HN user
Because they are? There are whole industries that are more or less total BS. Whatever you do for these companies you are pretty much not contributing anything worthwhile to the society.
Well, according to you maybe. The customers/patrons of the company probably have a differing view.
Land is a limited resource.
Precisely why the LVT is inherently flawed and regressive, and prone to abuse and exploitation by the rich and powerful, instead of being dictated by the aggregate market demand of regular citizens.
Empirical data from the US and France, however, indicates that ownership of land value (in absolute terms) is negatively correlated to the social welfare weight. Middle income households would pay relatively more land value taxes than high income households, but less in absolute terms.
Unfortunately, the "relatively more" aspect (to one's income) is what matters.
LVT is predicated on this idea landowners will be forced to "make efficient" land for common good, as an empty lot is taxed the same as the skyscraper. In practice, this just makes desirable areas unaffordable for the middle class and completely forces out the lower class. e.g. it _makes explicit_ into the tax laws, what is already happening in practice with property tax.
property taxes in a desirable area say "sorry you're poor and your house isn't nice, but you pay less tax than your rich neighbor". LVT says "don't let the door hit you on your poor ass on your way out, but if you want to stay you can pay the same tax as Mr Moneybags next door".
Not to mention the irony that LVT actually decreases the value of the land.
If buyers know that they’ll have to pay £10,000 in tax on a piece of land they valued at £100,000, they’ll only be willing to pay £90,000 for that land. The tax lowers the returns from land ownership which is reflected in the value of the land. The current owners of land are the ones who bear the full cost of future tax bills.
Again this disproportionately affects the middle class landowner and unceremoniously kicks the lower-class former-landowner who inherited the property out of the landowner class.
LVT is ultimately the billionaire's dream. It's a dressed up neo-Eminent Domain, pretending to be progressive while being punitive to those without means.
Worst of all* is the suggestion LVT it discourages land speculation - it actually does the exact opposite. It severely exacerbates speculation, akin to how people scalp concert tickets or limited edition Jordan shoes today.
*there's also countless issues with trusting the government to evaluate the land; the issue of value vs. area; subjectivness of varying types of land value from agricultural farmland vs. industrial land vs. service-oriented vs. transport/logistics vs. inherent value from resources, but "make the poor family living in a shack pay the same tax as the rich guy who build a skyscraper" is sufficiently flawed without going in depth into those issues.
Getting rid of 1031 would be a good start. But contrary to what most people/economists falsely proclaim, land value taxes are actually a regressive, punitive tax to those who commit the grave sin of living in an area that other people decide to gentrify. A complete non-solution to the problem.
What's your suggestion to eliminate landlords from the equation, then? CCP-style regulations where there is no citizen landownership? Only the government is allowed to own land? Property owners should be forced to operate as nonprofits and maintain the property, but donate all profits to taxes?
asking as someone who's never owned property.
There are countries in which there is no IP protection, it's not the utopia you think it is.
Asset multiples will collapse if unemployment rises significantly and the labor market weakens. Surely the investor class will still come out ahead, but it's interesting they seem to be ignoring this fact (except Warren Buffett, who's cash reserve to equity ratio is far greater than most of his peers)
Right - and this resistance against RTO from a basis “companies are doing it just because of sunk costs” has a logical conclusion companies should increase outsourcing further.
This doesn't add up to me. The priorities of corporate executives are to please the board of directors. BoD priorities are to please shareholders/investors. Shareholders/investors are pleased by growth/profits. That is, the investors care not about "how things look" but instead how they actually are, as in quarterly reports, share price, etc.
If employees are happier and more efficient working from home, it satisfies the priorities of all the above parties. If RTO makes people unhappy and either less productive OR makes them not want to work for that employer, it goes against the incentives and priorities of all the above parties.
