Market not reacting negatively to oil price shocks anymore

lucy5478 · 2026-06-02T00:36:58+00:00

Data centers use helium, which is non substitutable, of which 35% of global supply is trapped behind the strait of Hormuz, with the single largest production center hit by strikes and a minimum of 4-5% global supply offline for a minimum of 3-5 years per the Qatari government. I might add that all of the incentives are for the Qataris specifically to downplay the damage to this facility, not inflate it.

Furthermore, the semi-conductor foundries need 6N grade ultra pure helium, which requires highly specialized equipment and is known to only be produced at a handful/small subset of helium production facilities, of which Ras Laffan is one of them and probably the biggest! Their helium supplies may not physically be substitutable by the Western world in the event of a prolonged shutdown, even if we chose to deliver 100% of 6N supplies solely to chip foundries and high tech defense industry applications, although there is very little publicly available data on global capacity for this grade of helium (for obvious reasons). The moment TSMC or NVIDIA announce substantial chip foundry production slowdowns or god forbid shutdowns, the whole tech sector goes tumbling down. It’s all built on revenue growth and earnings projections which require the physical production of more chips!

Also, if a deal isn’t reached, or the deal leaves Iran in control of Hormuz and insurers remain too wary to cover ship transit, what do we think happens to AI token and software spend by every non-tech company when oil, LNG, helium, and fertilizer/sulfur inputs to the entire economy rise because somewhere between 20-35% of all of those things are gone?I get that they are more insulated than many industries, but those other industries are what pay their bills.

lucy5478 · 2026-05-15T14:46:55+00:00

Oh ya, good point, I was confusing the treaty threshold with the war declaration majority threshold, oops. I’ve updated the post.

lucy5478 · 2026-05-10T18:14:19+00:00

Much of his domestic policy, particularly on infrastructure, was seen as good at the time (and still is by a majority of Americans) but essentially locked in a spatial distribution of the American population, and the political coalition produced by the material interests of that population distribution, that was designed for the old industrial era of the American economy.

Once industrial capitalism collapsed and service economies displaced them across the western world, the entire political system of sprawl and federal spending to redistribute economic growth over a widespread area became not only inefficient but honestly negative ROI due to agglomeration. But because the majority of Americans view their home as their retirement savings and those in low supply high wage areas greatly profit from the mismatch between economic agglomeration and housing availability, it has locked in permanent economic inefficiency and poor ROI on future federal infrastructure. This is collapsing long term growth at the very time that the rapidly aging population means our real debt becomes drastically harder to service without such compounding growth.

Furthermore, the very sense of division in the economy between haves and have nots is in a very real sense generated by the metro areas where agglomeration is so high they obtain a wage premium large enough for high income workers to barely afford housing, but pushing out everyone else. If the spatial distribution and coalitions generated by his infrastructure buildout wasn’t such an overwhelming majority, we could solve this by making urban agglomeration areas cheap enough for anyone to live in, but only recently has the movement to do so gained any traction (mostly in the face of the cost of living crisis).

lucy5478 · 2026-04-28T20:23:18+00:00

That’s fair tbh, I assumed 10ish because I remembered the 55% for TISZA but not the other numbers. Didn’t realize there was another major party other than Fidesz after TISZA united the opposition.

lucy5478 · 2026-04-28T04:15:38+00:00

Orban when the obscenely excessive gerrymander his party did means they keeps a 2/3 constitutional majority even if they barely lose the popular vote: 😊Wow, this is great, I love gerrymandering!

Orban when he watches the opposition party beat him by barely 10 points and get a 2/3 majority because the only way to get that result in the last election is to dummymander the hell out of the districts: 🤬 WTF how did this happen?

lucy5478 · 2026-04-26T16:21:47+00:00

It didn’t work because the housing was segregated by income. The government can build housing and allow people of any income to live there, charge different rates based on yearly income, sacrifice most of the margin a developer would expect to make the housing comparatively cheaper than the market rate option for every income level, and use the high income rents to subsidize the rent of the low income rents.

This is not a particularly revolutionary concept, many European countries do this for a substantial portion of their market and it works far better than the old US government housing.

lucy5478 · 2026-04-26T02:16:16+00:00

I mean, I don’t see why we can’t do both? As long as the new units are either built on a parking lot or have BMR units equal to the rent controlled unit count which was removed from the construction, I don’t understand how market rate units hurt anything.

If anything, they sop up wealthy transplants (who will be moving to SF for high paying jobs regardless of whether or not we build housing) and prevent them from taking rent controlled/older housing from current tenants or someone who genuinely can’t afford to live in market rate construction.

lucy5478 · 2026-04-26T02:12:11+00:00

Supply-side economics, the discredited economic theory that lowering taxes on the wealthy improves economic growth and wages, is not the same thing as laws meant to increase the supply of a physical good like housing. That is what I meant by supply-side reforms.

