Dude, where’s my stuff | Hacker News Reader

Dude, where’s my stuff

am.jpmorgan.com

359 pointsthrow0101a350 comments

> The containership industry is a good illustration of the supply chain mess: as shown in the first chart, more than 70 containerships are stacked up outside Los Angeles/Long Beach ports waiting to unload. Idle containerships are back to just 3% of the total fleet, shipping costs are surging, manufacturing delivery times are extended and rail shipments are declining sharply from their summer peak, illustrating the far reaching impact of the delays.

I'm surprised that the article doesn't take up what happens when that logjam eventually clears.

At some point those ships will clear out of LA and there will be no more pile up. All the goods will have been distributed. Meanwhile, the world's container ship capacity will have increased by some large factor (30%, 50%) to address the shortage.

Fast forward 1-2 years and we have a world that's a mirror image of today's: surplus everything. Too much oil. Too much container ship capacity. Too many semiconductors. Too many employees.

It's not like COVID increased overall world demand relative to 2019. Rather, it created a log jam getting everything back to normal.

The current action in Washington DC around the budget sets the stage for rollback of the massive government transfers and deficit spending of the last 18 months. Eventually, those evictions will happen. Eventually.

Demand shocks can work both ways.

This is a well-known phenomenon known as the bullwhip effect (https://en.wikipedia.org/wiki/Bullwhip_effect).

Thank you for this, this was really interesting, I think this effect is not known enough. It is similar to pilot-induced oscillation in aerospace https://en.wikipedia.org/wiki/Pilot-induced_oscillation but with several layers of pilots

I've never heard of it before, but pilot-induced oscillation seems to be an instance of more general phenomena in control theory called ringing, which happens when there is too much overshoot (when the system goes past the desired position when you're trying to control it). To avoid having the system oscillate due to ringing we often need to lower the amount of overshoot, but by doing so we inevitably make our own control response slower.

https://en.wikipedia.org/wiki/Overshoot_(signal)

https://en.wikipedia.org/wiki/Ringing_(signal)

This is specially bad for systems with non-minimum phase. Such systems have a counter-intuitive property: once you give it an input, for example, to move in a certain direction, it first moves in the opposite direction (which is called undershoot) and then, after a delay, it moves to the desired position, and perhaps overshoot. The trouble is that as the system undershoots the control operator might be tempted to increase the signal to counteract this, but it makes things worse, increasing the undershoot and, after the relevant delay, the system will severely overshoot. There's a mathematical theorem that says that if the delay is too great it's impossible to control a system like this.

https://ealizadeh.com/blog/non-minimum-phase-systems

PS: since control theory and signal processing share an underlying theory of linear, time-invariant systems, there's an analogous phenomenon on signal processing, https://en.wikipedia.org/wiki/Ringing_artifacts - this kind of graph https://en.wikipedia.org/wiki/Ringing_artifacts#/media/File:... shows that ringing in signal processing and in control theory have the same mathematical treatment, and in both cases the cause is overshooting too much.

My understanding is that Overshoot and Ringing are mostly amplitude-related phenomena, they happen even if the transfer function has a phase of zero over the spectrum, as long as the gain is greater than one over the right part of the spectrum.

On the other hand, pilot induced oscillation, and the bullwhip effect seem to need some amount of phase-shift or delay to happen.

Woops, responded to the wrong post. Cheers!

Point taken. This analysis https://www.mdpi.com/2226-4310/3/4/42/htm gives three kinds of pilot-induced oscillation,

> Category 1 PIO: Characterized by oscillations with an underlying linear cause such as excessive time delay, phase loss, etc., which makes it easy to understand and study. Several criteria for manned aircraft focusing on excessive phase loss and time delay have already been developed. Certain criteria are based on open-loop analysis such as the Bandwidth/Pitch rate overshoot criteria [6,7], while criteria such as Neal-Smith [8] is a closed-loop analysis method with an assumed pilot model.

This one I think is kind like the non-minimum phase system I described and also like your description of delay being the root cause.

> Category 2 PIO: Characterized by nonlinear events which can be modeled as Quasi-linear events such as actuator rate limiting or amplitude limiting, etc. This is the most common type of PIO observed. Most PIOs associated with non-linear events were found to be “cliff-like” [5]; that is, the pilot reported the onset of the PIO as sudden and unexpected. Since control surface actuator rate limiting is a common non-linearity associated with modern flight control systems [9,10,11], most of the studies are focused on studying its influence on aircraft handling quality and PIO. Currently, Open Loop Onset Point (OLOP) developed by Holger Duda at Deutsches Zentrum für Luft-und Raumfahrt e.V. (DLR) is the only commonly accepted criterion for Category 2 PIO resulting from rate limited actuator in the fully rate saturated case [6,7].

This one goes way over my head

> Category 3 PIO: This category of PIO is caused by highly nonlinear events which involve transition in the control element of the aircraft or the human pilot behavioral dynamics. The non-linearities associated are more complex and cannot be modeled as quasi-linear effects. The PIOs associated with this category are also “cliff-like” [5]. Category 3 PIOs are difficult to recognize and are relatively rare, but could be highly dangerous when they do occur.

And this one is even worse

I also doubt that the traffic jam in LA alone will cause unnecessary increases in container and shipping capacity. Containers are short, already were before Covid hit. Since the situation didn't improve. That is not caused by the LA issue, rather both problems are symptoms of the same root problem.

The same thing happens in large scale orgs microservices when a downstream service sees an uptick in traffic. Each parent service will multiply the number given to them slightly in the increase in throttle limits, with the inner core services padding a fair bit more in throttle limit than the initial increase.

In German there is the “Schweinezyklus” (pig cycle”) which is basically the same.

It’s often used when industry asks for more graduates of a certain subject. Then people start getting degrees in that subject which leads to an oversupply of graduates who can’t find jobs. Then people stop getting these degrees and a few years later industry starts complaining again about the lack of workers.

Industry complains actually the whole time about the lack of workers…

"Fachkräftemangel" is a kind of meme in the media by now.

What they really want is cheap workers. So they try hard to create an illusion that there are constantly people missing.

Sure, it's actually never easy to get good people. But the real reason for the constant loud complains is to keep wages as low as possible.

It looks like a PID controller would be helpful.

https://en.wikipedia.org/wiki/PID_controller

This is literally why there's a shortage of everything. Look at oil in April

I think you underestimate this effect. Container ships are slow to build, semiconductor plants aren't being built, etc. We might have too many containers, but that's the only glut I can see on the horizon.

I know at least one newly opened semiconductor plant.

Link: https://www.infineon.com/cms/en/about-infineon/press/press-r...

But it wasn't build and opened due to the recent shortage, it was planned since quite a bit longer for fulfilling a more general, stable demand.

Same with Intel's new Arizona plant which began construction recently, it is not a reaction due to the current shortage, but to improve USA's domestic access to high-end modern semiconductor tech and due to Intel's shifted business plans to provide fab services for others.

So, while there will be semiconductor plants opening, they won't cause a bull-whip-effect. The need is more permanent for those fabs, and they're planned since years.

Intel just broke ground on a $20bn plant in Arizona.

You mean the plant that's been in discussions since at least 2014[0] and isn't really related to COVID at all?

[0] https://www.pcmag.com/news/intel-scraps-plans-to-open-cuttin...

Yes my guess is that they are trying to get government support for building it now that it is even more strategic.

Unfinished cars that only lack chips to be functional are filling parking lots around car factories in Europe. The main producer in my country, Škoda, adds some 5000 unfinished cars to its already formidable stockpile every week.

Once the chips arrive, there will be a wave of new cars on the market. Some are already sold (and the customer waits for their completion), but some will have to sell. In such conditions, prices will have to drop at least temporarily.

> Once the chips arrive, there will be a wave of new cars on the market. Some are already sold (and the customer waits for their completion), but some will have to sell. In such conditions, prices will have to drop at least temporarily.

Considering that new (and used) cars prices went up a lot in the last year, this will be a welcome change, especially for EVs.

For sure, it will be great for consumers. Not necessarily for companies that don't expect it.

As someone who tracks the demand of containers, I can confidently say we will never have too many containers.

> It's not like COVID increased overall world demand relative to 2019.

Didn't it? Transition to remote work not only nudged a lot of people to buy stuff, but opened a lot of jobs that were previously only available in US/Europe to people all around the globe, radically increasing their disposable incomes. I don't know how big of an effect it is so far — probably limited to our industry. But I don't think it's going to be this way just because of how much of an economic advantage is it to anyone except US/Europe white collar workers.

Remote work is only a minuscule part of the overall economy. Most people can’t just transition to remote work as they need to be on site.

That change in demand would at most show in some fraction of a percentage point in the overall picture. If at all.

It changed demand. So some items increased in popularity.

> It's not like COVID increased overall world demand relative to 2019.

Well, the article says that demand did increase a lot:

> Demand for many of these items soared during the pandemic as people built out home offices and related projects

But yeah, the coming overcapacity isn’t addressed.

Last I read up, The number of ships had been reduced, so saying there is a capacity increase is news to me. Where did you hear of this?

> Meanwhile, the world's container ship capacity will have increased by some large factor (30%, 50%) to address the shortage.

Possible but I doubt it. Container ships take years to build, there are backorders, people ordering them make these forecasts, shipyards were hit by COVID as well, they require all those supplies in short supply right now to start building.

I think the silicon fabs popping up all over the world are not because of the demand spikes necessarily but estimated demand growth, political motives (very few countries are comfortable with current situation of most top end fab capacity being located in Taiwan).

Actually, this is normal in the container shipping industry. Oversupply is the very likely result of this within 24 months. (Likely very much less.). Most of the oversupply typically comes from recycled ships and not new manufacturing. However, even during a downturn new manufacturing doesn't cease because container ships have a very short lifetime. New ships are sold typically in just a few years to smaller operations which in turn resell them again to smaller firms. At the end of their lifetimes, the ships inwill be owned by tiny (typically) East-Asian operators which will spend more time and money jury-rigging them to stay afloat than operating them under contract. The sea is not kind to steel. But when rates are high, even an old clunker can be run profitably, so these small operations with one or two rusting ships which are essentially lemons can continue operating them at a profit until rates dive again.

Meanwhile, the world's container ship capacity will have increased by some large factor (30%, 50%) to address the shortage.

How long do you think it takes to build a container ship?

It's in the area of three years in the best of times when you have a good supply of workers and raw materials and building capacity.

Covid did increase semiconductor market due to everyi going online and also other sectors like simple consumer electronics,cameras etc. This trend will probably not end. Humanity is going towards more tech every year.

> At some point those ships will clear out of LA and there will be no more pile up. All the goods will have been distributed. Meanwhile, the world's container ship capacity will have increased by some large factor (30%, 50%) to address the shortage.

They'll be scrapped:

* https://www.marineinsight.com/shipping-news/275-cargo-vessel...

* https://www.recyclingtoday.com/article/ship-recycling-steel-...

Or at least the oldest, smallest, least efficient ones will be.

> For all the clients that have asked me about the political and economic problems associated with the rise of autonomous vehicles and more unemployed truckers, I keep telling them they’ve got it backwards: the US has had a trucker shortage for the last few years, and it’s projected to get worse.

In addition to the need to point out that "shortage" just means "I don't want to pay market rate", a shortage of truck drivers does not negate the concern of automation causing mass unemployment of truckers.

The concern is that the 450,000 truckers will lose their jobs. "We want to have 500,000 truckers who would lose their jobs" doesn't addresses that issue.

To be clear, I'm still very much in favor of automation, but people aren't "getting it backwards" here. These are two different problems.

Yup, I work in logistics. Driver wages have been stagnant at best, dropping at worst for many many years. Outside specialized drivers, it's a horrible career choice.

This gives me the sads. I grew up around truck drivers. Back in the 80s, it was considered a good, middle-class job. I knew plenty of families that were supported by truckers.

Is “<insert-working-class-job> nostalgia” an everywhere thing, or limited to America?

It's not nostalgia. It's an observation that the middle class is shrinking. There used to be lots of jobs that supported families that are now subsistence labour. "Well, you shoulda been a programmer" is not a satisfactory solution to the problem.

Behold, the shrinking American middle class:

https://twitter.com/scottlincicome/status/144006410544490496...

