'Big Short' investor says white-collar jobs bubble is 'bursting'
seekingalpha.com
seekingalpha.com
WFH will reduce middle management and "prestige" employees as more efficient workflows evolve from the old "filing cabinets and typewriters" methods that some companies are still using to this day.
Automation is coming, and it is definitely coming for the white collar workers who act as human CRUD apps.
The ability to collate, search, and analyze data used to require labor power, it does not anymore.
I watch my partner's experience in accounting and the difference are stark.
There are many many bs steps in accounting with paper that disappear when digital tools are used.
Having physical pieces of paper as a fungible business tool is still something used by a lot of firms but they are simply behind the times, there are relatively simple software solutions for most paperwork needs and this reduces labor power required.
"We've always done it this way" is an excuse for firms that will fall behind other digitally empowered firms.
What does this mean for investors? Don't invest in companies that insist on using filing cabinets.
It's the most ridiculous thing I've ever seen, so it must either be a legal requirement or maybe the organization had a really bad experience with expense fraud and is now paranoid.
“You pay me enough that I can afford not to deal with Concur or our expensing process.”
Psycologically for some it is a massive change - having had numerous colleagues in the past who had core values like "if you are not physically sat at your desk you are not working".
On every metric, excluding commuter congestion and possibly office rental rates - no change.
It also removes geographic limiters that drive up the cost of certain pools of labour.
Imagine an economy where there were no ATMs. Any time you wanted cash, you would have to walk to the bank and wait in line to talk to a bank teller and cash a check. And every week you'd be paid by a check. Paper records were collected for everything and an army of employees had to reconcile the records. No spreadsheet software was available.
In fact, the number of bank tellers (not even bank employees) actually doubled since the advent of ATMS:
> The number of human bank tellers in the United States increased from approximately 300,000 in 1970 to approximately 600,000 in 2010. Counter-intuitively, a contributing factor may be the introduction of automated teller machines. ATMs let a branch operate with fewer tellers, making it cheaper for banks to open more branches. This likely resulted in more tellers being hired to handle non-automated tasks, but further automation and online banking may reverse this increase.
But somehow today more people work at banks than in the past, even accounting for population growth. Why would CRUD apps that make some stuff more efficient change this?
The larger a company gets, the more careerists it attracts. For careerists, “number of people managed” is a key performance indicator (and a boardroom/resume bragging right).
The human motivations of decision makers - to advance their own careers by being the manager that manages more people - is completely misaligned with these future efficiency hypotheses
As long as that remains true, we will continue to see bloat and companies hiring way more people than they need.
There are some other tides working in the favor of bloated salaries and payrolls. One is the focus of "stakeholder capitalism". Most of the large companies are held by ETFs. The large banks that run the ETFs are less concerned about individual efficiencies of any one company (they own them all anyway), but are more interested in other things (green initiatives, social causes, etc). So the decisions being made at these companies are less about profit and more about servicing "stakeholders", be it their employees, the community, the environment. That's all fine, but it's difficult to track and hold executives responsible. A bloated staff is fine because you don't want to lay off employees. Or various money losing departments are okay because they're servicing the community.
How do you go from Sr. Manager to Manager, you manage a large team, and create a need to have your org have multiple managers.
So yes, lots of perverse incentives to grow your org so-as to grow your career.
No org is perfect, but I keep seeing this take again and again and again, yet rarely any form of acknowledgment that it could be good for the company to incentivize proactively growing a team
Fednow should alleviate some of this.
Population growth doesn't account for regulatory changes and it takes a while to automate anything that interfaces with the law because of the inherent risk in getting it wrong. Banks are acutely exposed to this because they're often the ones who are ultimately responsible - they're the default insurance policy against counterparty risk.
Edit: Tellers also tend to be general purpose account managers at smaller banks, so if you called up the bank you'd eventually get forwarded to someone on the floor at your local branch instead of a call center.
Additionally, people are much more reliant on financial services and payment rails. Credit cards weren't as common (and required for almost everything) 20 years ago. People used cash for probably 10X as many transactions as they do now, so you probably had more 'cash economies'
I think it is hubris to say that anything a human can do cannot eventually be replaced by a machine. When we will actually reach that point is the real question.
If I could get quarters form an ATM, there would be no reason ever for me to.
What are people using tellers for?
They need to look you in the eyes to see if you are pure of heart and deserve a mortage.
Why am I stuck with WF? A longer, boring-er story.
The number of tellers is expected to drop by 12% over the next decade while general jobs are expected to grow by 5% according to government forecasts btw.
Being a cashier used to be a tougher job because you needed to know all the inventory. Now it’s ok for a grocery store cashier to not know what parsley is.
If automation makes it practical to do an embarrassingly small task in order to provide a value to someone richer, yeah, you can be hired into it. Maybe a lot of people will. But that’s not prosperity that’s capitalism holding you by the balls.
Not everyone is equally capable, which implies that some people are on the left side of the distribution. Some jobs that simplify the essential actions bring the job to meet the capabilities of the worker.
Lowering the bar is not needed or helpful. People who are so incapable that these jobs are their peak potential should probably just be on social programs.
(I had a family member, since passed, who was significantly mentally handicapped by a difficult birth sequence. She loved nothing more than to feel like she was included and being helpful to the limits of her ability.)
Jordan Peterson - What Kind Of Job Fits Your IQ
All those branches closed during covid. I have 6 within walking distance and there isn’t a human anywhere.
I count half a dozen Chase branches that have gone up near me in the past few months. I don't get it.
It hasn't in 250 years of automation.
