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U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

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Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#131

Post by bhupy »

milesskorpen wrote: post #110
hn_throwaway_99 wrote: post #17

Earlier quoted context omitted.

3 things: 1. People keep saying about the market being up recently, but skip the part about it still being down about 10% since the start of the year. 2. S&P is heavily weighted towards the strongest companies. Amazon, Apple, Facebook, Microsoft and Google account for 20% of S&P market cap. Most of those companies have been helped by the pandemic, or at least not hurt nearly as bad as smaller companies. 3. The market…

Google and Facebook definitely are not being helped right now. Advertising is drying up.

Alphabet just reported a 13% increase in revenue for Q1.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#132

Post by quickthrowman »

sseagull wrote: post #106
nutjob2 wrote: post #65

Earlier quoted context omitted.

It's a bear rally. This is the most optimistic market participants (bulls) buying at low prices and creating momentum that others follow. Waiting for them at higher prices are the pessimists (bears) ready to sell into the rally. Since there really hasn't been a capitulation, where everyone who would ever sell actually sold, it's likely the bears are still in control. I think some people are mistaking the extreme vola…

> Since there really hasn't been a capitulation, where everyone who would ever sell actually sold, it's likely the bears are still in control. I have heard this before, but I am having trouble feeling this. How do you determine capitulation? We had several days where trading was halted for a time due to steep losses, and 3/16 was the second biggest percentage loss in history (for the Dow at least). If that isn't capi…

Here’s why I don’t think it was capitulation. Check out google trends for “how to trade stocks” or a variation thereof. There was massive retail interest in buying the big dip, people aren’t interested in buying when capitulation has happened.

Perhaps the Fed intervened early enough to prevent a retest of the bottom, but I wouldn’t count on it.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#133

Post by lisper »

asah wrote: post #103
lisper wrote: post #97

Earlier quoted context omitted.

Have you looked at the Fed's balance sheet lately? It is quite literally off the charts. https://www.federalreserve.gov/monetarypolicy/bst_recenttren... It is no harder to inflate the dollar than any other currency. Print enough of them, and the their price will go down. It's no different from any other commodity.

serious q: down relative to what other currency or asset? gold? bitcoin? real estate?

Well, stocks at the moment. The real value of U.S. stocks has not risen 20% in one month. What has really happened is that the U.S. dollar has lost 20% of its value relative to stocks. Inflation takes a long time to work its way into the economy at large, and it is possible that it won't happen. We managed to avoid it after 2008, but back then we had some very competent people running the show. I'm less sanguine about that this time around. My reading of the tea leaves is that the Trump administration will prop up stock prices by whatever means necessary because they believe (probably correctly) that many people will vote according to the bottom line of their 401ks.

But it is simply not possible to keep pumping currency into a shrinking economy without producing inflation. Sooner or later the law of supply and demand will catch up with you. The only question is whether it will happen before or after November.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#136

Post by aaron695 »

dylkil wrote: post #84
aaron695 wrote: post #76

Why are we continually saying Recession when we know it will be a Depression?

we dont know that

Until everyone in the supply chain from mining to customers have free movement, which means 80% or more of the world have some sort of immunity (Either from opening everything up or vaccines) our economy will be depressed.

This will be many many quarters from now.

Even if today China said don't care that would be 6 months at least. And they are only part of the supply chain.

What don't we know?

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#137

Post by vorpalhex »

aaron695 wrote: post #76

Why are we continually saying Recession when we know it will be a Depression?

That's like saying you should remove your leg when you get an infected cut because we know it'll turn into gangrene.

It's profitable to be an economic doomsayer, which is why every single week for the past 8 years someone has said that we're going to have a recession or depression. That doesn't make them right.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#138

Post by mcphilip »

nimbius wrote: post #98

This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. My job just cut benefits and hours but we're "essential." Remembe…

> This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating.

Thanks for posting this comment. I know it sounds trite, but I’m sending well wishes your way, hoping you and your loved ones make it through this crisis as minimally impacted as possible.

I think you likely see the big picture better than others. The economy is absolutely crushed. That the markets go up must be especially frustrating to those not able to partake in any gains. My take on the market is that it will go up on good or bad news for the moment. Going up on good news is self explanatory, going up on bad news could be related to speculation that the Fed and Congress will pump even more money into the economy —- the wealthy expect to be propped up by the government as they were in the great financial crisis.

My cynical take on this is that the rich expect to get richer, no matter the outcome, and are investing accordingly. My question is how much, if any, social unrest this will lead to.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#139

Post by res0nat0r »

lmilcin wrote: post #96
gnulinux wrote: post #55

Earlier quoted context omitted.

How do you make up for the 2 months you decided not to eat out and cooked home instead? I live in Boston, and some of my favorite restaurants are already closed, and the huge liqueur store next to my house closed this week. It's not possible to make up for things like this, they're gonna be replaced by larger food chains once virus passes. But it's not true to say virus didn't hurt our economy permanently, of course,…

I never said businesses will come back from grave. But people will want to get out once this passes. I'm personally sick of staying at home, I am going to try to make better use of my time. Somebody will get that business anyway. I am also putting off repairing my car until after all this passes. Yes, car repair shops may be at loss now because I decided not to do business with them, but my car is still broken and I…

I think folks are underestimating how long this will go on. At least until the end of the year, minimum. There is absolutely nowhere near the amount of testing being done in the USA due to incompetence, that is needed to allow folks to feel safe, or to safely allow bars / concert venues or other large gatherings to happen. Massive amounts of businesses are never coming back from that.

We're a massively long way from that, plus the contrarian ignorance embedded in GOP politics now that are allowing / half demanding their cities open back up for business are going to all but ensure the USA has the biggest death / infection / economic hit of all of the countries in the world.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#140

Post by newacct583 »

nimbius wrote: post #98

This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. My job just cut benefits and hours but we're "essential." Remembe…

> Half the country is out of work

It is clearly not, otherwise that 4.8% would be a much bigger number. Hyperbole doesn't help here.

No one claims things are good. A global pandemic is a disaster any way you cut it. We're all affected, some much more than others, and we all have to help. But there's no magic wand we can wave where we all go back to work, either.

Even "essential" industries are affected. Very few people want to go to a crowded restaurant or theater right now, lockdown rules or no. Almost no one wants to travel on an airplane. That's just not coming back until we get the disease under control, and releasing lockdowns pushes that date farther into the future.

Remember the disease is disruptive all by itself. We have something like 25% of the nation's pork butchering capacity off line right now, not due to lockdowns (obviously they were "essential") but due to actual outbreaks. And that's what we should expect everywhere we permit commerce: random, uncontained, very disruptive outbreaks.

There's no magic. This sucks. But we have to work together to fix it, and harping about only one side of the problem hurts and doesn't help.

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