CT Brasky #2: Back when the CT was real

[TownieDeac]

Yeah, the supply chain stuff is temporary. But it is coming at a time when demand is increasing (and shifting)... That can cause some weird shit to happen. And even with the recent "rate scare" we are still at historically low interest rates. I've been in the camp that rates will be very low for the foreseeable future... So I get the urge to "make hay while the sun is shining", but I also think that things can change on a dime and most of us haven't been through actual inflation before (myself included).

The Economist has published some good stuff on inflation lately, and it has been pretty even-handed. I don't think I can link to it, though.

The bottom line is that anyone who tells you what is going to happen with the macroeconomy is probably wrong. That's why I think it is important to be relatively cautious and to be in a position where we are equipped to deal with the unexpected when it inevitably happens.

I'm probably not responding to your specific questions very well, but just trying to explain my thinking.

And I actually think raising the minimum wage is overdue... Would be great to do it in a targeted way as you suggest.

to this end, the "america is fucked either way" rhetoric just seems a bit alarmist

then again i think my son will die from global warming so

 

[Donkey Deac Doug]

to this end, the "america is fucked either way" rhetoric just seems a bit alarmist

then again i think my son will die from global warming so

I think it depends on your definition of fucked. If by "fucked' ATS means a downward spiral of productivity and erosion of protestants work ethic a la what we see in the UK now where complacency is a virtue (not that they ever had protestant work ethic, but like, the idea of "working hard as a good thing") - then yeah, we're totally fucked.

Also, I responded to your post on the previous page along with ATS.

 

[DeacsATS]

What he said.

And maybe I'm just in tune with it because I just sold my house and will be moving into a new one in 2 weeks.

My neighbor down the street can't proceed with his tear-down rebuild because the math doesn't work with lumber prices.

The person who bought my house just paid twice as much as he should have to build a set of stairs onto the existing porch. And the quality of the work has been really shitty.

The inventory of existing homes is at record low levels. Prices keep going up, even though mortgage rates have gone up about 50bps over the last month or so (huge move). That cannot continue.

Refis are going to dry up.

There are a lot of things going on right now and that is just in residential construction. Important, but just one part of the economy. Also seeing suppply chain issues with semiconductors, which has far reaching implications.

And I'm rambling again.

 

[DeacsATS]

to this end, the "america is fucked either way" rhetoric just seems a bit alarmist

then again i think my son will die from global warming so

Ha. I don't worry about global warming like that. But I do worry about my kids' future.

Not trying to be alarmist and I already said I'm a wacko... Just feels like our relative prosperity is long in the tooth.

 

[Donkey Deac Doug]

What he said.

And maybe I'm just in tune with it because I just sold my house and will be moving into a new one in 2 weeks.

My neighbor down the street can't proceed with his tear-down rebuild because the math doesn't work with lumber prices.

The person who bought my house just paid twice as much as he should have to build a set of stairs onto the existing porch. And the quality of the work has been really shitty.

The inventory of existing homes is at record low levels. Prices keep going up, even though mortgage rates have gone up about 50bps over the last month or so (huge move). That cannot continue.

Refis are going to dry up.

There are a lot of things going on right now and that is just in residential construction. Important, but just one part of the economy. Also seeing suppply chain issues with semiconductors, which has far reaching implications.

And I'm rambling again.

Keep going. I'm close.

 

[Louis Gossett Jr]

In this climate induced apocalypse how long is it until I get to board snowpiercer?

 

[TownieDeac]

Your last paragraph falls outside the scope of what ATS and I are focusing on.

We're both looking at the next year or two. There are absolutely supply chain problems, but that doesn't mean that you can't have a co-mingled problem.

