> “I had hoped the economy would have more clearly stabilized by now, but from what we're seeing it doesn't yet seem like it has, so we want to plan somewhat conservatively,” Zuckerberg said. A Meta spokesperson declined to comment.
The economy is stabilizing. It's being weaned off of ultra-loose money for the first time in years. The stock market is starting to behave more rationally, demanding that a company whose earnings potential is sinking and which offers no dividend be valued accordingly.
> ... Meta had more than 83,500 employees as of June 30, and added 5,700 new hires in the second quarter. ...
FWIW, 28 % annualized hiring growth for a company the size and age of Meta is not normal. It's a sign of mismanagement and especially loss of focus.
A little dated [2018], but still rings true: The average tenure for engineers at many major tech companies is ~3 years. Thus, you'd expect new hires at a rate of 30% annually just to maintain staffing levels. To determine headcount growth you, should look at year-over-year changes in total employee count, not just the number of new hires. TLDR: Meta's new-hire rate is not atypical.
3 years is deceptive - in an exponentially growing company, the majority of employees are fresh, pushing the average tenure low. The relevant number is "length of tenure at time of severance", which I believe skews much higher. Any company seeing 30% churn is having a bad, bad time.
What do you mean? Every employer I've worked for had data for the starting date of their employees, when someone leaves you have an end date of employment. It's a pretty simple metric to calculate.
Based on my limited observations having been in a similar situation for a year, I would guess the average tenure is Equity Award Years less percentage of people who get fired in less than the value of Equity Award Years.
And this 3 years is kept up artificially - companes like Meta or, as a colleague of mine who works there now, Github / Microsoft, offer stock packages that they can only use after four years. It's a pair of golden handcuffs; they would move on a lot faster I'm sure if it wasn't for that + the wages offered.
Having Microsoft or Google or Meta on your CV is a very valuable thing to have, regardless of what you actually did there, because they're still perceived as having high standards.
> The economy is in the early phases of the biggest Fed tightening since at least the 1980s.
But the 2010s through 2020s period is a myth, a figment of cheap money. This money was made cheap to help us get out of the 2007/2008 recession, but the cheap money clearly went on too long.
Its warped all of our thinking. We should have been raising rates and paying down the Fed's balance sheet a long, long time ago. To be fair, we began the process in 2019, but COVID19 wrecked us in 2020.
Now its 2022 and inflation is growing out of control. We have no choice but to raise rates now.
Plus we pretty much lowered rates to 0. Europe's experimentation with negative interest rates yielded... well it's debatable whether it yielded anything of substance (pun intended).
So there's pretty much nowhere else to go, and if we want to have the option to lowering rates to combat future crises... well it looks like we'll have to pay for the option.
Human complacency never ceases to fuck things up. Those who seriously plan ahead are a minority, and don't control the ballot box.
On the contrary. We're not complacent. The Fed is raising rates, like it should be.
Its a known fact that the Fed Rate takes months, maybe years, before its effects propagate through the economy. The 2.25% raise in just a few months is the steepest increase in decades, one of the most proactive moves ever done.
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But we as a society need to also be proactive and understand what this means. It means higher mortgage rates, higher rates for car loans, more difficult student loans, more expensive debt.
There are a couple of... other state banks... who are ignoring the issue and are dropping rates right now, despite the current state of the economy. Those are the ones who seem to have a short-sighted view on the world.
USA is actually leading the charge and is more proactive than most other countries on this matter. Furthermore, our political system is talking about it, and we're right now talking about it here on news.ycombinator.com.
We're all being proactive and forward looking right now. And even back in 2020, the political system had the debates and forward looking statements about inflation risk vs COVID19 recession risks. No one ever stopped looking forward.
Was it perfect? No. But no one's perfect when looking into the future. But the political system absolutely discussed and decided upon what we should do. I don't think anybody was short-term thinking at any of these points, we were just trapped between bad choices.
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For the most part, the super-low rates from 2010 through 2019 have been confirmed to be a good idea, as it kept inflation at the 2% for the duration. We were roughly on target. But we also were in a mystical time, of warped thinking of cheap money for the duration.
I'm referring to the complacency of the last 10 years, when every time the fed even muttered about raising rates they caved to Wall St panics and politics. Those super low rates are primarily responsible for everything from the insane wealth inequality we've developed over the last 10 years to housing becoming largely unaffordable to people losing their shirts gambling on bitcoin.
