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The revival of [The Economy] (thread) and the potential for its coming collapse
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Every other report I hear or read on Brexit troubles is that a do-over is impossible. Is it? Can they not overturn a referendum or send it back to ballot? It would be awkward sure but worth a shot if they can.
Everything I've read is that it's totally possible, it's just that the will to actually suck it up and do it is completely absent.
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The referendum wasn't binding, so no do-over is necessary. Maybe there would need to be a parliament vote to reverse course on Article 50, but even there I'm not sure that the government couldn't just do it unilaterally.
All this is more for the H-B thread, but generally speaking Brexit will be a drag on the world economy until March, after which who knows if it just continues to be a drag or spends the next three to six months imploding everything.
Not really a collective action problem? My understanding is that May doesn't have to call an election until after Brrxit breaks everything, and even then it wouldn't matter if the Tories lost because Corbyn is also in favor of Brexit.
Well, everyone could vote for the third party, but that's very unlikely. It's amazing that the two biggest parties are both pushing for it.
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I'm pretty sure the EU told the UK to suck it no take backs.
Allowing member states to be wishy washy on staying or leaving would break the whole system
Nope. They actually said the opposite.
At multiple and repeated points throughout the process. But that gets into a bigger issue.
The English speaking media, especially in the UK, has largely treated the EU as this inscrutable, laughable thing for foreigners that the media, especially its right wing components, only reports on to mock, misinterpret, and dismiss. Time and again, the EU via its multiple organs will meet, make public statements about their policies, and then get ignored in favor of minute-to-minute reporting on the latest maneuvering by May and the Tories.
This leads to the UK Parliament debating approaches that the EU dismissed in their entirety months before - publicly and reported on by multiple outlets domestic and foreign - then acting shocked when the EU points out that they already so "no" to said approach. It's all rather insane.
This is veering into the topic of UK politics for which there is an actual thread, but it's less an issue of media reporting and more that it is politically non-viable for the Tories to actually admit that Brexit is a failure and can't work and so we end up with endless kabuki theatre.
More tariffs coming, because those talks are definitely going to fail.
I don't think the people saying that China/Xi will back down have any understanding of Chinese culture. Xi will never allow himself to lose face in bowing to foreign pressure.
So you have two people, Trump and Xi, pushed by their own cultures of machismo into escalation.
"Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
Looks like we'll close negative for the calendar year today.
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The really jarring part of that article is that they are tariffs "against all remaining Chinese imports". At that point we haven't really failed to fuck with anything from steel to soybeans to shitty little 1 ticket arcade prizes, have we? Will the spider ring now cost 2 tickets instead of one?
I thought a lot of the tarriffs we're designed to side step Trump brand clothes etc
Would they now start impacting them?
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The article, and the Bloomberg article it sources, don't specify. I would be less than utterly not at all surprised if there were still carve-outs for all of his interests.
Fuck off.
Xi knows exactly what impact this has on our economy if it continues apace till let's just say 2020.
He also likely knows he gets a better deal in 2021 if that's the case.
Trump is too stupid to be nervous at this point.
Come Overwatch with meeeee
(Looking like Trump will run this country just like one of his businesses: **** it into a massive hole and walk away.)
WIN WHAT?
WHAT IS THE GOD DAMNED OBJECTIVE.
Making America great.
It needs to be stressed that China has centuries of generally justifiable resentment towards Western powers dicking them over. Add in a culture with a strong sense of pride in overcoming adversity and a dictator, raised in that culture, who doesn’t have to worry about reelection and I don’t see any way China backs down first.
The people most hurt by these tariffs have minimal political power. The politburo consists of wealthy citizens who will weather this just fine and would love nothing more than to see the strongest country forced to back down in the face of their rule.
There are some extant economic crises currently simmering, with some baseless speculation.
-low unemployment + stagnant wage growth + low job security. Labor markets look really, really strange right now. This isn't a real crisis because the people suffering aren't investment banks and C- suite execs, so it doesn't count. But it'll make the others worse. People should be more worried about Sears as a harbinger of things to come, but as with Brexit we've been reading about a retail apocalypse for so long that it isn't surprising to see a big employer go.
- Bonds are in a bad place. Corporate bonds really suck, yields are low and the higher yield ones are radioactive. Government bonds are probably more stable long term than the headlines make you think but populist governments all over are making investors nervous. All it takes is one G20 nation going Venezuela on us (hi Brazil in a few years) and the flight from bonds will be catastrophic. Brexit should be enough in its own, but I think the extended buildup has siphoned off most of the panic. This all gives equities a disproportionate weight right now and magnifies market shocks. The market isn't the economy, but we've got everyone's retirement savings wrapped up in stocks now and that looks worrisome.
