Americans' 'YOLO' spending spree baffles economists

https://www.bbc.com/worklife/article/20231130-why-americans-yolo-spending-attitude-baffles-economists

by safaa1993 • 3 years ago

63 140 3 years ago

economists when people aren’t rational economic actors: shocked pikachu face

astrange7• 3 years ago

That's not what rational expectations means, it's just a way of saying things are priced in, so that if the price of eggs went up there is probably a good reason for it and it doesn't mean you can go and start an egg business to compete on lower prices.

https://someunpleasant.substack.com/p/economists-do-they-kno...

dragonwriter5• 3 years ago

economists when people aren’t rational economic actors

This is more "economist selectively chosen by media that is trying to sell a downturn narrative when people don't act like there is an economic downturn when aggregate economic measures also don't show a downturn [...]"

Heck, even the article linked to support "people have drawn down their savings" in this article says notes of the reduced savings rate trend, "When the economy is good — like now, with the unemployment rate seemingly pinned below 4%, or back in the mid-2000s — people are more willing to operate with low levels of savings, because they're confident they're going to keep receiving a paycheck."

People aren't acting like there is a downturn because there isn't a downturn and media that is trying to sell a narrative about there being a downturn and the economists they select to respond are acting shocked that no one is acting like it is a downturn and using that to somehow sell the narrative that its even worse than if it was a downturn where people were acting normally for a downturn.

jdlyga• 3 years ago

The efficient market hypothesis taken down another peg

quickthrower22• 3 years ago

Stay solvent people!

MisterBastahrd• 3 years ago

The United States has $1.08T cumulative credit card debt. Somehow, we've managed to give trillions away to business owners for fucking up their own finances, but individuals should be left to rot in the sun under insanely usurious rates.

I'm not saying it's right. I'm just saying that the only reason that one set of bad decisions gets alleviated and the other one doesn't is because of who donates what. Wiping out that balance would also obliterate a lot of retail banks.

astrange7• 3 years ago

The US does not have historically high credit card debts right now, and it isn't particularly high relative to incomes either.

I think part of it might be that credit cards added planning features that have guaranteed fees to compete with BNPLs.

sp3322• 3 years ago

Isn't the US at record high levels of credit card debt right now?

jfengel• 3 years ago

I'm surprised they're surprised. Inflation makes people want to buy things before they get more expensive. Even if inflation cools prices will never be this low, and savings will be worth less tomorrow than today.

Seems like reasonable behavior to me.

cced• 3 years ago

Are we in the ‘it’s time to start worrying’ phase? When you think about this more and more often, which I personally am, what types of discussions should we start having?

astrange7• 3 years ago

We are not in any particularly worrisome period. The reason you are thinking more often about this is that we're in a "vibecession" where the media are all being unusually negative about everything.

This is causing historically strange results in financial surveys right now where everyone says they personally are doing fine but that they also think the economy is bad because they heard they were supposed to think that.

shermantanktop• 3 years ago

If you ask the consumer finance media, it’s always time to start worrying. Worrying sells and breeds more worry.

I’m not being dismissive of the odd situation we are living through, but I’ve not found the worry level of other people to be that helpful a guide. Those preppers with bugout bags are still waiting to be proven right.

Aloha13• 3 years ago

I dont think so. I've been hearing that it's a time to worry for over 20 years, thru three major once in a lifetime events. If none of those were a time to worry, I dont see why this is.

tempsy4• 3 years ago

I've never had the thought "let me spend a bunch of money on disposable things because it'll be more expensive a year from now"

I don't think that's how most people think about their purchasing decisions at all.

publicmail• 3 years ago

I think people definitely do exhibit this behavior. It’s part of what causes FOMO.

They also exhibit the opposite - waiting to buy things that they think will go on sale later.

zoklet-enjoyer2• 3 years ago

Really? Because that's how I think and have been thinking since the money printer got cranked up in 2020.

junipertea• 3 years ago

While neither of us can extrapolate behavior of “most people”, I and a lot of my middle class peers definitely this exact thought and acted on it.

NikkiA• 3 years ago

I have had the thought that I should buy 'luxuries' that I've been saving for, before they get unaffordable again, even if it makes things a little tighter than I'd like in the near term.

ruined• 3 years ago

disposable things? why do you think that's what people are buying?

nicolas_17• 3 years ago

Yeah, you haven't lived through actual inflation. In Argentina we're used to "buy it now because it will be more expensive next month". My laptop is more expensive used on mercadolibre than what I paid for it brand new 5 years ago.

