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IMF Says Great Lockdown Recession Likely Worst Since Depression

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Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#101

Post by frockington1 »

baq wrote: post #61
twomoretime wrote: post #22

Earlier quoted context omitted.

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.

'analysts' say that a 'V-shaped' recovery is 'priced in'. same 'analysts' mostly didn't notice a 11M city going into full lockdown.

Compared to the begging news wave that everyone was going to get infected and millions of death per state, an 11M city going into lockdown was definitely priced in

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#102

Post by wycy »

nl wrote: post #73
DCKing wrote: post #51

As a total dummy on macroeconomics, I find myself having the positive take "hey, we were probably moving towards some recession anyway, might as well get it over with in one go". I'm saying this because the graphs go up again in the not too distant future. Besides the obvious personal suffering that is going to be the consequence of this event on at least the short term, and under the uncertain assumption that we're…

hey, we were probably moving towards some recession anyway, That's a take that is gained from reading two many doom and gloom writers and not looking at the data. The data shows that economies - on average - expand and have done consistently, long term since the renaissance. Once you look at that, you see recessions as mistakes . Most large ones since the start of the 20th century have been caused by errors in the ca…

True that economies generally grow with time, but that doesn't mean the prices of stocks match reality. Prior to corona, the Dow Jones was nearly double it's value from 2016. Did the US economy really nearly double in value since 2016, or was there a mismatch between price and reality?

Honestly, I'm not an expert. But before coronavirus, the wild growth in the markets seemed--to me--out of line with the realities of the economy.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#103

Post by logicchains »

throwawaylolx wrote: post #76
logicchains wrote: post #63

Earlier quoted context omitted.

>Also the IMF article predicts a 3% contraction for 2020 and a 5.8% growth in 2021, so by what definition is this a depression? I wonder how they get those numbers. At least half the US economy is in shutdown right now. Two months of that is equivalent to one month of the whole economy being shutdown; to 1/12th of annual GDP lost, or around 8.3%. Add another month and its 12.5% of output lost.

>I wonder how they get those numbers. They explain in their article: https://www.imf.org/en/Publications/WEO/Issues/2020/04/14/we...

They don't describe the actual algorithm used for the calculation there, but they do state they're assuming 8% of work days lost for countries experiencing a pandemic, 5% for other countries. So I suppose if they assumed 5% work days lost for US, and otherwise 2% GDP growth for the year, then they could get a number around -3%. Only 5% of total workdays lost sounds quite optimistic to me though.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#104

Post by vsareto »

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.

>Get out and talk to real people

Uh, nah, don't do that yet

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#105

Post by tyingq »

leesalminen wrote: post #100
m_mueller wrote: post #23

Earlier quoted context omitted.

wouldn't be so sure. small businesses probably have a somewhat higher ability to go into a sleeper mode where operative costs are reduced to a minimum.

Minimum operative costs are still in the thousands of dollars per month for even the smallest of meat-space businesses. I don't know many hairdressers, nail stylists and massage therapists that can afford $1-3k/mo for the next several months with $0 revenue. Anecdotal, sure, but I have at least one of each of those in my family.

"hairdressers, nail stylists and massage therapists"

Most of those folks are contractors that pay rent (for their "small spot") or some sort of cut to the entity that owns the physical salon, right?

Though your point stands for the owners of such places, many of them probably working owners.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#106

Post by frockington1 »

chadlavi wrote: post #55
nl wrote: post #52

Earlier quoted context omitted.

The term "recession" has meaningful definitions: A recession is two or more quarters of negative economic growth in a row. A depression isn't clearly as defined, but some common definitions are "a 10% decrease in real economic output" or "a recession lasting more that two years"[1]. Neither of these definitions are met. [1] https://en.wikipedia.org/wiki/Depression_(economics)#Definit...

I'm honestly pretty surprised if we not at "a 10% decrease in real economic output" yet in the US

Healthcare and Technology sectors are probably on the way to all time high in output shortly. The US is a large player if not the largest in both of those sectors. We'll see a big hit but I think these sectors will be able to prevent a recession

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#107

Post by Ididntdothis »

anonanon42 wrote: post #97
Ididntdothis wrote: post #90

Earlier quoted context omitted.

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.

My employer has just furloughed 30% of the company for 6 months. 6 freakin' months. And we were very profitable. This cut was not necessary to maintain neutral profit/loss...they want to keep profits up. We're a software company backed by a brand name VC in SF. The board is in total meltdown.

Our system rewards people who relentlessly pursue their own advantage at the expense of others. The official talk is about shared sacrifice but the real winners are the ones who make others sacrifice. My company has a lot of problems but I really appreciate that they set out a goal to not lay off anybody. They could easily have laid off a lot of people but they didn’t. This will probably not get rewarded in the stock market but it shows that the company is not run by complete sociopaths like many others.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#108

Post by 2019-nCoV »

treyfitty wrote: post #92
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.

> It was no fault of our own because the circumstances of COVID were impossible to foresee. This is one of the biggest fallacies in modern finance. COVID was merely the catalyst which exposed terrible finances. The idea of unforeseeable black swans has become nothing more than a trope of an excuse that it's lost all meaning. Sure, the pandemic itself is a "black swan" but the subset/collection of events that lend its…

COVID is not a black swan (unknown unknown), but a white swan (known unknown). A looming Coronavirus pandemic was a well known global catastrophic risk.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#109

Post by nl »

wycy wrote: post #102
nl wrote: post #73

Earlier quoted context omitted.

hey, we were probably moving towards some recession anyway, That's a take that is gained from reading two many doom and gloom writers and not looking at the data. The data shows that economies - on average - expand and have done consistently, long term since the renaissance. Once you look at that, you see recessions as mistakes . Most large ones since the start of the 20th century have been caused by errors in the ca…

True that economies generally grow with time, but that doesn't mean the prices of stocks match reality. Prior to corona, the Dow Jones was nearly double it's value from 2016. Did the US economy really nearly double in value since 2016, or was there a mismatch between price and reality? Honestly, I'm not an expert. But before coronavirus, the wild growth in the markets seemed--to me--out of line with the realities of…

Sure I think that's a reasonable case to make. We could have - at some point - had a correction in the financial markets which might have caused a 2001 style disruption or maybe a 2008 recession.

But this is nothing like that at all. A stock market crash takes months to move through the economy.

A big crash means things like 700,000 new unemployment claims (2008 had that many at its peak).

The US just had 6 million new unemployment claims.

It's a whole new level.

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