Wall Street is going to wake up pretty soon and realize that strong economic numbers means no rate cuts. And eventually the rate cuts are going to bite into loans which are hitting their maturity dates and rolling over.

OK but we had this for basically all of last year as inflation moderated and jobs kept growing until suddenly good news meant good news to the market.

$SPX is at an all time high right now at $494. That's insane. I bought in at ~$360 in 2022.

Good, but now you should probably be considering when to exit that trade and book your profits.

Why? Don't try to time the market, especially if you are a passive index investor. (If you do believe in active investing, why are you investing in the S&P500?)

Just buy when you have money, and liquidate your investment when you need money.

The fed was created to prevent the boom bust cycles we’ve seen for the past 100 years. I don’t think “making it hurt less” when your entire purpose is to avoid the pain is praiseworthy.

But who’s to say - maybe the rains do actually keep coming because we make all those sacrifices to the gods.

They deserve praise because their job is incredibly difficult. Just because its what theyre supposed to do doesnt mean its easy. I give praise to my coworkers when they do a good job, and our work is way easier than the feds.

The creation of the Fed was a complicated process with lots of political horse trading.

And until at least the 1980s the Fed did worse than the (broken!) system that they replaced.

See https://www.cato.org/policy-report/november/december-2012/ha... about the Fed.

On the positive side, Canada would have been an excellent role model to emulate, instead of coming up with the Fed system: https://www.cato.org/blog/there-was-no-place-canada

The economic doomerism is basically chattering class bullshit

White collar jobs like tech have been negatively impacted, but most other industries have seen significant wage gains [0]

All this "woe is I" layoff bullshit when millions of non-Techies might have been left on the streets when Covid hit, while we were happily working remotely and purchasing stocks or property.

[0] - https://www.atlantafed.org/chcs/wage-growth-tracker

>The economic doomerism is basically chattering class bullshit

I'm skeptical that you go from the lowest rates in history, over the longest period in history, to the fastest hikes in history...without some serious economic repercussions.

>significant wage gains.

Consumed by inflation, for the most part (but at least we kept pace). The average person isn't wealthier.

Average Wages have been growing faster than inflation. [0]

You don't feel it in SF/NYC/Boston/Seattle but that's also due to industry skew, and you absolutely feel the economic change in cities like ATL, Phoenix, Columbus, etc

In the tier 1 cities I mentioned, wages are growing much slower than the cost of living, but that isn't true for the rest of the country anymore.

[0] - https://www.statista.com/statistics/1351276/wage-growth-vs-i...

Last years inflation was 10% in my country. I only got 3% raise because having higher raise would "increase inflation". I'm still able to afford my lifestyle but I don't have the same from 4 years ago.

> Last years inflation was 10% in my country

This is a conversation about America, not your country.

> I only got 3% raise because having higher raise would "increase inflation".

You only got 3% because you were not able or willing to find a buyer to give you more than 3%. Any other reason is just the buyer being polite.

Obviously, this works both ways too.

Which country is that? And who made that excuse that you quoted about inflation? That sounds like something that would be very weird for a private employer to say; so I assume you might be in the public sector, or something with very highly regulated wages?

Could only do it because of structural demographics (excess COVID deaths + retirements + ~3.6M Boomers retiring per year). Note shortages across various industries (teachers, bus drivers, healthcare workers, air traffic controllers, etc). New York City walked back its remote and flexible work policy due to hemorrhaging talent. The Federal government is holding onto a substantial cohort of workers because of its telework allowances (because those folks could simply retire instead).

Citations:

https://www.clevelandfed.org/publications/cleveland-fed-dist...

https://thehill.com/opinion/technology/4405350-telework-is-a...

https://www.nbcnewyork.com/news/local/nyc-remote-work-eric-a...

https://www.axios.com/2023/08/27/labor-shortages-air-traffic...

https://seekingalpha.com/article/4531829-older-workers-propp... | https://archive.ph/sKeyE

https://www.marketplace.org/2022/01/24/how-much-labor-force-...

https://www.axios.com/2023/05/08/us-labor-shortage-older-wor...

https://www.businessinsider.com/baby-boomer-retirement-surge...

https://www.cnbc.com/2023/08/21/american-workers-are-demandi...