Regardless time will tell
Perhaps that's not quite the right comparison - even though the population hasnt doubled since 1970, the number of people employed has (80M->160M, approx [0]). Adjusting for that, Bank Teller employment level is basically unchanged.
I’m not sure I buy into the bank analogy (probably due more to technology making bank products cheaper/more accessible and thus more customers and thus more bankers) but I definitely buy this.
If you believe fundamentally in basic market dynamics and that humans are generally productive creatures, then any automation that comes about will simply shift where the human labor is most useful, and we will generally always have enough human powered work to go around. The tech and automation is just making it more efficient for everyone.
You can see this principle with ERP implementations - they can literally bankrupt an entire company if you get too ambitious with what can be automated.
Edge cases & changing business context aren't going away.
There are very few industries that haven't already digitized, the ones you mentioned that have human CRUD apps are relatively rare. Accounting, law, healthcare...who else? Basically nobody.
How many new companies exist now because of automation?
Sure, there are some prestige managers out there, but I think their prevalence is overstated. Most managers I know in tech companies are overworked and have no time on their schedule.
I know some people who do this kind of work in various organizations.
As far as I (and they) can tell it all should have been automated down to 1/10 or less the staff it takes now decades ago with computers, but their orgs keep getting basically scammed by vendors promising the moon and delivering a mimeograph of a smeared Xerox of a bad photo of the moon, so it never happens—there's constant tool churn, but nothing ever gets faster or better. Anyone internal smart enough to automate any of it themselves either quietly does it some for them and their buddies so they can slack more, or does none at all and tells no-one what they're capable of because it'll just mean more work and management'll probably fuck it up anyway, if not be angry about it.
It's a leadership failure and it seems to be more common than not. Maybe we'll reach a tipping point where such orgs simply die from that kind of thing, but it really seems like we ought to have by now considering how much "low hanging fruit" that couldn't been tackled in the 80s is still around.
Unfortunately the software is so bad and so complex that upon deployment, they realised they couldn't just roll this out for direct access to staff. It is full of travel-industry terminology nobody understands combined with corporate org policy terminology few understand.
So they designated specific staff as "travel managers" who would be the ones to book travel for their group. These people then get special training etc. In practices however none of the managers have time for this so we are all delegating it to admin staff that already do other admin type work for our teams.
And so the whole exercise has brought us full circle to where dedicated staff are effectively manually booking travel for us. And of course then COVID hit so nobody traveled for 2 years after that and we all prefer remote / zoom as much as possible anyway.
It's really not a worthwhile effort getting everyone to learn the domain specifics, and a few domain experts to translate works pretty well, despite looking silly.
10,000 person tier 1 tech company, 80% of the staff are software engineers, so let’s be conservative and say the average cost of an hour of each employee’s time is $100.
I’ve got a great idea, lets implement a tool that means it takes a minimum of 4 hours to complete the process of booking flights, so that we can better enforce budget policies and make sure people don’t spend an extra $50 on flights.
Let’s also ignore the fact that the “cheaper” flight the tool makes you book is several hours different timing to the one you wanted, meaning you’re now losing nearly 8 fucking hours of productivity…
Yeah… but you saved $50 on the flight…
Yeah… but you saved $50 on the flight…"
How does a cheaper flight lose productivity, I have never been flying or in a plane before.
Then also red-eyes, it's hard to sleep on a plane, so you may get to somewhere in the morning but if you didn't have a full nights rest, what's the point? You're exhausted.
https://www.smithsonianmag.com/air-space-magazine/how-much-w...
The idea "this could all be easily automated so those who don't automate it will go out of business" presumes efficient market theory is true. Markets are not actually efficient. Markets are based on relationships between human beings. And a lot of human beings have a vested interest in things staying exactly the way they are.
that is why i automate some things but in general "keep my head down and my mouth shut". the people who get all angsty and revolutionary about this stuff tend to get fired / laid off / asked to leave / burned out. i know because i used to be one of them.
the people who survive are quiet and don't complain about "leadership failure" as you put it. we do not get paid to point out failures of our leadership. or to do things which would by their very existence imply a failure of leadership. we get paid to do what leadership tells us. our continued supply of health care, shelter, and food depend on it.
if i want to develop my talent / skill, well that is in my free time. i can build robots in my basement and play around with new algorithms and nobody will get mad at me or tell me to stop. now you'll have to excuse me, there is an STM32 board calling my name.
My employers and I were much happier when I switched to 30 hour work weeks and went to grad school part time :P
Nah, I’ve seen legacy code and how much maintenance it requires. Regular devs are safe.
In my experience, it's the exact opposite. WFH creates more of a fog of war, so companies end up hiring more managers to stay on top of it.
Some employees are great at self-directed WFH, but many others struggle without the physical, social context of the office to get them focused. Again, companies rely on more managers to compensate for those employees who struggle more with WFH.
I know people will say "Just hire people who are good at WFH", but if we transition large amounts of the workforce to WFH then you can no longer pick-and-choose just the good WFH people. You have to deal with the realities of managing WFH at scale.
Senior ICs are split on WFH. Managers who can code are split.
Managers who can’t code are unanimous.
If you try doing that remotely you need permanent surveilance with a webcam, and people get all uppity about it when that happens in their own home.
Jim sits and watches cat videos on youtube all day - is 0x plan, and will be promoted to being your boss next year.
It is a real issue though and the answer isn’t obvious. I tend to think that something like A16Z’s model will wind up as the end state: modest amounts of flex office space, geographically distributed, with frequent, family-friendly off sites.
Pair-programming software infrastructure will have to improve, and maintaining a hub of urban office space where Senior ICs get a COL bump to be near the young folks will probably be part of it.