Doesn't that graph non-critically equate cost of living increases with monetary inflation? I other words, it doesn't take into account the fact that many assets (such as housing) have increased in price much more than inflation would suggest, nor does it takes into account changes in basic necessities (one landline vs 3+ mobile internet subscriptions, one new POTS phone every 10 years vs 3+ new cell phones every other year).

Trucking is an industry that while it does have good jobs for people, it is just a pure cost for literally everybody. Everybody except the truckers themselves would benefit from lower trucking cost.

> Trucking is an industry that while it does have good jobs for people, it is just a pure cost for literally everybody. Everybody except the truckers themselves would benefit from lower trucking cost.

Right, this is exactly the neoliberal argument for importing and outsourcing jobs.

Yeah, it is, but it is also true

A single truck degrades roads thousand times more than a personal vehicle, yet they don't pay the equivalent on taxes because these costs need to be externalized in order to ensure that trucking remains redituable because of how fundamentally and structurally important it is for modern nations

Generally the best offset is just to reduce the amount of truckers needed for last mile delivery and just use railways for most of the travel as trucking again, relies on a high degree of externalities, be them social, economic or environmental to remain revenue positive

Again, trucking will forever exist, because it is important on a fundamental level, but ideally you would use railways as much as possible for logistics transport etc

I also wonder about the road damage issue. I wonder if when truck drivers are controlling fleets of vehicles that follow along, whether the weight can be distributed much better like a train and would therefore not damage the road as much because the unit pressure intensity would be lower.

This seems to be true for literally any job, or do you have a counter example?

There are certain areas companies strategically benefit from spending in, usually capital expenditures or payroll, and certain costs companies don’t (paying suppliers, shipping, taxes, interest). The costs companies want to pay tend to be oriented around improving the product set for the future, like R&D, or improving profitability, like marketing or sales.

From 2018:

> Oppelaar's first trucking job, in 1977, paid $5 an hour — or $21.50 an hour in 2018 dollars, he said. That was soon bumped up to $30 an hour in today's dollars.

> But now, as a line-haul driver for XPO Logistics, one of the world's largest logistics companies, Oppelaar earns about just under $25 an hour, he told Business Insider.

* https://www.businessinsider.com/trucking-shortage-eld-mandat...

Not discounting the possibility wages have declined. However, just comparing hourly rate in trucking is over-simplifying. Does the company cover any expenses? Does the driver own the cab? Is there a federal mandate on rest hours per day/week/month? And it is always misleading to compare wages "in today's dollars" as if every item and wage and asset inflates perfectly evenly.

At some level of detail you're right of course but I feel completely safe ignoring all that when we're talking about someone being paid $25/hr. It's objectively low. Is the employer paying the drivers' rent?

Does this particular guy have a clean driving record? Is he reliable? Here's a pretty well-known company stating they pay about $50k annually to 1st year drivers, with the potential for more than double that down the road. Walmart drivers average $87,500 annually. Of course, these companies won't even talk to you if you have a DUI or accidents, and then sure, your earning is going to be much lower.

https://schneiderjobs.com/truck-driving-jobs/experienced/tru...

https://corporate.walmart.com/newsroom/2020/03/09/walmarts-h...

What really changed in those 40 years? He is still doing the same job, with the same effectiveness. It's not really unexpected that the $/hr would remain the same. Honestly I am more surprised that it correlates that well to inflation.

> What really changed in those 40 years?

Off the top of my head: lower rates of unionization.

One is a real problem, actually experienced and only getting worse. One is a pretend problem that is only talked about and never experienced.

THe idea that Autonomous trucks could put all of the Truckers in the US out of business overnight is fantasy... but not an insane one, by economics standards. There is significant technological promise - We already have trucks that can line-follow for hundreds of miles without crashing. This represents an amazing amount of progress compared to the 2004 DARPA Grand Challenge, where the farthest car made it 11KM[1]. We could see just as much progress in the next five years as in the last 15, or we could see none at all - And how much progress we've made is debatable too, because some estimates say 1 crash/1,000 miles, and others 1/1,000,000.

The promise of this technology being on the horizon has led to pressure from the trucking companies to keep their costs down, lest they be replaced. The question in logistics providers minds is not if, but when, autonomous driving will replace human drivers for a significant number of miles driven. This has led to a depression effect where new drivers are not competing, because they're being offered lower wages and they see the writing on the wall too.

There are also several massive propaganda thumbs on the scale, including Government and tech companies, pretending that these things are closer than they are. Nobody is making rational decisions here; The market is truly insane. The workers are bearing the cost, and are choosing to take their labor elsewhere.

Economics is always an equilibrium, but often one still experiencing shocks. The market can and will adjust wages back up - If self-driving does not pan out. But that threat is acting as a buffer to suppress correction from the shocks that the system has experienced.

[1]https://en.wikipedia.org/wiki/DARPA_Grand_Challenge#2004_Gra...

It's pretty much what happened to merchant shipping in the 1970s when container ships came in.

Happened before, will happen again.

> The promise of this technology being on the horizon has led to pressure from the trucking companies to keep their costs down, lest they be replaced.

I have a strong suspicion that the pressure from another company willing to haul for a nickel a mile less is 100x a stronger pressure on costs than the future promise of a not-sure-when self-driving technology.

Yep. Without regulations that restrict people from taking new jobs, any labour 'shortage' can be solved by offering better conditions and/or higher pay. Take it to a hypothetical extreme: if truckers were offered $500k/yr and had to work 20 hours a week there would be no shortage.

Not true.

Markets take time to find new equilibrium points, during that time there can be shortages.

Not to mention that there is an upper limit on supply of labor in almost all markets.

> Not to mention that there is an upper limit on supply of labor in almost all markets.

You don't think the hundreds of thousands or millions of workers that work at jobs like an Amazon warehouse and make 15/hour would switch to being truck drivers for 500k/year? My job is easy but shit, I would seriously contemplate becoming a truck driver for a that much.

It's supply and demand. Supply is low, increase pay and supply increases.

> Supply is low, increase pay and supply increases.

“Supply” is the function mapping price to quantity supplied. With normal shape of a supply curve of a good or seevice in an idealized Econ 101 economy with no sharp supply constraints but the usual increasing marginal costs, increasing price increases quantity supplied.

Do you know how to drive a truck? I don't. It takes time to learn. Increasing wages for truck drivers doesn't make it faster to learn how to drive a truck.

> It's supply and demand. Supply is low, increase pay and supply increases.

And demand decreases. But sometimes demand _can't_ decrease, and that's another source of shortages.

If there's not enough food to go around you can't just raise prices to solve the problem (well, you can, but it's not really an acceptable solution).

Point being, shortages are a real thing.

See also: HN's favorite topic, housing in the Bay Area.

There are a lot of people with a truck driving license that work in other fields. With good incentives you could get them to become tricky drivers again.

The economy as a whole never reaches equilibrium. Think "eventually consistent".

There would be an instant shortage of schools to train and credential the new drivers. Then there would be a backlog at DMVs to issue licenses. And on and on.

Kind of like we're seeing now.

https://www.npr.org/sections/money/2021/05/25/999784202/is-t...

> And according to the American Association of Motor Vehicle Administrators, state governments issue more than 450,000 new commercial driver's licenses every year. A large fraction of those drivers enter the long-haul trucking industry.

> "It's just simple math," Spencer says. "If every year there are an excess of over 400,000 brand-new drivers created, how could there possibly be a shortage?"

> In a 2019 study published by the U.S. Bureau of Labor Statistics, economists Stephen V. Burks and Kristen Monaco investigated claims by industry leaders that the trucking labor market was somehow "broken" enough to create a decades-long shortage. Standard economics says if you don't have enough workers, you raise wages and within a reasonable amount of time, presto, no more shortage. Is trucking somehow different? A thorough investigation led them to conclude that the trucking labor market is not different. It is not broken. Yes, they say, the trucking labor market is "tight" — meaning that companies are competing to fill open jobs — but it functions in the same way as any other labor market.

I'm not sure but there might be a correlation to the fact that millions of babies are born every year but we somehow aren't seeing population growth to match...

Where there's an entrance there's also an exit.

If there's 400,000 new commercial driver's licenses every year then how many existing commercial driver's licenses expire / die / move to a different job / whatever?

The article I linked to talked about retention being the major issue in the trucking labour market - Which only re-enforces the grandparent's (yyy888sss) point - the issue is with the pay-to-work match, not some pipeline issue. In fact, the pipeline is probably so good that it prevents the industry from needing to solve the retention issue. If there are always fresh truckers to burn out, there's no need to pay better.

> If there's 400,000 new commercial driver's licenses every year then how many existing commercial driver's licenses expire / die / move to a different job / whatever?

I don't know how the licenses work in US but here in Finland a lot of people have truck drivers licenses and the permits to do it commercially (2 different things here) but do not actually work in trucking in the traditional sense.

For example got a friend who has those as he works construction as a crane operator. He needs the licenses/permits to be able to move his crane which is classified as a truck when driving on the roads to move it from site to site. Another one works in selling earth/dirt. He needs the licenses to drive his own truck to move stuff around the quarry (required as it is not fenced and gated off from public roads). Also loads his loader on the truck to move it between the sites he owns as needed.

Also a lot of people go into the field for a year or two and quit as it is hard work with long/bad hours and thus miss out on family life etc.

It could also be solved by government resorting to issue large numbers of an easy to get, "lorry driver" temporary visa for example of 1 year duration.

I've never heard the phrase "lorry driver" in a context where I had to think about what it meant. I think I've been picturing taxi drivers and not delivery drivers.

Yes, solve social problems with immigration, and then what?

Reap the benefits? Immigration is a net gain overall, we're basically taxing ourselves at the moment with arbitrary immigration controls.

I would expect a significant number of the immigrant drivers in this scenario would live extremely modestly, like sleeping in their cabs all the time. And they would send as much money back to their families in their home country, this behavior is seen in other such scenarios with imported labor.

It's tough on the worker, but good for their family and home country. It's cheap and compliant labor for the employer. But for the host country as a whole is it good? All that money being sent out of the country instead of spent locally can't be good for the host country vs a native worker.

Higher margins for employers and lower prices for consumers. Isn't that benefit enough?

Could we reframe this in a way that takes both supply and demand sides into consideration?

Something like: There's a lot of stuff to ship, but margins on those things are very thin + demand for said stuff is extremely elastic due to it not being super essential so there's also not a lot of room for increased driver wages.

This is a much better framing of the problem. And a much clearer case for automation.

Well said! Thank you.

Thank you. The one sided view we typically see on this, while in m supporting my views on paying people what they are worth, often glosses over that this isn't evil fat cat monopolists with monocles trying to keep the man down in all these cases.

Entire business models or industries may no longer be viable without major pricing changes throughout the solid k supply chain, which will ultimately give the consumer sticker shock.

It's a hot mess. Doesn't mean drivers shouldn't get paid more, but also doesn't mean it's pure selfish capitalism on behalf of those hiring them.

Truck drives tend to be truck owners doing independent jobs. And when the switch from wages to this happened, they were in fact massively taken advantage off. There was a lot of fraud or at least lying involved. A lot of one sided contracts putting all disadvantages on drivers. And then working drivers to exhaustion just pay debts.

It is not that customer would not buy product for 10 cents more. It is that, companies that took advantage of drivers had competitive advantage and grew to own market.

I would add that if manufacturing moves back to the US in any meaningful way, prices across the board will go up and consumption will go down. A lot of those thin margins will get crushed anyway, especially because - as you pointed out, much of the demand is elastic.

Why wasn't this a problem from 1950-1970 or so?

I would argue that was because the revenue was more evenly distributed across the workforce instead of being focused in the few at the top.

https://en.m.wikipedia.org/wiki/Bretton_Woods_system

Maybe that's a a good thing? Per https://phenomenalworld.org/interviews/trade-wars-are-class-... the rest of the world is chucking all sorts of junk at once --- per the high elasticity of the demand we barely want it but "oh fine" we'll take another shift if they are just that cheap.

If we're the dollar exporter, we should be able to call the shots in other ways. Dollars for democracy (hah), dollars for rail not cars, etc. etc. It's a massive soft power and develop-for-greater-good opportunity, but we choose to get inundated with cheap crap instead.

Shipping things across the ocean is externalizing carbon impacts of shipping emissions. It shouldn't be nearly as cheap as it is.

