News US Economy : News, Updates & Discussions

SMIC is far away from mastering 7nm at this point, but that doesn't mean they can't. Chinese government has allocated billions of $ and Chinese and US companies are loosing people to these Chinese govt sponsored programs !! I heard the salaries offered are more than Bay Area salaries (in the range of 500k to 1.5 mil $ depending on experience level and the unique experience they bering in).
Thats right given that they have just started, even samsung has the same issues with 8nm process getting low yields. China started this program long time back in 2014 by setting up a national fund to localize most of their contents in electronics.
 
Thats right given that they have just started, even samsung has the same issues with 8nm process getting low yields. China started this program long time back in 2014 by setting up a national fund to localize most of their contents in electronics.
China has been promoting chip fabrication since late 90s. However, the recent push is unprecedented due to the trade embargo on Huawei.
 
Shortage has reached epic proportions, if you are in market to buy a cpu or gpu you would know. Its worse than DRAM shortage that took place previously.

Amazon has started designing its own chip for datacenter , there was rumor even MS would do the same.

Yes you are right, their core competency or business is not building chips. I think if other companies dont step in TSMC will make a killing.
I haven't bought any chip from open market in last twenty years :). But as I said earlier we have not faced any shortage due to pandemic. So not every segment is equally impacted. There was some delay due to disruption in supply chain, but as of today most issues are shorted out.

Amazon and Google are making chips for their data centers since last few years. Current trend is about making custom processors with embedded AI processing elements and every damn company is in this rat race including Google, FB, MS, Tesla and even TicToc :ROFLMAO: .
 
After the presidential election took place the American economy seemed to take a new turn. I still support President Donal Trump, because he has practical policies and good results.
 


@Nilgiri thoughts on these developments

We are likely headed to period of liquidity bubble (and burst at some point and/or maybe even stagflation) in western economies. What is worrying is it has metastasized from assets to even commodities now....because of what corona did to supply side (idle labour by lockdown and now reluctant labour by income support by govt debt competing with return to work wages).

So this is the predictable left-centre cyclical create problem +respond to problem to it (more govt mishandling of economy in name of redistribution + spending etc).

i.e rather than rationally address what is creating the bubble, double down on more of what is creating it and pretend like its a solution (kicking can + hope population gets desensitized to new setting). This (so far) brings the highest returns politically in the short term....backed by vast institutional bias in your (left-centre "liberal") favour. But that might not continue to be the case, the political/economic elitists are losing the hold on narratives they once had (the signs/crackdowns on populist +counterculture dissenting voices are increasingly obvious IMO).

Western economies (and US is the biggest and most influential) basically misjudged the overall rate of (about 30 years now post cold war) creation + deployment of new growth areas to make up for ones they were giving away (quite cheaply and easily) to especially China...and the effect this would have on the bottom earning folks (say 30% or so) who now are easy pickings for big-govt + identity politics to push consolidated "Shame" and "privilege" diktat on rest of population....and a media unwilling to call this out in neutral way.

Corona has ripped lot of masks and bandaids off now, ahead of schedule. I would watch the inflation rate in US quite closely this year. CPI to begin with is limited scope of measuring it, but even that is registering it now recently. It is being called "transient" by Yellen and Biden admin (in most uncomfortable dismissive way)....but let us see.
 
We are likely headed to period of liquidity bubble (and burst at some point and/or maybe even stagflation) in western economies. What is worrying is it has metastasized from assets to even commodities now....because of what corona did to supply side (idle labour by lockdown and now reluctant labour by income support by govt debt competing with return to work wages).

So this is the predictable left-centre cyclical create problem +respond to problem to it (more govt mishandling of economy in name of redistribution + spending etc).

i.e rather than rationally address what is creating the bubble, double down on more of what is creating it and pretend like its a solution (kicking can + hope population gets desensitized to new setting). This (so far) brings the highest returns politically in the short term....backed by vast institutional bias in your (left-centre "liberal") favour. But that might not continue to be the case, the political/economic elitists are losing the hold on narratives they once had (the signs/crackdowns on populist +counterculture dissenting voices are increasingly obvious IMO).

Western economies (and US is the biggest and most influential) basically misjudged the overall rate of (about 30 years now post cold war) creation + deployment of new growth areas to make up for ones they were giving away (quite cheaply and easily) to especially China...and the effect this would have on the bottom earning folks (say 30% or so) who now are easy pickings for big-govt + identity politics to push consolidated "Shame" and "privilege" diktat on rest of population....and a media unwilling to call this out in neutral way.

Corona has ripped lot of masks and bandaids off now, ahead of schedule. I would watch the inflation rate in US quite closely this year. CPI to begin with is limited scope of measuring it, but even that is registering it now recently. It is being called "transient" by Yellen and Biden admin (in most uncomfortable dismissive way)....but let us see.
Basically, your saying chickens are home to roost. interesting.

Where does this leave the US-China equation? The US was trying to pull back its manufacturing units from china and Asia even before the covid hit. But they don't seem to be that successful.
 
Basically, your saying chickens are home to roost. interesting.

Where does this leave the US-China equation? The US was trying to pull back its manufacturing units from china and Asia even before the covid hit. But they don't seem to be that successful.

Economy in the end is composition valuation of human time/effort. It is valued overall by the ability to create more time (which means more activity i.e productivity). This is what fundamentally drives valuation of all inputs/resources (capital, labour, land etc), currencies (and their trade, both within and among them) are just a medium (that are not controlled perfectly or even well for it).

