Economics

If north of 40% of homes are owned by Boomers. And an estimated 40% of Boomers will need long-term care at an assisted-living facility according to Medicaid. Won’t the housing market radically change over the next decade?

ChesterD

There’s a flip side to this story. Rental prices will also go up over time. I reluctantly bought before the 2008 housing crises. Today my bond is almost paid off and my repayments and expenses are about half of what it would cost to rent my place. Time will tell how the housing market behaves.

Tokogogoloshe

This survey involved 308 people…not 3,080, not 30,800, not 308,000. Just 308. I don’t think that’s an effective sample size to accurately understand most American renters’ outlook on the housing market.

ImOutOfMilk

The thing that really sucks about renting is that rent price is directly correlated to the rise in housing prices; the higher the price of the house, the higher the mortgage, the higher the mortgage, the higher it costs to rent. Truly a vicious cycle.

Shaqtothefuture

But why is this happening *now*? Some thoughts…

* Yes, interest rates are low, that is causing people to bid up prices because they can afford more house for the same monthly payment. Are the rates the lowest ever? And was this basically a gift to boomers, because now, as they cash out of their homes, they can realize much larger gains?

* Yes, there seems to have been a lull in house construction over the past decade, but why did the effects from this materialize almost overnight?

* Yes, there has been a continual re-shifting in the economy, with jobs leaving middle America and pooling in a few hot metro areas, many of which are anti-housing and/or have anti-housing legislation in place (Proposition 13 in CA, Proposition 2.5 in MA), but this has been happening for 15+ years.

* Yes, COVID has changed things, it suppressed sales for a year, they likely came raging back with twice as much demand the next year. It also made seniors think twice about selling their homes and moving into nursing homes (which were COVID death traps). On the other hand, we have a million less people living due to COVID, many of whom were elderly, so why isn’t that boosting inventory?

* Have there been any robust studies of the corporate homebuying impacts? Corporations have always owned houses, but it seems like this has really picked up. But why now? Why is rental housing now a smart “investment” for corporations? Have algorithms developed to the point where it has made this kind of buying more targeted and concentrated?

* How has demographics affected the housing market, and why haven’t we seen an impact from this before? (or have we?). Are we seeing an impact from the Boomer Echo generation (aha millennials, born between 1982 and 1995) reaching house-buying age?

* Rental housing is important, because it gives a region a lot more worker flexibility, and provides younger people with the ability to live without anchoring themselves. It is also important to have a good supply of affordable housing, because service industry workers need somewhere to live too. I have a 2nd home in a vacation-type area which is experiencing a huge shift, with many seasonal homes shifted into full-time homes (thus depriving renters of housing). One service professional I use is living in a motel, paying $125 a night off-season, which is absolutely insane. This guy is almost homeless. And although everyone recognizes the need for more housing,

* Has the inequality in our economy made the housing market infeasible? In my region, the cost to construct a basic small detached house is something like $300-400k, that is absolutely unaffordable for the people who would live in a basic, small detached house. Are we being pushed into multi-story apartment buildings like what you see in Tokyo or lakeshore Toronto? Are such buildings in opposition to the American home-owning culture?

Just my thoughts.

MoonBatsRule

Because most of the first world is isolating Russia, Putin decides to isolate it more. That’ll learn ’em!

Putin has been exposed as small minded and thin skinned, very Trump-like.

As long as he is in charge, it seems like Russia will continue to spiral down the drain. I’d prefer they not become a giant North Korea, but they need a new leader, and a better system.

slippery

What are the effects of this? I’m assuming that this is in retaliation to the way Russian assets have been frozen (does that violate international law or no?), but will this actually accomplish anything or is this Putin throwing a fit?

>Meanwhile, the UK’s tax authority, HM Revenue and Customs, announced Tuesday that it would revoke the Moscow Stock Exchange’s recognized status, piling on to the unprecedented sanctions the British government has placed upon Russia.