I think it is illuminating to consider how these debates would go very differently if employers where the ones whose budgets paid for all the hours/fuel spent in office commutes
A significant number of employers do allocate budget and incur expenses for employee commuter benefits. And unclaimed commuter benefits results in cost savings for the employer, I'm not really sure I understand the point being made here.
So let's say they go full remote for jobs that allow it - why should they hire you, then? Why not hire someone in Vancouver for 80% of your salary, or Mexico for 60%, or Brazil for 40%?
The entire stock market hit an all-time high during this period. Because of $3 trillion from quantitative easing.
It's not the perfect medium because it requires living in some of the most expensive real estate markets on the planet.
This applies to the entire United States if everything that could were to go fully remote. Why hire someone for 6 figures in <a US state> when you could hire someone in Brazil to do it for 40% of the salary?
I am not sure I find this explanation convincing. If a corporation thinks it could increase profits without RTO and after eating office real-estate losses, it'll do so. The real estate companies and the middle managers do not make decisions for these companies. If wasted office costs are $10M, but more happy, productive, and efficient remote employees make an additional $20M, there wouldn't be RTO.
Are certain cities (like NYC) taxing unoccupied office space? If so, how much? This information is much more convincing than a claim that companies are enforcing RTO to make middle managers feel like they are "presiding over their kingdom".
Every job posting on their website states "Total compensation also includes generous equity and benefits."
You don't think it's a little uncalled for to wish physical harm and/or death on someone just because you disagree with their actions?
Can you point out some examples of astroturfed articles? I cannot say I find your statement convincing based on a google search of news about threads.
Why do you blame Facebook and not ElutherAI?
The UK structures water provision as regional monopolies. This should be a hilarious joke but it's the reality. You can't change water company without living in a different region. There is no effective market competition for water provision in the UK.
This is how utilities/water work in the vast majority of the US. I’m unclear why you think this is strange? At the very least, it doesn’t explain the UK’s problems.
Not even going to touch the bait in your statement but calling Kelly Rowland a hip-hop artist is an exceedingly bizarre statement. It would be like calling Blink 182 hair metal, or calling Coldplay classic rock.
It’s quite literally a problem, every day.
It was explained, maybe you didn't connect the reasoning.
First, there are no entities that have the amount of capital needed to keep the bond market moving besides banks. This is a $50 trillion market that makes the stock market look like a lemonade stand. I would suggest you do some research on the bond markets, it will become immediately apparent why only central and private banks have the capital necessary to drive it.
It's the nature of a credit/debt based system, which is currently in a booming credit cycle (although perhaps the end of the cycle)
As to why do banks need tax money for bailouts?
The banks don't need tax money, if you're willing to let banks fail - which would likely be healthy in the long run.
But in the short term, Joe Middle Class can't get a car loan to get a car, Wealthy Sally can't get a business loan to start a company and employ 50 people, Minimum Wage Mike can't get a home loan after saving up money for 25 years.
It's certainly a shame that banks basically face no consequences and the taxpayer has to pay for it. But people's perspective on bank bailouts changes quickly when they realize the "side effects" are their credit cards no longer exist and their loan rates tripled.
Actually, the yield curve was inverted at the time they made the purchases, compounding how strange their decision was.
Source on 1/3rd? Does that include the ~$80B of 15-30 year MBS they acquired at the same time?
clearly it was not enough considering interest rates were zero at the time and the yield curve was inverted.
These banks made poor investment decisions and were reckles with customer funds, and are to blame for their own failure. It might be on-brand for him, and surely he acted in his own interest and didn't give a shit about anyone else.
But did Thiel also organize runs on Silvergate Bank and Signature Bank NY? Why did those fail along with SVB in a span of days? His involvement seems to be getting exaggerated here.
This would have been "safer", but lost them money.
In a short-term sense, but the point of short-dated maturities is not to produce yield but rather provide liquidity, which allows you to purchase higher-yielding 10+ year notes in the event the interest rate rises.
