james22 Posted November 11, 2023 Posted November 11, 2023 We see four megatrends that require enormous capital investment over many years with decade-long implications for supply and higher potential for improved growth from labor and productivity in the US. • A capital spending boom could occur in the US. We believe aging capital stock and a tight labor supply will encourage capital expenditures after a decade of underinvestment. Private sector investment has begun to pick up momentum, helped by US fiscal spending following the Inflation Reduction Act (IRA), CHIPS Act, and Infrastructure and Jobs Act. • Enormous investment is required for the transition to green energy. Sustainability targets are a priority for several countries and have complex implications for energy supply and demand. To meet the Paris Accord 2050 net-zero requirements, an additional USD 17tr of global investment is required through 2035, thereby providing a boost to GDP, and probably inflation. • A focus on security and deglobalization could require a large amount of unproductive spending. Geopolitical risks and a focus on supply chain security improvements are expected to lead to increased spending on national defense and secure supply chains via reshoring, nearshoring, and friend-shoring. • Investments in Artificial Intelligence technology are expected to rise. As spending on AI infrastructure and applications & models ramps to nearly USD 300bn by 2027 (from USD 26bn in 2022), the impact on labor markets will vary. While long term demand could decline with the labor displacement, productivity improvements could lead to greater supply growth across industries. But, there are many things that could prevent a Roaring '20s outcome, including geopolitical conflicts, political dysfunction, a debt crisis, an energy crisis, climate disasters, and AI fizzling. A Roaring '20s regime is our bull case scenario, yet the probability of it happening has increased to 50%. https://www.ubs.com/us/en/wealth-management/insights/market-news/article.1603687.html
james22 Posted November 11, 2023 Author Posted November 11, 2023 “What comes next will likely be more consequential than the comparable technological flourishing that began in the 1920s. We will again see a boost to the economy’s productivity, which always increases overall wealth. The ‘rising tide’ does ‘lift all boats.’ The future will repeat a central pattern of the past. The 25 percent in the near future will live like the 5 percent today, and the future 5 percent will live like today’s 1 percent, and so on.” https://bigthink.com/the-present/roaring-twenties-2020s/
Gregmal Posted November 11, 2023 Posted November 11, 2023 (edited) Totally. Thought this was the most likely scenario coming out of COVID and it still seems so. Once the idiots at the Fed get told to exit stage left…. to fuck off with this dumb obsession over 1% of an arbitrary number…it’s off to the races. Housing and infrastructures are coiled and ready to go; just being held back by Fed retards and their nonsense. Once folks understand how much is tied to the housing and infrastructure ecosystem, a glimmer of which we saw in 2021…the magnitude will become apparent. Edited November 11, 2023 by Gregmal
Jaygo Posted November 11, 2023 Posted November 11, 2023 I think there is very good potential and pent up demand. I’d love to see some loosening of the nimbyism and bureaucracy since most people today are rule followers and just say wah, I can’t build that id never get a permit, wah. I think a guy like musk championing some diy engineering brilliance is also due. Where is todays Carol Shelby or Edison or Eiffel. Our trans mountain pipeline is almost done, the budget overruns and beurocratic nightmare has been legendary. I don’t think we can have a true boom of confidence and intelligence and economics without cutting some damn red tape.
Ulti Posted November 11, 2023 Posted November 11, 2023 22 minutes ago, Jaygo said: Our trans mountain pipeline is almost done, the budget overruns and beurocratic nightmare has been legendary. I don’t think we can have a true boom of confidence and intelligence and economics without cutting some damn red tape. An excellent podcast … I think the gentleman said there is a new provincial leader and attitude… they have actually asked him how to reduce red tape… also liked the energy outlook and how to run a business in general…. I liked his simplicity in explaining an energy company’s4 levers of buybacks debt reduction dividends and acquisitions to create fcf…. Sounds like these levers are ubiquitous for most publicly traded companies ( aiv and Joe ) ?