Idk about this. Assuming that Russia can soldier on, what incentive do they have to back down if we’re freezing everything they own and blacklisting them and we don’t give them an explicit off-ramp to remove the sanctions? IIRC, Boris Johnson is for keeping the sanctions on Russia even if they *do* withdraw. And there’s talk of banning Russian natural gas and oil, which make up 40% and 25% of the EU’s sources. Where are the hydrocarbons going to come from to replace them and how quickly can they get them? Depending on how the offensive in eastern Ukraine goes, the West may have to make some unsavory choices sooner rather than later.

parduscat

This is just a fake display of and for control. The sanctions are taking care of most things so this is just self imposing the next step that western nations would impose. Primarily though it pulls the billionaires back under his purview as his grip and influence on them is falling apart. Continuing to pull Russia away from the world is doing harm that will last for an entire generation, not to mention inhibit it’s end goal of being a global superpower. With a damaged economy and aging infrastructure/military the bite of Russia will be limited to their well known disruptive agenda of misinformation/hacking.

amerricka369

Future historians will note that these are all steps towards a full blown, proud, in your face dictatorship. No more pussy footing around and conducting fake elections. No more killing your enemies through surreptitious means. No more having front men for your billions. Everything will be Putin now and he is going to declare himself king emperor very soon.

yalogin

1

**The International Monetary Fund’s new World Economic Outlook expects growth to slow to 3.6 percent this year. The group is one of many to slash their forecasts recently.**

WASHINGTON — The world economy has entered a period of intense uncertainty as a capricious pandemic and the fallout from Russia’s war in Ukraine are fueling inflation and weighing on an already fragile global recovery.

These colliding challenges are confronting policymakers and central bankers in the United States and Europe as they seek to bring down inflation without slowing growth so much that they tip their economies into recession. In the last week, international organizations and think tanks have begun slashing their forecasts for growth and trade as they assess the war’s disruptions to global energy, food and commodity supplies, as well as China’s sweeping lockdowns to contain a renewed coronavirus outbreak.

The pall over the world economy was underscored on Tuesday by the International Monetary Fund, which said in its World Economic Outlook that global output was expected to slow this year to 3.6 percent, from 6.1 percent in 2021. That is a downgrade from a January forecast of 4.4 percent growth this year.

“Global economic prospects have been severely set back, largely because of Russia’s invasion of Ukraine,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, wrote in a blog post accompanying the report. “This crisis unfolds even as the global economy has not yet fully recovered from the pandemic.”

The economic concerns are a central topic for policymakers convening in Washington this week for the spring meetings of the International Monetary Fund and the World Bank.

Mr. Gourinchas said the war was slowing growth and spurring inflation, which he described as a “clear and present danger” for many countries. He added that disruptions to Russian supplies of oil, gas and metals, along with Ukrainian exports of wheat and corn, will ripple through commodities markets and across the global economy “like seismic waves.”

But he acknowledged that the trajectory of the global economy would depend on how the war proceeded and the ultimate breadth of the sanctions that the United States and its allies in Europe and Asia imposed on Russia.

Soupjoe5

Yeah, that seems pretty obvious. We can already see the effects this war is having on oil and gas prices. Both countries are top 10 wheat producers so the disruption in production will likely lead to political unrest in the middle east and south east asia(areas I believe import the grains). As the article says we will likely see ripples from this conflict for at least the remainder of the year.

Snapingbolts

A system where the ownership of capital is a condition to the acquisition of additional capital can’t be fair. The only production for which people are personally responsible for that merits a compensation is their own labor. There can’t be other factors that determine the distribution of unequal wealth.

If there are capital that doesn’t require labor, then its ownership should be equal.

The implications of having idle earners is more than just an ethical problem. The incentivization of the subtraction of existing capital and goods reduces the efficiency of production. It forces the production of redundant capital to avoid price gouged markets and disincentivizes labor activity.

We find ourselves in this bad situation because economists have avoided doing anything normative. Economic rule serves the purpose of regulating human economic activity. It’s of the greatest importance that these rules are fair and achieve planned results.

Holos620

> But the fact that practically nobody advances enough to get a raise over the $20 level shows that the Amazon business model is structured to attract entry-level workers with pay, burn them out with the pace and difficulty of the work (yearly turnover is 150 percent of the workforce)

I suspect this employee-management philosophy bleeds over into some of Amazon’s higher-paying jobs too: A significantly a back-loaded vesting schedule for Restricted Stock Units reduces the costs to the company of hire+burnout cycles.

Terr_

The world is one big monopoly game. The rice getting richer day by day, it’s getting harder and harder to join the club, more and more are hardly making a living, something needs to be different. The next generation will have a hard time surviving if the ruler makers don’t act now, there are so many things wrong with modern society, it’s not too late to fix it, but it’s getting harder.

