S.T.

FRIDAY, MAR 10, 2023 - 12:49 PM

Authored by Lance Roberts via RealInvestmentAdvice.com


SNIPPETS:

As Mr. Buffett states, buybacks done on a value-accretive basis benefit shareholders. However, that has not happened since the turn of the century.

Mostly Not Value-Accretive

“Over the past five years, according to S&P Dow Jones Indices, big U.S. companies have spent $3.9 trillion repurchasing their own stock. ... ...

Stock buybacks by companies in the S&P 500 are projected to top $1 trillion in 2023 for the first time in a calendar year, according to S&P Dow Jones Indices. ... ...

“A new study, “Share Repurchases on Trial,” by accounting and finance professors Nicholas Guest of Cornell University, S.P. Kothari of the Massachusetts Institute of Technology and Parth Venkat of the University of Alabama, analyzes the stock returns of thousands of companies from 1988-2020, comparing those that repurchased shares against firms that didn’t, adjusting for their size and other factors. In the year of a repurchase, companies that did large or frequent buybacks had slightly lower—not higher—returns. Over longer periods, their returns were indistinguishable.” – Jason Zweig

Clearly, if there is no real benefit to higher returns, then the buybacks were not value-accretive to shareholders. Which then fosters the question, why do they continue to do it?

Who Really Benefits

Share buybacks only return money to those individuals who sell their stock. This is an open market transaction, so if Apple (AAPL) buys back some of its outstanding stock, the only people who receive any capital are those who sold their shares.

So, who are the ones mostly selling their shares?

It’s the 😈🎩 insiders, of course, as changes in wage structures since the turn of the century became heavily dependent on stock-based compensation. Insiders often sell shares “given” to them as part of their overall compensation structure to convert them into actual wealth. As the Financial Times previously penned:

“🦀 Corporate executives give several reasons for stock buybacks but none of them has close to the explanatory power of this simple truth: Stock-based instruments make up the majority of their pay and in the short-term buybacks drive up stock prices.”

A report on a study by the Securities & Exchange Commission found the same:

SEC research found that many corporate executives sell significant amounts of their own shares after their companies announce stock buybacks, Yahoo Finance reports.

What is clear is that the misuse and abuse of share buybacks to manipulate earnings and reward insiders has become problematic. ... ...

Of course, that is probably why the SEC had banned stock buybacks until 1990, as they were a form of stock market manipulation.

Full article:
https://www.zerohedge.com/markets/buffett-buybacks-who-really-benefits

AGelbert NOTE: don't confuse the "Free Money era" mentioned in this article, that resulted in billions of dollars to being irresponsibly "invested" by 😈🎩 corporate greedballs, with the Wall Street pejorative "free money" low and middle income Americans rightfully received to get by during the Pandemic. That was JUSTIFIED money, not "Free Money era money". Wolf is talking about billions of dollars scammed from the Federal Government (e.g. "forgiven" loans to high income professionals and corporations PLUS Government bailouts to Airlines, Big Oil, etc. on the backs of we-the-taxpayers).

For those who don't know what 😒 Preferred "Stock" is, all you need to know is that it is nothing but a type of "secured" LOAN to a corporation that pays an agreed amount of interest. Unlike a share of "Common" stock, which actually IS Stock, because it goes up or down in price according to stock market buys and sells, and can also pay some, or less to 😈 nada, dividends every now and then, Preferred "Stock" is NOT, strictly speaking, "Stock". In the case of SVB Financial, those with Preffered "Stock" came out "better than nothing", though not completely unscathed. That does NOT mean that buying "Preferred Stock" is 100% secure. The fact that the financial establishment played name games with that interest paying LOAN called "Preferred Stock" should warn you that caveat emptor is sine qua non when you have dealings in the financial world ruled by Social Darwinist crooks and liars.

Graphics by yours truly.

Mar 11, 2023 By Wolf Richter for WOLF STREET



Not learned a thing since the Financial Crisis. Relying on ratings, preferred stock holders found themselves bailed in, bondholders got crushed.
SNIPPET:

But for investors, it would have been nice to get prior warning from the credit rating agencies that this stuff is maybe not investment grade after all, but junk that needs to come with high yields, before getting thrown off the cliff.



In terms of bonds, for example, the $650 million 1.8% senior unsecured notes, issued in October 2021, also during the Free Money era, plunged from 86 cents on the dollar on Wednesday to 37 cents on the dollarat the close on Friday. ... ...