What kept inflation at 2% was a perfect historical moment in global growth/globalization that will not come again in our lifetimes. Now when we need to borrow and invest in our economies the most, the cheap money is nowhere to be found up because we spent it all.
It was a big party, and instead of having a few drinks and going home slightly buzzed we binged out, threw up in the toilet and are now waking up in a puddle of our own making with a raging hangover. And now all of a sudden we're being proactive because we've decided drinking a glass of water might be a good idea? Yeah, it was a good idea last night. It's the only idea left now.
> What kept inflation at 2% was a perfect historical moment in global growth/globalization that will not come again in our lifetimes.
If that "perfectly balanced 2% inflation" was pushed away with say, the central bank raising interest rates, what do you think would have happened?
We would have had deflation. Which is incredibly dangerous. Its not even a question, all of that inflationary pressure (low rates, QE1, QE2, QE3, etc. etc.) the central bank pushed from 2010 through 2019 was just barely able to sustain 2% inflation... the target.
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We probably could have afforded to rock the boat a bit more than we did those 10 years though.
A target chosen completely arbitrarily. Obviously deflation is playing with fire, but I see no reason why something closer to 0% inflation would have been an issue. Maybe even a quarter or two of deflation wouldn't have killed things. Things more or less cost the same year to year? People would be less incentivized to invest unless they have an idea they think will have a return that beats a savings account? Cool, maybe slow, steady growth and savings could have stored up a decent cash pile for... oh, I don't know, a pandemic and a full blown war amongst (by world standards) wealthy nations? Those fun unforeseen events that I guess those in power (in the west at least) arrogantly deemed were no longer possible?
There are probably literally a thousand proverbs in a thousand languages, probably more in languages lost to time, that amount of some version of "when times are good, prepare for the bad". This is fundamental human knowledge.
I guess we generally agree, I just get frustrated when institutions like the fed, who are politically insulated by design, fail to appreciate their responsibility or make full use of their privileged position. Seems like for most of the last ten years leadership in general was conflict-avoidant to a fault.
Explain it like I'm 5 (or pls link me, happy to read more):
Previously the rich were borrowing easily and buying assets that go up in price bc...easy money. i.e. Houses appreciate really quickly, people can't afford them, the median income is outstripped by the median price etc. etc.
Now rates are going up but more people need to lose their job and be able to afford even less just at a lower price? i.e. Houses appreciate slowly but cost so much that even though the median price of a home is lower, most people still can't afford it bc the monthly is too high?
It seems like in both scenarios most working people can't afford things despite the interest rate being in the single digits unlike the 80s bc the interest rate on your money is so low and the cost/ownership of day to day items (say, a phone which was $15 for a house and is now ~100 per person per month) is wildly more.
Raising rates kills relatively inefficient, unproductive jobs, as it's harder to get a loan. So a business needs to be more profitable to survive in a higher-rate environment, to pay down the interest.
Now when the economy is in a crisis, sometimes you want those inefficient, unproductive jobs just to throw anything at the wall and see what sticks to stimulate the economy. That's when you lower rates.
The issue is we've lowered rates to near zero and held them there for so long the economy has gotten addicted to them, so now when the next crisis comes we have nowhere to go. If you think the working man will suffer from raising interest rates now, I think you'd be horrified by the experiment where we keep rates at zero and then a legit crisis comes along, and there's just nothing the fed can do but let market forces play out. That's one way to get great depression part II.
Plus super low rates has other knock on effects. Savings accounts become essentially worthless in the face of even mild inflation, so people speculate/gamble more in the markets. Also the super low interest rates exacerbated the housing shortage by making it profitable, for the first time in history, for financial firms to invest in single family homes en-masse.
I'd say trimming the unproductive jobs from the economy now, and the subsequent relatively mild unemployment it will produce, is the lesser of two evils choice. Interest rates are an incredibly blunt instrument, raise or lower someone always gets hurt.
Sort of. People who entered the workforce after around 2015 have no idea what is coming. Those of us who entered the workforce in the mid to late 1990s have already seen the movie a couple of times and know exactly what is coming. For those that don't know, the real economic pain typically comes during the 2-4 year period after the recession has technically ended. When you're actually in the recession it doesn't feel like it and people debate whether we really are in one, as they are doing today. It becomes apparent a little later.