In the US they have 5% inflation rather than 200% but the effect is still true, just less strong.

nytesky4• 3 years ago

I think that logic is usually applied to deflation and why it is so insidious (wait to spend and tomorrow will be even cheaper, grinding economy to a halt).

The inverse for inflation seems possible, but somewhat flawed because you will need even more money in general in the future, so hoarding cash to grow it could also be an impulse.

I feel like Keegan’s baby sitting coop has some parallels to the “unexpected” outcomes from human responses to market forces

nytesky4• 3 years ago

The krugman coop story: https://slate.com/business/1998/08/baby-sitting-the-economy....

FabHK2• 3 years ago

Inflation has come down, and rates have come up. As a result, real rates are higher than they've been for more than a decade.

So, now it makes more sense, economically, to delay consumption, than in a long time.

https://fred.stlouisfed.org/series/REAINTRATREARAT1MO

https://fred.stlouisfed.org/series/REAINTRATREARAT10Y

phendrenad2• 3 years ago

This effect was observed in Weimar Germany also, during absolutely insane inflationary times. History books tell the tale as though people rationally bought things because they held value more than cash, but now having lived through this relatively smaller inflationary era, I wonder if there's more to it, and it's a more subconscious thing.

oliwarner• 3 years ago

It seems reasonable iff you have money sitting around.

If you're buying at 22%APR, it makes a lot less sense. Every "saving" you make will be realised on you several times over.

chasd00• 3 years ago

Sentiment will always be pessimistic because optimism doesn’t trend on social media. Consumer sentiment isn’t meaningful in the social media era.

dragonwriter5• 3 years ago

Headline measures (like the overall consumer confidence index, or even the two major components of it), don't tell you much (the current situation portion tells you the same story as other broad economic indicators, the future expectations portion has been pure noise for a very long time.) I think some of the detailed components (current family situation and 6-month family expectation, for instance) do have some signal and are less a reflection of (social or other) media noise.

libraryatnight• 3 years ago

Retail therapy!

quickthrower22• 3 years ago

What if much Black Friday spending is buying stuff cheaper they would have needed anyway? That would be in line with a frugal outlook. People being savvy consumers.

nytesky4• 3 years ago

Yeah I got an $80 Chromebook because my kids are breaking one semi annually. Don’t need it now, but there will be a night when they need on and theirs is DOA. Expiring 2029 will get them to college, so buying now seemed worthwhile.

dragonwriter5• 3 years ago

This "YOLO" attitude towards money bucks the spending trends of past economic downturns

The 5.1% annualized GDP growth rate last quarter also bucks the trends of past economic downturns.

If neither aggregate output nor consumer behavior are acting like a downturn, maybe the thing that should be surprising is the description that there is an "economic downturn".

MattGaiser• 3 years ago

Indeed. The idea of an economic downtown almost seems to be one of sentiment rather than any data.

Wages are up above inflation. Asset prices are strong. Job market is strong. Inflation is dropping. Consumer spending is strong.

Other than inflation currently being a bit above target, which numbers are people unhappy about?

Whoppertime2• 3 years ago

The Month over Month inflation may be low, but since 2020 it's been 20%, and suffice to say a majority of the working population has not gotten a 20% wage increase since then

Fluorescence3• 3 years ago

I don't see debt being mentioned and I wonder how much economic activity is shuffling debt around e.g. if someone buys a car with credit but can't keep up with payments so has to sell it at a loss, it probably looks great on economic dashboards - two cars have been sold! In real life, it really sucked though.

A side note - I am a little wary at how frequently economic figures have been revised recently. It makes suspicious when people are surprised at good news that seems to go against sentiment. I fear that in a couple of years time, the Fed might discover Dave's spreadsheet included December twice or something.

battery_glasses2• 3 years ago

People are unhappy about housing.

If you own a house with a fixed rate mortgage then inflation will have a heavily muted effect on your personal financial situation since your (most likely) largest expense isn't effected.

However, people look around and see that they can't afford to move to a different house of similar size/quality because prices and interest rates are so high. And they definitely can't afford to move out of that starter house into something with an extra bedroom so they can start a family or take care of an aging parent.

This creates a deep sense of instability and the sensation that you are stuck where you are, and people generally don't like feeling unstable or stuck.

I truly believe 99% of the economic woe in America can be traced back to the lack of housing.

zlg_codes2• 3 years ago

Where is the job market strong and what opportunities are on offer?