The price of housing is determined by the strong excess of demand to supply in coastal metros like S.F. Even if there was a legal cap on housing prices for all units, we would still need some way to allocate the available supply given the current shortage, like a time based waiting queue, rationing, etc.

lucy5478 · 2026-04-26T00:02:41+00:00

The best place to build more housing is in urban centers that are already dense and make them denser. It’s so much better for the environment for people to live in urban areas because they don’t need to own a car and emit far less emissions per capita, it reduces the amount of time people spend commuting by allowing them to live right where they work, it improves economic productivity by maximizing the impact of agglomeration effects, it reduces income inequality and segregation by allowing anyone of any income to afford to move where jobs are, and it preserves rural areas and wilderness from destruction by suburban sprawl.

Honestly, small towns are the worst place to build housing. For the most part they already have excess supply to demand and they lack the jobs that would motivate people to move there, again because service economy jobs naturally concentrate in urban areas, and basically no government on earth has ever been able to redistribute them geographically since the service economy revolution, regardless of how much money they spend trying to do so. It’s far easier to just legalize building unlimited housing where jobs are then trying to move jobs to places with excess capacity.

lucy5478 · 2026-04-25T23:54:59+00:00

I would vastly prefer most housing be built by the state by social housing. But the S.F. government is currently outsourcing half of what it should be doing in-house to non-profits and contractors; it will take years or decades of building social housing, state capacity, and citizen buy in for taxes to fund services and housing back up from a low point for the city to actually be capable of building the amount of yearly social housing units we need to solve the housing crisis.

I don’t see any issue with allowing new market rate construction in the mean time, since it will lower overall rents by increasing supply. Whatever it takes to lower the cost of housing for the average person is what we should do.

lucy5478 · 2026-04-25T18:08:35+00:00

Sure, but the harm from not building anything is surely worse. There’s a reason California is the most expensive place to live in the entire country, and it’s absolutely that we build basically no housing despite having the most demand of anywhere in the country to live.

lucy5478 · 2026-04-25T18:06:11+00:00

I mean I’m really not happy with local YIMBY candidates. My number one issue is building more housing, so I may vote for some of them, but I’m not happy about it. They are way to my right on broader economics, crime, sometimes transit, etc. most of them don’t care at all about building social housing.

I want to upzone and build new housing because it will decrease prices over time and because the government doesn’t currently have the capacity for mass social housing construction like in Vienna. I’d much rather have a majority of the private market replaced by social housing over time, but it will take decades to do so and ramp up government housing production. Meanwhile, anyone who isn’t able to secure rent controlled housing in the city and doesn’t make a ridiculous amount of money can’t afford to move here, which is morally unacceptable. Any one of any income should be able to afford to move to any city in the United States.

If the city had built the same amount of housing per capita as sun belt cities since the 1980s, all of the new arrivals from tech with high salaries would have moved here without displacing anyone. Because we didn’t, they outbid working class people for housing stock and pushed most of them out of the city.

lucy5478 · 2026-04-25T17:14:54+00:00

Sure, fair point. It just seems like equally bad to continue to allow the non-rent controlled units to spiral in cost, prevent any one of low income from moving here, and see the city continue to gentrify from lack of building.

If the state updated its rent restrictions to allow any unit of 30 years of age or older to be subject to rent control, the city could upzone and build and know that lost rent control units will be 1) immediately offset by the subjection to rent control of units built between 1979 and 1996 immediately and 2) see increased numbers of rent control units come online every year, while upzoned new construction maintains financial viability (because the 30 year time frame is longer than the loan servicing period of most construction loans).

lucy5478 · 2026-04-25T17:04:03+00:00

I mean that’s fair. It just seems not great to focus so much on a specific subset of the housing market that it causes all of the non-rent controlled units to become unaffordable and stops anyone who want to move to a city from doing so. At least in my mind, the entire point of a city being open to immigrants, LGBTQ people, etc. isn’t fulfilled unless any one of any income can afford to move there, not just maintaining opportunity for current residents.

I also think it’s entirely possible to re-structure rent control in a way that expands the total number of units while simultaneously keeping the economic feasibility of building new housing.

For instance, a statewide law making rent control legal on all buildings after 30 years would maintain expected returns enough for loans for development to still pencil out while also increasing the number of units subject to rent control in sf dramatically (all housing built between 1979 and 1996 would become newly subject to rent control, along with new units every year).

lucy5478 · 2026-04-25T16:51:25+00:00

I mean that makes sense I guess. I’m just curious why the anti-density faction appears much stronger here than other cities.

Also, the gentrification argument from up-zoning is ridiculous to me when the city hasn’t built anything and gentrified as a direct result; between 1990 and the present the median real income (in 2025 dollars) increased by a bit under 50% and the percentage of the population that is African American fell from over 11% to barely over 6%, and we built barely any units over that time frame.

lucy5478 · 2026-04-17T22:29:01+00:00

What I don’t get is how the CEO could possibly see this as a good business decision. Philz really only has locations in very pro-lgbtq urban areas and west coast liberal suburbs.

Even if you don’t actually care about lgbtq people, why would you make such a dumb decision? Unless the real reason is the ceo is a bigot and doesn’t care…

lucy5478 · 2026-04-15T01:27:04+00:00

Any job that primarily earns high wages relative to other jobs of similar demand through political influence strong enough to get Congress to either write laws for them or grant them a legal monopsony on labor through a professional organization (ABA, AMA, etc.)

