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Senate Everything you always wanted to know about economics*

Discussion in 'Community' started by 3sm1r, Aug 14, 2019.

  1. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    @SuperWatto
    And please note that in @dp4m 's list only thoughts and prayers actually depend on you in some way.
     
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  2. Darth Guy

    Darth Guy Chosen One star 10

    Registered:
    Aug 16, 2002
    Several things have been pointing to recession largely independent of Trump. The longest economic "expansion" (the vast majority of which benefited a tiny minority) in U.S. history has to come to an end at some point. Downturns are inevitable in our system. Dumb trade wars exacerbate things, of course, but they aren't the main cause. There's also the fact that virtually nothing was fixed after the last crash and people are still worse off than they were before the "Great Recession."

    Also all our retirement savings will be wiped out when the consequences of climate change and the wanton destruction of the world ecosystem are factored in. (Hell, the "we're all ****ed" IPCC report predicted climate catastrophe as early as the 2030s.) *******s gambling with people's retirements aren't going to be able to insulate themselves from it forever.
     
    Last edited: Aug 15, 2019
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  3. SuperWatto

    SuperWatto Manager Emeritus star 7 VIP - Former Mod/RSA

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    Sep 19, 2000
    True, true, but then piling dumb stupid ****ing trade wars on top of that? I mean.
     
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  4. Lord Vivec

    Lord Vivec Chosen One star 9

    Registered:
    Apr 17, 2006
    There hasn't been an economics thread recently, so I'd like to hopefully not derail the thread by bringing up at least why I, someone with a background in the hard science, take issue with the field of economics as a study and maybe get some answers from the pro-economics crowd.

    At least with physics, we're investigating the actual phenomena and creating a model for how it works. Models allow one to make predictions and then the predictions are tested with experimentation, and when enough experimentation shows results in compliance with the model, your model becomes a theory. But I rarely see any of this on the field of economics. A lot of economic facts are just told to us by teachers, media, "experts" who get brought on to news shows, etc and we're supposed to take a lot of it on faith. Because when I do bring this up I get told that it's a soft science and that you can't do the experimentation to verify the models. So then I ask why is it that we're basing an entire society on something that can't be proven scientifically.
     
  5. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    What would be the alternative?
     
  6. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Nov 8, 2001
    Well, also, I get a little squicked in general (and I don't think that Vivec believes this) when people poo-poo soft sciences in general as I do believe there's benefit in things like psychology (conceptually), etc.

    I agree that economics isn't a rigid doctrine like an actual hard science -- but there are certain models that (in varying capitalistic markets) can reasonably be proven (supply + demand, JAWS, etc.) -- most of the advance theories are well beyond my ken. But at least understanding the basics, and understanding how the models work (because they're based on perfect systems, and essentially no system is perfect) can give a modicum of understanding.
     
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  7. Ghost

    Ghost Chosen One star 7

    Registered:
    Oct 13, 2003
    So, what happens if THIS goes down?

    https://finance.yahoo.com/news/mado...ge-committing-accounting-fraud-131211577.html

    Madoff whistleblower claims General Electric is committing fraud ‘bigger than Enron and Worldcom combined’

     
    Last edited: Aug 15, 2019
  8. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Under this administration? Nothing.
     
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  9. Ghost

    Ghost Chosen One star 7

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    Oct 13, 2003
    To our economy, I mean.
     
  10. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    I struggle to understand the inverted yield curve. I understand that it has to do with a comparison between long and short term interest rates, but it is not clear to me how it works and why it is relevant.
     
  11. Vaderize03

    Vaderize03 Manager Emeritus star 6 VIP - Former Mod/RSA

    Registered:
    Oct 25, 1999
    True, but the markets will convulse like a grand-mal seizure if this turns out to be accurate.

    I'm worried about bond yields. If another panic occurs, the entire planet will likely pile into US Treasuries. Their yields suck, but at least they aren't negative like over in Europe.

    What a mess.
     
  12. solojones

    solojones Chosen One star 10

    Registered:
    Sep 27, 2000
    So real question... the Hong Kong protestors have said they want to withdraw money from their banks or convert it into USD even to prove a point to the mainland about not using HK as just a revenue generator.

    If this run on the banks actually happens with the fervor that everything else in HK has been happening... what will that do to their economy?
     
  13. LAJ_FETT

    LAJ_FETT Tech Admin and Collecting/Lucasfilm Ltd Mod star 10 Staff Member Administrator

    Registered:
    May 25, 2002
    Not an economist but I've worked for a bank in the past in the US (teller and then IT). If the protestors start withdrawing money and causing a run on HK banks, sooner or later those banks will run out of on-hand cash to satisfy withdrawal requests. It's happened in the past here in the UK (Northern Rock Building Society). Given some of the scenes I saw at the airport, a bank running out of cash might be enough to set the protestors off. And then I think we might see Chinese intervention.
     