Yeah, we also only have structural disruptions in the first place because of the global pandemic.

All of the factors you've mention are in play in peer economies are managing things less well.

Bunch of my friends have gotten seconds jobs doing wfh govt jobs. Problem isn't labor shortages, problem is bullshit jobs. Some even have three jobs.

We would have enough bus drivers and train operators if we eliminated all bullshit white collar jobs.

If the job is going unfilled, it isn't paying enough (either for conditions or to meet worker needs at some level), simple as that. There is a market clearing price, and unemployment is not at 0.

900+ US school districts have moved to a four day week to retain teachers [1] [2], for example, because they have no other choice.

[1] https://www.cbsnews.com/news/school-districts-4-day-week-tea...

[2] https://www.npr.org/2023/11/08/1211632901/schools-across-the...

>If the job is going unfilled, it isn't paying enough (either for conditions or to meet worker needs at some level), simple as that.

For an individual Role, yes. for an economy, no, because you run into supply limitations.

But anyways, that isnt the question. The question is which jobs add value and how to structure an organization so that it is efficient and effective.

If your organization is crappy enough, you might not be able to get net value out of roles, even if you fill them.

>900+ US school districts have moved to a four day week to retain teachers [1] [2], for example, because they have no other choice.

From what I have seen in California Schools, there is more than enough money for teacher salary, but the grift and organization is the problem. State funding is ~ 23k per student, you have 30 students per class, or $700k/class. The average salary of public school teachers in 2021–22 for the State of California was $88,508.

Bullshit jobs and productive jobs that do not pay enough to outbid bullshit jobs is the same problem - misallocation of resources.

The market is allocating; to allocate more efficiently, move towards central planning where you can allocate more intelligently. Otherwise, this is the economy you've got.

Big fan of Graeber, agree there's lots of bullshit jobs.

> move towards central planning where you can allocate more intelligently

My understanding is that there's a lot of historical evidence to suggest that central planning would do the opposite of better allocating resources. Besides, with US government spending at around a third of the GDP[0] now, plenty of that is going on, already.

[0]: https://www.imf.org/external/datamapper/exp@FPP

Are you suggesting the government does not have bullshit jobs? Surely there are bullshit white collar government jobs while at the same time the government is not paying teachers and bus drivers enough.

No, bullshit jobs are everywhere (gov, private industry, etc). I'm suggesting that the metrics we have currently to evaluate if a job is bullshit or not are insufficient to capture the true value of a job and its outcomes, leading to the inefficiencies of bullshit jobs.

Central planning is likely the wrong phrase, I just don't have something better cooked up at the moment to describe, "Should this job really exist? Is it creating value in some way? Or is it just existing for some other suboptimal purpose?" Clearly, the market itself is not allocating efficiently if bullshit jobs exist in such great number. What is the solution? I don't know.

> Some even have three jobs.

Sounds like the problem is that people need three jobs to be comfortable.

who says they weren't comfortable?

“Comfortable” is far too nebulous of a metric to be useful in this discussion. How do you know they don’t have 3 jobs to afford an unnecessarily large/extravagant/showoff vehicle/house/etc? How do you define unnecessary?

if by comfortable you mean owning 4 rental properties then yes.

The second comment is deleted.

Specifically, in what direction did New York roll back the policy?

EDIT: Citations revamped to point directly to sources instead of my previous comments containing them.

https://www.nbcnewyork.com/news/local/nyc-remote-work-eric-a...

> Gov. Kathy Hochul said it has been a longer transition back to office work than anyone expected, as she too had predicted (if not demanded) a more robust return to work schedule. But now it sounds like she is opening up to the idea, whether she likes it or not.

> "I think the mayor is simply acknowledging the reality. We have a shortage of workers especially in government," Hochul said, adding that a more robust office pattern could still arrive down the line. "I believe all this is transitional, it does not have to be the death sentence in five days a week ever again, but we are not quite there yet."

Why do people need to return to the office? I have Teams, Zoom, email, Slack, and a cellphone. I also don't have an hour commute each way. I've gotten more done "at work" at home than I ever did in the office. Meetings are now as long as they need to be, not the full 1-2 hours scheduled whether we need it or not. While the opportunities for chit-chat and out-of-band conversations are not as spontaneous, using all the tools we have for communications can be just as impactful for one's mental health.

