‘A Powerful Signal of Recessions’ Has Wall Street’s Attention • Hacker News Board

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#121

Post by matte_black » Mon, Jun 25, 2018, 6:01 PM UTC

throwaway5752 wrote: post #101

matte_black wrote: post #96

Earlier quoted context omitted.

So when WeWork files for bankruptcy is that the signal to start moving into cash?

Sorry for a bit of a meta-reply, but this is kind of the reason for my sadness: there is this sense of isolation/aloofness to your question. The best thing to do is to work hard to prevent this outcome, since it's less than zero sum. I am sorry, but even if I knew your financial situation and goals I wouldn't want to offer investing opinions.

I’m not sure what I’m supposed to do to prevent a financial collapse across the nation...

I’ve made tons of money from the usual FANG suspects in the past few years, but it’s all unrealized gain. No doubt I’ve thought about selling off every year, but chose instead to continue riding it out, always wondering how much it’s going to take for me to be satisfied.

On days like today when FANG stocks are getting beat up, I wonder how much longer this can really go. Every year that passes I take more seriously any sign that suggests these stocks can no longer defy gravity.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#122

Post by Animats » Mon, Jun 25, 2018, 6:11 PM UTC

There's not much question that a recession is coming. But when? And what form will it take?

The last recession was driven by a price collapse in housing. That was unusual. The next one is more likely to be driven by trade problems, which is more common historically. Also, the last few years have seen a lot of investment into stuff that's not paying off, and after a few years, that comes back to bite you.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#123

Post by CompelTechnic » Mon, Jun 25, 2018, 6:14 PM UTC

ISL wrote: post #17

AznHisoka wrote: post #7

"Stocks have been in a sideways struggle since the Standard & Poor’s 500 last peaked on Jan. 26." Is this really true? Almost every single stock I've been tracking has just been going up this year, especially the tech ones. Even ones with decreasing revenues like GoPro.

The language of financial reporting is always amusing, when compared with any other commodity. "Milk has been in a sideways struggle since January 26. Carrots, too."

When stocks rise, people win. When milk gets more expensive, it may be that the milk producers are extracting more profits from the consumer, or it may be because their costs have risen and they need more revenue to even keep up. When the latter is true, no one wins.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#124

Post by throwaway5752 » Mon, Jun 25, 2018, 6:16 PM UTC

matte_black wrote: post #121

throwaway5752 wrote: post #101

Earlier quoted context omitted.

Sorry for a bit of a meta-reply, but this is kind of the reason for my sadness: there is this sense of isolation/aloofness to your question. The best thing to do is to work hard to prevent this outcome, since it's less than zero sum. I am sorry, but even if I knew your financial situation and goals I wouldn't want to offer investing opinions.

I’m not sure what I’m supposed to do to prevent a financial collapse across the nation... I’ve made tons of money from the usual FANG suspects in the past few years, but it’s all unrealized gain. No doubt I’ve thought about selling off every year, but chose instead to continue riding it out, always wondering how much it’s going to take for me to be satisfied. On days like today when FANG stocks are getting beat up, I…

... in the scope of a public forum, I don't want to go off-topic or give advice (which may well be wrong and cost you money). But you should ask yourself what your investments are worth, and why they are worth that. If you can't answer those questions, that is your first problem. Then you should ask if you have better returns elsewhere in various scenarios (repaying debt, moving to more fixed/safer income streams) based on your personal situation and goals. Best of luck, I hope that is useful. Don't underestimate your personal agency to change the world around you.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#125

Post by rm_-rf_slash » Mon, Jun 25, 2018, 6:24 PM UTC

ergothus wrote: post #95

rm_-rf_slash wrote: post #53

Earlier quoted context omitted.

To be fair, the economy was still fairly strong by that point. It wasn’t until 06-07 that the subprime lending really got out of hand, and even though 07 was technically when the recession started, it didn’t become a full-blown panic until 2008 when Lehman Brothers and Bear Sterns collapsed. The yield curve is like seeing upturned leaves in the wind: a storm may coming, but it’s not clear when.

My knowledge of predicting recessions is unchanged, but my way of looking at leaves on the ground is forever changed...

It’s not leaves on the ground, it’s the leaves on the branches to watch. When they’re upturned, it means that the pressure system is changing, which often precludes rain.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#126

Post by ericd » Mon, Jun 25, 2018, 6:31 PM UTC

toomuchtodo wrote: post #70

ericd wrote: post #66

Earlier quoted context omitted.

Interesting, I didn't realize they had multiple retail banks (GE Capital Bank became Marcus, Goldman Sachs' retail bank).

GE Capital’s deposits platform went to Goldman, the lending went to Synchrony. I don’t have the background on why it wasn’t acquired as a whole, but I’m sure the information exists online.

Oh, I see.

Was never very impressed with Synchrony. They used to address all my mail to Null Null, a bit disconcerting for an organization who ostensibly has to program systems to keep track of how much money they need to give me back.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#127

Post by jonknee » Mon, Jun 25, 2018, 6:31 PM UTC

shams93 wrote: post #93

throwaway5752 wrote: post #78

The difference is that a powerful group of people is enacting policies that have triggered recession/depression in the past and no good historical precedent/academic support for working. It's seems kind of crazy to me we're ignoring that part. We're starting trade wars on multiple fronts, exiting or weakening multilateral alliances (and simultaneous giving an advantage to our global adversaries), and weakening the ba…

Ultimately they're not raising tariffs on end products, they're raising it on parts, but that will still cause inflation plus unemployment because tariffs on parts will drive production out of the US where it gets taxed on the way back in, so you'll both lose exiting US jobs while driving up the cost of products coming back in as you both make it impossible to produce in the US and also drive up prices.

Currently it's devolving into tariffs on everything. Like Europe's 25% tariff on Harley motorcycles. They're getting hit on both ends too because their inputs are also hit (steel being the big one). Tariff in and tariff out, it's ridiculous.

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#128

Post by Bromskloss » Mon, Jun 25, 2018, 6:32 PM UTC

There is something sketchy in the underlying report [0]. In figure 2, they draw what I understand to be a curve of the probability (according to their model) of a recession happening within 12 months. The strange part is that they identify a "critical threshold" (at probability 0.24), and seem to imply that when the prediction goes above that value, a recession happens. That's not how probabilities work. Are they meaning something else, or are they just lost here?

[0] https://www.frbsf.org/economic-research/publications/economi...

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#129

Post by pesmhey » Mon, Jun 25, 2018, 6:32 PM UTC

Animats wrote: post #122

There's not much question that a recession is coming. But when? And what form will it take? The last recession was driven by a price collapse in housing. That was unusual. The next one is more likely to be driven by trade problems, which is more common historically. Also, the last few years have seen a lot of investment into stuff that's not paying off, and after a few years, that comes back to bite you.

Could you elaborate on bad investments made over the last few years?

Re: ‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

#130

Post by criddell » Mon, Jun 25, 2018, 6:35 PM UTC

bunderbunder wrote: post #107

Judgmentality wrote: post #85

Earlier quoted context omitted.

How do you propose to measure economic health?

Economic health in general? GDP misses some important details, but it's a much better measure than simply looking at the share prices (not even the market caps) of a small selection of companies operating in a specific sliver of the economy that was very important 100 years ago, but represents a declining fraction of overall US productivity.

GDP is awful as well.

Median wages, labor participation rates, access to education and health care, etc... are all more interesting measures. If the economy is only working well for the top 20%, then it's not a very good economy no matter what the GDP and stock market says.