    Last edited: Aug 16, 2019
  14. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Ehhhhh... I suspect we'll see "austerity measures" similar to what we saw in India when the bill changeover happened (it was not great) and limiting of withdrawals... but people forget that the HKMA (Hong Kong Monetary Authority) is wholly separate from the mainland, essentially acts as a central bank, etc. There's also a massive cultural stigma with bankruptcy, which will prevent significant collapses.

    Most importantly with the HKMA, here's the relevant passage (just from Wiki for ease of use):
    Hong Kong's banking industry is also... somewhat insulated:

    [​IMG]

    So realistically, I think it will make a good symbolic protest, but won't meaningfully destroy the HK economy (which the protesters likely do not want, as China would for sure take measures there)...
     
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  15. solojones

    solojones Chosen One star 10

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    Sep 27, 2000
    Yeah I'm sure they don't want to mess up their economy. Just to protest. Thanks for the explanation.
     
  16. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    I love to follow the lectures of Richard Wolff. The way he explains is very clear even for those who are not in the field.

     
  17. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Just a caution -- he's really good, but his worldview is likely closest aligned with you (and Vivec, etc.) so he likely won't explain more conservative methodologies and theories at all well (note: I don't agree with most of those either, but just as an explanation standpoint). It'd be like a Liberty University professor explaining evolution... :p
     
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  18. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    Thank you, I absolutely agree. I realize that he will give a biased framing of the data. For a moderate while still somehow left-leaning approach I read some stuff of Paul Krugman and of Joseph Stiglitz. For the conservative point of view... I really don't know, if you have something to suggest I'd be glad to follow your advise.

    (Ps. talking about books, if I was serious about learning I should have probably been more determined with the book "Capital" of Thomas Piketty, but it looks long and scary and I don't know when I'll have the courage to go ahead and read it all)
     
  19. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Nov 8, 2001
    ****, man, I don't listen to conservative folks on economics so I'm not 100% sure who'd be a good source. Maybe if Alan Greenspan wrote a book on economics?
     
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  20. Juliet316

    Juliet316 Hangman Winner star 10

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    Apr 27, 2005
    Well...
     
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  21. Rylo Ken

    Rylo Ken Force Ghost star 6

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    Dec 19, 2015
    If you put money in a vending machine to buy a bag of Bugles but it gets stuck, should you pay for another bag of bugles with the hope that the weight and velocity of the second bag dropping down on the first bag will carry both bags to the retrieval area? What does economics tell us about how many times we should repeat this exercise before giving up?
     
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  22. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    I believe the subject-matter expert here is @Diggy -- I wouldn't presume to argue vending machine macroeconomics with the expert...
     
  23. Diggy

    Diggy Force Ghost star 8

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    Feb 27, 2013
    I think we can pull this down to a single factor as far as the Bugle market goes, and to a larger extent the vending market at my work as a whole; if it’s a guaranteed refund, and the promise to pay is fulfilled within a reasonable period, I’m a bull.

    But if I’m having to grab the machine at it’s two top front corners, rock it backwards and forwards, desperately hoping the wretched tasting corn based snack will fall...I’m a bear.
     
    Last edited: Sep 28, 2019
  24. 3sm1r

    3sm1r Force Ghost star 5

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    Dec 27, 2017
    GDP and stock market
    This is a doubt that came to my mind today.
    The American GDP grows of roughly 2% per years. Maybe less, maybe more, but around this rate.
    However, if I invested in the total US market I would probably have average returns around 10%.
    Why is that? Naively I would expect the two numbers to be close, since they are two ways to measure the growth in the US economy.
     
  25. dp4m

    dp4m JCC Playoff Pick 'Em Winner, Also a Narc star 10 VIP - Game Winner

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    Not apples to apples.

    Primarily, there's still a lot of US money tied up in agriculture and manufacturing, which translates poorly on the stock market.

    As well, many of the top performing market leaders are information technology firm which are largely "on paper" money vs. physical money (see Uber, WeWork, etc.).

    This is why largely the president says "economy is great!" and regular people are still getting screwed. Combined with most people outside of the 1% do not have discretionary or speculative investment options. Most middle class people with stock investments are 401Ks and/or IRAs vs. Day trading...

    PS - average return on market to beat is 8% as conventional wisdom. If you are doing 10% you're a savant...
     
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