Also, overseas manufacturing amounts to environmental law arbitrage, enabled by falsely cheap shipping costs, so you can pollute as much as you want in Indonesia or China or India or whatever and then ship it to environmentally-restricted US.

And we're enriching our enemies (China) and technologically and infrastructurally enabling them. All things that also aren't priced into the "cheap goods".

Free trade arguments also fail when China does massive government investment to block access to emergent manufacturing markets by unsubsidized countries. And they manipulate their currency.

America should be onboard with righting the actual carbon emissions cost of goods shipment, but come on, the rich are getting rich off of that in America and don't give two shits about the middle class or future prosperity of the USA.

After all, they're all buying fortress estates in New Zealand for the forthcoming collapse that they themselves are willfully enabling.

With the rise of autonomous trucking will also come a return to highway robbery. Seems to me the job of trucking will turn to the job of security. There will evolve long term fluctuations in demand as robbery and security vie for dominance.

I hadn't thought of that, but good point!

A truck driven by a person feels very different than a robot.

Not sure that putting people on security quite fixes that, though, as they'd need to be properly kitted up to engage with raiders. That probably looks even worse, though. It's the story of a bunch of plucky underdogs liberating a load of produce from a robotic truck guarded by heavily-armed thugs.

Reeks heavily of Hunger Games.

Looking forward to that Mad Max sequel.

How feasible is it to unload and reload a truck in time, if police can be dispatched almost immediately? You can't take the entire trailer in an era of tiny and cheap gps trackers.

> In addition to the need to point out that "shortage" just means "I don't want to pay market rate"

I'm not very familiar with the trucking industry and I wont question your assertion that the shortage is (at least in part) caused by below-market-rate wages, but I think it's more complex than that.

We're in our second recession in less than two decades. During that time, demand for trucking has skyrocketed. And all the while rising gas prices and impending automation loom over the industry.

As I understand, many truck drivers own their trucks and those don't come cheap. I suspect there are few willing to make that investment considering all the things I just said. I suspect wages are low because the industry is taking advantage of those who already made the investment.

Yes, on the contrary, if the labor market wasn't tight, there would be little investment in automated trucks in the first place.

But if we were really serious about the driver shortage and freight bottleneck issues, we would simply build more rail. We've had (basically) driverless trucks before the driverful kind!

The fact that investors flock to AI hail maries and not tried-and-proven infrastructure demonstrates the limitation of the demand on one hand, and asset bubble in tech on the other.

You don’t “simply” build new rail in America. Nothing is simple about constructing new rail.

Curiosity, not challenge: why not? Political issues, engineering issues, both, or other?

Economics too. Rail mostly already exists where it can sustain itself, the rest of the country is just not dense enough.

So an enlightened Fordist shipping conglomerate would try to densify urban cores, where it is most efficient to get people their cheap stuff.

No, it's because rail doesn't get the massive subsidies that roads do. Roads are artificially cheap to use, especially for trucking that does the majority of the damage and pay minimal road fees, while rail has to pay for itself. It is very hard for rail, passenger or freight, to compete with the largess of federal tax dollars for road usage. If road fees were matched to the actual cost of road maintenance, like they are with rail, a lot of freight would shift over to barge and train overnight.

Simply put, railways are much more efficient between two fixed points than roads. They require much less fuel per ton, and they require much less labor, land, and capital equipment per person mile or ton mile. If the costs were properly priced in, consumers of various different types would strongly prefer rail for transit between fixed points (e.g. city to city). But currently the inefficiency of road usage is paid for by the federal government.

The density argument is massively overstated. Ohio has roughly the same density as France 282/mi^2 vs. 269/mi^2, and it's not even our most dense state. The fact that states like Ohio don't have anywhere close to the rail network that France has is a consequence of political decisions, not economics or the built environment.

We are talking about freight rail here. Ohio already has more intrastate freight volume than France, and that’s only a small fraction of the remainder of inbound, outbound, or freight traffic passing through. It is France that would need to seriously shape up if it is to keep up with Ohio. Alas, it will not do so, because rail freight volumes in France have fallen by almost half over last 20 years, as France is moving away from rail to road freight.

Don’t project differences between passenger rail systems to freight rail. It is by all means clear that US has the best freight rail system in the world.

This is completely irrelevant to the point I was making: arguments about how America "isn't dense enough" for rail is ignoring the fact that America actually is quite dense ... where Americans actually live. Our tenth densest state is denser than a country famous for its usage of high speed rail for passenger transit. Any difference in infrastructure is down to political choices, not density.

Thanks for the info. It seems that Ohio is an outlier in being the largest U.S. state without a publicly funded rail system [1], which is unfortunate.

I concede that the rail system in Ohio suffers from a lack of funding that the road system enjoys. I blame the politicians.

[1] http://allaboardohio.org/

It's very enshrined in eminent domain. It is not adequately discussed how a sort of NIMBYism holds back growth on macro scale things.

And yet we "simply" build new highways all the time, which consume a lot more land than railways do.

Do you have an example of a new highway built recently?

Eh it’s not just construction of entirely new highways but highway expansion. Plenty of examples of this.

Expansion doesn't take land if the state already had reserved that land for itself. Many highways have huge rights of way beside them because the state had grand plans for expansion when they were built in the 50s-70s.

Which is kind of like an accounting trick. The state already has the land, run a rail line through it instead of expanding it, etc.

But ultimately the expansion of the highways has downstream effects - state will buy new land, build new roads, etc. as density flows out. If you have a two lane highway going into a city and it's congested, and then you expand it, more people move out of the city or more further away - obviously someone is building new roads or expanding existing ones as that occurs.

According to the Bureau of Transport Statistics the US highway system went from 4,050,717 miles in 2009 to 4,171,125 miles in 2019. This is a delta 120,408 miles, or an increase of 2.9%. This is system miles, not even lane miles, so it will not include highway expansion.

Actually correlating this down to individual routes in an exhausting endeavor, given all the places these could be recorded. But I found that we did designate 7 new highways in the past 10 years, including I-14, I-11, I-87, I-41, I-42, I-2, and I-22.

Like the 710 freeway? https://www.latimes.com/california/story/2021-05-22/710-free...

California seems uniquely incapable of building anything, so of course a freeway there has stalled.

Elsewhere the US continues build tons and tons of roads. According to the Bureau of Transport Statistics the US highway system went from 4,050,717 miles in 2009 to 4,171,125 miles in 2019. This is a delta 120,408 miles, or an increase of 2.9%.

The 710 might be an interesting example, but it's not exactly indicative of a trend.

It is significantly simpler to build a local road on the land owned by people who want that road, than it is to eminent domain your way across the country, fighting hostile property owners you’re confiscating, NIMBYists, environmental activists etc.

That’s a good theory, until you investigate the fate of light rail in most American cities. By your theory light rail should be easy to build; it’s built by local authorities for local consumption. Yet, most of these projects fail to a combination of local incompetence and NIMBY action.

Can't do rail for last mile, and installing rail to every small town is mind boggingly expensive and impractical.

We are a very, very long way away from the point where shipping by rail gets hard due to last mile problems. Currently we're shipping tons of stuff cross country in trucks.

Think its the opposite, appears its the first mile problem. Its cheaper to just load it onto a truck at the source and drive it across country rather than loading on a truck, drive it to the rail and reload it and then unload it back onto a truck and drive it the last mile.

That inconvenience seems like it could be resolved with containerization, only at a smaller scale than the current 40-foot containers. Small standardized containers could be rapidly transferred between truck and train.

20 foot (nominal) containers are standardized and common. On rail, they usually put two on one car; I'm not sure if that's done with the same type car that takes a aingle 40 ft, or if they're different cars.

That unfortunately is under loading the car by quite a bit. Semi truck trailers are limited to 80,000lbs, including the trailer itself. Rail cars are usually rated for much more, the Union Pacific will accept up to 268,000 lbs including the car itself. Loading two tractor containers on a rail car is leaving ~100,000 lbs of cargo capacity on the table, so to speak.

You can also double stack on the well cars (subject to height limits of the route); if you really want to hit the car weight limit, four 20foot containers at road limit should be close to the rail limit, depending on how much trailers and well cars weigh.

Retail last mile by rail is impractical, but you can have industrial last mile by rail. If you're in the Bay Area, and ride CalTrain, you can see all sorts of junctions where they used to do last mile by rail to some facilities. Of course, those rails are hard to use now, what with the fences over them, but it's possible to make this work for industry (generally by locating industrial facilities where rail access is easier).

Last mile rail would require a massive increase in land usage though, wouldn't it? Especially as rails need to be quite straight.

Not really, in many places we actually still have the (disused and unmaintained) rail for last mile industrial delivery, which used to be the norm. Maybe at one point it would have required land use expansion, but we already paid that cost in the previous century.

Overall rail is generally going to be much, much more land efficient than roads. Yes, rail has a limited turning radius that must be accounted for[0], but rail can also deliver a lot more cargo than a road can for less maintenance. The Union Pacific indicates that the maximum weight for a shipment is 268,000 lbs per car. Meanwhile a semi-truck cannot exceed 80,000 lbs pretty much anywhere. A single freight train can pretty easily deliver a couple thousand tons of cargo, something that would take a hundred semi-trucks to deliver. This will almost certainly result in extra lanes and parking facilities for semi-trucks, increasing land use.

And then there's the fact that semi-trucks are really, really hard on roads. They do the overwhelming majority of the damage to them, due to their weight. From an infrastructure cost perspective, the best thing you could do is try and shift as much industrial shipments off of roads and onto railways. Obviously last mile will always be an issue, chances are your local target will be stocked via truck, but we could at least connect factories and ports via rail.

0 - Then again, so do highways.

Factories and ports with particularly heavy goods, it might make sense. On the land usage of highways yes, they use land but it's a sunk cost - every building already has (and needs) road connectivity, rail would be an addition in 99.9% of cases.

Some places never stopped. Have a look at all the rails branching off into factories and warehouses here in Winder.

https://www.google.com/maps/@33.993451,-83.7608816,484m/data...

Pan west along the rail.

A big rail company has a whole depot(?) by the airport.

https://www.google.com/maps/@33.9760042,-83.6717785,484m/dat...

> investors flock to AI hail maries and not tried-and-proven infrastructure demonstrates the limitation of the demand on one hand, and asset bubble in tech on the other.

Not at all.

VC investors flock to Hail Marys because industry disruption makes outsized returns (which is their investment thesis).

Investors who want stable, predictable, long term returns (eg retirement funds) love infrastructure projects.

Investors who want stable, predictable, long term returns (eg retirement funds) love diversified protfolios. FTFY.

Nobody is doing infra at scale in the private sector. Part of the reason I is lied -- it is risky not because it won't work, but simply because of the shear amount of upfront cost and duration of construction up front.

Of course, safe investor flocking to indexes of existing things does not missing big infra investment make.

> Yes, on the contrary, if the labor market wasn't tight, there would be little investment in automated trucks in the first place.

If automated trucks result in a lower capital and operational cost on behalf of the business, even with an ample supply of qualified truckers, why wouldn't that necessitate investment in that space?

They rather take the risk of unproven tech if it means they need to invest less, than go with the more expensive but proven option.

Keeping in mind the relationship between liquidity and risk, this shows they don't need new capacity too soon/desperately.

Also keep in mind things like making delivery cheaper in city than suburbans. There's lots of small cheap (in terms of investment, if not revenue hit) ways to make things more efficient. In that case, the fact that they rather make shipping rates artificially flat for appearance's sake says something about the long-term large-scale laxity of the economy, these recent specific bottlenecks not withstanding.

Because the odds of automated trucks costing less from a capital perspective are near zero, and operational costs are highly correlated with labor costs - if truckers are cheap, no one is likely to bother with maintaining and keeping likely fussy self driving vehicles operating

That is a relatively big if. It is possible that R&D and the cost of the hardware needed for autonomous driving amortize to a bigger value than just paying some person minimum wage to drive the truck.

some truckers I know of earn 6 figures, they are definitely not minimum wage earners.

Plus many of them are self-employed and pay very little to no tax

Usually self employed pay far more taxes, what’s different about these truck drivers? I assume they’re not cheating on their taxes.

Is that really the case? It’s not so in the UK

It is definitely the case in the US. They even call it the self-employment tax (https://www.irs.gov/businesses/small-businesses-self-employe...)

In the UK there have been some tax changes which affected truckers and other self employed contractors: IR35.

