The Economy

TigerVols · Nov 11, 2021

MileHigh said: ↑

I've always had Hondas and yup, just keep up the maintenance and they run great. My 2011 CRV had 245,000 on it. Still running great, but I wanted an upgrade so I got a new CRV about four months ago. Great cars.
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Same. Our 2012 CRV with 145K is just getting broken in but I suspect we may upgrade it next spring because the safety and security gadgets in my Alfa are fantastic and I really miss them when driving our CRV.

BTExpress · Nov 11, 2021

My brother just had to turn in his leased Giulia. Heartbroken.

The Big Ragu · Nov 11, 2021

TigerVols said: ↑

Far be it from me to argue economics with you and you know I do respect your knowledge and insight. But NFTs definitely have utility now and in the future...for instance, it's widely believed the NY Yankees are going to roll out NFT tickets next season, which will allow them to collect royalties on tickets sold in second-hand markets like Stub-Hub. Once that happens, TicketMaster and the like will be soon to follow.

Just last week I met with a guy who owns a patent on NFT conversions of car titles, and his plan is to turn them into a sort of fraudless CarFax. And of course, the exploding world of online gaming is awash with NFTs allowing players to purchase clothing and weapons and just this month a new platform launched that allows gamers holding NFTs on certain types of weapons and armor to move them from one game to an entirely different game.

Crypto today is where the Internet was in 1996. Only it won't take a decade (and the invention of the iPhone, Twitter and FB) to speed its acceptance. Internet 3.0 is real and it's here.
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Online gamers (who get geeked up about anything digital). ... and a lot of people who may do, or are planning to do, things. ... doesn't represent a whole lot of utlity to people.

We can go around in circles. You may turn out to be right. ... there may be widespread adoption of digital tokens and other assets at some point.

At this moment in time? They represent a fraction of a fraction of a percent of global economic activity. And most of the applications people talk about don't really solve any problem. Let's say the Yankees released non fungible token tickets next year. ... 99 percent of people looking to buy a Yankees ticket aren't set up to transact that way. They won't be anytime soon. Just because someone creates a different technology doesn't mean people are prepared to (or want to) use it (or in this case, be burdened by it). At the end of the day, people want to see a baseball game. Tickets as they exist already allow that to happen. What is better about the mousetrap?

TigerVols · Nov 11, 2021

BTExpress said: ↑

My brother just had to turn in his leased Giulia. Heartbroken.
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Your brother is my kind of man. It's a helluva car and if he's like me, he's had no issues with the brand (I have a Stelvio...NOT a 2017, so I'm good. Knock wood).

TigerVols · Nov 11, 2021

The Big Ragu said: ↑

Online gamers (who get geeked up about anything digital). ... and a lot of people who may do, or are planning to do, things. ... doesn't represent a whole lot of utlity to people.

We can go around in circles. You may turn out to be right. ... there may be widespread adoption of digital tokens and other assets at some point.

At this moment in time? They represent a fraction of a fraction of a percent of global economic activity. And most of the applications people talk about don't really solve any problem. Let's say the Yankees released non fungible token tickets next year. ... 99 percent of people looking to buy a Yankees ticket aren't set up to transact that way. They won't be anytime soon. Just because someone creates a different technology doesn't mean people are prepared to (or want to) use it (or in this case, be burdened by it). At the end of the day, people want to see a baseball game. Tickets as they exist already allow that to happen. What is better about the mousetrap?
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Agree on all this; of course, we are as a nation on the verge of spending hundreds of millions on EV auto infrastructure that doesn't reflect the number of cars on the road. As for your specific example, an NFT ticket is a better mousetrap for the seller just as an art NFT is a better mousetrap for the artist...commissions/royalties follow the tickets as they are sold. Should the Yankees decide to give a discount to NFT tickets over standard e-tickets, knowing they'll still come out ahead with the resell commission, then everyone comes out ahead.

goalmouth · Nov 11, 2021

Did we discuss Rivian, the maker of electric pickup trucks that's worth $86 billion since its recent IPO? It has an order from Amazon for 100,000 vehicles.

qtlaw · Nov 11, 2021

The Big Ragu said: ↑

Not a ponzi or pyramid.

It's one of two things: a boom or a bubble. Or it can be both.

If it is a boom, it means that we are at the dawn of a new era in which something transformative is happening. Booms often come with overinvestment, and things get ahead of themselves as a result, and then need to pull back and consolidate and let reality catch up with promise. And that might be happening. Think about the development of the Internet and ecommerce, for example, the dot.com bubble in the late 90s. Things got ridiculously overvalued, but it doesn't mean the technology was worthless. It was the exact opposite.

If it's a bubble, it's Tulipmania.

The reason I lean (but don't know) more toward bubble than boom is that I am very keyed in on what specifically has caused the bubble. And it isn't just limited to this. We are in a bit of an "everything bubble" right now with a lot of assets (ranging from things that actually have value but have just become overvalued to things that will be worthless) having run up in cost. And the reason has been real interest rates that are negative due to what central banks around the world have done over the last several decades, culminating with them going to even bigger extremes to keep rates negative (and debt growing) when the pandemic hit to hold off the credit crisis that is going to be the result of their reckelessness.

When you distort the debt markets the way they have, you push people into riskier and riskier behavior. ... and at the extreme, you get a lot of companies that don't earn anything and assets that are very pet-rock-like that develop speculative manias around them. It's the same kind of behavior they stoked that led to the housing crisis in the mid to late 2000s by creating distortions. Except rather than letting the defaults happen, they kicked the can down the road by creating exponentially more and more debt since then to prop everything up. That debt = leverage. Which gets people drunk. Money needs to cost something for people to value it properly. When you distort that cost and make it cheaper than free, people treat it like it is free (for example, people's home values have run up in value, and there is evidence that more and more people are pulling equity out in the form of loans. ... and using that money to speculate). And that is what I think has been going on with NFTs and cryptocurrencies (and more tangible things like exotic sports cars and rare art). But whether cryptocurrencies and NFTs actually have some utility (and therefore value) when the speculative fervor ends is the question I don't feel as confident guessing about.
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I agree; the fundamentals to an old econ major like me point towards Tulipmania. I certainly didn't think that about tech in 2001 and still don't (my only worry about tech is that tech leans heavily on someone producing something and leisure time (gaming, social media etc.)

Now yes, crypto could be transformative IF it completely replaced currency. I'm not so sure, mostly because its unregulated.

Azrael · Nov 11, 2021

I don't know.

I think "I'll use this one imaginary thing to buy this other imaginary thing" feels like a fair representation of Information Age economics.

garrow · Nov 11, 2021

The Big Ragu · Nov 11, 2021

If you want to create a third-grade narrative you can just as easily come up with, "The main reason gas prices are so high is that U.S.-based E&P / shale producers are refusing to increase production, because <insert your reason>."

It's a bit more complicated than that narrative.

Mngwa · Nov 11, 2021

Azrael said: ↑

I don't know.

I think "I'll use this one imaginary thing to buy this other imaginary thing" feels like a fair representation of Information Age economics.
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I have a few imaginary things. Not much, it goes up it goes down, it's up right now. I don't ever expect it to really be anything but if it becomes the next Bitcoin, you bet your ass changing those imaginary things into real money

Azrael · Nov 12, 2021

Azrael said: ↑

I don't know.

I think "I'll use this one imaginary thing to buy this other imaginary thing" feels like a fair representation of Information Age economics.
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The Economy

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The Economy

TigerVols Well-Known Member

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