I'm in Washington and I see no growth or opportunity around here.

Doesn't matter if we have 10000 more jobs if they suck.

CapstanRoller3• 3 years ago

Wages may have risen on the low end, but it's really difficult to find a job in many professions and the pay has dropped substantially. My LinkedIn feed is full of unemployed engineers, recruiters, etc. Layoffs are also continuing, but are no longer big enough to make the news.

The "recruitinghell" subreddit highlights many of these problems.

notyofriend2• 3 years ago

It’s hard to tell if that’s real. Small mistakes in inflation calculations can blow that up easily. Western economies don’t typically grow at 5% rates

demosthanos2• 3 years ago

"If 18 months ago, you'd have said the Federal Reserve Bank could raise interest rates by 500 basis points, and the consumer would chug on, relatively unfazed, I would have been extremely surprised," says Ellie Henderson, an economist at UK-based, global bank Investec. "I'd have said, 'that's just not how economics works'."

Economics is such a funny field to me. The systems involved are incredibly complex, yet economists habitually speak as though their models are anything more than that: models.

Somehow we got into a place where policy is made on the explicit assumption that the Federal Reserve Bank is in possession of a mystical lever, a single number that they can change to steer the behavior of more than 300 million people. As a layperson, it's incredibly obvious that interest rates are but a single variable in an enormously complex equation that we have no hope of recreating in a spreadsheet, but somehow that comes as a surprise to the professionals.

jonathankoren• 3 years ago

Economics is such a funny field to me. The systems involved are incredibly complex, yet economists habitually speak as though their models are anything more than that: models.

It’s funny that you bring this up, because this idea that the the power brokers forgot that their models were simplistic models of human behavior instead now thought of them as full, bidirectional descriptions of behavior is the thesis of many Adam Curtis documentaries. I’m thinking about the The Trap in particular.

c_o_n_v_e_x• 3 years ago

There's a whole line of thinking in the Austrian school of economics that consumers cannot be accurately modelled.

FabHK2• 3 years ago

Arguably, the more people, the better you can model aggregates. Just as with the gas equation - it works because there are so many molecules that individual idiosyncrasies are smoothed out.

And, so, yes, there have been regularities observed (that make theoretical sense, also); and when those break down, that is worthy of note and investigation. You can't just point to "oh, it's people", rather you should try to figure out what's systematically different this time.

landemva2• 3 years ago

in possession of a mystical lever, a single number that they can change to steer the behavior

Federal Reserve has more than one lever. They set bank reserve ratios. They engage in outright buying of underwater (mispriced) paper through quantitative easing. They created a new program this year to swap SVB's mispriced bond holdings at par. It's time to reel in Federal Reserve and reel in government deficit spending.

arvinsim• 3 years ago

I would think more of in terms that there is a single mystical entity that can change the behavior. And that entity is the Federal Reserve.

cykros• 3 years ago

They can also change initial margin requirements (Reg T), but this hasn't been done in decades. Neither have reserve requirements been changed since they were dropped to zero in the wake of the GFC.

They do have a few numbers though. The Federal Funds rate isn't actually directly set by them, but rather, targeted, using other policy to "enforce" that target (in the form of open market operations -- buying and selling securities) For what it's worth, it's amusing that they talk about the FF rate at all, given how vacant the market itself has been since the GFC (down to about $100B/night), as few care to engage in unsecured lending in the first place now that we all are painfully aware of counter-party risk. They do, however, directly set the reverse repo rate, the discount window rate (aka Primary Credit), and the prime rate (though, how much prime matters these days is a matter for debate).

HDThoreaun• 3 years ago

QE is not buying mispriced assets.

unsupp0rted• 3 years ago

I wonder if AGI can easily see the levers.

“If you want to slow down the economy by 15% then raise interest rates by n basis points, have these 4 people from your senior admin do a press tour, leak the following information ‘accidentally’ on YouTube, and wait 8 to 10 weeks for results”.

easywood• 3 years ago

"For economists, the real world is often a special case" - Edgar Fiedler

28304283409234• 3 years ago

My mom always said: “Economy is not a science. It is a force of nature. “

Gys• 3 years ago

I studied economics and totally agree with your mom. Because a very important aspect in economics is trust, which cannot be modeled and can change overnight.

tim333• 3 years ago

interest rates are but a single variable in an enormously complex equation that we have no hope of recreating

Or rather it's not even an equation. My decision whether to put off buying an iPhone if interest rates doesn't map to one really. Which doesn't stop people trying to estimate such probabilities with equations but it's a mistake to not recognise they are crude estimates of human behaviour.

smeagull2• 3 years ago

In a system where fewer people are paying mortgages, their lever is going to become less effective on spending.

r00fus• 3 years ago

It's a religion that worships a spherical cow named "rational actor".

nytesky4• 3 years ago

I have two questions.

