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Sorry. I got zero notifications that it was down.
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Sic transit gloria mundi (so shut up and get back to work)I think my first paid job requiring me to show up to a job site was pulling sweet corn in a field. I was 13. I think I got paid something like 25 bucks a day.
Same summer I worked on a potato grading machine on a potato farm. Did that for several years from 13-16. I think I got paid $8 a truckload that we loaded. Some summers it was good money. We could probably load 7-8 trucks in a day. One year potatoes were rotten from too much rain, and it took forever to grade in enough potatoes to load a truck. We might load 3 trucks a day. Not so good.
I was fortunate to do a lot of physical jobs for pay back in my teen years. I was a hard worker so never lacked for a job.
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Sic transit gloria mundi (so shut up and get back to work)This only hurts low skill workers further. Look for service levels to continue to deteriorate because of all the people lucky enough to get a $30/ hr job having to do the work of 3 people previously.
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Sic transit gloria mundi (so shut up and get back to work)I like zeihan.
He doesn’t go off on one of the more salient topics: fiscal policy. We are financing bigger deficits than ever right now, and not really batting an eye at them.
The treasury had been funding the government with a bias for shorter term instruments in an apparent bet that interest rates will go down at some point, kinda like a person who buys a new house on a 5 year ARM thinking they will refinance in the next couple of years. At some point they will have to shift to the long bond.
When the treasury moves long I think we will finally see what a mess this is. My par number for long bond interest is about 7 percent. This is based on nothing more than basic math of 3 percent “new normal inflation” plus 2 percent “risk free return” plus 2 percent long bond term premium. Thats 7 percent.
In other words, I agree with zeihan that now’s the time to borrow because rates are likely to go up, not down. He just takes a more tortured way of getting there by explaining it via demographics and capital flows. If rates do go down it will be political and not mathematical reasoning that wins the day.
And, no, I’m not massively shorting long bonds on my hypothesis of 7 percent par. I’m a big believer that markets can stay irrational far longer than I can stay solvent. It would not shock me if interest rates are lowered as a sop to Wall Street yet again, of course leading to continuation of the massive asset bubble we are in.
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Sic transit gloria mundi (so shut up and get back to work)The numbers issues are a big one. Fewer and fewer people trust the reported inflation numbers, and jobs numbers include part time jobs where people hold 2 or 3 of them.
GDP reports are supposedly “real” and so inflation adjusted, but with what inflation index? That’s the rub.
I think our economy is doing just ok, and is way too dependent on government and healthcare jobs, which aren’t always value creating.
I think our fiscal policy is a true train wreck.
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Sic transit gloria mundi (so shut up and get back to work)End of the article says they already moved HQ to Austin in 2020. Of course I have no idea what that means. A corporate HQ for a massive company can be 10 people.
I wonder how many employees this pulls out of California?
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Sic transit gloria mundi (so shut up and get back to work)It’s easier to do politics if you are really bad at math. The grid issue is math.
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Sic transit gloria mundi (so shut up and get back to work)Hawaii seems like frying pan to fire. It’s possibly the only state more wacko than California.
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Sic transit gloria mundi (so shut up and get back to work)It’s definitely ironic.
I have to think the market runup is helping California’s situation. The bulk of fluctuation is very high net worth individuals paying income tax rates on capital gains as I understand it. 2022 and 2023 markets weren’t great (until late in 2023) and now it’s gangbusters.
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Sic transit gloria mundi (so shut up and get back to work)I don’t know the technical definition of a street gang, which probably has some sort of organized crime element to it. Antifa is more of a clown show intended to intimidate. I don’t know if that qualifies.
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Sic transit gloria mundi (so shut up and get back to work)Oh just wait. At some point we will realize these interest rates were low.
The long bond in particular is being kept artificially low via supply. The treasury is issuing tons of short term debt and limited long term debt. They will be proven to be the most short sighted treasury leaders in history.
If I had more money I’d be short long duration treasuries from here to 2027. Rates have to go up. Once they go up, they will stay up because of the volume of treasury issues required to simply fund the debt.
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Sic transit gloria mundi (so shut up and get back to work)WSJ did a nice job of covering him.
I agree we need more like him.
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Sic transit gloria mundi (so shut up and get back to work)Who needs winning when you have beer and prop bets?
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Sic transit gloria mundi (so shut up and get back to work)One has to wonder if Kate would be funded if she were non-partisan.
Methinks no.
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Sic transit gloria mundi (so shut up and get back to work)