Jaygo Posted November 11, 2023 Posted November 11, 2023 In the 20’s era the personal car and widespread electricity were just gaining serious traction In North America. That’s a tough comp for any era but it really did bring a sense of freedom and possibility. kind of a far cry from today. Yea our standard of living is better today than 100 years ago but our improvement steps are getting incrementally smaller. I think our main goal today should be to bring back some sense of pride in education, excellence and competition. We should squeeze out the rent seekers defined as everyone from welfare jobbers to uncompetitive monopolists. When the war years ended everyone was already geared to striving to be the best or else risk loosing the war. Today we are bloated, lazy and frankly trivial in our ambitions. When you look at the growth of Dubai or Shanghai and some other jurisdictions you can kind of see a boundlessness in it but that ain’t the west that’s for sure.
Red Lion Posted November 11, 2023 Posted November 11, 2023 14 hours ago, Jaygo said: I think there is very good potential and pent up demand. I’d love to see some loosening of the nimbyism and bureaucracy since most people today are rule followers and just say wah, I can’t build that id never get a permit, wah. I totally agree with you, but I think the housing crisis, at least in the USA is about so much more than nimby now. There’s a critical labor shortage of skilled construction trades and until we have robots, none of the youth are getting into the trades.
Viking Posted November 11, 2023 Posted November 11, 2023 (edited) 16 hours ago, Jaygo said: In the 20’s era the personal car and widespread electricity were just gaining serious traction In North America. That’s a tough comp for any era but it really did bring a sense of freedom and possibility. kind of a far cry from today. Yea our standard of living is better today than 100 years ago but our improvement steps are getting incrementally smaller. I think our main goal today should be to bring back some sense of pride in education, excellence and competition. We should squeeze out the rent seekers defined as everyone from welfare jobbers to uncompetitive monopolists. When the war years ended everyone was already geared to striving to be the best or else risk loosing the war. Today we are bloated, lazy and frankly trivial in our ambitions. When you look at the growth of Dubai or Shanghai and some other jurisdictions you can kind of see a boundlessness in it but that ain’t the west that’s for sure. @Jaygo I look back 40 years ago to when i was a teenager. Quality of life for the average person in Canada today is much, much better in my opinion. Much has changed so there are big winners and losers. As i age out, the losers are much easier to see than the winners… so it is natural to feel that we collectively are worse off. So what is better? Education is infinitely better and cheap. Health care is better. Women have much more opportunity. Net worth of anyone who owns real estate is through the roof (most Canadian families). These are just a few examples that quickly come to mind. I remember the recession in the early 1980’s (I was a teenager trying to find a job). GDP declined 3.2%. Inflation was +10% and the unemployment rate peaked out at 12%. All the hand wringing today about the current economy/situation cracks me up a little… it reminds me of the scene in Crocodile Dundee. Perspective is important. My view is what doesn’t change over time is the opportunity for people to live a great life (here in Canada). Every generation, the model to live a successful life changes in important ways. And every generation 20% of young people figure it out and earn/live a great life; 20% crash and burn and 60% are going through the motions. My guess is it was the same 100 years ago. And the same 200 years ago. I tell my kids they should want to be in the 20% that lives a great life. The rub is the model of the past generation here in Canada (real estate) probably will not work for them - they need to figure out the new model. Your future reality is (usually) the sum of the choices you make. Personally, i think a great current opportunity for young people is to take advantage of all the tax free accounts being offered by the government… tax free compounding (plus low fee self-directed accounts and low fee ETF’s) starting in your early 20’s is a lay-up in terms of achieving financial independence - in about 20-25 years if you work at it (knowledge/skill/desire). Edited November 11, 2023 by Viking
Jaygo Posted November 11, 2023 Posted November 11, 2023 I agree that life is much better today but when the improvements slow down it feels like reverse. From 1900 - 1930 we went from shit ridden city streets rife with pestilence to inexpensive cars, penicillin, aircraft, electricity and a whole host of incredible things. I have a theory that is hard to quantify but I dont think our culture is producing truly individual people and I think that it will have negative long term consequences, maybe depression maybe suicide maybe just far lower productivity and inventiveness. The way mid twenty year old's act these days is truly baffling to me, they want everything, whine when they can have it then ask mom if the laundry is done. I'm all for tight families and my time with my parents was precious but i really cant understand why so many still live at home. The general thought is to save money but give me a break, how do you learn anything on your own. Why not rent a shit hole? work your ass off and get out of it to better digs. My theory is that the above is a result of a slow mental training of inadequacy and needing protection by having