> If automated trucks result in a lower capital and operational cost on behalf of the business, even with an ample supply of qualified truckers, why wouldn't that necessitate investment in that space?

No. The premium on known legal liability and working tech would outweigh a certain amount of opex (and capex can just be amortized into opex). And the research would need to pay itself off at several multiples. If the truckers were making minimum wage, it's unlikely that the amount you could charge would justify the investment ever. If they were all making $500/hr it would justify a huge research project.

Being able to drive continuously is worth it in many cases even if it didn't directly save money on driver costs. 1/2 the time spent in transit is half the capital costs for a given level of goods moved.

The upper bound on how much "driving continuously" is worth is a 2x labor price tag (two drivers per truck taking turns).

Isn't that more of a lower bound? You're assuming the drivers can each drive 12 hours at a time, and they wouldn't ask for any increased pay for the worse conditions (having to be continuously on the move, sleeping on the move).

Continuously on the move/sleeping in the move is a benefit for truckers. It's not a cost. The issue is, if we are already labor constrained, what is 2x the new going rate for drivers with a sudden doubling in demand.

That said, the benefits also assume that for some reason the only time the goods are idle is on a truck, which makes no sense in many cases.

There is a decent cost of volatility of labor that humans have that machines do not, as well as reduced liability. Machines are more predictable.

Sure, but that is icing on the cake. The fact of the matter is we are demand-constrained, so a new tech supply bonanza is a very risky thing. It is essential the holy grail self-driving trucks can compete on cost before/while more demand from its elasticity is "unlocked".

I meant to imply the upper bound is higher than 2x the labor costs of a single truck driver.

No, owning only half the number of tractor trailers is half the cost of capital (bond interest rate or loans or so on) is a cost savings. Plus a single driver can't go 12 hours a day any day of the week, let alone continuously.

Or we could get rid of the Jones act and just move freight by ship instead of driving it long distances.

Can you elaborate? What is the Jones act and how do you move freight by ship across a continental land mass?

The Jones act restricts ship traffic between US ports solely to US-flagged vessels dramatically reducing competition and increasing costs, and you move freight by ship across a continent with rivers and canals

Is anyone really going to move coal by barge via the Mississippi on a foreign flagged vessel if the Jones act didn’t exist? And if so, how could that be cheaper unless they were cutting scary amounts of corners no sane person would want them to cut?

>unless they were cutting scary amounts of corners no sane person would want them to cut?

This doesn't stop nearly as many people/companies as much as I wish it would.

I think the issue is more that you can’t ship between Florida and New York either with a foreign ship.

This prevents someone from say dropping off all their goods in Miami, then letting a British liner pick them up later and drop half off in NYC, and the other half in London.

Instead you have to either ship it yourself to NYC and Miami, or you have to send it by train to NYC from Miami.

If the Jones act was repealed, wouldn't everyone just ditch the American ship registration and choose a country with lower taxes, less safety standards, and lower crew wages?

I first learned about the Jones act while reading about cruise ship port destinations (since most cruise ships have flags of convenience, a notable exception being the cruise ship based out of Hawaii for Hawaiian ports).

The big restriction is using only American built ships (which we don't make anymore). You can keep the American flagged/crewed restriction and it would still significantly change the dynamics of shipping.

The big shipping companies are still European but their ships are built in Asia and crewed with whoever is cheapest.

Its a relentlessly efficient industry and I don't think a lot of Westerners are willing to spend an entire year on a cargo ship. The Jones act is actually an admission that the US cannot compete.

The cost of roads and their maintenance is externalized to the taxpayer, whereas rail requires more fully internalizing the infrastructure costs. Road damage scales with something like axle weight to the 4th(!!) power: https://www.insidescience.org/news/how-much-damage-do-heavy-...

But there is no rise of autonomous vehicles. Vehicles equipped with driver-assist features still require drivers. Suggesting that automated lane-keeping and traffic-light detection etc. is putting drivers out of business is like suggesting that autocomplete is putting writers out of business.

> Suggesting that automated lane-keeping and traffic-light detection etc. is putting drivers out of business is like suggesting that autocomplete is putting writers out of business.

Autocomplete paired with autogrammar and sentence prediction.

Say, have you noticed how a lot of "news" sites these days have a lot of articles that seem like they're generated by AI? Have you also noticed how most of the media feels empty and that investigative journalists are vanishing and often even being injured or killed?

> Say, have you noticed how a lot of "news" sites these days have a lot of articles that seem like they're generated by AI? Have you also noticed how most of the media feels empty and that investigative journalists are vanishing and often even being injured or killed?

Literally no to all of these. Not sure where you're looking.

He's right though, there are lots of articles being written by bots even in print these days, not being able to tell the difference between a somewhat bad writer and a bot is what makes them viable. And the tech just keeps getting better every day.

Same goes for cars, it's not a thing until it is.

Motor vehicles have always been highly regulated though, they'll probably need drivers onboard at all times whether they are driving or not, for safety. Kind of like train drivers (though that's a much more controlled environment) or aviation (again a much more controlled environment).

Pretty clear that we won't eliminate 500,000 trucking jobs any time soon. What we can do is eliminate the drivers jobs who run long distances. Running up and down I-80 or I-75 is a much simpler problem than negotiating the crowded streets of New York City or Chicago. Someone is still going to have to take the truck from the freeway stop into the city, make the delivery and pickup the next load.

Short term one very promising source of new drivers is parolees. If you've got a felony on your record it's still hard to get a good paying job. There are a couple of charities who train parolees to drive trucks. They've had good success but are limited by funding.

I didn't link any sources, but what I was seeing was ~500k long-haul truck drivers, >2MM heavy/semi truck drivers[0], and >3MM total truck drivers[1].

I think it will be some time before any significant portion of even the long-haul jobs go away, but will be a lot of jobs when they do start to vanish.

[0] https://www.npr.org/sections/money/2021/05/25/999784202/is-t...

[1] https://www.alltrucking.com/faq/truck-drivers-in-the-usa

The massive investments in autonomous vehicles are maybe a causal factor in the trucker shortage: fewer people want to invest in getting the license if they attach any credence to the widespread claims that the job might not exist in 5 years.

> "shortage" just means "I don't want to pay market rate"

I've read this repeatedly, and it makes sense at face value, but at some point don't some activities just have to be dropped, since there is a finite amount of labor to go around?

edit: upon further thought, there is probably a pool of labor available currently on unemployment benefits that could be activated with sufficiently high wages, but even that is not infinite.

With sufficiently high wages you can get people to change jobs to become truckers.

Problem here is that truckers are not working in vacuum, their wages come from the transport of goods. If the goods have low margins, wages of truckers cannot increase by much.

Here's the link to the actual content, without having to "agree" to anything. https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/ins...

You can also disable JavaScript and everything will load properly.

Wow. Just looking at the charts from ta perspectives, I'd anticipate:

- Minimum 10% drop in US goods spending

- Huge drop in China shipping container production

- Halving of container freight rate between LA and Shanghai

- Catastrophic drop in arrangement of freight and cargo prices (PPI)

- Jump in US home foreclosures

- Drop in emerging market capital inflows

- Worker training starting to catch up with business demand

- Drop in mfg delivery times

- Massive volatility opportunity/chaos, or both, depending on how you see it

Possible timelines for these changes do look really close, likely surging early 2022. Probably scary news coming around that time (not reflecting causality so much, as in "scary events cause drops"; you could even read the news as a natural outcome of the drops)

Not making any comments here as to good/bad or causality. It looks more like natural shakeouts that could allow for helpful interventions or follow-on effects, depending.

For governments, I'd think now is the time to get creative, protecting and planning for homeowners and vulnerable populations and businesses as much possible.

The above is speculation...

Follow-on predictions

- Crypto is going to boom again by early 2022 minimum. Elevator is going up.

- Political volatility could get exciting again in the US.

- How is political volatility going to show up in PRC? I guess I'd look for more strong moves by government to see where their fears are.

- Local business reopening coupons and deals will take off as COVID pressure eases

- (I am very bullish wrt US economic growth beyond 2022, we'll see what the catalysts may be. Long-term US is headed toward stabilization psychology, return of the gold watch after consolidation phase(s), IMO)

(Downvote if uncomfortable, I claim no crystal ball...)

Upvoted b/c it feels very well thought out and summarized the article brilliantly. And because I don't know if I agree with you politically, which makes it an even more valuable assessment to me (because I'm not prejudging).

Thanks for your comment. I don't even know if I agree with myself politically. I don't claim any position on the spectrum and would rather transcend it than find a place to stay. In my professional training I was taught to watch how human psychology and control dynamics emerge from less-conscious zones of human perception and judgment. To me this paints a different picture of politics than I think most would acknowledge.

Very well said regarding politics - I have trouble having useful political discussions with almost anyone, right or left, because everything is now framed as "good" vs "evil" or "enlightened" vs "sheep" instead of actually taking stock of the forces of psychology, economics, and legitimately different values that are really driving the political environment we live in.

Yes. I would love to engage in a civil way but find it literally impossible except with people who agree with me... so why bother?

What are your thoughts on the likelihood of success of the push from the right to implement minority control in US politics? If successful, this could have large consequences.

What's happening there? Haven't heard of it.

It takes me out of my big-picture wheelhouse, so I personally find it harder (because less energy-yielding/interesting) to follow this kind of thing.

I definitely noticed how much the US right began to project a mighty image in the last couple decades, the imagery and storytelling of which took on a rather fantastic, near-pornographic character. In off-the-cuff analyses of its storytellers' psychology, I found that they were uniformly less depth-oriented than impact-oriented. To me this is almost never good news in terms of actual might.

I could also see a massive return to centrism as the human-group organism feels around for equilibrium.

Really spitballin' here though. Sorry I can't really speculate in more precise terms on that issue.

> In my professional training I was taught to watch how human psychology and control dynamics emerge from less-conscious zones of human perception and judgment. To me this paints a different picture of politics than I think most would acknowledge.

Most cool! I try to do the same. Probably awful at it because I suspect I'm somewhere on the spectrum, but still trying in my 7th decade to understand or at least be sensitive to nonverbal cues. What was your professional training?

Thanks for your comment. I started out in tech, but was then trained as a group trainer, then as a coach, then as a jungian- and neo-jungian-oriented coach. My coaching mentors were psychologists and psychiatrists who saw value in depth-oriented coaching.

This got into admittedly weird territory for a techie; my theory of my objective brilliance died a few deaths in there, with more to go. ;-) I learned with disgust how much my buried subjective preferences push me toward tech and attempt to dictate my political views, my food choices, etc.

Still, as a result one can begin to apply a lot of really cool models to understand what kind of politics would be exemplary, and maybe just don't exist yet for example.

It's been an interesting path, but there are lots of interesting paths out there, yours included I'm sure.

Well I totally want to read your blog, or book, or see you YouTube channel!

What is "the gold watch" in this context? It is, understandably, a difficult phrase to Google for! I did find this[0], which refers to it without explanation.

[0] https://talkmarkets.com/content/economics--politics/inflatio...

This is just my opinion: Businesses will once again normalize long-term employee care. (The US government will likely have to subsidize this or in some way incentivize it)

The gold watch refers to the past standard of offering employees a gold watch upon retirement. It symbolizes stronger bonds between employer and employee. This type of thinking will come back, maybe not with a gold watch, but this type of stabilized care for the members of society and especially social circles (of which a business will be one) will return.

IMO part of the driver/incentive will be a mutual fear on the part of both business and employee, causing a tight love-embrace so to speak.

There are trade-offs though. For one, tech and stabilization are not known to be very good at coexisting (yet). I see the global economy coming off a local tech high, with some important lessons learned about what a business should be and how people should treat each other.

Again, no crystal ball. But I believe we are right in the middle of a global psychological shift. It will take time to settle and when it does, poof, a new era.

> This type of thinking will come back

Disagree, and I hope desperately I'm wrong. The reason is simple. Here in the USA the legal environment makes it dangerous to be an employer. You can get sued for any damn thing, and some areas (such as sexual harassment or workers comp) are guilty-until-proven-innocent. On the flip side, employers have an incentive to (immorally) fire someone just before retirement so they can avoid paying a pension, should one even exist.

Not sure how these things would change.

The current legal environment, sure. But I think government can and will change those things, especially while holding in its hands the future of massive corporations which show themselves willing to engage with a reasonable social contract. Gov > biz is making and will continue to make a huge comeback in the US.