So the West may compete/pull back + sustainably protect certain high scale manufacturing that is say still IP-dependent (from US/West/Allied East Asia) while growing+protecting what they can with services + soft culture + long term frontier tech expansion etc

But most of the mid tiers and low tiers are lost for good.

It will just take too much cost to move the capital for those (low+obsolete+freeware+rev-engged IP) tiers back to western democracies and operate (by way of labour) them in the high price level environment (i.e high wage, low interest rate) that actually uses the USD/Euro for day to day (unlike China which stockpiles and insulates/ensures Yuan peg by way of T-bond forex etc).

i.e you have to think of the inflation cost (to everyone) vis a vis job creation from doing that. i.e is the labour truly that inelastic and large enough of issue to do that.....versus deploying that money in other things.

What are the actual signals/efficiencies regarding this in free market compared to politicians etc. How does each present the numbers (more importantly which things does each not talk about).

Rather than getting into this (esp for the electorate), it is often far more easier (and possibly more efficient) to create welfare for the bottom segment and simply transfer money from productive parts of economy (and what you can borrow from others with essentially the credibility you built up say over 100 years "coming good" in long run like before).

They (especially US govt + corporate sponsors) have gotten addicted to easy finance/debt for budget deficit mostly initiated systematically after WoT and then 08 economic crisis....to do exactly that and say its sustainable.

It (debt model) is financed by Chinese export surge (an actual hard productivity increase and deployment of scale in last few decades).

Think of long rope growing at X rate at front end, but lit as fuse from back end....and burning at Y rate.

Effectively you want X minus Y to be positive to have a comfortable situation (this was what the economics and neo-liberal policy wonks spouted for the last few decades too predictably).

But if it is negative, you are running out of room (while policy wonks figure out how to manage emperor new clothes situation arriving)....and then it ultimately becomes case of when the burning end starts to heat the shortening rope average temperature to do something different (Trump may very well be equivalent of the boy that said uhhhhh, king has nothing on at end of that story).

These X and Y rates are not guaranteed fixed of course (i.e IP resistance from west now might increase even further from say what we are already seeing in semicon+comms area making Chinese progress into higher tiers far harder.....and also other developing countries by themselves and/or with western assistance start to out-compete on China's own burning "rope" which has its own set of long term issues as you saw in the polymatter series).

So it is hard to model or predict to any absolute way, but this will be the overall story for our lifetimes. Trump (along with pushback against his policy by establishment) is very likely just first of many series of things to come.

But they are definitely like you said chickens of last 30 years coming home to roost one by one.

The raw levers are there (as trump showed+actioned but also failed in deploying in organised, bipartisan and institutional way), but West needs to figure out the fine tuning in this new day and age and scale that up and as soon as possible....they cannot operate on cold war manual anymore. After all they NEVER built up the soviets (or were allowed to, but thats a different subject) like they have done with China. PRC has magnitudes more latent energy (w.r.t tier progression) in it than atrophying (after the basic tiers were unlocked) Soviets did.
 

US economy regains speed, GDP grows 6.9% in Q4, beats estimates; 2021 growth best in nearly 4 decades​

U.S. economic growth accelerated in the fourth quarter as businesses replenished depleted inventories to meet strong demand for goods, helping the nation to post its best performance in nearly four decades in 2021. Gross domestic product increased at a 6.9% annualized rate last quarter, the Commerce Department said in its advance GDP estimate on Thursday. That followed a 2.3% growth pace in the third quarter. Economists polled by Reuters had forecast GDP growth rising at a 5.5% rate. Estimates ranged from as low as a 3.4% rate to as high as a 7.0% pace.


The economy grew 5.7% in 2021, the strongest since 1984. It contracted 3.4% in 2020, the biggest drop in 74 years. Growth last year was fueled by massive fiscal stimulus as well as very low interest rates. The momentum, however, appears to have faded by December amid an onslaught of COVID-19 infections, fueled by the Omicron variant, which contributed to undercutting spending as well as disrupting activity at factories and services businesses.



Last year’s robust growth supports the Federal Reserve’s pivot towards raising interest rates in March. Fed Chair Jerome Powell told reporters on Wednesday after a two-day policy meeting that “the economy no longer needs sustained high levels of monetary policy support,” and that “it will soon be appropriate to raise” rates. The sharp rebound in growth last year could offer some cheer for President Joe Biden whose popularity is falling amid a stalled domestic economic agenda after the U.S. Congress failed to pass his signature $1.75 trillion Build Back Better legislation. It, however, diminishes prospects of more money from the government.


ALL ABOUT INVENTORIES


Inventory investment accounted for the bulk of the increase in GDP growth in the fourth quarter. Businesses had been drawing down inventories since the first quarter of 2021. Spending shifted during the pandemic to goods from services, a demand boom that pressured supply chains. Growth last quarter was also lifted by a jump in consumer spending in October before retreating considerably as Omicron spread across the country. Consumer spending, which accounts for more than two-thirds of economic activity, has been hampered by shortages of motor vehicles and other goods. A global chip shortage is hurting production. Reduced household purchasing power, with inflation way above the Fed’s 2% target, also hindered consumer spending at the tail end of the fourth quarter.


The Omicron-driven outbreak in infections has also impacted the labor market, though this is likely temporary. Employers are desperate for workers, with 10.6 million job openings at the end of November. A separate report from the Labor Department on Thursday showed initial claims for jobless benefits dropped 30,000 to a seasonally adjusted 260,000 during the week ended Jan. 22. Despite the anticipated soft patch in the first quarter because of challenges from the never ending pandemic, the worst inflation in decades, supply chain bottle necks and upcoming interest rate increases, the economy is expected to soldier on this year, with growth estimates as high as 3.9%.