bylaws and rules for everything imaginable to keep us safe. My kids cant wear sleeveless shirts at school, Why? At every assembly we recognise some Indian tribe as the original owners of the land, That's f....cked? why? I did not, nor did my kids take anyone's land. My kids hockey team is not allowed to change in the change room. why does he go home in sweaty clothing? Just because of a one in 100,000 pervert? Why do I do 4 hours of safety training for some jobs that take me 10-15 minutes to complete. No wonder transmountain cost 30 billion. Imagine we tried to rebuild the CPR today. Today we have so many small rules that probably have good intentions but really make it kind of shitty when looking back to times with more freedoms. My dad in the 70's spent a year working on and off in a logging camp in northern Vancouver island. He made a bunch of cash then lived on the beach in Tofino for 3 months, it got too cold and he and two friends drove to grassy key in Florida and camped on the beach for the winter. Two summers ago we went to Tofino and as beautiful as it is the beaches are now controlled ( no fires, no camping, no parking, dont even dream of drinking a cold one) Sure, we dont want vagabonds everywhere but we are also kind of making life miserable for the young and stupid. This rules upon rules kind of mentality is doing damage. I just cant really explain it, I just feel it. So yes we live longer today but were hooked to the internet and afraid of everything, most are too poor to really live and the ones who cast aside the rules are considered weird and antisocial. I'm in the camp of no boom till we let people be individuals, make mistakes, get hurt, go broke and fight back swinging.
james22 Posted November 11, 2023 Author Posted November 11, 2023 17 hours ago, Jaygo said: Yea our standard of living is better today than 100 years ago but our improvement steps are getting incrementally smaller. A world with internet is more than incrementally different than the world before it.
Sweet Posted November 12, 2023 Posted November 12, 2023 IMO - it’s not. I anticipate a sideways grind for a while longer. If rates stay at close to 5% stocks need to be yielding more than a 5% earnings yield. Forward looking PE for the SP-500 is now 18, so we are getting there.
Gamecock-YT Posted November 12, 2023 Posted November 12, 2023 Guess if that’s the case it’s also set for another Great Depression then
Spooky Posted November 12, 2023 Posted November 12, 2023 What we really need is a step change in productivity to improve people's quality of living. Maybe a combination of AI and automation could get us there.
james22 Posted November 12, 2023 Author Posted November 12, 2023 18 hours ago, Jaygo said: Today we have so many small rules that probably have good intentions but really make it kind of shitty when looking back to times with more freedoms. I think it’s mostly true that things are stagnating compared to the century, or quarter-century before 1970. Some of that is simply because we’ve snagged the low-hanging fruit: You can only invent radio once. But I think there’s more to it than that. In the United States, which drove most of the “golden quarter’s” progress, 1970 marks what scholars of administrative law (like me) call the “regulatory explosion.” Although government expanded a lot during the New Deal under FDR, it wasn’t until 1970, under Richard Nixon, that we saw an explosion of new-type regulations that directly burdened people and progress: The Clean Air Act, the Clean Water Act, National Environmental Policy Act, the founding of Occupation Safety and Health Administration, the creation of the Environmental Protection Agency, etc. — all things that would have made the most hard-boiled New Dealer blanch. Within a decade or so, Washington was transformed from a sleepy backwater (mocked by John F. Kennedy for its “Southern efficiency and Northern charm”) to a city full of fancy restaurants and expensive houses, a trend that has only continued in the decades since. The explosion of regulations led to an explosion of people to lobby the regulators, and lobbyists need nice restaurants and fancy houses. Maybe it’s just a coincidence that progress suddenly slowed down, but I don’t think so. https://www.usatoday.com/story/opinion/2016/05/12/technological-progress-stagnation-regulatory-explosion-1970s-column/84225066/
backtothebeach Posted November 12, 2023 Posted November 12, 2023 18 hours ago, Jaygo said: Today we have so many small rules that probably have good intentions but really make it kind of shitty when looking back to times with more freedoms. Screw your freedom.mp4
SharperDingaan Posted November 12, 2023 Posted November 12, 2023 (edited) The reality is that the more 'comfortable' living becomes; the less participants 'apply' themselves in useful every day activity. To significantly change a standard of living, requires a change in mindset; and the more 'comfortable' you are, the less incentive you have to do so. The middle-class will continue to do very well/thrive, but it will look nothing like it does today. Most would expect a great many of today's fat and lazy to drop out, replaced by a new crop of the lean and mean, and a smaller total number. Simply the well-know rags-to-rags in 3 generations; and not a bad thing. Those < 15 have an entirely different mindset, long absent from more recent generations. One of the more striking differences is trades school first to get a ticket, then a gap-year of decisions, then university/profession/post-grad. Greater maturity, confidence in decisions, and more of the applied versus academic. Expectation that the professional will also hold a trades ticket, and never be out of of work for any extended time. Multiple short/medium term careers, of conventional employment, and continuous side hustles (electrician, plumber,welder, etc.). Treat employees poorly, and you bankrupt as your employees walk out the door. Also notable is the much stronger sense of family; they've seen the failures of mom/dad, gran/gramps, and are not about to repeat them. Most would also expect a secular decline in both the wedding and legal trades, as attitudes are very, very different. Then add to it, that this is the generation that will be implementing today's new technologies ...... All good. SD Edited November 15, 2023 by SharperDingaan