It’s a new world, and there will be an adjustment, but there’s enough critical people who simply aren’t going back that it’ll be management’s job to figure it out. I imagine figuring it out well will pay commensurately well.
> but there’s enough critical people who simply aren’t going back that it’ll be management’s job to figure it out
Pendulum is swinging, my friend. With a big recession looming, companies will have all the leverage. Elon has already paved the way and other big companies will soon follow. On the other end of the spectrum, a lot of startups will be bootstrapped in this recession and a majority of startup founders want to have the initial bootstrapping team to be together[0].
[0] Based on my first hand observation working as an advisor for a VC firm.
With that said, we've been through this before: companies always have leverage with many/most of their employees, and that is going even further up for awhile, but Google Search doesn't stay up without a meaningful number of people who have made enough money to not be pushed around.
This is the flip side of being one of the "CEO/VC class" and having a boom decade or two: most of the real pros made some serious money on stock and can't be herded like cattle the way new grads can be.
The American economy has become an experiment in how close you can get to indentured servitude for your working people without calling it that by twisting the macroeconomic knobs until the kid doesn't get medicine unless you hump that bullshit job. I'm sure the money guy who figures out how to do that to hardass infrastructure hackers or founder-caliber kids will be hailed as a hero (in private), but it hasn't happened yet alhamdulillah.
The tactic never seems to be to hire more people to do the actual work though, curious!
This is all baloney. There is noone organising the information and documents in "modern" companies. There is just a rolling reset of knowledge with an average lifetime of about three years.
> Having physical pieces of paper as a fungible business tool is still something used by a lot of firms but they are simply behind the times,
They are not behind their times. They are using a system that actually works.
Increasing automation...the increasingly widespread adoption of enterprise software, data analytics, and machine learnings are increasingly rendering office jobs moot as much of the traditional number crunching, document processing, and repetitive analysis performed by office professionals is now being performed by software.
This is not even wrong, in the W. Pauli sense. Just one of the many reasons is enterprise software works less and less for the enterprise that 'rents' it and more and more for the enterprise that controls it.
Everyone hates enterprise software who is on the receiving end of it.
As for the accounting example DM5 uses, ask his partner about when three people have to co-ordinate a fixing a single ppv in a single po. It can take days to fix a single mistake. Meahwhile dozens or hundreds more po's have piled up.
po = purchase order, ppv = purchase price variance 3 people = seperation of duties, because people try to steal.
This has been said over and over. In the 1980's people worried automation would leave lots of people unemployed. And long before in 1931 Keynes [1] predicted we should now be living in a world of abundance. He said our the biggest concern would be how to spend all this free time.
Yet I see people working harder than ever, and burnout is the number one reason for absence of work in many countries.
Every step you automate opens up new possibilities and more employees are needed. I work as a software engineer now for around 15 years. Never have my software reduced costs, because as soon as my software automates something people want more.
Although I'm skeptical, we could really facing a turning point, Keynes made his predictions for 2030, so we'll see :)
[1] Economic Possibilities for Our Grandchildren (1931)
I do have a pet-theory that humans aren't well equipped for long-term 9-5 computer thought work. Anecdotally, I see people burning out in < 5 years with thought work careers. People under 30 packing up their careers to go live in a van or whatever it may be.
Until some genius writes delete from invoices ...
I don't think that we are nearly close enough to have digital recordkeeping done right.
At this stage I'd welcome any automation in the accounting space but efforts I've seen thus far have not been promising. Domain specific software is tricky - either you get SWE in then they don't know the domain, or the opposite then the code is garbage. That gap means endless meetings and committees about requirements and end user testing in practice even for the most trivial of automations.
Outsourcing is way more likely to kill accounting jobs.
It's generally a mistake to trust the financial advice of any hedge fund manager, and they usually provide advice that makes the S&P seem like a bad bet.
Time will tell whether said speculation will turn out to be right. However, if more people believed such speculation, it might make it more likely to be right in the future. Therefore, there's a selfish reason for said person to promulgate such speculation.
Looking at the S&P anywhere in the past 100 years makes it look like a pretty solid bet (not even a bet really).
e.g. it took 30 years to recover to 1929 levels, then also 30 years to reach the 1960’s peak, in 2010 it fell to mid 90’s levels (all inflation adjusted).
So yes, you’re right but it depends on how long you can wait. Over 50-60 years you should be fine. 20-30 who knows, if you’ve entered just before a peak it might not recover within your lifetime.
No one ever became wealthy from buy and hold index funds. The returns are relatively low because most people are lazy and it's the easy thing to do. That's why I split my time between active investing (https://grizzlybulls.com) and working on my private business ventures.
Nobody ever became poor from it either (unless they panic). At least your money keeps pace with inflation to some extend. It certainly beats the money sitting in your bank account doing nothing (the alternative for most people).
At this point, the entire globe has fallen in uncharted economic territory. Anyone projecting certainty about what the future holds is a fool, liar, or both.
He was right once a long time ago. Now he's just a charlatan continually desperately trying to capitalize on that one dusty old win.
Seems a bit credible.
The bubble caused by a decade of easy money started to burst last year.
Go look at a stock chart from the last 1Y and you’ll see that the sky has started to fall, and had been falling from just after 1Y and has a long long way to go.
Until inflation is under control and fed tightening stops, housing, equities, and bonds will continue to fall in price. This week almost saw a catastrophic run on the pound and UK gilts and US bonds are flashing warning signs.
The crash started last year and continues with mathematical certainty until the fed pivots.
Maybe we just have a different definition of these terms?
