What happens when Universities run the Treasury playbook?

Data on e-commerce, top searches, making money to spend money, AI is less great, Cable's resurrection. Universities tried to spend their way out of a people shortage. It's not fine.

First, five datas to learn from:

• Top youtube searches suggest we can’t sleep

• Behaviors do change, or hope for the e-commerce s-curve

• When we make more money, we spend it

• AI is so great, we’re using it less (reprise)

• Cable is dead! Long live Cable! (reprise)

Second, words (and pictures) to learn from:

• State Universities ran the Treasury’s playbook, but it doesn’t seem to be “working.” Funny, that.

Thanks, as always, for reading, and please do spread the gospel of Random Walk. Also, if you have feedback or ideas to share, please use the comments liberally, or just email me, if you’re feeling timorous, but I do want to hear from you, all the same.

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Scatterplots

People are having trouble falling asleep

Similarweb (which measures webtraffic) released it’s report for top Youtube searches and my first reaction is “this must be a mistake.” I mean, it could be, but take a look—what even are these things?

The #1 search by a long shot is for something called ASMR, which I had to look up, and it stands for Autonomous Sensory Meridian Response:

An autonomous sensory meridian response (ASMR) is a tingling sensation that usually begins on the scalp and moves down the back of the neck and upper spine. A pleasant form of paresthesia, it has been compared with auditory-tactile synesthesia . . . ASMR is a subjective experience of "low-grade euphoria" characterized by "a combination of positive feelings and a distinct static-like tingling sensation on the skin." It is most commonly triggered by specific auditory or visual stimuli, and less commonly by intentional attention control. A genre of videos intended to induce ASMR has emerged, approximately 25 million of which had been published on YouTube by 2022, and categories of dedicated live ASMR streams exist on Twitch, Instagram, and TikTok.

Oh.

I’m curious, so I wanted to see what I was missing, and rest assured, I’m not missing anything. And neither are you. Or anyone, except for the idiots watching this nonsense:

This stuff is terrible. And pointless. And far more irritating than relaxing. It’s like kids discovering late-night FM radio, but just the “dulcet tones” and none of the music or DJ styling. Oh, and they want to sell you cork cut-outs of bread to drum your fingertips on.

Mr. Beast I respect. But this ASMR thing? The children are definitely wrong. Not giving an inch on this one.

But it does make me wonder (again) . . . why are they so stressed?

Buying wood online

Many moons ago, RW pondered the “ecommerce s-curve,” i.e. the possibility that growth would be shaped like an “s” with slow growth, and then quick, and then slow again. A big part of the question was whether certain commerce categories—like gas, for example, or cars—could actually be bought and sold online. If not, then e-commerce was a lot closer to peak than perhaps some would like to think.

In that vein, it turns out that people are actually buying lumber online . . . and Amazon of all places is leading the (growth) charge:

The change is small, but online sales of lumber sales are actually growing, while Brick and Mortar sales fall:

Lumber seems like a pretty reasonable thing to buy online, although admittedly I buy lumber rarely. The biggest barrier is probably a behavioral change from the buyers, but once Home Depot and Lowe’s got people hooked on e-buying during the pandemic, there’s no reason to go back.

Make money, spend money

The CFO of the consumer lending company, Upstart Holdings, recently pointed out that when people make more money, they spend it on stuff (via

The Transcript

):

"Despite a continuing recovery in the disposable income stemming from the ever-strengthening labor market, any incremental earnings over the past quarter has been directed almost entirely towards higher consumption, which has continued to increase in lockstep. And consumer balance sheets have not benefited from incremental savings as they had earlier in the year." - Upstart Holdings (UPST -2.69%↓) CFO Sanjay Datta

On the one hand, that’s a good thing: people are getting paid more, so they’re spending more, and so growth continues apace.

On the other hand, it’s not a good thing, insofar as spending-more drives inflation-more, and we don’t want that.

RW has long taken the position that goods inflation will come and go (as it has), while the structural people shortages will drive persistent inflation of the price of people.

Wages are growing at a stubborn ~5% clip (via

The Overshoot

):

Wage growth and Goods n’ Service growth generally run together:

If wages grow at ~5%, and wages and inflation grow together, then the Fed cannot hit its 2% target. So either the relationship breaks, wages stop growing (because of additional Fed intervention or otherwise), or inflation is longer and higher than anyone wants.

AI is so great we’re just about to start using it (reprise)

I’m sharing some ChatGPT related data, mostly because it’s pretty and consistent with a RW theme, and not to change anyone’s overall view of the long and/or short of ChatGPT.

First, via similarweb and Chartr, total users of ChatGPT may have dropped for the first time ever:

New users may have been declining since April, but returning users picked up the slack, until recently.

Likewise, posts about ChatGPT on reddit have calmed a bit as well:

You might conclude that “the bubble is popping” but RW genuinely doesn’t think so.

The novelty might have worn off, that’s certainly possible, but the people who make software are still hard at work. Likewise, as Byrne Hobart pointed out re. the death of Stack Exchange, decreased chatter doesn’t necessarily mean decreased interest—it can mean the opposite of that, insofar as chatting signals the “getting to know you” phase, while no-chatting signals the “getting to work” phase.

No further deep thoughts. I just liked the charts.¹

Cable is dead! Long live Cable! (reprise)

RW recently told the story of how streaming killed cable’s bundling with cheaper a la carte content . . . only to discover that cheaper a la carte content isn’t sustainable without bundling (or higher prices). The net result is that we’re going to end up exactly where we started.

Anyway, Disney DIS 0.00%↑ just announced a price increase for Disney+ (and they’re getting into gambling!), and wouldn’t you know it, they’re not the only one:

Streaming spend/household has already gone from $20-$30 in the past 3 years. The streamers now demand MORE:

Sometimes you need to come full circle to learn what you already know.

Great Wall of Text

When Universities Run Treasury’s Playbook

Universities had big dreams. Sure, enrollment was beginning to stagnate—because the number of college-aged people was beginning to stagnate—but if they borrowed a bunch of money and put on a good show, they’d fill the people-gap with international and out-of-state students. Plus the government was giving out student loans like candy, so why not raise tuition and get on that gravy train bring the great american dream of education to the masses?

Fast forward two decades, and the experiment hasn’t gone great. Universities definitely did all the borrowing and spending. They got their students to borrow a bunch more, as well, to help cover the cost. But enrollment did not get any better, the debt is still there, and now the free-money era for both schools and students has reached an impasse.

Not great.

It turns out you cannot borrow and spend your way out of a people-shortage. Unless you’re the U.S. Treasury, of course, and then everything will be fine.