vinod1 Posted November 13, 2023 Posted November 13, 2023 On 11/11/2023 at 3:27 PM, Jaygo said: I agree that life is much better today but when the improvements slow down it feels like reverse. From 1900 - 1930 we went from shit ridden city streets rife with pestilence to inexpensive cars, penicillin, aircraft, electricity and a whole host of incredible things. I have a theory that is hard to quantify but I dont think our culture is producing truly individual people and I think that it will have negative long term consequences, maybe depression maybe suicide maybe just far lower productivity and inventiveness. The way mid twenty year old's act these days is truly baffling to me, they want everything, whine when they can have it then ask mom if the laundry is done. I'm all for tight families and my time with my parents was precious but i really cant understand why so many still live at home. The general thought is to save money but give me a break, how do you learn anything on your own. Why not rent a shit hole? work your ass off and get out of it to better digs. My theory is that the above is a result of a slow mental training of inadequacy and needing protection by having bylaws and rules for everything imaginable to keep us safe. My kids cant wear sleeveless shirts at school, Why? At every assembly we recognise some Indian tribe as the original owners of the land, That's f....cked? why? I did not, nor did my kids take anyone's land. My kids hockey team is not allowed to change in the change room. why does he go home in sweaty clothing? Just because of a one in 100,000 pervert? Why do I do 4 hours of safety training for some jobs that take me 10-15 minutes to complete. No wonder transmountain cost 30 billion. Imagine we tried to rebuild the CPR today. Today we have so many small rules that probably have good intentions but really make it kind of shitty when looking back to times with more freedoms. My dad in the 70's spent a year working on and off in a logging camp in northern Vancouver island. He made a bunch of cash then lived on the beach in Tofino for 3 months, it got too cold and he and two friends drove to grassy key in Florida and camped on the beach for the winter. Two summers ago we went to Tofino and as beautiful as it is the beaches are now controlled ( no fires, no camping, no parking, dont even dream of drinking a cold one) Sure, we dont want vagabonds everywhere but we are also kind of making life miserable for the young and stupid. This rules upon rules kind of mentality is doing damage. I just cant really explain it, I just feel it. So yes we live longer today but were hooked to the internet and afraid of everything, most are too poor to really live and the ones who cast aside the rules are considered weird and antisocial. I'm in the camp of no boom till we let people be individuals, make mistakes, get hurt, go broke and fight back swinging. You might be absolutely right, but the following is what gives me pause. For the last 2000 years people always thought the next generation is going to hell. It is actually quite funny if you research the different things people worried about in the past. Books, bicycles, cars, landline phones at homes. Look up the stories behind these and we now see how the fears are beyond ridiculous. Would future generations look at what we worry about in similar way? The baseline for what is acceptable/normal/good/right is what we have experienced in our childhood. Anything before is too primitive, anything after is coddling. We long for, back in the day... The story of human progress can be summed up in one word: conquest of risks. So not sure what is going on is bad. Vinod
Cigarbutt Posted November 14, 2023 Posted November 14, 2023 On 11/11/2023 at 3:27 PM, Jaygo said: I agree that life is much better today but when the improvements slow down it feels like reverse. From 1900 - 1930 we went from shit ridden city streets rife with pestilence to inexpensive cars, penicillin, aircraft, electricity and a whole host of incredible things. ... That's f....cked? why?...My kids hockey team is not allowed to change in the change room. why does he go home in sweaty clothing? Just because of a one in 100,000 pervert? ... pervert? On 11/12/2023 at 8:59 PM, vinod1 said: ... The story of human progress can be summed up in one word: conquest of risks. So not sure what is going on is bad. Vinod The penicillin example is interesting. Penicillin was 'discovered' in 1928 but availability came effectively to 'market' only in the 1940s, mostly as a result of imperfect but still impressive collaboration between countries and a reasonably effective combination of public and private participants. So it took a while for a revolutionary change (like electrification etc) to take effect. Now we have the internet, artificial intelligence and related and, so far, productivity growth numbers have remained quite anemic. So it may take a while for the evolutionary (so far) technology to make it to market in a way to improve productivity (and, as a corollary, our standards of living)?