It starts as hiring freezes and funding drying up, it ends in mass layoffs.
In a year or two the crash will be obvious, everyone will be certain investing is a terrible idea, and it’ll be a great time to invest/start a company.
It's still a great time to found a company now, if you have the right idea and network ;)
The stock market's price level is well above where it was pre-pandemic, it's trading at earnings multiples in-line with 30+ year averages [1] (what was the 10Y yield in 1990, might I ask?) because earnings have gone up.
I know being doom and gloom makes you sound smart (to some), but don't fall into the trap of 'everything is shit now because inflation has been high for 20 months'
Here's someone else who called it over a year ago with some charts with counterpoint those you link:
https://www.hussmanfunds.com/comment/mc220925/
OR CAPE: https://www.multpl.com/shiller-pe
Note he's in good company, with Jeremy Grantham for example also warning of the same thing:
https://www.livewiremarkets.com/wires/grantham-this-is-a-bub...
Just to be clear, the argument is not 'everything is shit now because inflation', it is that the era of easy money has ended, significant inflation and war means a regime change in central bank intervention, and central banks will now tighten till things break. They haven't even managed to unwind QE yet and stop buying their own debt, will they ever? If they do, watch out.
This isn't doom and gloom, it's simple realism about the regime change in interest rates - the era of 0% money is gone, in its place we have a normalisation, which means a normalisation of frothy asset prices and a reversion to the mean of earnings and prices in many domains. Usually these things take a year or two to work out, it won't be a fast process.
When that changes, I think you’ll see earnings rise as chasing growth now carries a higher cost.
Citation needed. Maybe we are enter a local minimum, but what, you think off-stock-market value is not going to be brought onto the stock market?
I think you should try to raise a private capital fund and roll-up as many mom and pop retailers as you can, then.
Usually, they cite things like artificially low input costs (hard to argue that today), unsustainable demand from customers due to 'cheap money' (haven't seen evidence of that yet, the opposite actually), and a general disdain for advertising and retail business models (despite their long-term durability).
And what about all the companies that still have billion dollar market caps but have NEGATIVE earnings? (Atlassian, Snowflake, Uber, Crowdstrike, Shopify.... the list goes on)
Folks we are in a tightening cycle in order to fight inflation. It's feels important to remind everyone that economic conditions like this have not happened in decades. This site (hackernews) has pretty much entirely existed in the era of cheap money and low interest rates.
Keep your head in the sand at your own peril.
Companies are tightening their belts and you should too.
I think they are an extremely small part of the $100tn global stock market that people here love talking about because they work there.
>Folks we are in a tightening cycle in order to fight inflation.
My point was that we are at multiples in-line with 1990, ya know when we had 8% 10Y yields.
Folks, call the end of the world at your own peril.
Additionally, if the entire world stock market is $100tn, the US is sitting pretty, because at $49tn the US stock markets represent HALF of the entire world stock market.
Is any part of you worried the S&P is headed 3600 -> 3500 -> 3200 -> 3000 -> 2800 given the current climate? I'm worried that the current P/E ratio (from EPS TTM, past 4 quarters) might be a bit "rosy", and the next 4 quarters of earnings are over-optimistically priced (not enough pain has been factored in/the effects of corporations having to try to grow for 18 months in a 4% interest rate environment hasn't been priced in yet).
If you check https://www.spglobal.com/spdji/en/documents/additional-mater... and https://www.yardeni.com/pub/yriearningsforecast.pdf, analysts are forecasting 8-9% earnings growth 2022 -> 2023.
That means if we don't hit those numbers, the market will have to reprice itself, no?
Where do you propose to store wealth if it is all coming down?
Or are there specific bond funds for this unique time?
What type of loans are we supposed to be getting?
https://fred.stlouisfed.org/series/T10YIE
Good muck to anyone placing their trust in internet forum hot takes.
Nope. Only a few percent above and trending sharply downward:
Only one of the reasons it's foolish to 'inflation-adjust' asset prices.
EDIT: Also one nit
> and trending sharply downward
If only the stock market's past performance were indicative of future trends!
What a needlessly condescending reply
I just think P/E by itself is way too oversimplified and a pretty garbage metric when used in aggregate + historically due to things like interest rates, sector/business model skew, relative maturity of companies, etc also fluctuating over time. It’s like Week1 of value investing 101, not an actual metric by which you’d want to engage in value investing or historical analysis.
1) 'Inflation adjust' asset prices (if you think the average stock-holder has anywhere near the spend patterns of the CPI basket, boy howdy do I have something to tell you about home ownership and income inequality: rent is 33% of the CPI bucket and that's an 'imputed cost' for the vast majority of stock-holders who own their homes)
2) Think 7.5% in 2 years is a 'bad return'
EDIT: Let's actually play a fun game, what's the real return of the SPY from the perspective of someone planning on taking a trip to Europe/The UK/Japan?
https://news.ycombinator.com/item?id=33031466
Basically, fu Main Street, got mine. I wonder if they believe the meta-awareness the internet has provided will just go away if they crash tech/social media? That’s where all the progressive undesirables work, after all.
Past pols convinced people “trickle down” was sincere economics, not a bawdy joke. That Reaganomic funneling of wealth to the top was for their own good, and the public now blames modern progressives. A pols dedication to double speak is commendable.
https://www.weforum.org/agenda/2015/06/can-free-trade-bring-... https://www.weforum.org/agenda/2019/03/poverty-reduction-res... https://www.flexport.com/blog/does-trade-reduce-poverty-an-a... https://www.piie.com/bookstore/trade-policy-and-global-pover...
I'm not a tankie or Stalin apologist but it shows what is possible within a planned economy.