I maintain that this Fed tightening is manufactured consent to be ruled by an aristocratic class in charge of government. Rent seekers in their twilight years convinced future agency must directly build upon their efforts by propping up their wealth working in the industries they own all the valuable real land and infra capital.
A minority has monopolized agency and insulated themselves from real work using a historical basis that there’s always been bean counters who divvy up public production, take 5 for themselves and give 1 to the next person in the public line. It’s a hard job being stingy, after all.
It’s government quota on free trade abstracted into technical jargon and made unfalsifiable.
I think another factor is the rise of china, which ramped up massively in that time, hid inflation.
We thought the near 0% rates had no consequences except for housing and a few other non china influenced products. It turns out the inflation was there but china's ramp up hid it. In fact, in hindsight we saw inflation everywhere except in china's manufacturing (and perhaps an oil sands boom helped too). But china manufactured so much of what we consume we didn't notice the consequences.
Inflation everywhere? Like in car prices? Food costs? Eggs? Milk? Butter? Paper? Wood? Lumber? Orange Juice?
These things aren't made in China (or at least, the USA largely eats milk-and-eggs from USA and/or Canada), and for the 2010 through 2019 period, their prices were incredibly stable.
What American manufactured product (or agricultural product) inflated from 2010 through 2019 to a degree beyond which was reasonable?
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The main issue with the Fed, was that they made the wrong call on Inflation in 2021, thinking it was "transitory". Now that we've had a year, I can agree with the inflation doomers that the inflation was in fact sticking this time around.
However, the inflation doomers were wrong from 2010 through 2019, so you'll have to forgive me for not listening to the boys who cried wolf.
>The main issue with the Fed, was that they made the wrong call on Inflation in 2021, thinking it was "transitory".
They made the wrong prediction, but the Fed isn't in the business of making predictions. It makes sense that they didn't want to crash the economy while people were still largely intent on staying at home. The Fed's mistake was caving into Trump's pressure to reverse quantitative tightening when the economy was healthy in 2019. When an unexpected disaster inevitably struck, they little headroom to lower interest rates, so they had no choice but to ramp up quantitative easing.
Yeah and if he does know please share that with everyone else (people ok with terrifying news at least).
We are not stabilizing. There are serious supply issues, staffing issues, wild currency fluctuations, and fear -- including of nuclear conflict.
I am not sure in what world this is stabilization. It is easy to hit on the "mule" i.e. the average Joe and say "I gave you too much money, that you never saw, thus why Yada Yada, so learn not to eat and that will work fine." This is the naive explanation offered to the public masses to make them feel bad and that they deserve the recession. Aka anything to avoid political suicide. Other countries don't go out saying this fyi-- because e.g. they have a freaking war in the doorsteps during a pandemic and can't produce goods, because no natural gas. Because of sabotage.
That's what I'm hearing; we didn't dodge a recession it just hasn't started yet.
In TX energy prices are already up a lot this year. We generate a substantial percentage of electricity from natural gas, and exports are up for obvious reasons.
Thanks to the shale boom natural gas has been effectively free in the US (as a byproduct of shale oil production) for the last few years. For various reasons the boom has reverted to the mean (although shale is still very much around), and as a result natural gas in the US has gone from "free" to "not free". Prices will go up, but we'll be fine. We still literally have more gas than we know what to do with.
It's the Europeans and East Asians who are being royally screwed by gas prices at the moment, and that pressure isn't likely to cease anytime soon, particularly with the destruction of Nordstream.
I'm not sure historical natural gas prices support this idea of "free". Would need to crunch the numbers but at a glance the price came down about 50% in the 2010s from the aughts. It's had a few big, temporary dips most recently during the start of the pandemic in 2020.
It certainly wasn't "free" in Feb 2021. We have about a 3% hike on our bills now to pay down the record profits gas producers received.
My bill last cycle was 20% higher than last year with near identical usage. UK has already seen incredible energy cost increases. European winter is going to drive energy prices even higher.
Yeah, "we" will be fine because computers. But lower income families are getting hit hard with this and inflation.
Even still there is the Applebee's effect; people with money are paying more attention to those commercials because a lunch for two is pushing past 50$ dollars these days! That's gonna dry up investment even more. In the UK Liz Truss comes in and immediately commits political suicide with these tax cuts. Putting aside critiques aimed at trickle down economics, the timing is TERRIBLE. Startups are laying off because investment is drying up; tax cuts on high earners are going into savings and low-risk market investments.