Full article:
https://wolfstreet.com/2023/03/11/svb-financial-had-investment-grade-credit-ratings-from-moodys-and-sp-up-to-collapse-then-ratings-got-slashed-in-one-fell-swoop-to-default/

Reality based COMMENTS:

Dang Mar 11, 2023 at 11:35 pm
Your article is both poignant and a sad commentary about my ability to ascertain value vs price, a fundamental precept of the higher business education industry.I could search appropriate bonds in the AAA category up until about 2000 or so with confidence that the rating agencies had correctly categorized the risk of the likelihood that the borrower would pay the money back. The street is selling the myth on a mound of lies. A former champ selling themselves on the corner.

The pillars of the community are pathological liars and criminals. Enticing people into overvalued securities for the vig.

We’re not talking about the wolf of the wall street dumpster.

We are talking about the private network of debt rating agencies who were selected by the Federal Government to price they’re trillions of dollars of issuance. The bond market went from the rock of Gibraltar to the rock that weights down the body.

We deserve a Postal Service bank.

Depth Charge Mar 11, 2023 at 7:14 pm
The entire financial system is one giant fraud. Moody’s was also rating all of the subprime junk last housing bubble at AAA. They should have been shut down.

Beyond this, the banks don’t even have capital reserve requirements anymore. And there’s no more “mark to market,” either. All of this after the 2008 crisis.

Nothing was learned alright. In fact, they decided to double down and go even harder.

Ambrose Bierce Mar 12, 2023 at 12:08 pm
So why aren’t the bank reserves available for SVB? Isn’t that the point of creating “excess” reserves. There should be a Wolf Street for Dummies. I don’t get any of this, including the SVB stock symbol listed on the Stuttgart exchange. Why is the financial stock separate from the bank stock? Apparently one business with assets waning is Landvest, a real estate and forestry management company, that’s not a tech startup. And what does all this have to do with Silvergate, in La Jolla, Ca., which has exposure to crypto and is also on the ropes? Is that what contagion means?

Wolf Richter > Ambrose Bierce Mar 12, 2023 at 12:28 pm
1. “reserves” = cash that banks put on deposit at the Fed. Only the Fed calls this bank cash “reserves,” the banks call them “cash” or “interest-earning cash” or similar on their books.

2. Borrowing from the Fed at the “Discount Window.”

SVB probably withdrew all of its cash deposits at the Fed (reserves) to fund the withdrawals by its own depositors. Close to the end, it had no cash at the Fed (no reserves)

Borrowing at the Discount Window might have occurred (this is not disclosed 🙊 by bank, and we 🤷‍♂️ don’t know), but the Fed requires that a bank is solvent in order to use the DW, and this bank was deemed insolvent, so it couldn’t borrow at the DW anymore, if it ever could.   

SVB had subsidiaries in the UK, Germany, China, and other countries. Some of them floated some of their shares at the local exchanges. For example, the SVB entity floated shares in the UK, and those share stopped trading on Friday, the BoE is going to declare the entity insolvent and shut it down. I don’t think Germany has taken that measure yet. The China entity, which is a joint venture with a  Chinese firm seems to be still up and running.

Depth Charge Mar 11, 2023 at 7:20 pm
This entire “system” in the US has morphed into a rigged shell game where the rich have hijacked the government and are taking everybody else for a ride. And the moment one of their little Ponzis blows up, they cry for a taxpayer bailout and get it .

I am noticing more and more comments on social media sites like Twitter and Youtube where people are fed up with bailouts and are crying for all of these people/companies to burn . People love that SVB blew up and a bunch of rich people potentially lost billions. Eat your losses, 🐷🎩 pigs.

Nissanfan > Depth Charge Mar 11, 2023 at 7:30 pm
Did they lose though, or it is simply an average Joe with workplace 401Ks managed by financial groups?

Top 😈🎩 institutional owners of SVB:
The Vanguard Group, Inc. 10.85%
SSgA Funds Management, Inc. 5.22%
BlackRock Fund Advisors 5.18%
Alecta Pension Insurance Mutual 4.46%

Those funds will still collect their maintenance fees as if nothing happened.