Which is true almost anywhere in the world. Obviously Russia was several decades behind western Europe in 1917. But I’d be very surprised in if the gap between Western Europe and Russia in this regard was considerably higher in 1915 than it was in 1985.
> Soviet jobs were much more stable and so much more desirable even at the same level of pay.
What is this even supposed to mean? It was illegal to not have a job and most people couldn’t freely choose their workplace. Obviously certain positions which provided access to state resources were highly coveted despite only a moderate increase in pay (I don’t think I need to explain why). How is that in anyway something positive, though?
It’s not particularly surprising that if you literally work a few million to death and distribute the surplus they created amongst the rest of the population (the one innovation I’ll grant USSR) you can have some impressive growth figures. In fact the more people starve to death or die in the gulags the more per capita productivity increases.
> who had in living memory been serfs, into an industrialized powerhouse with a quite high standard of living.
Right. You can probably say the same about many states in Germany. Russia was just 40 or so years late. It not unreasonable to believe that it’s industrial output would had reached similar levels without the revolution in comparable timeframe (probably with considerably higher inequality but with a magnitude or two less murder, however higher inequality would probably meant that more people would have died from preventable diseases which would potentially offset a million or two who were executed).
The economy and where possible, the outcomes, are intentional. Cushion “the right people” with free money so they can ride the long hard dip. Gamble with everyone else. It’s all part of the spoken traditions so we readily accept it. The lords of finance demand sacrifice!
That one is a mixed bag. There are clearly areas where it is falling - SF, Austin, Boise, a few regions like W Florida... but there are regions where it simply is not (the northeast in particular).
I'd love for that to fall. And let's not talk about rents.
I predicted it, too. I saw it coming the exact minute the government starting giving out stimulus and unemployment checks when the pandemic started. Shouldn't I be getting all the credit for realizing this was going to happen a few months into the pandemic.
It doesn't take a genius to figure this whole thing plays out. Burry is just stating the obvious, there's no great amazing calculations made to figure it out.
> Through his analysis of mortgage lending practices in 2003 and 2004, he correctly predicted that the real estate bubble would collapse as early as 2007. His research on the values of residential real estate convinced him that subprime mortgages, especially those with "teaser" rates, and the bonds based on these mortgages, would begin losing value when the original rates were replaced by much higher rates, often in as little as two years after initiation. This conclusion led him to short the market by persuading Goldman Sachs and other investment firms to sell him credit default swaps against subprime deals he saw as vulnerable.[14][15][16]
That's the challenge with predictions. If you're off by a day, you'd still be perceived as being right. If the predicted magnitude was 5% off you'd still be perceived as being right. There's no hard and fast rule as far as I can tell about how off you can be and still be considered "right".
Printer is coming, heh.
We should come to terms with the fact that central banks simply can’t raise us out of inflation in short order. It disrupts too much and will cascade. Not to mention politicians implementing policy that directly hinders their efforts.
Decades of YCC in japan did fuck all for the Yen this year...
Most our code bases look like this too. Why wouldn’t our financial systems become hairballs too?
The prediction is based on really simple macro too. Nothing is certain except death and timing a bubble pop/price correction is notoriously hard, especially when it’s based on discrete decisions by the Fed to raise interest rates/stop expanding the balance sheet. But it’s been clear for quite some time that the Fed would have to stop that eventually as stopping inflation became more important than stimulating the economy.
I’d much sooner call the people who thought the loose monetary and fiscal policy of the 2010s (and especially during COVID) was a permanent fixture the fools.
Howso? We're back in a more historically normal interest rate environment. The last 12 years of zero-interest rates were the "uncharted" territory IMO.
It's been a little longer than that:
2010: UH OH: Michael Burry Agrees With John Paulson Again https://www.businessinsider.com/michael-burry-john-paulson-f... "Michael Burry, one of the first to predict the subprime crisis and bet against it, is now betting on a weak recovery by investing in gold and farmland, two hedges against inflation."
Why are these people so interesting to bloggers/journalists?
Reporter wants to say something about 'I bet WFH will have negative impacts on white collar workers."
Their options are:
1) Do data-driven research and come up with a dry, sort-of-compelling article about recent data releases that doesn't get traction
2) Use a 'famous for being right in a big way' celebrity to 'launder' their idea.
i.e. For all the times they called an event 65%, it happened about 65% of the time.
So they weren't "wrong" the other 35% of the time, it's just those are the times the 35% chance bore out.
People have a habit of assuming "is likely" is the same as "guaranteed". Or that that's what the caller believe will happen. And then using the event once passed to discredit the initial analysis.
But he gave Trump a higher probability of winning than just about anyone, other than Trump himself. One of Silver's detractors, Sam Wang, even said it was so impossible Trump would win that he'd eat a bug if he got more than 240 electoral votes. (he chose a gourmet cricket https://www.politico.com/story/2016/11/sam-wang-poll-expert-...)
What was funny about that one was he also got a bunch of "LOL no way you lunatic, he can't possibly have that large a chance and no-one else is saying so, so you're dumb, or maybe you're secretly a pro-Trump shill".
Caught it going both ways.
Sounds kinda useless?
I mean, if they said the probabilities were 99 to 1 or 1 to 99, regardless the outcome they can say “well, we never said it couldnt happen”
In that case, please "educate" me on how to understand the quality of a prediction (was it accurate or not), of a binary event (say a Presidential candidate winning election), when both outcomes are both "probable" to a non-zero degree.
I'm eagerly looking forward to my "education".