All this combined is, IMHO, going to lead to a massive global recession.
"Free" in the sense of free extraction. Obviously you still need to pay for distribution, but the shale fields to this day are flaring off natural gas that they otherwise have no way to sell. That 50% drop in the 2010s is the shale boom.
Now that shale has calmed down and global demand has spiked, there's now a cost for the actual natural gas itself. A doubling of prices may seem like a lot, but historically the price is still well below average. Much like we've gotten used to free money over the last ten years, we've also gotten used to free gas.
That's not to say it isn't a problem, but we aren't in danger of running out of gas or any runaway price spikes.
NASDAQ is UP 20 or so % from just before the pandemic. That’s how inflated things got in the last two years. The person you’re responding to is right on the money.
> For the rest of us, it's very much uncharted waters.
Aren't economies all uncharted waters until they aren't (e.g. hindsight)? 2 years ago we hit a global pandemic and tech stocks were trading at absurd PE levels 6 months later. So, no one really knows "where this will end up".
Absolutely. The entire thing is absolutely about China. Russia is a broken country that would have no significance beyond its hydrocarbons and nukes. China is an economic superpower and growing world power. Very soon it could replace the US as the primary driver of globalism. If the west had shown itself as disunited, it would have been time for China to take center stage in world affairs for the next hundred years. Instead it will wait for another generation.
China doesn't have another generation. They'll be going into a very stark population collapse that's worse than what Japan is experiencing now, where adult diapers outsell baby diapers. I expect that China's economy and influence will take the shape of an upside-down U, with the peak in the next decade. If they're going to move on Taiwan, they cannot wait forever. They came close to catching up the US, but I don't think they will achieve it.
>They'll be going into a very stark population collapse that's worse than what Japan is experiencing now, where adult diapers outsell baby diapers.
As opposed to most of Europe ...
Also, the quality of your human capital is more important than just having a large unsustainable population growth without much marketable skills or know-how on the international scale. Otherwise parts of Africa and Asia would be economic super powers by now.
Most immigration to Europe is incredibly low-bar unskilled economic chancers interested in exploiting the welfare state, not skilled workers, doctors and engineers like you get in US and Canada which have stricter immigration policies.
That is patently false. Especially the Western and Northern EU countries have a massive influx of high-skill workers (doctors, programmers, engineers) from both Eastern EU countries (which will dry up sooner rather than later, to be fair, with terrible population growth already happening for more than a decade in places like Romania), but also from neighboring countries - Turkey being the largest source.
Even the so hated "refugee crisis" from Syria saw mostly middle-class Syrians moving to Europe (putting it in fear quotes since the whole of the EU had fewer refugees than Turkey alone to accept).
>Especially the Western and Northern EU countries have a massive influx of high-skill workers (doctors, programmers, engineers) from both Eastern EU countries
That's mostly false. I haven't met a single programmer from Romania in Austria or any dev from turkey who wishes to emigrate here. Non-EU skilled people I met all want to move to low tax high salary places like Switzerland, UK, Netherlands. Having an open borders immigration policy is discouraging for those with skills who can afford to shop around for the better option vs economic refugees who shop around for the country with the most welfare.
If I look at the immigration statistics here, most immigrants are refugees from Africa, Middle East, and East Asia, not doctors and engineers with visas, those are only a tiny minority of the total immigration.
You may not have met them, and Austria may not be very attractive for this type of immigration, but there are significant populations of them. Remember that BioNTech (who created the European Corona vaccine) was in fact founded and is operated by Turkish immigrants to Germany.
> Non-EU skilled people I met all want to move to low tax high salary places like Switzerland, UK, Netherlands.
The Netherlands at least is still part of the EU. You'll also find plenty of high-skilled migrants in Ireland as well, and France and Germany also attract quite a few.
Note that language concerns and attitudes towards foreigners, especially foreign workers, are a huge part of how many people come to work in a particular country. Ireland and the UK have a huge advantage here purely by virtue of speaking English, as does France for the populations in North Africa. The Netherlands are very open to using English in business, even though their own language is quite obscure. German is less internationally spoke than English or French, but it is not that obscure either.