BNPL seem to be about 4 weeks — isn’t that about the grace period for a paid off credit card? If anything I thinking you charge at the beginning of a cycle, you get 7 weeks? Am I misunderstanding?

I heard on Planet Money how consumer sentiment is down in the Michigan survey, and I am really wondering if there is a bias in how the survey is run. With caller id and modern cell phones, I imagine there are pretty big demographic bias in who will willingly participate in a survey, and I suspect their outlook will dominate and may not be representative of the populace? Do they have a realistic way to collect reliable data in modern era?

damiankennedy• 3 years ago

yep, 55 days on some cards

and no, these surveys are as reliable as the ones before elections, same with other modern democracies

vharuck• 3 years ago

With caller id and modern cell phones, I imagine there are pretty big demographic bias in who will willingly participate in a survey, and I suspect their outlook will dominate and may not be representative of the populace? Do they have a realistic way to collect reliable data in modern era?

All well-run surveys will apply weights to responses when calculating rates so the results reflect what would be if the participants were a "perfectly distributed" sampling across groups.

The article links to another article[0] for the consumer sentiment survey. The linked article says this:

Methodology
Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,000 U.S. adults. The margin of error for total respondents is +/-2.43 percentage points. Fieldwork was undertaken between September 28 – October 6, 2023. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

2000 isn't a bad sample size for the basic analysis done. But I wish they'd include errors when comparing subgroups. Some of these differences are probably not statistically significant.

YouGov draws participants from a pool of people who've already been recruited and tracked[1]. I haven't found a good explanation of how they recruit or retain them, and don't feel like spending much more time on it.

There's one last red flag with the survey quoted in the Bank Rate, and it qualifies for my rule of thumb to ignore the article: the survey is not linked. I'd be happy with just the methodology, executive summary, and technical notes. Otherwise, I assume anyone quoting a survey they could but won't share isn't being totally honest.

[0]https://www.bankrate.com/personal-finance/biden-economy-and-...

[1]https://yougov.co.uk/about/panel

edmundsauto• 3 years ago

You can make adjustments for response bias, but as the bias increases, the adjustments have to as well. That amplifies error bars, which makes the insights less useful.

paxys• 3 years ago

Credit cards and BNPL are the new subprime mortgage. Yeah the economy is great while everyone is spending like there's no tomorrow, but there will be a time soon enough when it'll be obvious that the trillions of dollars in consumer debt we have racked up simply aren't getting paid back.

sdenton43• 3 years ago

Tell me why I'm wrong...

The federal interest rate applies to loans, so the main first order effect for consumers is via mortgage rates and car loans. However, home sales are low because prices have been sticky despite the higher interest rates, leading to far fewer sales as people can't afford the higher mortgage costs. Meanwhile, people who already own houses are completely insulated from mortgage rate changes.

So, consumer spending is relatively insulated from first order effects of the federal interest rate, especially for existing homeowners.

sdenton43• 3 years ago

(also seems kinda weird to measure this with black Friday sales... Which could simply be an indicator of people trying to get further with the money they have by spending less during non sale periods. But I assume there's more evidence than what's at the top of the article.)

Aloha13• 3 years ago

Do people actually wait for black friday to buy a house?!

battery_glasses2• 3 years ago

You're only insulated so long as don't have to move. Very few people stay in 1 house for thirty years. If you own a house you are now stuck there - hope you don't need to move for a new job, hope you don't want to have another kid, hope your parents don't age into needing substantially more care, etc.

Aloha13• 3 years ago

Anyone who went thru went felt like a life changing (and life challenging) event, like the pandemic, is not going to behave in the same way people used to (before they had those experiences).

Because of social media, and the media - people felt, quite acutely - the very real risks of COVID - basically people felt (with some truth) that they were lucky to escape the pandemic alive, and because of this, are acting in a YOLO way - you saw people behave the same way 100 years ago from the combined effects of the 1918 Flu Pandemic and World War 1 - all over the world, but particularly in the United States.

