Worst economic crisis since 1930s depression, IMF says • Hacker News Board

Re: Worst economic crisis since 1930s depression, IMF says

#41

Post by avalys » Fri, Apr 10, 2020, 1:36 AM UTC

mLuby wrote: post #2

And yet the stock market is already recovering. I guess "worst crisis since Great Depression" has been priced in?

One major difference between the Great Depression and the current situation is that the government has made it very clear that they will do whatever it takes to soften the economic ramifications of the pandemic. A huge contribution to the Great Depression was the government’s deliberate inaction.

“Regarding the Great Depression...we did it. We’re very sorry...we won’t do it again.” - Ben Bernanke, 2002

Normally government intervention in an economic crisis is opposed by one of the two political parties, for whatever reason - often a desire to avoid rewarding “bad behavior” that led to the crisis in the first place. In this case, the only bad behavior was on the part of the government and their total failure to plan for this scenario, and so the entire political spectrum is willing to spend money in order to fix it.

So I think there is optimism not just that the health consequences may not be as severe as was originally forecast, but that there is a path and political consensus for the government to manage the economic fallout as well.

Re: Worst economic crisis since 1930s depression, IMF says

#42

Post by Ididntdothis » Fri, Apr 10, 2020, 1:37 AM UTC

swsieber wrote: post #32

At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc. I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over…

I am sure a lot of politicians are struggling with this decision right now.

Re: Worst economic crisis since 1930s depression, IMF says

#43

Post by blhack » Fri, Apr 10, 2020, 1:37 AM UTC

andbberger wrote: post #33

blhack wrote: post #27

Earlier quoted context omitted.

The increase in the last two weeks is because it's becoming obvious that: 1) The US's response to this was competent. 2) The measures put in place are working. 3) The projections are improving substantially . 4) The time horizon is shrinking. 5) We are starting to understand how to treat this. (+ "in the us"). Two weeks ago we were looking at places like Italy, and extrapolating that the US could see deaths in the mi…

The US's response could not be described as anything even approaching competent. This is still just getting started. Let's check back in a few months and see how this comment has aged...

What should the US have done that other countries are doing?

We closed travel early, we started closing businesses early, and we hold daily press conferences with multiple medical and financial experts that are directly informing the entire population of what measures they should be taking.

edit: it seems like the general response to "what should we have done" is "the federal government should have shut down travel/businesses nationwide".

Is that even legal for the federal government to do? I know that when Trump floated the idea of travel restrictions for NY, Cuomo called it an act of war (https://www.cnn.com/2020/03/28/politics/cuomo-ny-quarantine-...).

Re: Worst economic crisis since 1930s depression, IMF says

#44

Post by noway421 » Fri, Apr 10, 2020, 1:37 AM UTC

topspin wrote: post #34

noway421 wrote: post #6

'Market learned to smooth out crises, because so many happened' is now least true than ever.

Who are you quoting? The only hit Google returns is you, in this thread.

I'm paraphrasing from memory a conversation I had. The gist is that volatility goes away with the time because market learns to anticipate and smooth out the crises, even if it's an unexpected out-of-blue event, since over sufficient enough time it would have happened at least once.

Maybe this still holds true, but the time frame for that must be massive.

Re: Worst economic crisis since 1930s depression, IMF says

#45

Post by Retric » Fri, Apr 10, 2020, 1:38 AM UTC

0xff00ffee wrote: post #35

blhack wrote: post #27

Earlier quoted context omitted.

The increase in the last two weeks is because it's becoming obvious that: 1) The US's response to this was competent. 2) The measures put in place are working. 3) The projections are improving substantially . 4) The time horizon is shrinking. 5) We are starting to understand how to treat this. (+ "in the us"). Two weeks ago we were looking at places like Italy, and extrapolating that the US could see deaths in the mi…

The reason why Trump went from "its a democratic hoax" to "100k-200k dead" was literally the Overton Window. Pick the biggest, most unlikely number, get everyone used to that, and deploy the puffery when it doesn't happen. Markets are responding to that. It was a pretty good move because that argument co-opted the opposition who was claiming a million or more would die. That was BS, and the administration's position…

What’s so strange to me is how much trust is being placed in these test results. Across the country doctors are telling people they can’t test people so stay home in self quarantine until you have difficulty breathing. Consider, 1/2 of all tests in New Jersey have been positive, nationwide it’s 1/4th for a disease that shares many symptoms with the flu.