They would've actually gained money by (1) not being forced to sell assets at a loss, thereby leading to a run and also becoming insolvent and (2) e.g. used the maturing short-dated bonds to purchase 3-year treasuries at today's 4.1% rate, rather than their shitty 1.8% 10-year notes.
There are way better ways to "yield chase" than this,
Such as what?
There are not, if you have $50-100B. Your options as a bank are either treasury bonds or mortgage-backed securities.
As a private sector investor (e.g. Warren Buffett) you have the additional option of equity investing, but it will take many years to move that much money.
Does it? Or is this just how the system is currently designed?
Yes, to both questions. The US Debt is at $31 trillion, it only works as long as the system keeps feeding money into government bonds.
The entire global financial system (not just the USA; the rest of the world is dependent on the USD and US banks) is reliant on this cycle of money.
50 years ago we might have asked who will provide the Fed with the gold it needs to issue enough currency to avoid deflation as the population grows exponentially.
It was realized the gold standard stifled growth too much, and was abandoned just about 50 years ago as well.
You can have a safe system without growth (everything Tech was built off credit/debt and castles in the sky until decades after the companies were founded) or you can have the tech industry with a debt-credit based system.
Sure, but the thing they bought also had almost no yield, so that's what I'm not understanding. Why is shitty 1% 10 year T notes "yield chasing"?
Exactly. the 1-year notes had zero interest rate risk, and almost no yield. The 10-year notes offered very high interest rate risk (remember: rates were almost zero) and barely-more-than-no-yield.
Choosing 1.5% return at high interest rate risk vs. 0.5% return for low rate risk. Either way you are getting almost nothing, but one has the risk of putting you into a liquidity crisis. In a sense you're willing to risk it all to squeeze an extra 1%, It is the absolute definition of yield chasing.
and apparently have lots of mechanisms by which you can borrow against them should you need to in almost any non-runlike scenario.
If your $1000 bond is worth $1005 at maturity, and it has dropped to $990 and you want to borrow from me against the bond, I will charge you at least $15 in this scenario. That's slightly oversimplified, but lenders (other than the Fed/QE) will loan at a rate where you're essentially locking in a loss, because they have what you need to offset your risk you failed to hedge against (liquidity).
If the SVB bankers were "yield chasing" surely there were more effective ways of doing so at approximately the same risk.
Not that I am aware of, at that scale of money. There's also high-risk lending to borrowers (which SVB did) but companies might borrow $10M, $20M, maybe $100M. When you're talking $50-100B, Bonds are the only game in town.
Sorry, but you're completely misunderstanding what you're reading, or reading false information if that's your interpretation.
Bond portfolios typically hold a mix of maturities from 1, 2, 3, to 10-year+ maturities. The short term ones offer liquidity and protect against interest rate risk. Because if the interest rate increases and new bonds are issued at a higher rate, your maturing bonds become cash to purchase the new, higher-yield notes.
Literally - call your 401k provider and ask to speak with an investment advisor if you don't believe me.
Holding only 10-30 year HTMs is absolutely yield chasing. SVB skipped having the short-term maturities, because they do not offer much yield. It is basically the literal definition of yield chasing.
SVB would have been equally as lambasted for keeping the deposits in cash, as that's an equally as irresponsible thing to do.
All cash would've been foolish, but considering the primary purpose of a bank is to provide liquidity for clients, it's a bit of a reach to call it equally irresponsible as assuming your banking clients would be fine waiting 6-10 years for your investments to mature.
10 year bills are way cheaper because of the interest rate risk. You have to hold an unrealized/paper loss if rates move against you, but eventually you will realize the face value after 10 years.
This is why bond investors who aren't yield chasing would never overleverage into these.
At the _very_ least the fed announced interest rate rises in March of 2022 (with updates in June, Sept, Nov/Dec) and SVB could've worked out some kind of short-term credit deal with a JP Morgan type last year. Instead they did nothing but sat on assets which they knew would drop over 20% market value in a year while not ensuring short-term liquidity.