Paarslaars Posted November 14, 2023 Posted November 14, 2023 It will take a while, but we are adapting to change much quicker. It won't take 12 years for this to have its impact.
ValueArb Posted November 14, 2023 Posted November 14, 2023 In the 1920s US debt to GDP was in the 20-30% range. Today it's 130%.
Dinar Posted November 14, 2023 Posted November 14, 2023 (edited) 11 minutes ago, ValueArb said: In the 1920s US debt to GDP was in the 20-30% range. Today it's 130%. There is another important difference. In the 1920s, people were ashamed to go on welfare. Today it is considered normal. In addition, today for too many members of society, welfare pays better than an honest job. Education is much worse today than in the 1920s. Edited November 14, 2023 by Dinar
Gregmal Posted November 14, 2023 Posted November 14, 2023 The bar for a roaring 20s is also so much lower today because of efficiency. Imagine going on a vacation from NY to say Cape Cod in the 20s? The cost relative to average wage? The time? Today it requires much less for people to live well and we finally do at least temporarily seem to have an environment where if folks want to do well, they can work hard for it.
Paarslaars Posted November 15, 2023 Posted November 15, 2023 On the other hand, we also live in a world where you have to do a lot less to have a nice life... more and more people are working part time because they prefer the time over the money. Especially younger people now tend to focus much more on their mental well being than career or money. Maybe a bit too much, damn snowflakes.
mattee2264 Posted November 15, 2023 Posted November 15, 2023 The other important difference is that in the 1920s the USA was a developing/emerging economy. So technologies that allowed mechanisation of agriculture and automation of manufacturing and so on allowed for more rapid industrialisation and massive productivity improvements. And freed up labour so it could be moved into higher value uses. In this sense the new technologies were very much complementary to society. The difference with AI is that it would be replacing a lot of low skill tasks and in a world of billions of people there are no obvious other low skill tasks for them to engage in. So you could just end up with a lot of structural unemployment and a lot more government debt as the welfare system will have to expand and you cannot tax AI the same way you can tax labour and it is also far more difficult to tax companies than it is to tax labour. Certainly AI is a deflationary technology. But I am not convinced it is going to lead to massive increases in world GDP.
SharperDingaan Posted November 15, 2023 Posted November 15, 2023 (edited) One of the biggest issues around blockchain and AI is the lack of discussion around the ESG and CSR impacts. Just because you could do repetitive tasks cheaper, more efficiently, and with fewer people 'does not mean that you will be allowed to'. Those menial jobs feed millions of people; take them away via the poor use of technology, you get violent civil unrest, and regime change. A great many people on minimum wage can no longer afford the cost of living; they live in trailers/tents, and rely on both public transit to get to work, and food banks. Furthermore, as work is either eliminated, or displaced (WFH); transit volumes sink, ticket prices rise, and the social issues rapidly worsen. Depending where you live, regimes will act differently, but they will/do act. Ant Financial discovered the hard way, that size is not protection. NA has tremendous new technologies in the wings, and is very good at implementing. Tossing sh1te against the wall to see what sticks, is just messy execution of 'agile project management'. It ain't pretty, but it optimises practical solutions very quickly, and the US is very good at it. We have the technology, and failure is not an option. Another roaring 20's is inevitable; but 100 years+ later, don't expect it to rhyme. SD Edited November 15, 2023 by SharperDingaan
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