Lone Coyote Mar 11, 2023 at 9:04 pm
Already seeing 🐍 talking heads on twitter (including an 🐉 elected representative from California) crying for bailouts .
I was too young to get what happened in 2008 at the time but if it happens again I will lose the last bit of hope in the financial system (assuming I still have it in the first place). aaagh

kramartini Mar 12, 2023 at 5:58 am
But in the Financial Crisis, the government got all of its TARP money back, plus interest , plus profit on the exercise or sale of warrants . The so-called bailouts were really a special tax levied on strong banks (the majority) to clean up the mess at a handful of weak banks.

crazytown > kramartini Mar 12, 2023 at 10:31 am
😠 BS. It was a handout to save a bunch of crooks who should have been sent to prison instead of given a blank check by the even more crooked treasury department at the time. Too big to fail should not exist.


Wolf Richter > kramartini Mar 12, 2023 at 10:24 am
Tarp was peanuts compared to what the Fed did. The Fed did all the bailouts that made Tarp, 🎩 Buffett, and all investors a ton of money. It did it by 😈 printing trillions of dollars and buying assets with it, driving up asset prices, including those of private-label MBS that had collapsed. Without  that, Tarp would have shown steep losses, as would have all other 🎩😈 investors.
😒👉

MONDAY, MAR 13, 2023 - 05:20 PM


Authored by Michael Hudson

The collapses of Silvergate and Silicon Valley Bank are like icebergs calving off from the Antarctic glacier. The financial analogy to the global warming causing this collapse of supporting shelving is the rising temperature of interest rates, which spiked last Thursday and Friday to close at 4.60 percent for the U.S. Treasury’s two-year bonds. Bank depositors meanwhile were still being paid only 0.2 percent on their deposits. That has led to a steady withdrawal of funds from banks – and a corresponding decline in commercial bank balances with the Federal Reserve.

Most media reports reflect a prayer that the bank runs will be localized, as if there is no context or environmental cause. There is general embarrassment to explain how the breakup of banks that is now gaining momentum is the result of the way that the Obama 🎩 Administration bailed out the 💩🎩 banks in 2008 with fifteen years of Quantitative Easing 🎩 to re-inflate prices for packaged bank mortgages – and with them, housing prices, along with stock and bond prices.

The Fed’s $9 trillion of QE (not counted as part of the budget deficit) fueled an asset-price inflation that made trillions of dollars for holders of financial assets – the One Percent with a generous spillover effect for the remaining members of the top Ten Percent . The cost of home ownership soared by capitalizing mortgages at falling interest rates into more highly debt-leveraged property. The U.S. economy experienced the largest bond-market boom in history as interest rates fell below 1 percent. The economy polarized between the creditor positive-net-worth class and the rest of the economy – whose analogy to environmental pollution and global warming was debt pollution.

But in serving the banks and the financial ownership class, the Fed painted itself into a corner: What would happen if and when interest rates finally rose?

In Killing the Host I wrote about what seemed obvious enough. Rising interest rates cause the prices of bonds already issued to fall – along with real estate and stock prices. That is what has been happening under the Fed’s fight against “inflation,” its euphemism for opposing rising employment and wage levels. Prices are plunging for bonds, and also for the capitalized value of packaged mortgages and other securities in which banks hold their assets on their balance sheet to back their deposits.

The result threatens to push down bank assets below their deposit liabilities, wiping out their net worth – their stockholder equity. This is what was threatened in 2008. It is what occurred in a more extreme way with S&Ls and savings banks in the 1980s, leading to their demise. These “financial intermediaries” did not create credit as commercial banks can do, but lent deposits out in the form of long-term mortgages at fixed interest rates, often for 30 years. But in the wake of the Volcker spike in interest rates that inaugurated the 1980s, the overall level of interest rates remained higher than the interest rates that S&Ls and savings banks were receiving. Depositors began to withdraw their money to get higher returns elsewhere, because S&Ls and savings banks could not pay higher their depositors higher rates out of the revenue coming in from their mortgages fixed at lower rates. So even without fraud Keating-style, the mismatch between short-term liabilities and long-term interest rates ended their business plan.

The S&Ls owed money to depositors short-term, but were locked into long-term assets at falling prices. Of course, S&L mortgages were much longer-term than was the case for commercial banks. But the effect of rising interest rates has the same effect on bank assets that it has on all financial assets. Just as the QE interest-rate decline aimed to bolster the banks, its reversal today must have the opposite effect. And if banks have made bad derivatives trades, they’re in trouble. 🚩

Any bank has a problem of keeping its asset valuations higher than its deposit liabilities. When the Fed raises interest rates sharply enough to crash bond prices, the banking system’s asset structure weakens. That is the corner into which the Fed has painted the economy by QE.