While the official infection rate might have more or less stabilized it’s not going down and it’s vastly low. So, what’s making them think 100-200k is a high enough to call it a safe benchmark?

By official numbers NYC infection rate is already 1%, for that to be low and infection rates steady it’s going do easily hit double digits very quickly.

Re: Worst economic crisis since 1930s depression, IMF says

#46

Post by lisper » Fri, Apr 10, 2020, 1:38 AM UTC

swsieber wrote: post #32

At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc. I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over…

If you assume a mortality rate of 1% (which is probably in the ballpark) then you can expect 75 million deaths without intervention. So far world-wide we've had about 95,000 deaths. So doing nothing would result in about 700 times as many deaths as have occurred so far. I'd say it's probably to soon to throw in the towel.

Re: Worst economic crisis since 1930s depression, IMF says

#47

Post by throwaway122378 » Fri, Apr 10, 2020, 1:39 AM UTC

0xff00ffee wrote: post #35

blhack wrote: post #27

Earlier quoted context omitted.

The increase in the last two weeks is because it's becoming obvious that: 1) The US's response to this was competent. 2) The measures put in place are working. 3) The projections are improving substantially . 4) The time horizon is shrinking. 5) We are starting to understand how to treat this. (+ "in the us"). Two weeks ago we were looking at places like Italy, and extrapolating that the US could see deaths in the mi…

The reason why Trump went from "its a democratic hoax" to "100k-200k dead" was literally the Overton Window. Pick the biggest, most unlikely number, get everyone used to that, and deploy the puffery when it doesn't happen. Markets are responding to that. It was a pretty good move because that argument co-opted the opposition who was claiming a million or more would die. That was BS, and the administration's position…

Those estimates weren’t created or solely vocalized by the administration

Re: Worst economic crisis since 1930s depression, IMF says

#48

Post by vkou » Fri, Apr 10, 2020, 1:40 AM UTC

mLuby wrote: post #2

And yet the stock market is already recovering. I guess "worst crisis since Great Depression" has been priced in?

The printing presses injecting four trillion dollars into it over the past few weeks are to thank for that 'recovery'.

The fed is lending money to companies that would otherwise be going bankrupt, and is buying junk bonds from anyone they can.

The prior owners of the junk bonds then turn around, and spend that money on buying stocks. It's madness.

Re: Worst economic crisis since 1930s depression, IMF says

#49

Post by TechBro8615 » Fri, Apr 10, 2020, 1:41 AM UTC

Ok, but how noteworthy is this really? I mean, what do people expect to happen when 90% of the human race stops going to work for multiple months? And in the US, the government has incentivized small businesses to furlough employees so they can collect unemployment benefits. I realize that was not Mnuchin’s intention, but it seems to be widespread in the service industry, for example. Because of this, unemployment data is unfortunately meaningless for the time being.

I’m optimistic we’ll see this elusive “V shaped recovery.” But we won’t have a clear picture of what this recession really looks like until people are allowed back to work and we can see what the unemployment numbers revert to.

That said, I’m also worried about downstream effects like changed habits after quarantine, and avoidance of activities like going out to dinner.

Re: Worst economic crisis since 1930s depression, IMF says

#50

Post by redis_mlc » Fri, Apr 10, 2020, 1:41 AM UTC

swsieber wrote: post #32

At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc. I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over…

It already happened. The West will be litigating unpaid rent, etc. for the next decade since there aren't enough court rooms.

What we fundamentally got wrong is that ventilators don't work in 66% - 90% of cases, so "flattening the curve" was largely pointless and distracted leaders from low-tech solutions like quarantine centers and palliative care.

We should have learned that in 2002 from SARS-1, but nobody even seems to remember it.