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IMF Says Great Lockdown Recession Likely Worst Since Depression

bloomberg.com

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Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#81

Post by dustingetz »

Dumblydorr wrote: post #74
justinzollars wrote: post #31

This certainly feels real to me. Yesterday, I was laid off from my job at Easypost. We had a very big and very painful layoff because my company took on way too much leverage. The circumstances of COVID19 were tough to foresee but I really wish we hadn't taken on so much debt while times were good. I have experience in Go, Ruby, Python and I'm excited to hack again.

Nothing personal, but how is it not a company's fault to take on tons of leverage and not have cash reserves? I know this is typical SV growth mindset, but it isn't conventional financial wisdom. Seems to me companies need to get lucky if they go growth at all costs, because if you havent flipped the profit switch before a recession, your balance sheets are too red.

When one org takes on too much leverage it is the org's fault

When every org, smb, landlord and individual takes on too much leverage, it is the macro economic system we exist in that is at fault

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#82

Post by timr »

mantap wrote: post #68
nabla9 wrote: post #30

Earlier quoted context omitted.

There will be huge shift in structure of business. Many small mom and pop shops are not coming back. Big chains, and franchises survive. Permanent changes in customer behavior. Many people with resistance and habits against 'new ways' are forced to learn internet shopping and delivery. Their habits can change permanently.

The change in habits cuts both ways. I've bought from many small online stores recently as a result of the big retailers (inc Amazon) being totally sold out.

Similarly, I've been buying a lot more from smaller, local stores because the major chains are disasters. It's worth it to pay a few dollars more for groceries to avoid waiting in an hour-long line, for example.

Just as companies are re-thinking the fragility of supply chains that depend on a single country, maybe this will help counter-balance the consumer trends toward huge retail.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#83

Post by sebazzz »

webbruce wrote: post #62

Based on some of these comments, the degree to which so many are out of touch is unbelievable. 17 MILLION people have filed for unemployment and I'm sure this week will be another 6M as companies don't keep this much cash on hand. Tech's been living in a bubble for a long time and reality is starting to hit. Get out and talk to real people, not your Slack buddies working in SF.

Those companies that fire people, do they also file for support money from the government? If that is the case, is that fair? Thinking from the perspective of a country which has actually good worker protection, so not as many people get fired and companies get support in paying their workers.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#84

Post by [deleted] »

logicchains wrote: post #75
codenesium wrote: post #67

Earlier quoted context omitted.

How do people die from an economic slowdown? Maybe in poor countries but I don't think in a developed country an economic slowdown should kill anybody.

Poverty leads to higher suicide rates, e.g. https://www.usnews.com/news/healthiest-communities/articles/... . It also leads to people being generally less healthy and dying earlier: https://www.sciencedaily.com/releases/2018/11/181123135003.h... . If poverty leads someone who's currently 10 years old to die five years earlier, then in terms of loss-of-life-years it's similar to the loss if e.g. an 80 year old is kill…

[deleted]

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#85

Post by SketchySeaBeast »

Dumblydorr wrote: post #77
mcv wrote: post #44

I find myself less interested in whether or not something is a recession or not. I mean, sure, the numbers of the economy are going down, but the big numbers don't necessarily mean much for anyone's personal life. Of course it can; losing your job is no fun. But the big reason why the Great Depression was so bad, is that we didn't have any social security back then. Unemployed meant having no income at all. No health…

Look into unemployment system tech. In my state, its physically impossible to access it. Whenever you call or go online, it is straight up broken and dozens of contact attempts have yielded nothing. Our economic system is not nearly robust enough for these suddenly 5-10% unemployed and underemployed citizens. We can not "easily get through this if we want to".

I can't speak to the states, but as a Canadian, my wife and I tried to tackle the communication problem together - it took us a collective 550 calls over the day to even make it to the "on hold" queue, and I'm pretty sure making into the queue was purely by luck - my wife continued trying and never got through. The system is completely overwhelmed.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#86

Post by nomercy400 »

codenesium wrote: post #67
londons_explore wrote: post #58

I think historians will look back at COVID-19 as a textbook way not to handle an emergency. They will point out that 99% of deaths were related to economic effects of our response, not the disease itself. Hundreds of millions will starve or die in failed states in an economic slowdown, while only hundreds of thousands die of disease.

How do people die from an economic slowdown? Maybe in poor countries but I don't think in a developed country an economic slowdown should kill anybody.

Does that also imply that if many people die from economic slowdown, that country should be considered 'poor' or 'undeveloped'?

Maybe countries that feel developed but still experience this should reconsider their policies.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#87

Post by dd36 »

WJW wrote: post #17
fallingfrog wrote: post #14

Earlier quoted context omitted.

Gotta reinflate the bubble at any cost

It pays for pensions and old people vote a lot. So you can see why it might be a priority for politicians.

Or, donors are heavily invested and politicians work for donors.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#88

Post by dakna »

twomoretime wrote: post #22
anilshanbhag wrote: post #3

Stock market doesn't seem to agree with this conclusion.

I don't know how anyone can trust the stock market right now. We're living in unprecedented uncertainty and on top of that, [literally] everything's closed and no one is buying anything, how can the economy possibly be growing like the market right now? Hot air that will crash eventually.

>Hot air that will crash eventually.

If the Fed stops buying junk bonds, yes. Until then it looks like the current market prices this bailout in.

https://fred.stlouisfed.org/series/WALCL

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#89

Post by watwut »

dustingetz wrote: post #81
Dumblydorr wrote: post #74

Earlier quoted context omitted.

Nothing personal, but how is it not a company's fault to take on tons of leverage and not have cash reserves? I know this is typical SV growth mindset, but it isn't conventional financial wisdom. Seems to me companies need to get lucky if they go growth at all costs, because if you havent flipped the profit switch before a recession, your balance sheets are too red.

When one org takes on too much leverage it is the org's fault When every org, smb, landlord and individual takes on too much leverage, it is the macro economic system we exist in that is at fault

It is not case that every org, smb, landlord and individual took on too much leverage. Quite a few among those who are laying people off run out of money because their customers are not buying services now or because they were flat out closed.

Which is something else then "my company took on way too much leverage".

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#90

Post by Ididntdothis »

webbruce wrote: post #62

Based on some of these comments, the degree to which so many are out of touch is unbelievable. 17 MILLION people have filed for unemployment and I'm sure this week will be another 6M as companies don't keep this much cash on hand. Tech's been living in a bubble for a long time and reality is starting to hit. Get out and talk to real people, not your Slack buddies working in SF.

I agree with you but the high number of unemployment claims is also a feature of the bailout plans. Let’s hope people will get hired back quickly.
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