The Fed recognizes this inherent problem, of course. That is why it avoided raising interest rates for so long – until the wage-earning bottom 99 Percent began to benefit by the recovery in employment. When wages began to recover, the Fed could not resist fighting the usual class war against labor. But in doing so, its policy has turned into a war against the banking system as well.

Silvergate was the first to go, but it was a special case. It had sought to ride the cryptocurrency wave by serving as a bank for various currencies. After SBF’s vast fraud was exposed, there was a run on cryptocurrencies. Investor/gamblers jumped ship. The crypto-managers had to pay by drawing down the deposits they had at Silvergate. It went under.

Silvergate’s failure destroyed the great illusion of cryptocurrency deposits. The popular impression was that crypto provided an alternative to commercial banks and “fiat currency.” But what could crypto funds invest in to back their coin purchases, if not bank deposits and government securities or private stocks and bonds? What is crypto, ultimately, if not simply a mutual fund with secrecy of ownership to protect 😈 money launderers?

Silicon Valley Bank also is in many ways a special case, given its specialized lending to IT startups. New Republic bank also has suffered a run, and it too is specialized, lending to wealthy depositors in the San Francisco and northern California area. But a bank run was being talked up last week, and financial markets were shaken up as bond prices declined when Fed Chairman Jerome Powell announced that he actually planned to raise interest rates even more than he earlier had targeted, in view of the rising employment making wage earners more uppity in their demands to at least keep up with the inflation caused by the U.S. sanctions against Russian energy and food and the actions by monopolies to raise prices “to anticipate the coming inflation.” Wages have not kept pace with the resulting high inflation rates.

It looks like Silicon Valley Bank will have to liquidate its securities at a loss. Probably it will be taken over by a larger bank, but the entire financial system is being squeezed. Reuters reported on Friday that bank reserves at the Fed were plunging. That hardly is surprising, as banks are paying about 0.2 percent on deposits, while depositors can withdraw their money to buy two-year U.S. Treasury notes yielding 3.8 or almost 4 percent. No wonder well-to-do investors are running from the banks.

The obvious question is why the Fed doesn’t simply bail out banks in SVB’s position. The answer is that the lower prices for financial assets looks like the New Normal. For banks with negative equity, how can solvency be resolved without sharply reducing interest rates to restore the 15-year Zero Interest-Rate Policy (ZIRP)?

There is an even larger elephant in the room: 💣 derivatives 😵. Volatility increased last Thursday and Friday. The turmoil has reached vast magnitudes beyond what characterized the 2008 crash of AIG and other speculators. Today, JP Morgan Chase and other New York banks have tens of trillions of dollar valuations of derivatives – casino bets 💣 on which way interest rates, bond prices, stock prices and other measures will change.

For every winning guess, there is a loser. When trillions of dollars are bet on, some bank trader is bound to wind up with a loss that can easily wipe out the bank’s entire net equity.

There is now a flight to “cash,” to a safe haven – something even better than cash: U.S. Treasury securities. Despite the talk of Republicans refusing to raise the debt ceiling, the Treasury can always print the money to pay its bondholders. It looks like the Treasury will become the new depository of choice for those who have the financial resources. Bank deposits will fall. And with them, bank holdings of reserves at the Fed.

So far, the stock market has resisted following the plunge in bond prices. My guess is that we will now see the Great Unwinding of the great Fictitious Capital boom of 2008-2015. So the chickens are coming hope to 🌠 roost – with the “chicken” being, perhaps, the elephantine overhang of derivatives fueled by the post-2008 loosening of financial regulation and risk analysis.
https://www.zerohedge.com/markets/hudson-why-banking-system-breaking

March 13, 2023



20,229 views  Premiered Mar 13, 2023  Economic Update with Richard D. Wolff 🗽 
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[S13 E11] Social Security, Ohio Derailment, Puerto Rican Poverty : US Capitalism Provokes

In this week’s show, Prof. Wolff focuses on the struggle over Social Security- real versus false alternatives- and the East Palestine, Ohio, derailment tragedy. In the second half of the show, Wolff interviews Alexis Colón about the colonial status of Puerto Rico and Puerto Ricans fighting against it.