I dont think we're really fundamentally understanding the real world psychological effects of the Pandemic and the psychological effects of feeling like we were living in an emergency for 18-24 months - and I think it'll likely take a decade or more to really analyze and process this.

salynchnew• 3 years ago

Underrated comment.

You hear constantly about how people in the USA who went through the Great Depression became lifelong hoarders, etc.

The idea that folks who went through a massive global pandemic (which, unlike the Spanish Flu, was liberally reported on in the media) wouldn't realize that their life is short and act accordingly is... funny.

coffeebeqn• 3 years ago

I mean the next 20 decades weren’t great for Europe after the Spanish flu. Hope it’s not that

Aloha13• 3 years ago

I have heard so many people say "life is short, why wait?" in the last 18 months, maybe before that - I've seen people quit jobs, relocate, buy houses - do all sorts of things they wanted to do that made them feel more fulfilled, or just happier. I've even made choices of my own with a very big eye on mortality.

We might have been waiting before, but as I said elsewhere in thread, I've experienced three once in a lifetime type events since a turned 18 - why should I wait? I want to live the life I want to live. Pandemic for me tamped down any FOMO I might have, but did not tamp down the YOLO - because of that, why wait?, do the things you want now, while you can, bring joy and warmth into your life, experience new things - because you never know when the bottom might fall out again.

Whoppertime2• 3 years ago

If the great depression lead to hoarders what will Covid lead to? Lifelong TP Hoarders?

Spivak• 3 years ago

And the fact that the disease itself was mild for most people didn't change the fact that people's lives were put on hold for 2 years. Even if you didn't feel like you "survived" it still put front and center that our current way of life isn't a given.

Aloha13• 3 years ago

Yeah, you're capturing my perspective exactly.

It was arguably the psychological impact of the on hold feeling that did more to explain now, than anything about the disease itself - though the pandemic did make me personally acutely aware of my own mortality - and I dont think I'm the only one.

cjohnson3183• 3 years ago

I appreciate your perspective, but I'd like to provide an alternative viewpoint. I think only a minority of Americans were really effected by the pandemic in the way you're describing. Many Americans did not believe a pandemic was happening, or had ever happened. Many believed the pandemic was real, but worked through it anyway because they had no choice. Only a minority of Americans believed the pandemic was real, and could afford to rearrange their whole life accordingly.

I think there's a lot of reasons for runaway spending, from feeling overly optimistic about the economy, to feeling overly pessimistic about the economy, like the extravagant spending of Russian nobility on the eve of the February Revolution of 1917. It can even be the case that multiple groups are spending a ton for different reasons.

demosthanos2• 3 years ago

Everyone was affected by the pandemic. Red state, blue state, service worker or constant zoom meetings, everyone was impacted. Local government, personal political views, socioeconomic status and everything else had an impact on how people experienced the pandemic and for how long (in some places things went back to more-or-less normal sooner), but there's no question that the entire world felt the impact intensely.

Aloha13• 3 years ago

I'm sorry, you're wrong - and I dont say that lightly.

My roommate worked a service job during the pandemic, went to work every day.

He couldn't go shopping at a store for 6 months, he couldn't go out to eat for a similar length of time - there was social pressure on him to not do these things even once they reopened for fear of harming others. Social Media was acidic, and the mainstream media was.. upsetting, to put it politely. I'd also note that we are in Texas, which didn't keep its restrictions as long as NY or CA, and it was still traumatic.

All but the most crazy anti-vax nut jobs believe the pandemic happened, I know folks who would otherwise lean very conservative take it quite seriously - do you know why? they saw the morgue trailers. I know others folks who didn't who behaved the same way after watching a loved one die. The folks who didn't believe are not a small number, I'll admit - around 15% of the country - but polling backs up people believing the illness was real, and that it was dangerous - the level of danger however did vary in intensity by partisan paring.

Balgair3• 3 years ago

In the US, roughly a million people died of covid during the pandemic. That's ~1 in 340 people, or roughly two Dunbar's numbers (150). Meaning that every 1 in 2 people was 'close' to someone that died of covid. That plus the restrictions and all the other jazz. It was a lot.

Personally, my family lost 5 due to covid. And we lost another 3 during the pandemic that we had to digitally mourn too[0]. The family is still not processing all of it very well, as a fair few members are still at very high risk and travel is still restricted for us. It's as if those years didn't really happen. Personally, I have a hard time remembering 2020-22. There are just gaps in my mind.