I am generally in favour of tightening migration laws in general around Europe, but even I can admit that this isn't accurate. Many European countries are wonderful places to live and raise families. Canada and the U.S. absolutely compete with the U.K., Nordic countries, the Netherlands, Switzerland, and even France and Germany, on skilled workers. The U.S. offers the best wages, and people motivated primarily by wages will try the U.S. first. But there are lots of people who either don't make the H1B cut, don't want to be beholden to political whims during the arduous trek to citizenship (which can take a decade or more, with multiple gates), or (and this one is a big one), are turned off by U.S. education, violence, crime, health outcomes, lack of social safety nets, and politics.
All that said, Europe is going to have to become much tougher on refugees in the coming decades. I foresee a re-negotiation of the various refugee conventions written at a very different time in history.
Why isn't this accurate? I never said Europe is not a great place. I said that the statistical majority of immigrants moving here are mostly low skilled refugees in the tens of thousands a month, rather than the much needed doctors, nurses, teachers and various workers and engineers wich are very few of the total immigration population.
In an ideal world maybe. In the real word, what you hope for was definitely not the result of Europe's uncontrolled immigration policies. If you want future doctors, nurses, etc, you need to to select for those through a points based immigration system like the US, Canada, Australia, etc. are doing instead of letting all the chancers in who are willing to pay smugglers and cheat the asylum system and hope they'll then want to play by the rules and become doctors and nurses.
Last week I saw a report with Middle Eastern migrants stuck in Serbia wanting to cross into the EU (Germany and Austria specifically). They interviewed one migrant from Iraq with his wife and five small kids, let's call him "Bob", and the reporter asked Bob why he's trying to get to the EU. He said it's because there's no future in Iraq. Well Bob, let me ask you this, if you knew there's no future in Iraq, why did you decided to have five kids then? Surely if you live in poverty, then birth control is a better idea no? Or oral/anal/pulling out, if that's not available. But instead, the EU(German/Austrian) taxpayer will have to pay to house a man with no knowledge of birth control or sense of personal responsibility, who's only professional skill is busting nuts, and his numerous family.
A mixed-race friend of mine volunteers in a refugee center here since he speaks several languages and he's pissed that migrants just laugh at us, saying "Europeans are so stupid they pay us for everything then give us more money which we just send back home".
This kind of immigration does not breed the results you're hoping for since it mostly encourages the ones willing to cheat to get free stuff rather that to contribute to the host nation.
The rich countries with restrictive immigration policies and high barrier of entry (US, Canada, Australia, New-Zeeland, Switzerland), attract the highly skilled and most productive immigrants that will add the most amount of value back into the economy. EU mostly attracts welfare shoppers.
You seem very angry about welfare and immigration of people without skills. We have very different opinions about what makes a country strong.
I'd point out that in all your replies in this subtree, you're essentially making the same point.
And if you're making the same point, you're not really thinking about what you're replying to: you could be replying to a wall for all intents and purposes.
In my city we have medical students coming to study from all over Asia and Africa. They will become doctors, surgeons and other specialists. Many will use this as a stepping stone to stay in the EU. What you said is flat out false.
The more important stat is what the distirbution of immigrants vs natives working as doctors or nurses in the EU is compared to the distribution of migrants vs natives in the total population. I believe you will see that migrants are generally over-represented in Healthcare compared to their percentage of the total population, and similarly in certain other industries.
I have not been able to find very recent data, but here is a paper from 2007 [0], showing that the percentage of physicians working in the country at that time who were migrants either from inside or outside Europe was well over 5%, with significant outliers such as the UK (30%), Ireland (30%), Norway (15%). In Austria it was 5%, though most migrants were from other rich EU countries.
Immigration is incredibly key to this. There are a number of nations where young people outstrip elderly populations and allowing the flow of people and labor is crucial, as is their enablement/assimilation/integration so that they stay
Except immigration to Europe is mostly unskilled workforce that doesn't assimilate very successfully.
Also, the cost of housing in Europe is increasing so much that all those young people don't see a bright future ahead without help from the bank of mom and dad.
> there are two separate civilizations hurting each other on the French soil,
Having actually spent some time in France I'm happy to be able to inform you that this is Fox News bullshit.
It's better to base your opinions on experience in the real world than on whatever nonsense you see on the propaganda arm of the lunatic wing of the Republican Party
> Having actually spent some time in France I'm happy to be able to inform you that this is Fox News bullshit. It's better to base your opinions on experience in the real world than
Thanks, my goddaughter is a victim. A dozen of other events, but those can be repaired.
No-one is born racist. All the people I know who complain about the absence of penalty for rapists are victims. It’s real nice to see us blamed as racists.