On a broader scale, what you are asking about is called a "Scoring Rule". Wikipedia, as usual, provides an overview[2]. You can take the mean of a forecaster's score, which allows you to compare forecaster methodologies.
I'm not sure why your comment needed to be so aggressive.
Note that this is the easy part: a sports model that predicted a 50% win for the first team, a weather model that predicted historical averages, or a language model that predicted letter frequencies, would have near-perfect calibration, but would at the same time be pretty useless. The other part is discrimination: how educated your guesses are. That is not so simple to quantify, although the 538 articles above mention some of the possible measures.
That's it for what an uncertain binary prediction means; but why do we want one? Well, if you're betting (literally or figuratively) on an outcome, it probably makes a difference to you whether the "losing" possibility will come up 1% of the time or 40% of the time; but that does not seem that easy to formalize and may feel unsatisfactory.
In that case, here's a formal result.
An always-certain prediction service is obviously equivalent to a deterministic decision rule, which churns some data about the situation and says yes or no based on that. (They are the same thing.) An uncertain prediction service is (less obviously) equivalent to a randomized decision rule, which churns some data about the situation, tosses some (known) coins, and says yes or no based on both. (Take the service's result, output yes or no with the probabilities it gave.) Of course there's always a probabilistic decision rule that performs at least as well as any given deterministic one (run the deterministic rule, choose not to toss any coins, output its result).
It turns out (see e.g. the introduction[3] to Chentsov's monograph[4]) there can be randomized decision rules that are strictly better on average than any possible deterministic rule.
[1] https://fivethirtyeight.com/features/when-we-say-70-percent-...
[2] https://projects.fivethirtyeight.com/checking-our-work/
[3] https://books.google.lv/books?id=iqMluWtSFdoC&pg=PA8
[4] https://openlibrary.org/books/OL26831120M/, https://bookstore.ams.org/mmono-53
Thank you. I thought I was going slightly insane having someone argue otherwise.
I understand you could evaluate quality over many deterministic predictions, but I'd also presume that those have to all be similar in nature (i.e. all be election outcomes) otherwise there are too many confounding factors if you try and evaluate quality over vastly different prediction calculations.
Pop culture knows the movie 'Big Short', but they probably have never heard of a Nobel prized economist.
I think paul krugman is an pop culture figure too.
https://www.livewiremarkets.com/wires/grantham-this-is-a-bub...
He predicted the market would crash this year, and liquidated most of his portfolio in the first half of the year to get out of harm's way. Most of the rest of us are now nursing massive losses.
https://markets.businessinsider.com/news/stocks/big-short-mi...
I also liquidated most of my stock positions based on that data and I'm not in finance.
I don’t see talked about as much these days, curious what the sentiment is on him now?
(I really enjoyed his books)
Just a guess though of course.
Also interesting use of the word bubble considering it involves an unprecedented change in how our economy has functioned for the past 3/4 of a century.
"The car dependent American suburb bubble is bursting"
These things happen two ways, gradually then suddenly. It is coming, but there is no need for sudden panic.
Ultimately, he may very well be right but I don't put much more weight into his opinion than any other prognosticator. I feel like the subprime bubble was uniquely suited to his expertise, but stuff like this requires both a deeper understanding of jobs and technology than he has, and is less of an inevitability.
White-collar jobs will boom, but they'll be outsourced. Work from home changes nothing about labor needs only labor location. If anything, work-from-home is a net productivity negative for large, bureaucratic organizations because slacking becomes even easier.
[0] https://www.reddit.com/r/wallstreetbets/comments/oawsxf/i_an...
As a good dev looking for a job, I can tell you with 95% certainty that the good devs are not applying to your job because your company is a boring knockoff doing boring things and your job sounds like a boring dead-end where developers will be cordoned off into a little box with nary enough room to turn around while they implement mandates handed down from above by a product owner who never uses the actual product with no opportunity for actually discussing whether this new silly feature will make the product worse or not (it will) while technical debt and cruft accumulates and any attempt to invest in the long-term health of your product will result in a reprimand.
After months of looking at job postings, hiring managers complaining about not finding good devs just sounds like incels complaining about not being able to date hot women. Look inward. Lots of good devs are out there looking. They're just not looking at you.
> trying to revolutionize
There are a lot of aspirational companies out there. I'd rather work at an aspirational company than one with no vision at all, but you still need to convince me that there's an actual chance you can deliver on this vision. If you told me you were going to revolutionize the world's energy sector with a perpetual motion machine, I'm obviously passing. Treat me like an investor -- convince me your company has a future. Because, of course, I am an investor; I'm considering investing a large percentage of my professional life in your company.
> nuclear power deployment performance
Nuclear power is interesting but highly regulated. If I come up with new and interesting ideas that contribute to this space, is it too tightly constrained by regulation to have any chance those ideas could get applied? Will I be in a position where anyone will actually listen to my ideas, or have you already made up your mind about how everything is going to work? Am I going to get to talk about the product development, or is this going to be handed down to me with people taking offense if I try to explain why that latest change doesn't make sense with the rest of the application?
And what is "deployment performance" -- trying to cut the costs involved in building and deploying new nuclear power plants? If it is, just say that. Don't make me guess what your company actually does, because I'm going to guess using my priors, and as you probably guessed from my other comment, my priors are very negative.
> a highly customized PLM app
Two red flags here: "highly customized" -- I'm a software developer. I write code (among many other things, of course). What does "customized" mean? Are you building this in some other inner platform? "Customized" sounds much weaker than just plain new code. Will I find Apex code built on SharePoint or something awful like that? "Customized" is a huge red-flag word for me because it's almost exclusively used by people who are afraid of programming and don't understand the software development lifecycle.