GongTzu

In regards to the sharing of revenue paper referenced in this article…It makes sense to me that as a company scales and as automation is implemented that: 1. There is need for less employees over time as compared to revenue. 2. That average wages of those employees will go up as they can be more productive by leveraging capital equipment, etc. I got Excel out and did some calculations on the AmEx example….
Average employees in 1960 made 218% above poverty line vs in 2019 they made 682% above. Poverty line is not a great metric always so also adjusted for inflation and compared…Average wages at AmEx increased 2518% over that period where inflation was just 764%. The amount of revenue per employee increased 8854% which shows that capital expenditures made by shareholders were making employees more productive. More than a quarter of the increased revenue went back to the employees which seems fair to me considering the shareholders made 100% of the investment to get the increase in productivity. But who knows…you can make statistics support any position usually. The position I’m trying to make is that as automation and AI do more and more of the work doesn’t it make logical sense that the owners of that equipment/software will take a bigger portion of the profits? And it’s seems the owners are still sharing some of it with the workers that are left.

rpow813

Yet another time when the lack financial education shows itself. If you don’t understand the rules of money you will lose out to those who do.

I could address the tired old minimum wage debate but one thing that leaders to more questions abd isn’t just an easy “that’s bad” is the percentage of wages to employees. Think about any big changes since the 60s. Anything come to mind? With automation and innovation costs decrease. And for those who took accounting classes you know the biggest variable cost is employees. It takes fewer people to do the same job today. It would be interesting to see other metrics in conjunction like the value produced by employee.

a-a-ron1776

A 6-7% 30 year fixed is going to crush the real estate market.

Just 3 months ago many on reddit including this forum were laughing at those of us calling top of the housing market.

scw211

This is coming fast. The 10 year has broken below its longer term (or above if looking at yields) its long term bull trend.

If it confirms the high on the yields in the US treasury markets above their 2018 highs? This is were J. Powell’s glass jaw gets punched, if it in short order expresses itself as the SPX dipping below its 200 week moving average and risks setting into a longer term bear market in equities.

If history is a guide, he will tap out with one good uppercut to the jaw.

But, he has never been in the ring with inflation and somebody in the corner that is (for the moment) telling him to go the distance. Will it be different this time around?

CremedelaSmegma

Something gotta give in europe, I say that as a european.

Natural gas is no ‘magical’ resource, it has been found all over europe.
The Netherlands were the largest producer right till the 1980’s, Norway has huge reserves and big parts of the north sea are explored yet undriled.

The problem is the green movement and changing attitudes.

Importing gas from russia or the US is not less harmfull for the enviroment than drilling at home.
It just “feels” better, no ugly industrial facilities, local enviromental hazards with fracking etc.

Something gotta give here.
Either start drilling or pay up Putin forever. Can’t have both.

just-a-dreamer-

“Analysts say Russian crude oil would be easier to replace than gas but that a boycott would still lead to higher energy prices that would hit consumers who are already facing record EU inflation of 7.5 per cent,” it says here

DrJGH

>EU nations get 40% of their natural gas and 25% of their oil from Russia

That really says it all. How in the world is the EU going to replace that much natural gas and oil in any amount of time without crippling their economies and driving oil prices higher in general? If they do this, I feel like it’ll be tantamount to self-immolation for the EU’s economy. They need to communicate clearly to Russia how to off ramp from this war and specifically how to have sanctions lifted. Cause right now, Russia has no clear reason to stop.

parduscat

Kinda want to say it’s a misleading title. While unions play a major role in our economics, it’s not _all unions_, nor _all businesses_. A percentage for scale would be appropriate to use in the title, because this is reddit and not too many people will sit down and read beyond the headline.
The title makes it sound like _every single business and union collectively agreed on a boycott_, which isn’t the case.

Ilunamie

Controversial comment:

A huge catalyst of the Ukrainian war is natural gas. The US was vehemently opposed to Russian gas in Europe, they issued harsh sanctions against Nordstream 2 right before war broke out.

scw211

I would put it much higher. Probably in the 80% range. The question should be, what factors do we think are in place to PREVENT a recession, rather than what would cause a recession. The cost of living crisis, inflation, the global trade headwinds, energy costs etc. The restrictions on consumer spending, but also the restrictions on government spending.

Very hard to see how this will not lead to a recession. Given that all measurements are essentially lagging indicators, it could be that this has already started.

I would also add: IF we agree that current inflation measurements are materially misstating actual inflation, then it may be that the recession has already started and we are simply measuring incorrectly. I think this is the case.

marco-sharko

Goldman Sachs and other big players control capital market prices. They literally decide when there’s a recession or not, in so far as the fluctuations of capital market prices cause economic recessions.