Timestamps:
00:00 - 01:01 - Intro
01:02 - 10:06 - Social Security
10:07 - 14:33 - Ohio Train Derailment
14:34 - 15:45 - Announcements
14:46 - 29:50 - Interview with Alexis Colón

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Selected (of many reality based) Comments:

treefrog3349 March 13, 2023
The plight of the average American worker could be best describe as one of "erosion": slow and steady, barely discernible degradation of their economic viability over a long period of time. Using a steel bridge as an example, the superficial patina that accumulating rust exhibits obscures the actual structural integrity of the bridge. It takes a long time, but if that erosion persists, the bridge will eventually collapse under its own weight. Such is the plight of a large swath of our working class, the very foundation of our economy. An immense upward transfer of wealth over the last 40 years coupled with the neglect for the well-being of millions, is undermining the structural integrity of democracy itself. Worse yet, this wasn't a matter of neglect and mismanagement. It was intentional, providing a ready pool of desperate, manipulatable and exploited "citizens".

Sober Thinking March 16, 2023
Excellent video! I would only add that Social Security is actually CUT every single year since 1983. How so?
📢 The SS pension income threshhold for taxing SS benefits has NOT been adjusted for inflation since then!

Here's a graphic that proves that:

Retired Senior Citizens that depend onSocial Security to survive are annually LOSING some buying power, despite their SS pension being annually adjusted up by the CPI COLA calculations of the BLS. That is effectively a PENSION CUT EVERY SINGLE YEAR BECAUSE of INFLATION.

ANY 😈 politician, REGARDLESS of Party affiliation, that says Social Security is "not being cut and will be defended" is a LIAR! 😡

TECHSPOT

By Rob Thubron April 14, 2023 at 6:55 AM


It begins

SNIPPETS:

What just happened? Fears that generative AIs could replace human jobs have become a reality 😬 at one of China's largest media and public relations companies. Bluefocus Intelligent Communications Group Co. is planning on replacing its external copywriters and graphic designers with generative AI models, and more of the country's industry giants could follow suit.

Bloomberg News reports that an internal staff memo seen by the publication revealed the plans to replace external staff with generative AI. "To 💵🎩😈 embrace the new wave of AI-generated content, starting today we've decided to halt all spending on third-party copywriters and designers," reads the internal memo. ... ...

Any system that can automate a human worker's job is going to cause concerns, as has been the case for decades, but few technologies have caused as much worry as generative AI. According to research by bank Goldman Sachs, these systems could replace a quarter of work tasks in the US and Europe, the equivalent of 300 million jobs, and cause "significant disruption" across big economies.

Joseph Briggs and Devesh Kodnani, the authors of the Goldman Sachs paper, say nearly two-thirds of jobs in the US and Europe are exposed to some degree of AI automation. Globally, 18% of work could be automated by AI, with developed countries impacted more than emerging markets. About 7% of workers in jobs where generative AI could perform at least half their daily tasks are vulnerable to replacement.

Full article:
https://www.techspot.com/news/98314-company-replace-creative-workers-chatgpt-like-generative-ai.html

Selected (of several) Reality Based COMMENTS:

kira setsu Apr 14, 2023, 12:38 PM
Uncle Al said

"At some point I think there will be a rebellion against all of those that choose to go this route, especially by professionals. Once these companies start feeling it in the pocketbook they will quickly reverse their decisions. No matter the benefits of AI, if it puts educated people out of work and their are no jobs to be found, there will be no money to be spent and the downfall begins ......"

.
"At some point"
that's the massive issue right there, these companies aren't dumb and they notice that so far at least..."we the people" have done nothing to go against them or really fight back, the fact a company just comes out and says flat out "were gonna replace with you" is all you need to know, they have no fear of retribution because it hasn't happened to any of the other wild and terrible ideas they crank out..."at some point" will be chiseled into humanity's tombstone, probably by a chiselbot turbo.

Have you seen the reaction of many companies regarding the protests and boycotts for these pushing their woke agendas with force and at stupid levels?
what they have done is push harder
but yes, this is on a larger scale, because it can attack people's sources of income/livelihood.

Neatfeatguy Apr 14, 2023, 2:18 PM
Quick! Let's save money by outsourcing to what isn't really AI!

This AI crap can't think for itself, it only regurgitates what it finds online. Why do stupid people seem to think this is AI? Oh yeah, that's right....because stupid media and company big wigs know most humans out there are dumb and will believe what they tell them, especially if they keep repeating the same thing over and over again.