-M&As are getting riskier and riskier as sectors consolidate and face a steeper road to meet earnings targets. Lots of heavily leveraged large companies still trying to make acquisitions. Someone big is gonna have a Lehman-style collapse and I guarantee it comes out that the reason is over-leverage.
Housing has some yellow flags, student debt is a decade-old elephant in the room, consumer savings are way down, and governments aren't willing to finance a TARP or ARRA these days if the inevitable happens. And that's without even getting into trade. The short version of my thoughts on that: tariffs hurt right up until until they're repealed.
Not only are people getting spooked over small things now - for understandable reasons given the flavor of American and European economies in 2018 - when something significant does happen we're not going to see proportionate responses. At best we'll see solutions that make recessions worse: austerity, isolationism, and deregulation.
Agree with most of the rest, though. Especially the bonds and housing concerns.
Sears' terrible decisions are pretty representative of those made by retailers all over. The major one is to spin off your real estate into a holding company, make your stores pay that company rent and extract your profit that way leaving the core of the business to idle. Then walk away in bankruptcy as a creditor with the rights to that real estate, the sole remaining valuable asset.
Once you've structured your holdings that way, what incentive do you have to ensure your stores are able to do anything more than pay rent? In fact, the quicker you can get to bankruptcy - without getting sued for negligence by your shareholders, of course - the quicker you get to turn that real estate into something more valuable. Meanwhile you sell off your most valuable brands and turn your departments into their own profit centers competing against everyone else in the company.
That's the Sears model and it's going to become more common as retail gets squeezed. I agree that the seeds of the retail crunch were sown in 2008, but it didn't have to play out the same way. A complete unwillingness to regulate Amazon (i.e. online purchases being 100% tax optional until recently) and illegal efforts to resist unionization and collude to suppress wages throughout the tech sector are the main reasons that ecommerce grabbed too large a market share too quickly. B&M retailers never had time to compete on a level playing field, and their execs and boards had (and still have) perverse incentives detrimental to the long term health of their businesses.
Your dismissal of the industry that employs more people than any other is too glib by half. Millions of retail employees are still going to be left out of jobs after warehouse workers are delivery drivers are hired to convert more and more spending to ecommerce; and then all those people are going to be automated out of their jobs. But that's another thread.
Retraining isn't a scalable solution either. There are already more skilled workers than positions in a lot of high value industries. See my point about stagnant wages despite low unemployment. There's not enough room in our economy to absorb millions of people losing jobs in one sector into other industries; there's already not enough room to negotiate for a raise.
That a store in that industry can do well and see growth in the current market makes it hard to believe other collapsing chains couldn't avoid it.
They're the Target to Fry's K-Mart which seems like a solid way to go. I would never actively go there but when my mouse breaks or something and I need to get a backup asap its good there are still brick and mortars around.
welllll I guess I won't be paying taxes on any capital gains this year!
argh
Wait, what?
Yeah, literally literally.
Standing up to Trump plays directly in to the Chinese states current propaganda objectives. Like, so perfectly it's hackish, as is the standard for the writing we've been getting since 2016 or so.
Best Buy was getting eaten alive by "showrooming" and transitioned to selling the value of their services (in-home experts, Geek Squad, professional installation) as a way to combat that. It has mostly worked.
Oh and people started having to pay sales tax to buy the same thing online. Turns out that when you don't get an automatic 7-10% discount on your prices over your competition you don't grow as fast. Imagine that.
This was back when companies who did have physical presence in a state would be required to collect sales tax on their online sales, making the retail/online hybrid model even harder to adopt.
There's a business model for B&M retail in the ecommerce era. But it's hard to do and the market for it will be substantially smaller. The transition to that is going to be extremely painful for a large number of ordinary people and I take issue with opinions that minimize that. We should find ways to mitigate the suffering.
I don't know if you can pin that totally on him being an Objectivist, at least any more so than a typical CEO. The company I work for (which is very large) and our main vendor partner (which is very, very, very large) have been tracking results and paying bonuses on how different departments perform for years. Recently it's become more and more territorial, in our vendor's case that's been in the news a bit.
Some of this is pretty logical: is HR spending too much? Is LP keeping costs down? Are some districts performing well while others aren't?
But a lot of it is structured so as to downplay when a department causes the company as a whole to miss earnings targets, giving executives a scapegoat to fire and bonuses to withhold from management. It obscures issues with the core business as long as possible until the window to resolve them is past.
Anecdotal, I know. But these aren't companies run by notorious Objectivists, it's just typical CEO/board of directors stuff.