The other red flag: "app". You're trying to "revolutionize nuclear power deployment performance" with an ... app? Look, I get that "app" is just short for "application" and therefore could mean anything, including an advanced industry-centric analysis tool. But it doesn't, does it? You wouldn't use the word "app" for that. So you're trying to revolutionize nuclear power with a $2 app in the Apple Store or something? That's what it sounds like to me.
Again, think of me as an investor. If that's your elevator pitch, I've come away with the message "big ideas with absolutely no idea how to deliver on them".
I truly wish I lived in the world you imagine. I've been in the job I'm leaving for 13 years, received top-tier performance reviews every year, constant improvement, very good software, technical lead of one of the most profitable teams in the entire (huge) company. Everyone who has ever worked with me directly has great things to say. Meanwhile the vice presidents of such-and-such that play musical chairs with their titles every 2 years do not care. I have made it very clear what they need to do to keep me (and it's not onerous, in fact it's mutually beneficial for everyone and completely in line with the CEO's vision), and they do not care. I'm not sitting in the right seat; I'm not already buddies with the right VP; so fuck me. I can go get fucked.
It honestly sounds like you either have no real-world experience or you've gotten extremely lucky with the company you found. If it's the latter, do whatever you can to stay there as long as it doesn't turn to shit (and it can, at any point).
Yeah, they aren't going to be the best with a specific company's stack, but they'll likely have a better perspective on how it can be improved.
There's some longer-term things you can only learn by being at the same company for a long time (such as "how to grow a startup from 1 to 100 employees" and what comes with that), but those things are usually outside the realm of what software engineers interest themselves with.
If you're spending more than 2 years at the same company, the only domain knowledge you're growing is that of how to be an employee at that particular company, and very little of it is very useful outside of it. Things like "I know how all these Facebook internal tools work inside-and-out". Cool, we don't have or need them cause we're a totally different company, now what?
Whereas a lot of even surface-level knowledge can bring a huge amount of unique perspectives and solutions. And my own most successful projects have been the results of combinations of experience in multiple domains at once.
And none of this prevents you from actually developing deep domain knowledge. For example, I have NOT held the same job for a decade and a half, but I HAVE been using Python (and other various software) for all that time, in a large amount of very varied situations, and I absolutely have "deep domain knowledge" there.
I built a full stack app in about 6 months, at one point, 5 years ago. (frontend js framework, backend js framework, SQL framework)
I now work for a company whose applications aren't much more complex than what I built, in terms of systems and complexity. Though the apps are definitely much more polished and with many more complete UX & usage options. It makes millions of dollars.
At least at most large companies which are lumbering, slow moving, where 60% of people contribute and 40% of people barely hang on by pretending to work
(largely because A. they don't know what's going on due to poor documentation and poor requirements gathering, and B. they aren't qualified in the skills needed for currently under development work).
As a solo developer, I move much faster and learn much more on my own, than I do at my current job. Why? Because I direct my own work, on my own projects. I don't have someone who has never built an application, who has a project/product manager title, trying to gather requirements for something they've never done before.
Not to mention that they've never founded an organization and led it to success. So, they don't understand how Apps are built, and the don't understand how Organizations are built and guided efficiently...
Combine this with a company that has a bunch of legacy applications and is now moving into somewhat over-hyped frameworks...
Yeah... Don't get me wrong-- I like the people I work with. I see a lot of under-qualified people in management who are slowing down the system because they can't efficiently organize people to do what they don't understand-- they have too many unknown unknowns in their ability to parse out upcoming work. Unfortunately, most of them were hired for currently-fashionable political reasons.
This is exactly what I’ve found. Most of my work is technically easier than my personal projects.
There are definitely parts that are far more complex, but the vast majority of the company isn’t working in those areas.
From what I’ve seen, if you want domain knowledge you have to dig for it.
So everyone assuming that I stopped learning anything new 12 years ago can fuck right off.
I'm not saying this to brag, I'm saying this to point out that all these assertions that "you should change jobs every 2 years or you stagnate" or "you can't learn your job deeply in 2 years" are both completely unfounded bullshit assumptions. It completely depends on what the job is.
The reality is that for a massive number of devs working for traditional businesses, there isn't all that much on the table. You can try to move up into the management caste and get big bumps, but you're only going to get incremental advancements.
I actually wonder if any companies have considered massive salaries to be a liability in litigation, because it could be pointed to as an example of unfair wages.
Anyway, you're getting a fancy management job, or some super elite dev job.
Similarly, I have worked at places that have had "good devs" who didn't have such image problems, that worked at places that did not understand (or appreciate) what it was that they had, and did nothing to keep them on the staff. "Whatever. It's hiring season anyway." After their departure, productivity suffered, and when points were reiterated (that were covered before the person left), the response was something along the lines of a timid, "Oh...I thought you were joking."
Your assumption is constructed around the idea that people will always do what is in their best interest, and be in a frame of mind to appreciate the "big picture" things. In my own experience, this is rarely the case. More often than not, it is a sort of miracle that even some very well-known places are able to stay in business.
I'm sure there are exceptions, of course. Some upper management really are very smart and "keyed in" to the value of specific employees output and are also in a position to do something about it. I would simply argue that those arrangements are significantly less common than you might be led to believe, and that such remedial, reactive measures are unsuccessful far more often than they are successful.
Just a thought!
I have noticed that too many times employers want literal gods to come in and fix their entire tech stack, their product, and by extension their company.
Of course, they are frequently only paying average salaries.
There is always a reason the devs are not coming and most of the time it has something to do with work / life balance, benefits or salary or any of the above.