Dimitrios Apr 14, 2023, 4:23 PM
Job interview

What are your qualifications?

" I'm a cybernetic organism. Living tissue over a metal endoskeleton."

mbk34 Apr 15, 2023, 2:27 AM
AI creeps up on you. I thought I was ahead of the game having put (fairly simple) AI into arcade games and produced genetic learning programs for chess engines. Then I'm having breakfast with my son who expresses little interest in IT, let alone AI, and he mentions he uses ChatGPT all the time to produce reports for the energy markets.

cristianm Apr 15, 2023, 5:02 AM
Creative work can't be replaced by generative programs for now. But let's be serious, there are tons of articles that do not require creativity because they are rehashes of older things, sensationally repacked or not. There are summaries of games and so on that are written with very few formulations. So GPTs can write the junk with little to no loss to humanity. But writing a novel is more than generating some text that seems to flow.

Gastec Apr 16, 2023, 5:23 PM
"Creative workers", an euphemism for all workers. The propaganda I've been hearing for decades from all political parties, was that they want to CREATE more jobs, not to destroy jobs, at least in Europe. Many European and from over the pond corporations have received lots of help, legal facilities and look-the-other-way's from the State and from the Law, the kind a simple individual who wants to open a small bussiness doesn't get, precisely because they came with the promise of creating lots of jobs after opening their factories, supermarkets, office buildings and whatnot.
Now, after getting all that help to fill their pockets with lots of money, surprise mechanics Pikachu! They have the nerve to tell us that they no longer need human workers? And we have to what, just shut up, "just buy it" because "it just works"?

Thanthan Apr 16, 2023, 8:49 PM
For a Technology that will hallucinate two non existent norms for every correct one it lists in a given field people sure are expecting a lot from this tech.
I asked it to put some lists of relevant European norms for work and seriously I had to abandon the **** it GPT gave me. Numbers all wrong, non existent standards, just BS for what is an incredibly simple question.

It’s way, way too prone to being absolutely stupid in all the wrong places to be capable of replacing a human. A human I at least know which parts it finds hard when I’m doing quality control… the AI is stupid in the most absurd of places.

Don’t get me started on the art ones… ask them to give you an action scene or something with lots of people, I dare you.

We are not there yet. It’s semi interesting research, and fun to use at home. Trust it for work? Yea bugger off.

Gastec Apr 17, 2023, 7:55 AM
yRaz said

Keeping economic inneffiencies for the sake of keeping jobs is silly. "computer" use to be a job where people would do math by hand. I don't think modern farmers are arguing with hydraulics. The fact of the matter is that if your job can be easily replaced and automated then it should be. No one is entitled to a job.

"No one is entitled to a job". You must be an idealist, because the world is full of nepotism and lazy people "entitled" to their jobs. For example in the socialist, progressive and inclusive EU country (that starts with S) where I live and work, mediocrity is awarded and stupidity is tolerated and the chatbots won't take up many jobs any time soon, in the big corporations or factories with thousands of employees, because if they do, those jobless masses will burn down the cities, along with the politicians who let it happen. If there must be a change it has to happen slowly, not overnight because some greedy, old Corporate Commanders want a few more billions before they go meet their horned god.

Avro Arrow Apr 17, 2023, 8:25 AM
Gastec said

"No one is entitled to a job". You must be an idealist, because the world is full of nepotism and lazy people "entitled" to their jobs. For example in the socialist, progressive and inclusive EU country (that starts with S) where I live and work, mediocrity is awarded and stupidity is tolerated and the chatbots won't take up many jobs any time soon, in the big corporations or factories with thousands of employees, because if they do, those jobless masses will burn down the cities, along with the politicians who let it happen. If there must be a change it has to happen slowly, not overnight because some greedy, old Corporate Commanders want a few more billions before they go meet their horned god.

I agree that nobody is "entitled" to a job but I do believe that private corporations should be heavily-regulated because, as we've seen, they're extremely prone to making decisions that damage the economy, the people and the planet.

I don't know what country you mean so I'll make a guess... Sweden?

EDIT: Your speckled hen reference actually makes me think more like Slovakia or Slovenia.

Shear Apr 17, 2023, 9:22 AM
yRaz said

Keeping economic inneffiencies for the sake of keeping jobs is silly. "computer" use to be a job where people would do math by hand. I don't think modern farmers are arguing with hydraulics. The fact of the matter is that if your job can be easily replaced and automated then it should be. No one is entitled to a job.