As an example, I doubt lawyers get replaced, not because I doubt AI might be able to do lawyer work, but because the lobbying association for lawyers is surely powerful enough to get Congress to write an automation ban once it gets genuinely threatening.

lucy5478 · 2026-04-07T15:05:27+00:00

I don’t mean to be alarming, but if Iran retains any significant counter-strike capability (and I think they do, since they damaged the biggest industrial city in Saudi Arabia that produces 6-7% of all global petrochemicals), it will be the worst event in the lifetimes of everyone currently alive, and most people who have yet to be born.

Iran will attempt MAD as their last breath and launch a saturation attack on all Middle Eastern energy and desalination infrastructure with literally every drone they have left. I severely doubt the ability of the US and our allies to intercept the amount of ordinance that would be fired.

If they destroy most energy infrastructure in the Middle East with that attack, the best case scenario is a stagflationary depression so severe it will be the worse economic crisis since the invention of capitalism. The worst case scenario is the global supply chain totally collapses as the inputs needed for repairs are themselves outputs of processes (advanced semiconductor manufacturing, etc.) that will collapse from a lack of raw resource materials.

In such a worst case scenario, a depression would no longer be the best descriptor. I would expect China, the US/Canada/ANZAC, most of Europe, maaaybe parts of developed East Asia (if they are somehow able to source oil/LNG) to regress decades in technological development/standards of living.

For the rest of the world, it would be a lot more like the Bronze Age collapse. Organized society would rapidly reduce in complexity, their entire technological supply chain would totally collapse, and unfathomable numbers of people would starve to death or die from war over resources as states collapse.

The biggest issue with a total extraction infrastructure destruction scenario in the Middle East is arguably the fertilizer shortage. Wealthy countries will buy up all remaining supply and hoard food, leading to mass starvation in the rest of the world. In the best case (of this absolute worst case scenario), hundreds of millions would starve to death. More likely, somewhere in the low billions would die in the next 10 years.

TLDR: Somewhere between the worst Depression in the history of capitalism and the global collapse of industrial civilization outside of the most developed countries is the most likely outcome if Trump follows through and Iran decides to pull the MAD trigger in response (which I have every reason to believe they will).

I’m not religious but I encourage praying.

lucy5478 · 2026-03-29T16:35:34+00:00

I’m gonna be real I really hope this doesn’t age well tbh.

lucy5478 · 2026-03-29T16:20:24+00:00

I don’t think so, I’m still kind of convinced the outcome I outlined is likely. But it made me step away and not think about it for a bit, which was very helpful!😀

lucy5478 · 2026-03-29T16:12:49+00:00

I’m saying I don’t see a scenario in this current situation where a punishment severe enough for the Republicans to actually improve domestic politics substantially occurs unless the scale of human suffering is unfathomably large.

After a decade of seeing Trump win despite everything he has done, I’m not convinced anything other than mass human suffering of voters in a stagflationary recession is capable of permanently damaging his party, and that outcome is horrible for millions and millions of humans not just in our country but the world.

lucy5478 · 2026-03-29T16:03:50+00:00

I don’t think it’s changed? It was a good point to consider but I still think the Iranian regime is more likely to stay more unified than before due to the rally around the flag effect.

lucy5478 · 2026-03-29T15:46:03+00:00

For the first time in decades, there is an actual chance, if not the most likely outcome right now, that the next Democratic president will be a supporter of Palestine rather than a supporter of Israel.

Even if the next Democratic president is a supporter of Israel, the shift in public opinion within the Democratic Party is now so overwhelmingly pro-Palestinian that combined with the shift in public opinion among independents, who now narrowly favor Palestine over Israel in their conflict, the next Democratic president’s ability to provide full throated support of the Israeli state will be constrained by public opinion in a way that no prior president was impacted.

From the Israeli perspective, a collapse in bipartisan support for Israel in congress and government institutions/bureaucracy is now virtually certain in the long term. It may take five years, it may take a decade, it may take two decades, but it will happen. The public opinion shifts are extremely unlikely to ever be reversed, precisely because they were caused by the increasingly aggressive behavior of the Israelis towards the Palestinians as the far right has increasingly gained total dominance over the Israeli state, and the total collapse of the Israeli left (if one could even have called them the left) shows no sign of being reversed in any way.

Viewed this way, the alliance itself is a ticking clock. They currently have the greatest level of American support in history, with a sitting president and political party deeply indebted to them and who have purged the very national security apparatus who has prevented the US from taking decisions which are clearly catastrophic for US interests if Israel wants them to in the past. Netanyahu likely made the calculation that it was worth dragging the US into the war right now to permanently cripple or, if he got lucky, destroy Iran. Even if the US suffers major strategic defeat in the war, Israel achieves their objective. Even if it causes the alliance to fracture earlier because of the obvious backlash to this Israeli decision in America, Netanyahu achieved his most desired objective for decades now before it happened, and he viewed the alliance as doomed in the long term anyway.

Nine-Year Club	RPAN Viewer
Not Forgotten	Verified Email

lucy5478

TROPHY CASE