I dont know you, you could be the coolest boss on earth but if something is wrong with the above points then you wont find what you are looking for.
"there is a massive shortage of blue collar jobs like truck drivers, hospitality and restaurant employees, and other employees necessary for actually creating and delivering the goods and services that consumers want and need on a daily basis."
This recession is more about everyone else down to line cooks in restaurants being able to negotiate for higher salaries.
I wouldn't really call it a "bubble" though more sort of "overdue wage adjustment" but the Fed is moving to crush it.
I am never again giving up WFH.
What he means exactly is still not known.
Gen Z are much smaller than Boomers. This is a structural issue that can be fixed only via immigration.
What could have been automated probably was automated.
Also, due to china failures, there is going to be boom of insourcing not outsourcing.
The words meaning sure hadn't changed, but I imagine the longer its mainstream the more it will morph. Soon we won't be allowed to say it at all, lest we offend somebody with the slur.
For many too, they held on because their job was fun. My neighbor was a shipping container captain… he was eligible for retirement for many years. What finally made him retire was all the rigamarole the pandemic introduced. It stopped being fun.
The same thing happened with a local family-owned Agricultural store near me that’s been around for 70-odd years. Dealing with everything in the past 2 years sucked all the joy out of running the store, so they decided to retire.
Isn't that their entire schtick? The New Zealand of generations.
this seems likely the cause (compounded by the pandemic - people shifting industries, online ordering skyrocketing), unfortunately we still have another 10 years of baby boomers.
https://seekingalpha.com/article/4537751-the-big-short-micha...
The last sentence of the tweet is a dead giveaway of the archaic thinking. Why is WFH going to be blamed again? It feels like it's yet another manager's plea for employees to come back to the office and get micromanaged.
The article tries to answer my question:
> Work from home. The work from home trend is threatening office jobs because it reduces the need for many traditional office roles like secretaries and receptionists.
In what world are secretaries and receptionists a prevalent job title in the first place? Is the author of this article retired or something? The first wave of computing already shifted those roles. Executive assistants to the SLT are not just answering phones and twiddling thumbs. On top of that, in the modern world receptionists are one of the most minimally staffed parts of a company already. My last 1,000 employee in-person company had no more than two or three receptionists and they were contracted out to a vendor.
You know what is expanding post-pandemic? Co-working spaces. [1] Technology and the pandemic aren't eliminating offices, they're changing them. Many employees want a separate space to work, or a place to collaborate in person, but they don't want to be forced to go in daily. Companies don't want to have to make long-term lease commitments and dedicate one seat per employee.
Guess who has receptionists? Coworking spaces. But again they aren't sitting there twiddling their thumbs. WeWork and the rest of the modern coworking spaces are highly automated. You can't just ask the reception desk to fix something or make a change to your office, you have to put in a ticket. These receptionists wear many hats: they're salespeople, they set up events, they communicate with tenants, they do light cleaning. Their tasks are too varied to be replaced by an automation, and their salaries aren't that expensive.
> In contrast, the increasingly widespread adoption of enterprise software, data analytics, and machine learnings are increasingly rendering office jobs moot as much of the traditional number crunching, document processing, and repetitive analysis performed by office professionals is now being performed by software.
Automation is driving new business ventures for precisely the reasons the article brings up. Thousands of businesses exist today that couldn't possibly exist because computing wasn't powerful enough. As soon as you automate an enterprise task it opens up more opportunity to provide more complex business products and invite new ventures into the mix making products that didn't exist in the past.
Being able to do more things with less money is basically always a net positive.
> Furthermore, while restaurant, retail, and even factory workers are all expected to be ultimately replaced by robots that tech companies like Tesla (TSLA) are producing, this technology is even further away from being widely deployed, with some predicting these machines to not be meaningfully impactful until the end of this decade.
Not 100% related to my argument, but this quote above is one of the dumbest things this article claims. Anyone who thinks that retail and hospitality workers are going to straight up be replaced by robots is delusional, especially with the timeframe of "the end of this decade."
It costs something like $20/hour to hire a line cook, less in low cost of living areas. Certainly, the future of hospitality has fewer workers per customer, but that's just normal labor optimization. There won't be a fully automated McDonald's, but McDonald's employees work with a lot of automated devices. The dexterity and intelligence of a human is very difficult to replace entirely. Robots aren't going to be talking to customers at the Apple Store, the whole reason people are there is to talk to a person, and retail salaries are already quite low.
And why is Tesla in this discussion? Tesla doesn't produce factory automation robots. They purchase plain jane factory robotics that have been part of the auto industry for decades. It's like the article just wanted to bring up Tesla for no reason.
> As a third strike against the safety of white collar jobs at the moment, most companies have already more than fully recovered their number of white collar jobs from before the COVID-19 outbreak.
The article from this point on is basically talking about the normal boom/bust cycle of business, even though the beginning of the article and Burry's tweet are talking about permanent decline.
I'd say that this part of the article unintentionally makes the opposite argument it's trying to make. It is directly stating that blue collar job demand is worse, and white collar jobs recovered almost immediately.
What is the actual structural reason why companies won't hire more white collar workers? You can't just spew out "automation" because the past 20 years or so has shown us the opposite trend in relation to automation. White collar workers are the foundation of automation companies.
[1]https://www.nytimes.com/2022/05/17/technology/coworking-spac...
https://www.theverge.com/2022/9/30/23374729/tesla-bot-ai-day...
But it seems to be very far behind its competition.
Also, for evidence on what I was talking about with McDonald’s, just jump on YouTube and search “McDonald’s POV,” good luck automating all that and beating the human and simple specialized tools on performance.