I'm cynical: Every one of those changes will be faught against tooth and nail by activists that will argue its an erosion of worker rights and bringing back things like sexism.

Doesn't sound like you're advocating this, but anyway it always puzzles me why anybody would actually WANT "long-term employee care." I don't want that. I just want money, and I'll take care of the rest. I don't want to get married to a job or a company. I want to quit and possible start a new job as and when I like, without losing out on long-term promises of "care."

Yes, I'm aware of the psychological perspective you are communicating. It's been behind the tech push. People who take this position will increasingly need to seek out direct market access during these volatile times; you may be well advised to steer clear of employee positions in large organizations. There is often a very fine line between "I don't want to be cared for" and "I don't want to care for others." It's hard to work in a place where you can't communicate A without also communicating B. The closer you are to pure-currency zones of employ, the less problematic this will be.

Keep in mind it's a very strong subjective position you're communicating as well. If you want to anticipate markets, try to watch what others are actually doing & ask what they are thinking, vs. what you personally think and do. This will help you to avoid traps in mental efforts requiring prediction or speculation. Especially looking at the way your expressed position could overlap with e.g. privateer mentality. This is, and will continue to be, a rare position within organized employee ranks.

> If you want to anticipate markets, try to watch what others are actually doing & ask what they are thinking, vs. what you personally think and do.

Aren't you asking people to try and anticipate how their employers will fare for decades?

It seems like basically the same thing and just a matter of diversification. I'd rather not have all my eggs in one basket.

To clarify, that comment was rather directed toward people who write like the commenter; a huge segment of them are seeking ways to more objectively predict outcomes (this is more beneficial toward the singular monetary goal expressed above, the closer they get to the currency markets).

What do you think about it when compared to the oft repeated (though possibly overblown) claims of ageism in tech? The way it could work is that you work your young/middle years in a company, and they continue to employ you in your near-retirement years due to the massive amount of domain knowledge, relationships, and general mutual respect.

On the other hand, I do want that. I've been at my company a long time. I realize at times I probably could have done better financially job hopping, so understand that aspect. But with that tenure comes friendships that border on brotherhood, and a lot of respect. I sure wouldn't be fired for lack of production if my wife was dying of brain cancer, like the article floating around earlier today.

A lot of people have thought that over the years. I’ve seen several be severely disappointed. All of the ones I personally knew, unfortunately, died well before their time due to the stress. :(

Sorry to hear that. Out of curiosity, could you clarify what 'thought that' was, or what contributed to stress? Job hopping or staying?

They had full insurance through their employer, thought the employer would have their back if something happened, then.....

For person 1, their wife got cancer. The wife was covered through their insurance plan, and the HR department saw that it was likely to be very, very expensive to cover them, so they started a program of systematic harassment against person 1 until they resigned. The wife died of cancer shortly afterwards, but not until racking several hundred thousand dollars worth of medical bills. Her death was partially due to lack of coverage and stress resulting in difficulty in effective treatment. Person 1 got a heart attack and died within 2 years of resigning, and roughly a year after his wife died. The employer was a small municipal government in California.

For person 2, the employer was attempting to makeup a cash shortfall, and was pressuring a number of employees to accept early retirement (at greatly reduced payout for their plan) or quit, especially older employees. Management in a number of divisions started to go around and pressure employees over 55 (quite obviously) to take the buyout, and for those who wouldn't, they started to apply tougher and tougher (and obviously unfair) work standards to them so they could fire them or push them out, which they did to several people who I did not know successfully. Several friends ended up taking the offer and quitting because they saw the writing on the wall, one of them, who stayed on roughly 6 months past the others quitting, had a stroke on the job due to stress and died. He stayed because he felt he didn't have much choice as he was the bread earner in the family, and they had not hit the point he would get a meaningful payout on his retirement, but was too old to go somewhere else (he was in his late 50's).

The second one, my mother was one of the ones who took the early payout, and I'm glad she did. She was having heart arrhythmias due to the stress. Magically they cleared up within a month of leaving, and she hasn't had a problem since. She lost somewhere on the order of 50k from her retirement benefits because of it, however.

That said, one of my grandfathers worked for a union and a major shipyard in the 50-70's, and his pension and retirement medical coverage had his back faithfully and with good coverage until he died - at 96.

So it isn't all bad. It is a lot of faith to place in an organization however.

It's not about job-hopping at all - I could easily imagine staying with a company a long time if I was happy there.

Implicit in the "care for you later" agreement is "by underpaying you now."

Whatever a company is setting aside for you later - or just promising you will be there later - could instead just be paid to you now. You might think of it as "AND," but it's really always inherently "OR."

Another difference is that there are many strings placed on the future implied promises and care, such as you staying with that organization for a long time.

So you can get paid in promises, or you can get paid in money. I want to get paid in money, and if I need security I can invest, buy all types of insurance, etc. No reason my employer needs to do that for me, any more than I need them to buy my groceries.

You don't want long-term employee care because you probably have skills that are in high demand right now. But that can change. You will want long-term employee care when your company fires you during an economic downturn to save costs and it's hard to find a new job.

Implicit in the "care for you later" agreement is "by underpaying you now."

And if a company is promising to continue paying everybody for a long time after they stop working for the company, the company can only do that by underpaying everyone by a lot all the rest of the time. Why complicate things that way. Instead of underpaying everyone and having the company decide everything, how about just pay us a lot more NOW and we can handle the rest for ourselves. Saving, investing, insurance, and govt programs (where available) can all help out with this.

I don't think so. Yes "we are all Japan now" rings some truth. But the salary-man dynamics you speak of think are a) somewhat culturally specific b) I expect to not hold there either.

The long term trend is away from ownership to rent (or public goods). Car -> ridsehare (or public transit). Freestanding house -> apartment. Full time -> part time. Firm warehouses -> market clearinghouse (Amazon). Yes, it's a meme that's beaten to death, but it's true. Exclusivity in ownership is simply too inefficient and will be arbitraged away.

I appreciate the explanation of that phrase - thank you!

Crypto does poorly in market volatility and uncertainty.

Exactly, crypto has been a speculative, risk-on asset for the past few years, despite what crypto fans say. The correlation between SPX and BTC is uncanny.

I've never seen Terms & Conditions on a blog before

"Please read through the disclaimer before entering the site"

I'm 97% sure it's due to SEC regulation for financial advisors when disclosing information that could be invested on.

How’d you land at 97? Probably best to use 99, 100, or some variation of “I’m fairly certain”, no?

I am only 96% kidding ;)

Well, I'm 100% sure that some of that is there for SEC reasons, but I'm not 100% sure the primary motivator for putting it up is the SEC, JPM being JPM and all, who knows... so, as throwing caution to the wind, I put 97%, as I also feel 100% sure I don't really trust JPM. :)

I decided to say no cuz I didn't want to agree to it and it punted me out to their home page. :/ EULAs are awful.

A lot of this content is only approved for certain geographical jurisdictions due to the amount of protections most governments put on their local banking/financial services sector.

Firefox reader mode solves this.

Anything that doesn't improve upon reader mode is superfluous design.

Looking at the very first chart, containerships anchored in Los Angeles and Long Beach started increasing dramatically in late 2020, peaked in January 2021, then started falling back down almost reaching pre-pandemic levels by around June 2021. Then, in July 2021, they started rising quickly again, that rise has continued unabated, and as of now, the level is at the highest it has ever been, and almost TWICE the previous peak in January 2021. What specifically caused this sudden spike over the last 3 months?

>What specifically caused this sudden spike over the last 3 months?

Looks like it's because ships are leaving empty for China so the unloading has slowed since the available warehouse space is taken up by outbound shipments (which are not being loaded because of that mismatch in shipping rates):

   However, westbound freight rates have not risen nearly as much, leading to an odd and problematic phenomenon: incentives for container owners to move them back to China empty to accelerate receipt of eastbound freight rates, instead of waiting for containers to be refilled to earn westbound freight rates as well. This is illustrated in the fourth chart which shows departing containers from LA/LB: a lot of them started leaving empty once eastbound freight rates surged. This further exacerbates supply chain issues, since US goods (i.e., grains) that were supposed to depart US railcars and warehouses for export remain in place, occupying space that US imported goods were destined for.

Man...I don't know how good the argument is because it's not a field I'm familiar with. But the charts and arguments are so well done. Each chart is simple yet very illustrative.

Moments like this where I'm reminded that BI is really more about telling a good story. Kudos!

“Not sure if the argument is good but the charts look cool” - welcome to consulting.

There’s limited economic incentive to build new 200-mm chip plants given wafer-thin margins

Oh I see what they did there

Super I annoyed I missed that. Good on you!

>2 According to a paper released by the Philadelphia Federal Reserve, 70% of the massive rise in fintech loans is simply due to regulatory arbitrage rather than fintech lenders having superior technology or lower costs. Also: shadow banks now control the riskiest segment of the market (FHA). You get what you pay for. See “Fintech, Regulatory Arbitrage and the Rise of Shadow Banks”, Buchak et al, NBER, 2017.

Under the radar comment.

One of the long term trends of Capitalism post industrialization is that the assets bubbles get stupider and stupider. How I long for the days when the asset bubbles were laying railroads or other such things.

For tulips thou art, and unto tulips shalt thou return

https://www.fdic.gov/analysis/cfr/bank-research-conference/a...

There is the beer distribution game from MIT which illustrates the bullwhip effect in supply chains. If you try it, you’ll see that it’s a sobering experience.

https://www.kearney.com/web/beer-distribution-game/the-bullw...

Where is the game?

Here is one: https://beergame.masystem.se

Anyone else feel there is a disconnect between what he is saying and his graphs?

Sort of "I have opinions, here are pictures, trust me".

consulting :)

Side note but I absolutely love the reference to Dude, Where's My Car [1] in the title.

It wouldn't have been as entertaining or remotely shocking to me if this were a tech startup's blog, but there's something awesome about a prestigious finance company like JP Morgan referencing an iconic, trashy, Ashton Kutcher stoner comedy film.

From a marketing standpoint, when you establish yourself over decades as a very serious company, I guess it makes it all the better when you loosen that image up.

[1] https://en.wikipedia.org/wiki/Dude,_Where%27s_My_Car%3F

You must not read many research reports.... research analysts have a pretty well developed sense of humor

Usually it’s just a bunch of hitchhikers guide to the galaxy quotes

https://archive.is/nFUL3#3%

I’m presuming this is the same link that was submitted, in typical HN fashion? For some reason the captcha won’t load for me. But I’m curious - why submit the mirror if the source isn’t behind a paywall and isn’t likely to succumb to an HN-induced overload?

No paywall, but there's a page-blocking T&C modal that cannot be dismissed unless you "Accept" the terms. The archive link doesn't force you to accept.

Link rot.

Anyone who thinks 2022 is going to have a downturn is mistaken, IMHO.

Foreclosure moratorium + low interest rates + rising home values (aka, equity) gave most folks whom would be in the rears a chance to refinance. Only true deadbeats whom didn't work are going to go nuts up, and since the labor market is tight, there are few of those. Aka, housing will not resolve.

Many businesses have already started raising wages. When the unemployment boosters stop, people are still going to want a living wage, and there will remain competition to do so. The labor shortage will not resolve.

All the science on Delta variant clearly spells out a longer 'covid life' outcome, anyone whom says we need more data is being ignorant. COVID will not resolve.

We're not the only country dumping money into the streets, and with China doing well, they love buying American stocks. Along with the rest of the world. That's a ton of money entering the market. There will not be a correction.

Unfortunately, Bitcoin will also rise. There's no incentive for the whales to bail out now, especially as miners are finding energy at true wholesale cost or cheaper. It does make it more resilient. As much as I hate Bitcoin, it too is going to be benefit.

I'm not saying there will never be a correction, but it's not going to be in early 22, and I still doubt late 22 as well. You heard it here first.

on the contrary, the world is facing a global economic collapse the likes of which it has never seen before.

possibly true, but not in 22.

So... this year? :-)

If you agree the building is going to explode, you don’t start talking confidently about how you probably have another hour but instead leave the building.

> All the science on Delta variant clearly spells out a longer 'covid life' outcome, anyone whom says we need more data is being ignorant. COVID will not resolve.

It will become a seasonal endemic virus, just like the flu. That's the trajectory we are on.