Just gotta give people a few more years to become more comfortable and effective at home and to be better supported by tools/infra/culture for remote work… then they’ll be ready to come back.

1.8M people over the age of 55 die every year in the US, half of which are in the labor force. Progress is inevitable as these workers age out, and younger workers take their place.

This might prevent a recession, but it will continue to fuel inflation.

Inflation has been falling for a while. It's down to 3.4% -- higher than the 2% target, but well below the peak. The Fed is even considering cutting interest rates, which says that they think that inflation is under control.

The recent bout of inflation is less about monetary policy than about the supply side, especially things like COVID and Ukraine causing supply disruptions. Those things have levelled out and begun to decrease.

Housing costs haven't dropped enough IMO to declare a win.

I think its become clear that its a government problem, because if it was just a market problem, supply / demand would have leveled out by now.

Why would it have leveled out? Just article of faith about The Market?

Go talk to a builder. Land is ridiculously expensive due to speculation and labor is impossible to find due to it being a generally shitty job.

It’s a supply and demand problem, but it’ll take years to play out. Too many people are locked into 30-year mortgages with 26-28 years left at 2-3% interest. They’ll basically never sell (barring a major issue like having to move for a job after layoff or a divorce). So the supply of housing is much lower than normal all across the country. In some areas new construction can pick up some of that slack, but new construction is just getting into swing after a huge drop early in the pandemic.

> Housing costs haven't dropped enough IMO to declare a win.

This is a fundamental misunderstanding about inflation. If inflation goes to 0%, housing costs will stay exactly where they are now. You are looking for a deflation in housing costs, where inflation is < 0%. We had that in 2008 and it caused...collateral damage.

The only real way to lower housing prices is to build a lot more housing. So yes, it's a government problem in that we don't let private actors build housing to meet the market's demand.

Why would the market have leveled out by now?

It takes years to build any substantial housing.

> The recent bout of inflation is less about monetary policy than about the supply side

The fiscal side[0] is probably more to blame than the supply-chain restrictions. Aggregate demand was kept turbocharged since Covid through deficit spending. And given that the CPI is still 19.1% higher as of last reading compared to pre-pandemic times, whether or not the rate of change is falling, people are still rightly feeling squeezed.

[0]: https://fred.stlouisfed.org/series/FYFSD

The fed is considering dropping interest rates because the commercial real estate market is absolutely effed if they don't and they "need" to protect banks and the wealthy.

WSJ article on the pending "Doom Loop" https://archive.is/MOzr9

>The Fed is even considering cutting interest rates

What does this even mean, practically speaking? Their entire purpose is to always be considering lowering, maintaining or raising rates.

I know nothing about this stuff. Aren't they combating inflation with higher interest rates? Is it out of their control?

When you consider the politics of the doomers, its far worse than that. The economic-doomers want the Fed to lower rates to "save jobs". Because lower-rates tends to lower unemployment.

The Fed is ignoring them and keeping rates high, because the economic-doomers are wrong.

------------

So economic doomers complain about inflation (which the Fed is trying to fix with high rates), but also want to pretend that unemployment is secretly 10x worse than it really is for some reason.

The Fed is talking about lowering rates, because everybody is thirsty for the punch bowl. They want to be responsible, but it's sooo tempting.

Personally I believe they kept rates far too low for far too long last time, deceived by the way the free money inflated assets rather than consumer prices, and that's a big part of what caused the recent inflation spike.

Everyone I know that is an economic doomer is much more worried about inflation than they are about unemployment.

High rates favor labor money, low rates favor capital money. Low rates also improve job creation, so sometimes labor is divided.

Several rate cuts are expected this year. Based on Jerome Powell's speech yesterday, March cuts are unlikely, today's data would confirm that. Rate cuts likely beginning over summer depending on the data over the next few months.

It's 100% out of their control.

The current policy management has conclusively disproved that you must sacrifice employment to reduce inflation.

A shrinking workforce and demographic pyramid collapse will fuel inflation well enough.