So as I said: There are two groups of people in France. Those who excuse the rapists because of their race, and those who don’t.
Is there any other country that ever showed anything other then upside-down U in terms of economy strength and influence. To best of my knowledge every country, empire or society rises and eventually falls. Probably the best known example is Roman empire but every other society I can think of exhibits same pattern.
Hah, good point! In the case of China they're likely to peak soon. The USA might peak much later still. The Roman empire lasted over 1000 years. I have my doubts the US can go the distance, but let's see.
Treating all the things that were called "The Roman Empire" as one thing is a pretty big stretch. Modern nations have much more rigid and well-defined natures.
China has multiple generations. Even "stark" demographic collapse at PRC scale is generating millions of new births per year (several times greater than US even with immigration), there will never be shortage of bodies to fill the military, especially increasingly small force structure of modern militaries that's shifting towards autonomous platforms. As for economy, expect PRC to continue growing, more importantly, move up tech/value chain and build comprehensive national power, just like Japan did while her demographic was absolutely in the shits because JP managed to massively improve human capita via education to create the skilled workers for high value economy (also SKR, TW). For reference PRC is now outputting as much STEM talent as all OECD combined.
Like other the Asian Tigers with death spiral demographics still grew significantly simply because cohort of skilled workers increased massively even though demographics broadly declined. There's a reason PRC is rapidly moving up science and innovation indexes (controlled for quality, not just citations). The reality is, PRC demographics has never been MORE competitive, and will increasingly be, because advanced economic development phase is just getting started. Quantity of quality is in human capital is increasing at stupendous pace. Now add in PRC is adopting as much industrial robots / automation than the next 15 countries combined and that overall demographic decline (as in net population decline) only improves PRC strategic position by reducing import dependence. And that the massive regional income disparity + huge home ownership + enviable house hold savings rate = PRC elderly simply don't have significant expection (or need) for old age social support. In many ways, PRC is almost optimized for weathering demographic bomb with less social cost relative to properly developed countries that are seeing comparable demographic decline.
Japan's economy has been stagnant for the last thirty years[1]. China can look forward to worse by all indications so far. Upskilling their labor force won't fix that. It didn't save Japan.
Not for JP because their skillforce potential was already relatively maxed out, their education reform paid off late in 70s while domestic politics squandered female labour participation. JP stagnanted after it tapped out demographic divident of educated/skilled work force in 80s - JP didn't have enough people / demand to upgrade what she had left to push further. Ultimately she settled in fairly prosperous status quo, but as medium sized country, also did not have sufficient internal market or requisite talent to compete across every sector.
VS PRC's recent skilled demographic explosion form 00s academic / S&T / R&D reforms that have not been fully exploited, which is the critical cohort that will build national strength. PRC has internal markets and talent pool to compete in every sector and will move up value chain accordingly. Ultimately just due to sheer amount of people, huge % of whom are lost cause, PRC will settle somewhere below JP, but still significantly higher than where it is now, likely much than US in gross/real ppp terms. Another important dynamic is PRC moving up value chain across all sectors will chip away at western economic primacy. PRC's skills driven growth trend will be slower relative to historic performance of other Tigers because even world demand was not enough to uplift 1.4B people. But that slower growth will start to directly challenge / eat lunch in sectors wealthy west dominantes. PRC may grow slow, but it merely growing will ensure west grows SLOWER if not regress.
One should expect PRC economy to grow slower and stagnate in 20-30 years, but will pull head of US, substantively in real GDP / PPP terms. All while moving up the up value chain, increasing comprehensive national power, and simulatenously erode western economies growth potential. Antcipate a future where every $1 growth in PRC hightech exports takes away 2% from west. Expect PRC industrial/trade policy sell at -$1 loss to cost west $4. JP as US vassel post war did not have the political freedom to play that game, it got Plaza'ed instead.
I read Japan's lack of growth as directly stemming from their cultural conservatism. I believe they're among the countries with the lowest immigration and least ethnic foreigners living there?
It's hard to engage economically with a diverse world when your available viewpoints are less diverse. At some point you reach a ceiling.
China has run through the Japanese hypergrowth years (leverage wage disparity, then move up value chain by producing copies of higher value items) and is now in the R&D phase. We'll see how it goes from here.
If you look past their big talks of outrage in news media and critically asses the actual amount of military equipment given to Ukraine, you will see that it is nowhere close to any kind of "all-in", hardline or not. They are still refusing to provide even modern main battle tanks FFS.