You can exert pressure from both sides of the market. A 2x4 costs ~$0.25/ft. in "normal" conditions. If you add a pandemic, which removes the vast majority of supply of 2x4's, the price jumps to ~$1.00/ft. Then you give everyone in the Country $2,000 and they want to build a deck. Well, now that motherfucker is ~$2.00/ft and oh my fucking god, the weekend warrior is now seriously impacting the ability for large-scale contractors to effectively build housing.

and principally this isn't just wood but lots of things outside of building houses. i totally get how the supply chain issues combined with more purchasing power creates a supply and demand bottleneck. however, what % of the people getting 1400 want to now buy something affected by these concerns vs people who will pay bills or debt or put it in savings or whatever? seems like the targeting is just about right in that someone like me isn't getting the $, and my wife does want to re-do our bathroom (goddammit).

It's happening in that sector right now, and you have a collision of shit causing a lot of problems. The cheap money typically leads to people buying houses (low interest rates r gud). However, we're straight up running out of houses for peoople to move in to. The GSO area typically has something like 4,000 SFH's on the market at any given time. We're in a world where that's more like 40 at any given time right now. Same thing as the 2x4 - demand is out-stripping supply. But then you've also got the added problem of Rufus - my 60-something buddy who wants to build a house, but won't put his house on the market, because lumber prices are too high to build a new home. So those inflationary bubbles start to merge.

makes sense, the DC market is interesting in that regard too. we've got new housing laws about density and affordability that i'm sure are constrained by these same supply chain concerns as well. totally different thing, i know, but still of interest.

Couple that with my most-often-used HVAC contractor being STRAIGHT FUCKED. All of his best techs have been fired or won't come back from a layoff because they are slaying it in unemployment. So he's dicking around with garbage techs that - I shit you not - have come back over 20 times to the last job they did for me (typically, new SFH should have 4 maybe 5 HVAC visits). Stack on top of that a totally wild problem getting new/replacement HVAC parts that are totally fucking random. Register vents? We have 123124,42,35435463 of them. Motherboards for furnaces? We have negative 234249328 of them and we're backordered so deep in the ass that you'd better consider fucking geothermal.

i'd argue (at least theoretically anyway) that this is precisely the kind of case study we need to be discussing regarding UBI. there are studies in europe about paying people not to work that go well beyond just our paltry unemployment spending. they still tend to conclude that people want to work on the whole, and until i see good large scale data to suggest otherwise, i think these are short term effects of not right-sizing welfare spending. because more jobs are going to go away, and that doesn't have to be a bad thing. our productivity has so far outstripped wage and social spending growth that something has to eventually give.

It's cool to say, "awww...yeah, macro economic policy and shit," but the economy is usually an ocean, but right now it is acting like a fucking four year old in a bathtub sloshing fucking water on the ceiling.

some thoughts

 

[JuiceCrewAllStar]

then your tax dollars are going towards just paying interest on the 20 some odd trillion in debt we got, or ya gotta just slash social security.

or, you know, get back to taxing the rich like we've done for most of this nation's history

 

[TownieDeac]

I think it depends on your definition of fucked. If by "fucked' ATS means a downward spiral of productivity and erosion of protestants work ethic a la what we see in the UK now where complacency is a virtue (not that they ever had protestant work ethic, but like, the idea of "working hard as a good thing") - then yeah, we're totally fucked.

Also, I responded to your post on the previous page along with ATS.

yea hard disagree here, this isn't what's happened in england or broader europe in my observation

 

[Kory]

or, you know, get back to taxing the rich like we've done for most of this nation's history

 

[JuiceCrewAllStar]

Bruh, Lumber is up like fucking 300%.

we're getting smoked by lumber increases, but I'm also being told much of it is covid related -- both supply chain logistics and border control issues -- that should (hopefully) bring things down a good bit in 2021

never mind, catching up -- see this has been addressed

 

[TownieDeac]

i mean look at "innovation" in america in 21st century and tell me any of it, apart from maybe in the energy sector, is _good_

crypto, vulture capital/financialization, gig economy

the whole rise and grind thing in America isn't an inherently good thing or band thing imo, it's about how it gets applied

 

[WRS]

I’m definitely in the ATS camp on this. Feels like the country has passed a tipping point that will be very difficult to reclaim. Huge and accelerating inequality gap, climate change/environmental concerns, etc.

