
Covid and Cascading Collapses - duck
https://www.ben-evans.com/benedictevans/2020/5/4/covid-and-cascading-collapses
======
phkahler
I think one reason retail and a lot of other businesses in the real world will
be killed by Covid is low interest rates. These have fueled several decades of
rising real estate prices and rents. Cue a pandemic where they have to close
for a while but still have to service debt or rent and they're done.

They've been cutting rates to stimulate the economy, but that's not
sustainable and has led to fragility. We need rates in the 5 to 7 percent
range IMHO to prevent this type of thing. In that range, banks may also make
loans they can hang on to rather than securities, and people may actually save
a bit and have that buffer.

~~~
jseliger
Real estate and rent prices rise in most American cities because cities
restrict supply in the face of rising demand:
[https://www.forbes.com/sites/scottbeyer/2016/09/30/the-
verdi...](https://www.forbes.com/sites/scottbeyer/2016/09/30/the-verdict-is-
in-land-use-regulations-increase-housing-costs/). Interest rates are a
sideshow.

We can fix this, just like Japan did, anytime we want to, by removing
impediments to supply increases. [https://www.wsj.com/articles/what-housing-
crisis-in-japan-ho...](https://www.wsj.com/articles/what-housing-crisis-in-
japan-home-prices-stay-flat-11554210002)

~~~
maxsilver
> cities restrict supply in the face of rising demand

This isn't really a meaningful statement about the problem. Real estate and
rent prices dramatically rose in the US, _even in the cities where supply far
outstripped demand_ , and even in cities that _lost_ population this past
decade.

While supply and demand are slightly an issue in a few specific metros (like
San Francisco), US real estate in most metros is _mostly_ a problem fueled by
low interest rates and a ridiculous over-inflation in urban property values,
as mentioned above.

~~~
lend000
One city can't "outstrip demand" by itself. If prices are cheaper in one city,
demand will spillover from others. It's a national problem. Cities/states that
do build have certainly done better, though. Compare the cost of living in
Dallas and Houston to San Francisco and Los Angeles.

This isn't to say easy money and certain tax policies (like California's 2%
taxable growth limit) haven't contributed to the problem, on top of zoning.

~~~
irrational
I would think it depends on the city. Portland Oregon is about 3 hours (at
highway speeds) from Seattle, 7 hours from Boise, and about 9 hours from
Sacramento (the next cities to the North, West and South). There is no demand
spillover for cities that are as isolated as Portland.

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scep12
As usual, great stuff from Benedict. One of the better twitter follows I've
picked up in the past few years.

> The ad market reset in 2008, and the visible part is the money leaving
> print, but the most interesting part may be the money that’s not captured in
> ‘advertising’ at all.

My thinking exactly when I look at this chart. The definition of "advertising"
and the criteria for inclusion in each of the 4 buckets would be interesting.
I can certainly think of other ways to capture consumers' attention than spend
money on print, digital, tv, or radio.

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obiefernandez
As far as I can tell, one of the coronavirus sleeper success stories has been
[https://outshool.com](https://outshool.com) for homeschooling (and
unschooling) kids. We've been using it for my 12-year old and we see both
offerings and usage exploding. There's really nothing else like it on the
market that we know of...

~~~
mrfusion
I can’t get it to load. What do you like about it?

~~~
r00fus
Probably a typo - it's [https://outschool.com](https://outschool.com) \- and
it's not clear why this is better than any other mooc.

~~~
fastball
Most MOOCs I've encountered are targeted at a higher age-range than 3-18.

~~~
r00fus
khanacademy isn't. My 7 year olds have done a lot of the basic classes in the
past year or two.

~~~
fastball
Fair point. This looks more structured than content I've seen from KA, but
maybe I haven't plumbed the depths of it.

Either way, always good to have more alternatives, no?

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olivermarks
Re television advertising: '... As an ad agency head put it to me a couple of
years ago: ‘subscriptions are down and viewing is down, but budgets are flat,
so CPMs are up’

I suspect the demographic of people who still watch broadcast TV is aging out
fast. TV was a 'sit back and watch at 9pm' experience for those generations,
and aside from live events such as sports TV watching seems to be very short
attention span if watched at all in the pervasive online video and streaming
world. I therefore think TV advertising - and broadcast TV - is going to fall
off a cliff soon.

~~~
jeffbee
There have still been recent popular TV series that release weekly, rather
than all-at-once binges. Pretty much everything on HBO and FX, for starters. I
don't think watching TV on a schedule has passed out of living memory. I
personally remember very fondly the collective experience of watching things
like The X-Files and Battlestar Galactica at the same moment as the rest of
the country.

~~~
downerending
It hasn't passed out of memory, but it may have passed what people are willing
to put up with. I'm old, and the only ads I don't regularly block are on cable
TV in hotels, which I (used to) visit a few days a year. Even then, more than
an hour becomes intolerable.

One of the great boons of the 21st century will be the elimination of
advertising.

~~~
ses1984
It's not going away, it's just changing.

~~~
olivermarks
Targeted advertising from FB & Google have completely changed advertising
industry client media planning and buying. Broadcast TV will survive for above
the line brand reinforcement for a few more years but if prospective customer
viewers dwindle (beer consumers watching live sports via online streams
instead of broadcast TV for example, this has already happened with pay per
view) I don't see there is much else left for broadcast TV, especially as
'news' from these big media companies has never had such a poor reputation.

The other reality is that a 4k screen is no longer a 'TV', it is the viewing
device for any number of inputs

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jayrot
Just wanted to say that I found this fascinating. Don't know if Mr. Evans was
already a household name, but I just discovered his writing right now (a win
for HN) and got lost reading previous essays.

Just wanted to say, thanks.

~~~
macintux
Here are some other analysts you may like if you’re not already familiar with
them.

[http://www.asymco.com/](http://www.asymco.com/)

[https://stratechery.com/](https://stratechery.com/)

[https://www.aboveavalon.com/](https://www.aboveavalon.com/)

I haven’t been actively following any of them for a few years now, but
collectively they plus Ben Evans really impress me.

~~~
PakG1
I'd also add to this list the following for some great writing and analysis
now and then (not consistently, but good enough to make the list).

[https://www.epsilontheory.com/](https://www.epsilontheory.com/)

[https://www.ribbonfarm.com/](https://www.ribbonfarm.com/)

[https://slatestarcodex.com/](https://slatestarcodex.com/)

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ken
I'd be curious to see "junk mail" in these charts as a category of print
advertising. In my experience, that's always been by far the biggest category.
You can come to some mistaken conclusions when you ignore the elephant in the
room.