They wouldn't receive offensive arms, until they did. They wouldn't receive HIMARS, until they did. They wouldn't receive fighter aircraft, until they did.
The only red lines on material escalation seem to be around ATACMS.
I'd expect MBTs and A-10s by next spring, with training over winter.
That may very well be the intent, but it seems to be backfiring. Go look at this very recent German Marshal Fund survey polling atlanticist countries with section on PRC invasion of TW.
TLDR: negligible (average 4%) consider sending arms and even less (average 2%) consider sending troops. As if delivering either is possible to an island within overwhelming PRC military advantage. US highest at 8%, which is hilariously low given White House deterrence efforts. 32% considers joint sanctions. 35% only diplomatic efforts to end conflict. 12% do nothing. PRC is looking at these numbers and rubbing hands with glee.
Also consider UKR/RU conflict is already putting EU competitiveness into the shits with trend likely to continue. Pre-war PRC was worried about EU acting as potential spoiler via US coordination, but now EU is so weak that they're even more geopolitically irrelevant. Meanwhile PRC gets dependable energy partner in RU and increased influence in central Asia / MENA / global south who sees the hypocrisy in western response when a western country is attacked. India is even more reticent about militarizing QUAD. JP economy is going to shits, even if they wanted to increase military spending, they likely can not afford to.
Also notice youth are substantially less PRC. In 2030+ time frame, we're like to going to see extremely war wearing societies with polity shifting less anti-PRC at all cost, digging out of economic cesspit who will have even less appetite to sanction a much larger trading partner like PRC. These signalling are having less and less impact coming as EU weakens. As for US, PRC factored in US intervention in TW scenario anyway. It's not deterred but building up massive nuclear arsenal to follow RU's nuclear coercion strategy.
The economy most definitely experiences stability when people and business are able to have a reasonable amount of confidence that things don't hit the fan at any second now. This stability allows people to invest with more freedom, take more risk, and grow at a stable rate.
Of course this behavior eventually overheats...but in terms of expectations there is definitely a stable state to an economy, even if it only last a few years.
FWIW Meta has apparently done $15 billion in buybacks this year which gives them a 4% yield at current cap. Investors generally prefer buybacks to dividends because of tax advantages, so this should actually have helped their stock more than a 4% div yield would.
Dividend is different than a buyback. Buying back at a 3% earnings multiple is not equivalent to a 3% dividend.
It's much worse for shareholders. The company is investing in something that yields below the risk free rate of return.
Put another way, if they gave that same money back to shareholders via a distribution, the shareholders could earn more buying US treasuries with that distribution.
Buybacks are largely motivated by execs using company funds to increase their compensation, even if ROI is poor on the buyback. Otherwise they would never buyback at such low yields. Dividends don't go to option/RSU holders.
But anyway, a buyback at 10% earnings yield like Meta has, roughly, is a good use of funds
Buybacks have a lot of motivations. Execs trying to boost stock is certainly one. But shareholders do prefer buybacks. Claiming otherwise is just wrong. If a shareholder wants to get out of the equity and into bonds since rates are high they can cash out through the buyback.
> Put another way, if they gave that same money back to shareholders via a distribution
They literally are. Buybacks are just as much shareholder distributions as dividends.
Buybacks are not distributions. A company can buyback 99% of it's shares and if the stock goes to 0, the shareholder never got anything. Buybacks increase ownership percentage, and only if they outpace dilution via other means.
The airlines did a ton of buybacks over the years, and their stocks are down. Owning a larger percentage of a stock that's losing value doesn't do you much good.
To say blanket that shareholders prefer buybacks is just wrong. Ignorant shareholders may prefer buybacks at 3% ROI, smart shareholders will prefer activities that yield far higher.
If I can buy an IG bond that yields 6%, why would I want my company to use their cash to buy a 3% yielding asset? Just bubble era mentality fostered by a market that was distorted to the upside via ZIRP.
Buybacks are just distributions that give shareholders the option of taking the money or having the company reinvest it for them. If you think you can get better returns elsewhere take the distribution. If you don't let the company reinvest.
Buybacks are not distributions. They give you an increased ownership percentage. If the company goes bankrupt you never got any benefit from the buyback.
The return of the buyback is only known at the time you sell your shares, because the earnings yield and valuation of the company are dynamic, and buybacks defer the gain until time of sale.