> We're not the only country dumping money into the streets, and with China doing well, they love buying American stocks.

Yeah, I don't think you have any clue what's really going on in China, but they are heading into their first big financial crisis ATM. Their property sector is already dead.

Somewhat related, how does Brightcove hide the media files? I do not see any mp4 or other video files in the network tab. Is this like the good ol' times with flash player?

It looks like they use media blobulation similar to how Twitter does it.

It's split into ~9 second excerpts. Each are loaded by ajax on demand. They're served with content type video/MP2T. JS loads the content of the response into a Blob. `URL.createObjectURL` converts each piece into a "blob:"-scheme URL that can be interpreted by the <video> element on the page.

This is awesome - thanks for this explanation! Always wondered how "media" could slip into the browser without being tracked in the Media tab of the Chrome Developer Tools. This explains it!

Thank you so much for your explanation! I've always wondered how they did that.

Do you know any way to get a copy of the full video? I like to play video at 1.5x speed, but some player don't have this feature so I need to obtain the URI (to play the network file with local player ove) or the file itself (e.g with youtube-dl).

Try reloading the page after opening the network tab.

How times have changed. I would never have imagined JP Morgan approving a formal public title such as this. But here it is.

No objections to it, but it's certainly a change in standards. (and no objection to a change of standards when they fit the situation)

Analyst research notes have often conveyed humour. This has been a trend for years[1].

https://www.bloomberg.com/professional/blog/boring-wall-stre...

> Ford is actually offering customers faster delivery if they agree to “lower feature content”, which translates into fewer semiconductors.

Sounds like a good deal. You get a car instead of a "platform".

I was surprised (impressed?) auto manufacturers could just "leave out" chips and features and still have a working/functional vehicle. I always assumed it would be too complicated given how complicated some of these systems are.

I'm not used to seeing a terms and conditions click-through on a blog post, but that's a pretty amazing discussion of large scale global supply chain issues at play today.

It’s an SEC requirement and so it’s not construed as investment advice given by a licensed broker.

In a related note, see the chart "Input prices are pushing up inflation":

* https://www.oecd.org/economic-outlook#GDP-growth-projections...

Using Feb 2020 as a baseline of ~100, Shipping is now 482.

if you don't want me to read your blog, keep the terms and conditions page. I am clearly not your audience.

Same - I bounced right out. I'm not reading all of that.

I'm curious what zapping the modal with uBlock Origin means, from the perspective of a JP Morgan lawyer

Some organizations’ legal teams would consider that unauthorized access and try to charge you with hacking.

there was a modal? i guess having javascript disabled exempts me from the terms

Get BehindTheOverlay Revival if you are on desktop.

left click, block element ... or not

For anyone working on supply chains, what risks are you worried about that others seem to be ignoring?

Some of the numbers in this article are complete B/S, like the unemployment rates y/y% (as if there is no covid crisis) or the wages (which seem cooked, and anyway, are only in one sector).

> First, the world is going to need more containers..

Isnt the issue with ports and their infra rather than containers or ships count?

> So far, most analyses show very little job growth differentials between US states that terminated subsidies vs those that didn’t1. That said, some forecasts call for 1.3 million new jobs by year-end due to expiring unemployment benefits and another 300,000 new jobs due to school reopening

"The evidence so far contradicts these forecasts, nevertheless..."

My favorite thing about this is that the URL is "dude-where-is-my-stuff"; can't use apostrophes in banking anywhere.

It would probably be escaped in the URL, and most content management systems since at least the early oughts either omits or substitutes words with punctuation (and may give content managing humans control over that) for SEO purposes.

Advocating for an increase in foreclosures (increase the homeless population) and an increase in “acquired immunity” (read: let COVID run rampant and employ whoever survives) is incredibly ghoulish.

It’s made even more shameful by its casual tone and tongue in cheek decades-old pop culture title. This article openly and unequivocally advocates for human misery and death in order to avoid upward pressure on wages.

He's an analyst trying to reason about the near term future of the global economy, backing up his arguments with data. That's his job. Your ascribing malice and ill will to observations of someone who's not making decisions is a little bit silly.

If my job were to be to subtract all traces of humanity from language about things that directly affect countless people, I’d consider that to be ghoulish even though I was receiving a paycheck.

The idea that my pointing out that something somebody said was distasteful is “a little bit silly” on the grounds that the author was paid to write those words seems… ghoulish?

You might want to avoid medical textbooks.

I’ve never read a JP Morgan medical text book, but that’s a salient point.

How is not foreclosing on seriously delinquent US homeowners and letting people go about their lives and jobs (aka COVID run rampant) in the US any worse than not building housing for homeless people in Mexico and India and not making it a priority to vaccinate the entire global population on our own dime?

Why is it so evil to not give thousands of dollars to US people - but it's fine to do to non US people?

What?

Edit: I will clarify that I’ve obviously not brought up other countries covid responses. I’m literally asking why this completely new equivocation could possibly deserve my response. It’s a confusing question to me, so I’ll clarify:

I do not care for this thought experiment. I did not solicit it nor will I help you out with your unrelated rhetoric.

Sounds like you're just addicted to excessive political correctness and are shocked when it's absent from a report that has no place for it. The author's job is not to express moral stances that you agree with, but to provide accurate fact based estimates without ceremony, which they do well here.

This is a fascinating opinion that I’ve seen various forms of.

I suppose it is objectively a fact that the author believes that increasing the supply of homeless people and allowing for the spread of a pandemic will help increase financial returns for some stakeholders. Stating the ” fact“ that one believes that human life and dignity should rightly be traded for cash does not make it an objective statement that’s somehow elevated above having an obvious moral stance.

Does the author have a crystal ball that shows various timelines, and he’s objectively reporting exactly what is shown? Or is this a human person with an opinion on the future from a specific viewpoint that’s necessarily influenced by his worldview?

> Stating the "fact" that one believes that human life and dignity should rightly be traded for cash does not make it an objective statement that’s somehow elevated above having an obvious moral stance.

The author is not advocating for what should be done. He's describing what he expects to happen, based on what X policy changes will affect Y result.

You’re of the opinion that the author does have a crystal ball and is objectively relating what can be known about the future(s)? And he’s doing so in such a careful manner that he’s painstakingly taken immense care to ensure that his musings are not interpreted as prescriptive?

That’s not my interpretation

No, I don't think he is clairvoyant. He is making a forecast, a prediction about what might likely happen in the near future.

So the phrase “will require” is descriptive and not prescriptive?

That’s news to me because I was of the opinion that the future, having not happened yet and has such has never been observed, cannot be objectively described.

This whole premise of “It’s not his opinion, his brain is just so big that the awful things he outwardly advocates for should be considered facts about the future, which he’s capable of observing and commenting on due to his aforementioned big brain.” is nakedly designed to carry water for people that have semi-psychopathic opinions.

For example, the opinion that there won’t be enough boats on the ocean unless the homeless population increases definitely sounds like some sort of superstitious hokum, but because it’s on a bank website it’s to be treated as if it’s as logically consequent as the laws of thermodynamics.

This is beyond silly. It’s slapstick.

> So the phrase "will require" is descriptive and not prescriptive?

In this instance yes, I think so.

So the accusation that the author is advocating for the things he describes (and thus morally bankrupt) comes down to the words "will require" in the lede? "X will require Y" is another way of saying "X won't happen until Y" and doesn't indicate favor for the cause or the effect in question.

And I'm not saying it isn't his opinion. Obviously these are his opinions. There is a difference between having an opinion on what you think will happen and having an opinion on what should or ought to (rightly, justly) happen. In the body where he elaborates on his predictions in the lede he actually uses the words "will probably require", indicating he is not certain what will happen but describing what he thinks is most likely. So there is no confusion here that he is sharing opinions on future events, and not describing what will certainly happen like some sort of psychic.

This is a fascinating word game!

He doesn’t actually think that in order to increase returns it’s a good idea to increase foreclosures and allow further spread of a pandemic. He doesn’t actually want or openly advocate for these measures. He’s just a big brained genius that’s doling out little gems of the future to us plebs out of the kindness of his heart, free of charge.

In order to maximize the philanthropic value of this stoic and unbiased gift to the reader (which I’m assuming is for a regular Joe who would never consider taking any of this as advice?), he’s chosen the notably objective and not-profit-driven community information sharing website, jpmorgan dot com

Bankers generally put out analyses like this to convince would-be clients that their firm can make them money by making smart predictions about the future.

I don’t know why HN is acting so strange regarding replies today but here we go:

> Again, and one last time, he is not advocating for what society should do. He is predicting what it will do,

To mirror your language: Again, and for one last time: The intended audience is, by your own admission, possible banking clients. “Institutional investors“ is a category of organizations that have the ability to ramp up foreclosures and/or reduce COVID measures in their businesses.

Perhaps there is some difficulty distinguishing between some random nobody tweeting “lol I think foreclosures are good” and a banking professional “suggesting” that “maybe if the homeless population increases along with fewer Covid concerns, my clients as a professional would make more money. Wink wink!” on an enormous and well-respected platform.

I’m always curious about people that go out of their way to defend big, awful organizations and their terrible agendas. When I was younger, I intuitively guessed that the folks defending the banks were the lavish, decadent rich people. Oddly enough I’ve found that that’s not normally the case, the biggest cheerleaders for this sort of godawful naked “fuck the poor” rhetoric are the aspirational “temporarily embarrassed millionaires.”

Good tidings!

> I don’t know why HN is acting so strange regarding replies today

It's a speedbump. You have to wait a few minutes before replying to a reply. It encourages reflecting on what the other person is saying instead of launching into what you already wanted to say.

> The intended audience is, by your own admission, possible banking clients. “Institutional investors“ is a category of organizations that have the ability to ramp up foreclosures and/or reduce COVID measures in their businesses.

I don't admit that. We disagree on who the intended audience is. It's not decision-makers looking for a policy recommendation. It's investors who want to know what will happen to their investments.

> I’m always curious about people that go out of their way to defend big, awful organizations and their terrible agendas. > cheerleaders for this sort of godawful naked “fuck the poor” rhetoric are the aspirational “temporarily embarrassed millionaires.”

Surprise surprise, people on HN will give you push-back when you say something outrageous. Maybe you'd find better luck somewhere like r/wallstreetbets where you'll get many upboats for saying something along the lines of "Bankers, evil bastards, amirite?"

> It's not decision-makers looking for a policy recommendation. It's investors who want to know what will happen to their investments.

Ohhh. Your position is that the intended audience is your everyday Joe looking out for their retirement.

Who amongst us hasn’t taken some of our paychecks, put it into a Roth IRA and then immediately rushed to read the words of… uh, Michael Cembalest, Chairman of Market and Investment Strategy at JP Morgan Asset Management?

Your position is fascinating because now the goalposts have moved from “he’s not advocating for homelessness and an unchecked spread of a pandemic” to “actually it doesn’t matter whether or not he’s advocating for homelessness and an unchecked spread of a pandemic because his intended readers are incapable of facilitating what he’s advocating for.

Under this assumption that nothing he writes could possibly be seen as bad. He could in theory instead of advocating for people being forcibly removed from their homes and thrown into abject poverty, advocate for just straight up shooting poor people in their faces. I mean surely the intended audience doesn’t have a gun!

He could advocate for incest to keep family money in the family. That’s not abhorrent, it’s how the Hapsburgs did things, so it’s an objectively normal thing to say!

From your position, there’s literally nothing that he could have said that you’d dislike. The level of fealty that temporarily embarrassed millionaires give to the people that don’t know that they exist is frankly phenomenal. JP Morgan isn’t going to pay you to defend them from an inconsequential internet stranger, but you post like you think they will.

Edit: The part of this that’s so incredibly comical, bordering on farcical is the motion that the “intended audience” of ‘Michael Cembalest, Chairman of Market and Investment Strategy at JP Morgan Asset Management‘ does not include any any people that could be in a position to set policies regarding foreclosures.

In order to believe that you have to simply believe that nobody in the banking industry talks to one another or reads anything related to their industry.

It’s like a panicked lie from a toddler or a dog caught eating trash: The only option is to invent a new reality, whole cloth, on the spot and update it as needed.

Still running with the strawman that he's actually advocating anything, I see.

For whatever reason I’m unable to respond to the response to this, so I’ll put this here:

> Bankers generally put out analyses like this to convince would-be clients that their firm can make them money by making smart predictions about the future.

