomorrow.

switch007 3y ago

Yup. Larger properties round here are going for £50-150k above last sale price (last sales being 4-6 years). It's madness.

voisin 3y ago
In areas of Canada (Toronto and Vancouver vicinities), housing prices were increasing at $80k per MONTH. To only have your house increase by 50-150k over 4-6 years would be better than even the podunk unincorporated villages hours from any economic centre.
- switch007 3y ago
  Appreciate the context. But the figures I quoted are huge sums for the average working person round here (we're closer to a "podunk village" than e.g. Toronto + Vancouver metro areas), as I'm sure $80k/month is to Canadians. They represent real problems for most people who live here. They can't be dismissed because a large metro area in Canada has seen even higher inflated prices

acchow 3y ago

People refinanced their mortgages at 2.5% in 2022. Suddenly their monthly payments fell significantly and they have more money to spend every month