It's one thing to take away tedious jobs from people like calculating and manual labor by replacing it with mechanized stuff. It's entirely different when you start taking away jobs that are meaningful to people like programming, writing, and art of any kind. If people aren't working because they can't get a job due to AI doing everything better faster and forever without any complaints humanity is done. People NEED jobs to live. They may not be entitled to one but they absolutely need one and it will be impossible to compete with AIs eventually.

You can say well we will make new jobs... right those will also get automated immediately.

yRaz Apr 17, 2023, 9:48 AM
Shear said

It's one thing to take away tedious jobs from people like calculating and manual labor by replacing it with mechanized stuff. It's entirely different when you start taking away jobs that are meaningful to people like programming, writing, and art of any kind. If people aren't working because they can't get a job due to AI doing everything better faster and forever without any complaints humanity is done. People NEED jobs to live. They may not be entitled to one but they absolutely need one and it will be impossible to compete with AIs eventually.

You can say well we will make new jobs... right those will also get automated immediately.

If AI can do everything better than maybe we have to reevaluate how our economy works

yRaz Apr 17, 2023, 10:07 AM
Avro Arrow said

I agree that nobody is "entitled" to a job but I do believe that private corporations should be heavily-regulated because, as we've seen, they're extremely prone to making decisions that damage the economy, the people and the planet.

I don't know what country you mean so I'll make a guess... Sweden?

EDIT: Your speckled hen reference actually makes me think more like Slovakia or Slovenia.

The economy has been broken for the entirety of human kind. The only time it remotely worked properly was between 1940 and 1970 and then it completely failed in 2008. I'm not calling for outright socialism but whatever this dumpster fire that we call capitalism is not working. For human history we have relied on production based economies. If AI and automation can replace the human work force WE WILL have to think of how the economy works differently. I know I'm tired of living in this clown world . I got a significant raise this year but when adjusted for the cost of living I still make less than I did pre-covid.

Shear Apr 17, 2023, 10:49 AM
yRaz said

If AI can do everything better than maybe we have to reevaluate how our economy works

100% this should happen. In theory with AI every person on Earth could live an amazing life. Just enjoy every second of it on this planet. Have meaningful experiences whatever they may be to each person. But people are greedy, especially the elites who are in charge of making these systems (board members, the people who are all about that profits the people who are funding all this) and I just don't see how this isn't going to be exploited to the max instead.

Economics and Beyond

Thursday Mar 16, 2023 🔊 PODCAST

Historians Naomi Oreskes (Harvard University) and Erik Conway (Caltech) talk to Rob about their just-released book, The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market.

May 25, 2023 • by Wolf Richter • 55 Comments


Wolf Richter on inflation, consumers, the labor market, and when will these drunken sailors finally stop throwing money around, with Adam Taggart on Wealthion:

May 25, 2023 at 9:23 am perpetual perp
There’s no ‘irony’ in our current system. All that is going on is best described as ‘unethical.’ We have an ethics problem. The gyrations the Fed goes through with interest rate manipulation has what is called an ‘allocative effect’ said effect allocates (as in transfers) wealth from labor and the middle class up to the super-rich class. Both in the ‘boom’ and in the ensuing ‘bust’ of our chronic ‘boom and bust’ episodes. The cure for this nonsense is to re-install progressive tax rates, to apply the anti-trust laws. And to impose some ethics in the markets, which are essentially casinos today, having very little to do with accurate price resolution.

May 25, 2023 at 1:18 pm AGelbert > perpetual perp
Agreed. At the root of, not just the economy’s problems, but most of the socially destructive actions presently causing the degradation of our biosphere and the reduction of average human life span, is TPTB’s love affair with Social Darwinism. Social Darwinists believe that ethics based principles are ‘limitations pretending to be virtues’. To them, ethics are ‘feel good illusions’ that humans invented to pretend our species has empathy. To Social Darwinists, empathy is irrefutable evidence of inexcusable weakness. To them, all who are guided by ethics are deluded fools that should be eliminated from the human ‘apex predator’ gene pool for the “good” of our species.

Until TPTB recognize that their love affair with profit over people and planet, otherwise known as “corporate fiduciary responsibility”, is ruinously socially destructive, things will get worse.


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Historians Naomi Oreskes (Harvard University) and Erik Conway (Caltech) talk to Rob about their just-released book, The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market.