I'm not the same person I was after it. My spending is a, to be honest, a bit more free now. There really is a sense of YOLO in my life. Not a very large sense, but a sense all the same. Seeing so many close family members die, sometimes at their bedside, it affected me. I know now, in some very small way, how short my life is. How precious it is, how frivolous it is. I'm personally still dealing with a lot of that memento mori.

[0] I will forever hate zoom because of those horribly dumb, mismanaged, separated funerals. Fuck's sake, digital cruelty.

mikewarot• 3 years ago

At one point, there were so many people dying some areas, that the dead had to be kept on ice until someone could come pick them up from their families homes. Obviously this happened in low income areas more than elsewhere.

Many people died, and were buried without a funeral or wake. Many people couldn't even visit their dying family members, and had to make do with video calls to their loved ones, all alone and hooked up to machinery as they passed on.

This was definitely a traumatic event. Looking at annual numbers glosses over most of the horror and shock of it. No wonder the Economists don't get it.

jrflowers• 3 years ago

I love being an economist and waking up in a sweat in the middle of the night to a terrifying riddle: “given the base points situation, how do they still decide to pay rent”

nine_zeros• 3 years ago

Anecdotally, my non-tech peer group have a booming economy thanks to the Inflation Reduction Act, Infrastructure Act, and Chips Act. Business owners are seeing orders go through the roof which they attribute to booming manufacturing, trades and retail. They don't believe it when I say tech is in recession (or at least laying off/reducing headcount).

nradov• 3 years ago

This is exactly it. Factory construction is booming.

https://www.wsj.com/articles/americas-factory-building-boom-...

jmyeet• 3 years ago

My theory is the two underlying causes are:

1. Inflation benefits spending now. What you want is only getting more expensive. Also, any debt you have is having its real value reduced without you having to do anything so why pay it off? and

2. Despair. For a lot of people, they're struggling to make ends meet. There is no concept of saving for the future or even being able to retire. For an increasing number of people the stability of home ownership is increasingly out of reach. The retirement plan for these people is simply to die in debt. Plus people think about their mortality when you go through a pandemic where over a million Americans died and there was massive disruption to people's lives. The real spending power of people has also been eaten away by the rising cost of necessities (which the article mentions).

vitehozonage• 3 years ago

Agreed. I dont think im alone in feeling like the future world wont be something i want to live in at all. The future and present seems so incredibly dark to me. I see no motivation to be saving with a long-term perspective. Savings and asset can be taken from me or evaporate, but what i experience right now cannot be.

satvikpendem2• 3 years ago

There is no concept of saving for the future or even being able to retire.

This kind of attitude cause such events to transpire, truly ironic.

baazaa• 3 years ago

The massive generational redistribution of wealth means that naturally the interest-rate consumer spending link has changed. Before higher interest rates meant boomers had less to spend after their mortgage, now it means they have more to spend from returns on their investments.

mensetmanusman• 3 years ago

Someone has to keep the game of musical chairs going!

lamontcg• 3 years ago

The question to start asking, pretty soon, is if the booming economy means that the Fed is going to have to raise rates and step on the brake pedal even harder?

Pretty soon sentiment is likely to shift towards "good news is bad news" if inflation starts to tick up again. Everyone is talking about how hiring is good and people are spending all kinds of money, that means more money chasing goods, which is going to be inflationary. Again.

And we know what the Fed's views are on inflation.

Meanwhile CMBS continues to slowly melt down as loans hit maturity dates and fail to pay off and debt service triples on them. Distressed office loans have increased from 3% a year ago to over 10.5% now. And across the economy, all the bad bets of the ZIRP era are finally getting stress tested.

smeagull2• 3 years ago

If you know that you're never going to save enough for a house, then you no longer have an incentive to save long-term.

ac130kz• 3 years ago

Moloko's "Time is Now" was playing in my head during this Black Friday.

friend_and_foe• 3 years ago

I can tell you why. The same reason everyone blows their paychecks as soon as humanly possible in Venezuela.

Prices go up slow enough but faster than they used to, people slow down their spending because times are tight. Prices go up fast enough, people spend their money before it is worth less than it is right now.

I'm not surprised it baffles economists. Economists are mostly just finance analysts nowadays.

doc_shekt• 3 years ago

There's no drive to save for the future of you feel like there's no future.

_nalply• 3 years ago

Let's say the inconvenient truth: Our ship is sinking.

Let's party as long it's going good. Let's party like there's no tomorrow.

Americans' 'YOLO' spending spree baffles economists

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