This is starting to sound like something from a fever dream. I pointed out that this man is advocating for increased homelessness and preventable death on the premise that increased homelessness and death will create more profits for existing and would-be customers of JP Morgan.

So far, the responses have been: 1. No he isn’t advocating for death and homelessness at all 2. He just thinks it’d be profitable and is sharing his objective opinion in such a way that should not be construed as advice for existing or possible investment banking clients.

And now… 3. He’s not advocating for increased homelessness and death, but if he were to come off that way it’s because -while he’s NOT giving advice- he’s written a form of advertisement that looks like advice to institutional investors in order to attract clients that would take his advice, which is entirely different from what’s been written in the article.

It’s not an article advocating for homelessness! It’s an ad for a service that may or may not advocate for homelessness after you pay them! It’s entirely plausible that the author tells his clients to reduce foreclosures!

The facts that he’s stated his opinion, is in a position to be taken seriously and is published by one of the biggest corporations on the planet are all coincidental and any criticism of his position should not be taken seriously due to the fact that he could be… what? Lying?

Again, this is some slapstick nonsense. The sheer amount of words people come up with to avoid saying “I literally don’t care who lives or dies, or human dignity so long as my portfolio performs well “ is astonishing.

Treating these sort of prescriptions (which is what this is, full stop) as some sort of magically objective, academic collection of facts is a form of mental gymnastics to create some distance between yourself and what happens to people in the name of your 401k.

“It’s just an objective forecast!” is a binky to soothe a guilty conscience.

Again, and one last time, he is not advocating for what society should do. He is predicting what it will do, which is what an insight is. That is the service he provides to his customers: predicting the future. His customers want the best guess for what the future holds because knowing that is the best way to make money, or at least not lose it.

You keep conflating predicting what will happen (foreclosures, immunity via vaccination or infection) with advocating for what should be done (kick people out, get everyone sick) and then attacking a strawman.

The "whatever reason" is a built-in HN mechanism to limit daft subthresds like this one.

I have trouble understanding what you'd prefer. Should this analysis be more concerned with (non-financial) human impacts? More concerned with impacts on the most affected/least privileged? Should it have been written by someone else? Should it not have been written at all? Should there be no demand for it?

He's just following orders!

You think a JPMorgan analyst writing a report saying foreclosures are good for the economy doesn't have mal intent? This is like the purdue memo that says oxycodone isn't addictive.

On one hand, yes you are right. There is consolidation bonzanza waiting to happen in housing, which honestly I am not even mad about because homeownership is a disgraceful sham and national institutional investors might be less NIMBY.

On the other hand, keep in mind that kneecapping demand is orthodox macroeconomics since the 1970s for very stupid reasons. Finance people are pretty good at unlearning stupid ivory tower econ, cause stuff like "flows before pros" vs "the market efficiently allocates goods" is their day job, but sometimes it's hard to let old habits die out. (And the textbook stuff is a nice salve for feeling better about the impacts of the job, too.)

See https://www.employamerica.org/researchreports/inflation-expe... for a sketch of how normal macro is bullshit.

If I sound too conspiratorial, here is https://www.federalreserve.gov/econres/feds/files/2021062pap..., a paper from a well-credentialed macroeconomicist at the fed whose sick of the bullshit. There's been good empirical work for years, and now the theory damn is finally breaking.

Now, to sound much more conspiratorial after all, you can also read a prediction of the trend until from...1943. https://delong.typepad.com/kalecki43.pdf Rock-bottom interest rates, UBI vs jobs guarantee, a breakdown of the full employment consensus (as occurred in the 1970s), it's all there.

Home ownership used to be one of the few accessible investments that directly benefit less well off people. Rather than throw rent money in a black hole they build equity. How is that a sham?

Housing cannot by definition be a good investment, without becoming gradually more scarce and unaffordable in the future.

Keeping housing affordable means that it should grow with inflation, approximately.

A good investment should outpace inflation.

In the case when population remains constant, sure, but with a growing population, more housing is always required, thus the value should always increase, no?

Prices increase when you have a shortage. Prices decrease when you have a surplus. We can maintain prices by growing housing stock in line with population. (The same applies to everything else from semiconductors to cars to human labor.)

In California, people used zoning regulations to create a shortage and predictably house prices rose. Some people got richer. Other people got evicted.

Ideally, we'd create a slight housing surplus to reduce prices. As an added benefit, this would reduce rent-seeking opportunities and create a buffer of empty housing stock that would make moving and searching for a new place to live less of a hassle increasing people's mobility.

I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation)

Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing.

> Would also note that housing can be affordable nationally, and unaffordable in some markets given the local nature of housing.

True, but if we don't densify (the natural result of that thinking), we'll condemn ourselves to waste inefficiency low growth and environmental destruction.

> I interpreted the parent post to be more as “sound financial strategy to saving” rather than “good investment” (buying for levered appreciation).

This is still a bit fraught, especially as housing has historically reason too fast. Remember there are net 0 dollars (basically), and saving is a mostly monetary phenomenon. Arguably it's because terrible cost disease in healthcare, education, housing, etc. that people want to save so much in the first place!

I commented this previously, but simply owning-and-then-selling a house should not be a good investment. What you do with it is supposed to make it a good investment.

This idea that investing means squatting valuable assets needs to die.

Save on rent, farm, rent to others, make a shop... preventing others who would put the land to better use is doing more harm than good.

So if you turn your house into an apartment, you should come out ahead, but this only works if enough population growth (including immigration). Still a pretty bad investment.

There are increasing returns to density, but they don't show up quick enough to defeat NIMBYism on the margins. The margins, of course, are where NIMBYism thrives. No one likes moving!

The point is it never should have been that way.

In a hypothetical world where humans eat something durable like wood, making wood an investment would create a group of people who cannot afford food.

In the real world where shelter is durable, making it an investment creates a group of people who cannot afford shelter.

Homeownership-as-investment is a mechanism to increase one's wealth at the expense of the less fortunate. It is ethically bankrupt.

It is also a disgrace that even though technological progress makes more and more things people need affordable, we use political means like zoning regulations to artificially drive up home prices in order to turn them into a good investment and thus unaffordable for some.

I don’t read this as foreclosures are good for the economy. Rather that (among other things) the distortion created by intervention in housing market has a number of significant implications for other parts of the economy.

How could foreclosures not be good? If you buy too large a property in too nice of a location, making it too unaffordable for you, then you don’t deserve it. In fact not only do you not deserve it, you should be punished for not considering you could not afford it. You are stealing from others people’s livelihoods. To equate this to oxycodone shows ignorance to the fact that 75% of housing is owned by individual investors like you and I, or your mom and pop, while oxycodone is owned by a monopoly backed by big government.

I'm not commenting on the validity of the memo, only the conflict of interest that prevents the writer from admitting if foreclosures are bad for the economy.

It's bad on descriptive grounds. There is no "wage price" spiral going on. Labor is weak no it's not the 1970s. There is simply supply bottlenecks, or rather:

increased demand is auditing our practices and finding the weakpoints we already had.

This is a good thing. (Unless you are a lazy capitalist that just wants to maximize your effort/investment to profit ratio.) We should continue to hold up demand until the bottle necks are fixed. (This is not a "beatings will continue until moral improves" situation.) We should be thankful increased demand as clarified what investments are needed. No surprise, it's unsexy things like 200m fabs not whatever trendy shit gets the money in the asset bubble we've had the last decade.

If we do anything beyond prop up demand and enacting environmental regulation, it should be puncturing the stupid asset bubble like China is doing with real estate. Getting all that crypto money to seek returns elsewhere would be a good thing.

> global economy, backing up his arguments with data. That's his job. Your ascribing malice

Only thinking about the economy while ignoring its societal by-effects is malicious by definition, unfortunately there's no need to "ascribe" anything. Time and again people tend to forget this. Related to this I highly recommend Karl Polanyi's "The Great Transformation" [1] which sort of addressed this phenomenon back in the 1940s:

> On a broader theoretical level, the Great Transformation argues that markets can not solely be understood through economic theory. Rather, markets are embedded in social and political logics, which makes it necessary for economic analysts to take into account politics when trying to understand the economy.

[1] https://en.wikipedia.org/wiki/The_Great_Transformation_(book...

What is the definition of maliciousness that you are thinking of?

I would not ascribe malice to these people but cold heartedness and lack of empathy. One common pattern is that they usually advocate tough measures for others but not for their own class.

In 2008 all financial guys suddenly told us that they need bailouts when for decades they advocated for large scale layoffs, reduction of social systems, keeping wages low and other stuff because it was “creative destruction”. But when this destruction reached themselves they suddenly needed bailouts and of course we were told it would have been immoral to take away their million dollar bonuses.

A lot of these analysts are psychopaths who are capable of only looking out for themselves.

You don't see the houses that aren't built, or the lives that aren't lived. This guy isn't advocating for an increase in net human misery, he's advocating for dropping our crazy societal focus on the misery we can see (and imagining that wage increases would simply materialize from nowhere is the height of that) that ultimately makes us all worse off.

>You don't see the houses that aren't built, or the lives that aren't lived.

You see houses that don’t exist and lifetimes that aren’t lived? That’s amazing. I personally don’t think “misery” falls into the category of “crazy societal focus”.

It sounds like you’re trolling, but assuming not, the houses that doesn’t exist is a reference to underdeveloped housing, which has the effect of driving up rents or driving people to live in less desirable areas. Less desirable areas doesn’t mean what you might imagine (less fun), it means worse schools, worse jobs, and so on, and at least for that person. That all has societal effects including impoverishment and shorter healthy lifespans.

Please do look at ypur own argument and think it through in practical terms. One has to be a blind free market believer to think that higher foreclosures decrease suffering. Yes market forces may drive more houses to be built, but that means years on the street for some poor soul. In addition.rents have already risen massively pre-covid, so likely lack of housing is not the factor - lack of affordable housing is the issue.

To accuse another of trolling just because you are unable to think beyond the abstract is pretty childish.

Why would rents rise if there’s nobody to pay the higher rent? Rent has been increasing because there is a bidding war among potential renters. Lack of housing in general is what causes a lack of affordable housing.

Because when your rent rises you don't go homeless, you pony up.

Or you move to something that better fits your budget. At least, if there's sufficient supply you will.

Not if you are poor enough.

Moving costs money too. Suddenly, not only are you on the hood for the increased rent where you are, but now you gotta pay another months rent in addition to deposits (not everywhere charges last month's rent upfront). And it isn't just housing: You might have to pay a deposit for utilities (for example) especially if they weren't in your name previously. And then there are logistics of actually getting your stuff to the new place. You might have to leave some things behind. And over the next couple of months, you'll probably have things like connection fees for water and electricity. If you are really lucky, you'll get deposits back to help with this.

All this assumes you weren't already living in a crappy, low-rent apartment too. Sometimes, there isn't much to choose from. Enough affordable housing is only part of the issue.

There is a level at which you are too poor to move. You cant afford first and last months deposit. You cant afford a moving truck. You cant afford whatever required deposits may exist for heating, electricity, gas, etc. There are a lot of families that exist in this zone. Not too mention a lot of people are tied to a location due to the availability of free childcare via a relative.

Or your background level of life stress increases and you are 2% more likely to escape from it with vodka and then fall into a spiral of alcoholism.

Why don’t landlords just raise the rent to $10k/mo everywhere then? If everyone just pays it seems like a surefire win.

Some municipalities mandate growth rates on residential leases be capped (say, 12%).

If as a landlord you took the chance and overpriced your property, it might sit empty, and the kind of tenant who eventually takes it is the kind of tenant who will find a better deal once they have the time to look around.

And leases are contracts, so they have lag times before the rules change for any individual renter.

> Please do look at ypur own argument and think it through in practical terms. One has to be a blind free market believer to think that higher foreclosures decrease suffering. Yes market forces may drive more houses to be built, but that means years on the street for some poor soul.

This seems like the same kind of thinking as "Just printing money and handing it out will make everyone better off. How could it not? One has to be a blind economist to think that anyone would be worse off for getting extra money; yes market forces may drive the value of money down, but that would take years to have an effect."

Certain policies provide a cushioning effect and softening the blow. Decreasing suffering in this way prevents a lot of societal pressures down the line. It’s not just about printing money.