A company buying back at low ROI is not equivalent to paying out dividends from cash flow
Don't know how to make it any clearer, seems you're using layman's knowledge and fundamentally misunderstand the mechanisms here
I agree with you. But I also think this companies have potential for earning money. Real money.
FB has incredible aí models and platforms as well as interesting hw products. But they keep pushing publicity for creepy projects such as their second life version.
So what happens is that they have tons of fantastic things they do not properly use.
I also think that media has chosen Zuckerberg to hit.
Yeah. Lots of contradictions etc, but if anything, he is not stupid.
> Lots of contradictions etc, but if anything, he is not stupid.
What makes you think that? Especially after just pointing out that the strategy he himself has put front and center as the present and future of Facebook (Meta) is "creepy", when you think they have other things that could generate money?
I get 37% based on what it was when I started in 2017, and that's net over attrition during the same time. Absolutely crazy. They need to not only clear out some deadwood but also change their engineering/evaluation practices so they don't have 10K engineers working on projects that only exist because of NIH syndrome and/or impact whoring.
> It's a sign of mismanagement and especially loss of focus.
I think it's a natural symptom of running a company built on exploiting people's desire to craft and control their own image. It's corporate narcissism. Zuckerberg has been invincible for so long, how could he not be consumed by the reality distortion field himself?
Remember that buybacks are another way of returning money to shareholders, and Meta bought 10% of it's shares this year. A 10% yield is pretty significant and reflects its high PE ratio.
However, they took on 10bn in debt this summer, joining Apple and the other FANGS. These companies claim to have high margins.
For me, if Apple claims to make a 20% margin, but then spends all that money and needs to borrow more, and its revenues are shrinking - that's not a growth stock and that's not an honest earnings. If you need to spend the money to continue to make sales, it's part of your operating costs. If you need to borrow money to continue to operate, you don't have a margin.
At least Meta is genuinely spending its borrowed money on future growth (trying to build this VR thing) and is continuing to grow revenue in local currency terms . We might not believe it would work, but it's honest margin. Not a zero profit growth stock - yet.
I think we are in a wierd situation where some companies are being more honest than others, and the honest ones will be punished until the pendulum swings in the next 2 quaters.
> For me, if Apple claims to make a 20% margin, but then spends all that money and needs to borrow more...
NB that having a large cash reserve and borrowing more money are not mutually exclusive. From a large company's perspective, borrowing money when times are good and money is easy to get are low gives the company a "war chest" to either be able to suddenly invest money quickly should the need arise, or to weather long drawn-out storms, when times are bad and money is hard to get.
EDIT: Apple has around $100B in debt, and around $202 billion in cash reserves; it could pay off its debt tomorrow if it wanted to; but then it would have "only" $100B in cash.
Going by the current inflation and unemployment trends, the economy won't stabilize for a year at the very least. We have a very difficult situation. Inflation is high, unemployment is low. In 2008, we had low inflation and high unemployment, but not this time. So, with the tightening of interest rates, unemployment has to go high. With unemployment increasing, prices of goods will fall due to decrease in demand. At that time, hopefully inflation will go on a downward trend.
The expected inflation in US is around 2-3% and until we see inflation heading towards those numbers it's hard to say economy is stabilizing.
For comparison, the expected inflation in India is around 8-10% and that's why you don't see the pinch in the Indian economy right now even with the tightening of rates.
I am no predictor of the future, but more likely the US interest rates will hit the range of 10% before we start seeing any easing in inflation. Once we see unemployment numbers going up consistently for a couple of quarters that will be the sign of economic stabilization I think.
> The economy is stabilizing. It's being weaned off of ultra-loose money for the first time in years. The stock market is starting to behave more rationally, demanding that a company whose earnings potential is sinking and which offers no dividend be valued accordingly.
Agree with the latter part of your statement, but no way have we hit "stability". Yes, taking away the ultra-loose money policy had to happen, but doing so has perturbed the system and it's going to take a while to stabilize.
The economy is stabilizing. It's being weaned off of ultra-loose money for the first time in years. The stock market is starting to behave more rationally, demanding that a company whose earnings potential is sinking and which offers no dividend be valued accordingly.
> ... Meta had more than 83,500 employees as of June 30, and added 5,700 new hires in the second quarter. ...
FWIW, 28 % annualized hiring growth for a company the size and age of Meta is not normal. It's a sign of mismanagement and especially loss of focus.