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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

#111

Post by adequateness »

frockington1 wrote: post #99
adequateness wrote: post #93

Earlier quoted context omitted.

The lockdown isn't the only reason for the current economic crisis. Look at what was happening in the repo market a few months back before Coronavirus was even a thing.

I thought the repo market was mainly due to regulation drying up liquidity in that market. It didn;t seem to me like a larger concern. What are your thoughts on it?

What regulations are you referring to? I didn't look to deeply into it but I interpreted it as companies wanting to hold cash more instead of lending because they expected a crash.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#113

Post by BjoernKW »

jazzyk wrote: post #95
BjoernKW wrote: post #56

Earlier quoted context omitted.

The stock market is commonly considered to represent what the economy is expected to look like in 6-12 months. If we assume a sharp downturn in Q1 and Q2 of 2020 and a subsequent uptick and prolonged recovery in the second half of 2020 and continuing in 2021 that pretty much corresponds to how stock markets have been reacting over the past few weeks.

No, it is just helicopter money distributed (to some) by the Federal Reserve. "Whatever it takes" to backstop the stock market is apparently working.

Well, while I don’t disagree that the current “Whatever it takes” influx of money helps with propping up the market right now there’s nothing that inherently prevents the economy from growing again once the immediate crisis is behind us.

Make no mistake, there will be huge shifts and upheavals, regarding the ways we work and buy stuff for example.

Many of today’s incumbents might not exist anymore in two years’ time but there’ll be others to take their place.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#114

Post by ModernMech »

djohnston wrote: post #78
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…

this is also different because there isn't an economic causal factor. we intentionally stopped everything. that didn't happen in 1929 or 2008 or the 70's, we collectively got together and said shut it down until we get a hold on this disease

> this is also different because there isn't an economic causal factor. we intentionally stopped everything.

Yes we intentionally stopped things, but that would have happened either way as the disease spread and people got sick.

Look at the meat packing plant in SD where 1 case turned into ~300 and they had to shut down [1]. If we had not shut down things, that would be the story at workplaces across the country. Think about schools and universities throughout the country. If they had not shut down as the pandemic was ramping up, they would have become breeding grounds for the disease and would have had to shut down anyway as students and teachers fell ill.

Yes we shut down things intentionally but our hand was forced. The flip side of this is we cannot re-open things just as intentionally because the result will be a flare-up of cases. So while it may seem like we have control over when we start/stop the economy here, really the virus is controlling the timeline.

[1] https://abc7news.com/smithfied-foods-coronavirus-meat-packin...

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#115

Post by jlaurend »

sebazzz wrote: post #83
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.

The legislation being enacted's main goal is to keep people employed. The PPP (payment protection plan) is directed at small businesses (Now, the larger company / industry bailouts -- those seem less well-defined. I haven't seen the latest on those but I'm sure the government would _like_ to tie them to employment as much as possible but we'll have to wait to see.

[1] https://smartasset.com/financial-advisor/paycheck-protection...

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#116

Post by justinzollars »

dijit wrote: post #38
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.

If you feel like coming over to this side of the pond I’m hiring. We assist in relocation. https://www.massive.se/job/online-infrastructure-engineer-si...

thanks I'll check it out

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#117

Post by jazzyk »

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.

I wholeheartedly agree with you, but the fault lies with the Federal Reserve, which has been promoting reckless behavior for years now.

Artificially setting interest rates so low (say 1%) that by saving money, you are actually losing money to inflation (real inflation at least 5%, if you include healthcare, real estate and higher education) promotes over-leveraging and that's what we got.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#118

Post by jazzyk »

BjoernKW wrote: post #113
jazzyk wrote: post #95

Earlier quoted context omitted.

No, it is just helicopter money distributed (to some) by the Federal Reserve. "Whatever it takes" to backstop the stock market is apparently working.

Well, while I don’t disagree that the current “Whatever it takes” influx of money helps with propping up the market right now there’s nothing that inherently prevents the economy from growing again once the immediate crisis is behind us. Make no mistake, there will be huge shifts and upheavals, regarding the ways we work and buy stuff for example. Many of today’s incumbents might not exist anymore in two years’ time…

You make sense, unfortunately our "market" economy does not.

Many of today's incumbents WILL exist in two years' time, because they are the recipients of "helicopter money" to prop them up, even if they deserve to die.

The real losers will be small and medium businesses who will get some token (not enough to survive) help, so that politicians can claim that everyone was helped.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#119

Post by mcv »

dustinmoris wrote: post #79
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…

> We can easily get through this is we want to. Skip a vacation, but a luxury item less... Wow that is pretty out of touch with reality. If you have a household where two people were all of a sudden out of a job at the same time with absolutely no warning or preparation, having to pay for two kids, a mortgage and no prospect to find a job in the next few months then I'm afraid skipping a vacation or not buying a luxu…

Sure, but that's why we need to take care of each other. Poor countries may not be able to, but wealthy countries absolutely are. Of course choices need to be made, but the choice not to help out those who are hit hardest by this, is a political choice. It's not an inability to help.

Of course there are countries, like the US, that seem eager to fuck this up, but again, that's a political choice. There's no doubt that the US has the economic capacity to get through this if it wants to. The problem is that its political class has other priorities.

In Netherland, people who lose their job still get paid. Restaurants survive by switching to delivery. Some companies may go bankrupt, many people will have to take a step back in their lifestyle, but overall, life here has been pretty good, and we have that leeway to make that step back.

That doesn't mean nothing will change once this is over; I think and hope a lot of people will reassess what's important. I hope we'll pay the people in these "essential jobs" better than we've done so far. And I hope people will learn to appreciate the essentials of life more and be less eager to get back into the rat race of status and useless crap. But we do have a lot of useless crap in our society that we can easily cut back on without letting anyone fall through the cracks.

In western Europe at least. I'm well aware that some other countries love rugged individualism for the poor and care more about bailing out the rich. But again, that's a political choice.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#120

Post by mcv »

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".

That's a really good point. Even if a society technically has the resources to take care of everybody, a big disruption can still threaten access to it. As much as I'd like to see western/northern European countries as fairly well organised in this regard, government sites are crap everywhere.
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