Policies like eviction / foreclosure moratoriums are not sustainable long term. Eventually people will need to come off those crutches and start paying their rents and mortgages again. Those things aren't free right now, it's just other people paying for them. Including our future selves via taxes and inflation. The longer this goes on, the more painful it will be for everyone. Long term there is no free lunch. We've been in this crisis long enough that emergency stopgap policies don't make sense any more.

Practically, it’s simply that this is a situation where higher foreclosures in the short team lead to fewer overall, as we get closer to enough affordable housing options for everyone (and providing public aid becomes cheaper for those who cannot afford anything.) It sounds like we have the same heart for renters and homeowners. Both of your insults are misplaced.

> You see houses that don’t exist

Of course. I had money to build a house for renting at the end of 2019 and started looking into it in Jan 2020. This house would have increased house supply, provide a home for people that can afford to rent but not to build/buy/... their own house, etc.

I decided to put that money in stonks in march 2020 instead because I evaluated the risks of both options, and the risk of stonks was lower than the risk of renters not paying rent.

So I saw that house literally not being built.

Putting that money in stonks in march 2020 was probably one of the best financial decisions I've ever made.

Where did he advocate for an increase in foreclosures or acquired immunity? I didn't read either of these things in the transcript, and rereading doesn't seem to hint at it, either (to me).

I’d suggest searching the terms “foreclosure” and “acquired immunity” in the text. If you find it to be up for interpretation, I’d love to see your take.

>Even so, given the high degree of Delta variant contagiousness, a combination of vaccination and acquired immunity should drive down pandemic measures substantially by November.

I didnt find this distasteful.

I see lots of text describing trends and making predictions, but not any text about whether those trends are good or bad (at least in the moral sense)

OK. I read the entire article, so I was able to see those terms used in context, which I think is key to understanding what the author is trying to say.

The discussion around acquired immunity also includes vaccinations, as in "...will require increased global vaccination and acquired immunity" in the very first sentence, and "...a combination of vaccination and acquired immunity" later in the section discussing COVID. Vaccination was mentioned first both times. I am not sure what you're seeing here, but I am reading an acknowledgement that some people will not get vaccinated, not advocacy for non-vaccination or anything like that.

The discussion around mortgage foreclosures is a little less clear cut, to me, because it's commentary on data that may not show the whole story, and it assumes a familiarity with the subject that I don't have. I still didn't read anything close to "we must foreclose on mortgages and increase the homeless population," which I think is basically your take. Instead, I read an analyst commenting on data that appears to show the labor pool being impacted by ongoing COVID-relief policies, noting that COVID concerns may be trending down (again based on data), and then suggesting that we may need to walk back the relief policies to help address the labor shortage.

Literally the first sentence (extraordinary housing supports is code for increased foreclosures):

"The global supply chain mess will require increased global vaccination and acquired immunity, semiconductor capacity expansion and the end of extraordinary housing/labor supports to resolve."

Imagine thinking that people don't take jobs because their foreclosure has been pushed out into the future. Would people without a home will be more or less likely to be hired?

> Advocating for [...] an increase in “acquired immunity” (read: let COVID run rampant and employ whoever survives) is incredibly ghoulish.

He doesn't advocate for that anywhere. He only mentions that it is playing a part, in adition to vaccinations, in building up global immunity. This is a simple truth. He does not glorify it or advocate for it.

I interpreted the words “less… concern about COVID” as being serious. It’s entirely possible that those words were incorporated as some sort of joke or gesture though, I suppose

Here's the full quote.:

> less community spread and concern about COVID

My more charitable interpretation was that less community spread would result in less concern.

Are you making an issue of not being happy with the tone, into one of implied motives.

I read those sections, I've reproduced them below as well, and I can't find any advocacy there. Matter of fact, the use of emotional terms tends to be meagre in such articles - however they use the term Horrific to describe the mortality rate of COVID in America.

-----------

The federal foreclosure moratorium officially ended on July 31. However, we don’t anticipate a sharp rise in new foreclosure filings due to a CFPB rule issued in June that established procedural safeguards that have to be met before foreclosures can begin (hurdles are hard to meet and include provisions that a property has to be abandoned, or that the servicer hasn’t heard from the borrower for an extended period). The new rule expires in December 2021, after which normal foreclosure patterns might resume. Foreclosures fell close to zero in the US once the moratorium was put in place. The second chart shows the gap between the MBA definition of delinquency which defines deferred payments as delinquent, and the Fed definition which does not. See appendix for a discussion of homeowner vs renter treatment.

As for COVID, concerns may dissipate in the next few months. As we explained on our August webcast, this fall was going to be a very bad one in the US. Even so, given the high degree of Delta variant contagiousness, a combination of vaccination and acquired immunity should drive down pandemic measures substantially by November. The latest infection and hospitalization data from Hotspot states, horrific as they are (i.e., the world’s highest reported mortality rate) are beginning to roll over; mortality should follow. For anyone that disbelieves COVID mortality data, see the sixth chart below: there has been another surge in mortality from all causes in the US relative to seasonal trends. If you can think of another reason for this other than COVID, please let me know. The biggest risk to this outlook is fading immunity of vaccinated people; we will know over the next couple of months how this plays out in the US. Booster shots in Israel appear to drive antibody levels up substantially, and also result in Pfizer efficacy vs severe infection that rises above 90% again.

Comments like this remind me that people map their own mental model of the world onto text-based communication when interpreting other peoples meaning or intent.

I didn’t read it at all like this.

This is interpretation is very much a stretch. He is simply stating a fact. To get the supply chain fixed you need to reduce the spread of covid, only way to do that is with... " increased global vaccination and acquired immunity". If you are dead, you don't really fall under the "acquired immunity" umbrella he is calling for, you are just dead. More dead people would lead to a reduction in labor and put more strain on the supply chain which is the opposite of what the author wants. The world has to continue to run and it needs to run on hard data, not on messages drafted to support feeling's. Covid was and is rough on everyone but people running businesses need to be able to make predictions and those predictions must be based on unvarnished facts.

There was probably a way to bring this point up without alienating everyone. It is ghoulish if your framing is accurate, but now everyone's focused on you rather than the point.

Foreclosures are a necessary evil. Without the ability to foreclose how do you prevent people from taking loans in bad faith? The only way would be to not give loans in the first place.

The alternative is to maintain the foreclosure moratorium and lockdowns indefinitely, correct? This will eventually have the long-term result of causing more human misery.

Whether we are actually reaching that tipping point as the author claims is a great question that deserves honest debate. But tarring one option as ghoulish in order to shut down debate makes it harder to have this discussion.

Objecting to the lesser of two evils because it is still evil doesn't result in better outcomes.

Could someone knowledgeable please explain how it is that we're having _worse_ infection rates than last year given that, by CDC estimates, 160M+ people already had covid [1] (and is therefore at least partially immune), and hundreds of millions of people had the vaccine? Nothing seems to make sense anymore, and nobody, as far as I can tell, is willing to offer a coherent explanation.

[1] https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/burd... - note that the case numbers people typically refer to aren't the right numbers to be referring to - they do not take unreported cases into account. The CDC estimates there are 4.2x as many cases as the "confirmed" ones that everyone is hyperventilating about.

The infection rates may be worse than last year because last year, 2020, large swaths of the country were in lock down, and so your chances of actually getting infected may have been lower since you were probably (a) staying at home, and (b) mostly interacting with a small circle of people.

Now many areas of the US have lifted restrictions, but many people are not protecting themselves: they are refusing to get vaccines, and they are refusing to wear masks. And then they gather willy-nilly.

>95% of the people in ICUs are folks that are not vaccinated.

Plus we have a new variant of COVID—Delta—that is both more contagious, and may hit you harder.

> large swaths of the country were in lock down

Not in September. There were massive riots and political rallies, remember?

> they are refusing to get vaccines

A lot of them are already immune due to having had covid. About half, assuming random sampling. And last year _nobody_ had any vaccines.

> people are not protecting themselves

Protections that are currently deployed are mostly "covid theater" anyway. Nobody even checks your body temperature when you go into a grocery store or board a plane.

> Plus we have a new variant of COVID—Delta—that is both more contagious, and may hit you harder.

The first part of that is true, but the second is not - Delta seems to be more contagious but less deadly. This is a fairly common progression in viral evolution.

> Not in September. There were massive riots and political rallies, remember?

Yes, in September. There were riots and protests in some places, but most of the country was very much in lockdown conditions with significantly more restrictions in place than there are today.

Also, increased/improved testing may be a factor.

PCR cycle threshold was reduced in January, so if anything we should be getting a lot fewer false positives now (and a lot more false negatives), even though testing throughput is 1.5x of what it was in Sep 2020. But again, half the people had the disease, and well over a half had the vaccine. We should not be seeing what we're seeing. Remember - 4 times as many people aren't even on the radar, they have mild cases and never go to the hospital.

We should be asking questions as to whether multi-trillion dollar bullshit we've been doing to "stop covid" (which can't be stopped) is effective or not, yet there's a very notable lack of journalistic inquisitiveness in that regard. It's becoming a religion, basically, where if you challenge the dogma you're branded an apostate and excommunicated instead of anyone trying to persuade you with facts.

FWIW, not a single soul is even asking the obvious question: what scientific justification is there to require vaccination for people with _confirmed_ previous covid infection? Science says they already enjoy immunity superior to any vaccine available on the market. And yet they are considered "unvaccinated", and could lose their livelihood if they live in blue states or work for (or even _with_) the federal government. Especially the medical frontline workers that just last year were "heroes" and had covid in droves: a lot of them have lost their jobs yesterday in NY.

If this was about science, it'd focus on vulnerable populations. During the entire duration of this pandemic, only a little over 400 children have died with covid, and less than 1400 people in the 15-24 age range. Yet where is the public discourse focused now? On vaccinating the children and the young adults. Why? I have a thousand such "why"s and the whole situation, to me at least, stinks of corruption, ineptitude, and science denialism, because nobody has a coherent answer, even the people who should know better. And the less educated folks, while they might not understand the subtleties of this debate, can smell the bullshit too.

> There were massive riots and political rallies

I remember a lot of rallies, but not any (well many) riots. But those were outdoors and masked. Well, most of them.

> A lot of them are already immune due to having had covid.

If that were true, then we wouldn't be having a spike right now. Clearly, they have some immunity.

> Protections that are currently deployed are mostly "covid theater" anyway. Nobody even checks your body temperature when you go into a grocery store

Fever is an imperfect test. But you don't recall when they checked your temperature for grocery stores?

But masks and vaccines are effective, not theater.

Vaccines are effective at reducing severity of the disease, sure, cold, hard data supports that. Masks though? In confined spaces like airplanes and especially if you did not even screen for basic symptoms like fever beforehand? LOL. Fact is, there is absolutely nothing standing in the way of a symptomatic COVID carrier getting onto a plane and infecting everyone inside. From which we can conclude that the masks are 2020 version of TSA: security theater aimed at pacifying the public and little else.

> In confined spaces like airplanes

Airplanes have excellent filtration systems. You're probably fine on a plane.

It of course depends on the mask. Wear a well fitted N95 and you should be fine in almost any situation.

Airplanes are also stuffed like sardine cans with people, some of whom may be contagious. Not even N95 would save you after 5 hours in that environment. Nor are they sanitized after the previous group of passengers disembarks. Just give it up already, you know I'm right.

Vaccination reduced the overall attack rate to 4.6% (95% CrI: 4.3% – 5.0%) from 9.0% (95% CrI: 8.4% – 9.4%) without vaccination, over 300 days

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7709178/

The vaccine reduces you risk of getting covid by half. Cases will go up if people believe they are fully protected.

Everyone's risk of getting covid is 100%. It's an endemic disease that's never going away. _At best_ the vaccine would only postpone the inevitable. Also, vaccine does not prevent you from getting COVID. It just significantly (about 10x) reduces your chances of dying from it. That is enough of a benefit for most clear thinking people to justify getting it. Yet the government tries to piss in everyone's face and tell them it's raining, with its "mandates", and it's encountering the rather predictable pushback because facts on the ground do not at all align with what the talking heads on TV are saying.

Could be:

* increased testing

* reduced social distancing

* more virulent strains

I'm glad they linked the bank research report instead of a comedic and sensational Zerohedge article. Please continue doing this, and less of that.

If you're interested in the industry and solving today's supply chain peak with technology, please don't hesitate to contact us at BlueCargo! contact@bluecargo.io

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