 

[Louis Gossett Jr]

I wish we would spend the trillions on things that last. Like to really transform society with things that improve everyone’s lives permanently. Like a 2 trillion research budget or infrastructure projects. Instead its like a sweet sweet sugar high, very satisfying for about 30 minutes.

 

[Kory]

Between big tech, the social safety net and national infrastructure, I feel like libertarian stock is gonna take a p sharp dive in the next few years but what do I know

 

[Kory]

I’m definitely in the ATS camp on this. Feels like the country has passed a tipping point that will be very difficult to reclaim. Huge and accelerating inequality gap, climate change/environmental concerns, etc.

it is good that we can all agree we need to radically change the economic system in place accelerating all these concerns

 

[deacdiggler]

I wish we would spend the trillions on things that last. Like to really transform society with things that improve everyone’s lives permanently. Like a 2 trillion research budget or infrastructure projects. Instead its like a sweet sweet sugar high, very satisfying for about 30 minutes.

while i agree with the idea, research is just going to drive up wages for people who are already in short supply right? Infrastructure would be good, or manufacturing/installing the smart energy grid and renewables.

 

[plama]

How can they keep coming up with clever & original rules to the Challenge? It's amazing.

 

[DeacsATS]

Between big tech, the social safety net and national infrastructure, I feel like libertarian stock is gonna take a p sharp dive in the next few years but what do I know

Nah.

It's like how the election of Trump was supposed to signal the end of the New York Times. Turned out that the opposite happened and the NYT had an amazing turnaround.

 

[JuiceCrewAllStar]

Your last paragraph falls outside the scope of what ATS and I are focusing on.

We're both looking at the next year or two. There are absolutely supply chain problems, but that doesn't mean that you can't have a co-mingled problem.

You can exert pressure from both sides of the market. A 2x4 costs ~$0.25/ft. in "normal" conditions. If you add a pandemic, which removes the vast majority of supply of 2x4's, the price jumps to ~$1.00/ft. Then you give everyone in the Country $2,000 and they want to build a deck. Well, now that motherfucker is ~$2.00/ft and oh my fucking god, the weekend warrior is now seriously impacting the ability for large-scale contractors to effectively build housing.

It's happening in that sector right now, and you have a collision of shit causing a lot of problems. The cheap money typically leads to people buying houses (low interest rates r gud). However, we're straight up running out of houses for peoople to move in to. The GSO area typically has something like 4,000 SFH's on the market at any given time. We're in a world where that's more like 40 at any given time right now. Same thing as the 2x4 - demand is out-stripping supply. But then you've also got the added problem of Rufus - my 60-something buddy who wants to build a house, but won't put his house on the market, because lumber prices are too high to build a new home. So those inflationary bubbles start to merge.

Couple that with my most-often-used HVAC contractor being STRAIGHT FUCKED. All of his best techs have been fired or won't come back from a layoff because they are slaying it in unemployment. So he's dicking around with garbage techs that - I shit you not - have come back over 20 times to the last job they did for me (typically, new SFH should have 4 maybe 5 HVAC visits). Stack on top of that a totally wild problem getting new/replacement HVAC parts that are totally fucking random. Register vents? We have 123124,42,35435463 of them. Motherboards for furnaces? We have negative 234249328 of them and we're backordered so deep in the ass that you'd better consider fucking geothermal.

It's cool to say, "awww...yeah, macro economic policy and shit," but the economy is usually an ocean, but right now it is acting like a fucking four year old in a bathtub sloshing fucking water on the ceiling.

what is unemployment payout in NC? a quick google says $350 per week, so if you add the $300 per week from the feds, that puts you at $33,800 annually -- what was dude paying if this is "killing it"