Holos620

Optimists, I see.

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AnalShockTrooper

More like a 99% chance of recession by this summer. 2 years is ridiculous. We’ll be in fema camps two years from now if things don’t drastically change.

jimbuhlim

Is this a mystery? They do this for the same reason they exclude things like energy: To prop up ever-increasing government deficit spending, and to continually finance it with low interest rates.

If they were at all interested in honesty, they’d still give us the early 1980 value, along with their new calculations.

Ok_Try_9746

I think what we are seeing over the past 20
Or so years is that gulf between wealth and everyone else widening so much, that the capitalist economy is starting to roll over on itself. Capital, money, has become so common, yet concentrated, and wages paid has failed to keep up with expected “returns”
On that capital invested, that bubbles must be blown through more money printing and QE, with regularity.

AshFromTheStands

No shit! This article is like saying , those who spend too much time in the Sun may get burned…..

I
The article focuses on the wrong thing about inequality , which is the poor thanks to overpriced housing , energy, food are forced to become even poorer just to exist

abrandis

This is the scary thing, when inequality gets to be too much the people at the bottom will inevitably try to destroy the system. At this point the ruling class can either give ground to resolve grievances (never happened). Or they can externalize these anger and grievances which requires an external enemy or a new promise. Which usually leads to war and genocide. In theory, the countries that are ruled by clear headed individuals will delay the inequality to slow down the build up of internal pressures. All they have to do to win is be the last to implode.

MrChence

Is this necessarily true? Was China included? I argue it’s the ability for average citizens to succeed rather than inequality.

Inequality was certainly a problem but I think the real problem which isn’t being addressed is the ability to succeed.

The US has always an aggressive inequality coefficient especially for the bottom quintile, but up until I guess recent decades it was possible to become fairly successful through hardwork. It is certainly more difficult now and I think that breeds a lot of unhappiness. For example for small businesses they are hugely disadvantaged today without an HR and legal department – a lot of pitfalls that can trap businesses without HR and legal resources…

scw211

Here’in lies the rub – taking a step back, what are we solving for / answer with this info?

To me – the Q is, are people on whole (total pop.) better? & here’s a questionnaire to score it.

Are all people as a whole doing better or worse say given 25-50 YRS time series? Parameters are: Human species living, quality of life, age, health, all of it.

Clearly the answer is yes. Argue small points but in the aggregate by almost all measures – yes.

Here’in lies the rub – people, perception & cognitive interpretation given our reptilian dominance hierarchy. – 100 yrs ago I’d have been dead by now through nature given my caste, but I’m alive with quality of life not afforded in previous generations given a time series comparison, it’s only my interpretation of that happiness in relation to my population within my current time series that drives satisfaction levels. It’s the perception driving the questionnaire.

Irishabacus

Is there an actual paper here? I searched around, including looking up the author in Google Scholar, and it doesn’t seem to be public yet.

> Any country that moved from the lowest quarter of countries in terms of inequality to the highest quarter saw a decrease in life satisfaction of about 0.4 on the 10-point scale, he found.

It’s unclear whether this is about market income inequality or post-transfer inequality. Post-transfer inequality is something that is somewhat more malleable via policy levers, but market income inequality is mostly an emergent phenomenon, and treating it as an exogenous variable leads to bad analyses. Fun fact: France actually has the highest market income inequality of any wealthy country in the OECD.

Anyway, post-transfer income inequality is largely a policy choice about the extent to which people should keep what they earn and pay for what they use. But high market income inequality is a symptom of a society in which many people are highly productive and many people are not. This naturally leads to the questions about why so many people have low marginal product, and whether the same factors that cause this also cause other social problems commonly attributed to inequality.

For example, it’s often asserted that inequality causes crime, and to some extent that may be true, but it’s also true that crime causes inequality. Crime doesn’t pay well (what little it does pay rarely shows up in income data), and it getting caught hurts your future career prospects. Plus there may be an element of social contagion. Furthermore, personality and cognitive traits that predispose people to committing crimes also tend to make them less employable, even without criminal records. So there are highly plausible routes through which income inequality can be correlated with crime without actually causing crime.

I’m not saying that income inequality definitely doesn’t cause any of the various social ills it’s claimed to cause, just that there are plausible alternative hypotheses to explain the relation observed, and that most of the research on the topic is kind of crap and doesn’t really give due consideration to the difficulty of correctly identifying the casual relationships at play. Is this one of those papers? I don’t know. I couldn’t find it.

SerialStateLineXer