Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

341–350 of 877 posts

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

#341

Post by lisper »

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…

> nobody seems to care.

A lot of people care. Many of those who care believe that the situation we're in right now is caused (or at least greatly exacerbated) by incompetent leadership at the national level, but unfortunately that view is not shared by a substantial fraction of the American people, and against that kind of headwind there is only so much we can do.

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

#342

Post by matthewdgreen »

SpicyLemonZest wrote: post #305
matthewdgreen wrote: post #284

Earlier quoted context omitted.

How many people do you know who are going to buy the latest iPhone this year or next? I can tell you that among my acquaintances, that number is vastly lower than it was if I asked the same question in February. And that's assuming that everything with the virus goes as well as possible, which it isn't.

The number of people who say they're going to is vastly lower, certainly. But I don't think that people's attitudes during a mandatory stay at home order are reflective of what we'll actually do once it's clear the worst is behind us.

My point is that many of these people are enduring real financial hardship. Many have already lost jobs or taken major pay cuts. The ones who haven't lost them are afraid of it, and diverting more money into savings and away from discretionary purchases. I assume the people I know are probably more white-collar and in relatively safer jobs than the general population, which (looking only at today's unemployment numbers) is bleeding badly.

This isn't about what people want to do. It's about what they will be able to afford to do.

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

#343

Post by omgwtfbyobbq »

mywittyname wrote: post #118
iambateman wrote: post #4

I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?

Well, that's a 12% increase following a huge drop. So the market is still 15% or so under its February peak. A significant number of S&P 500 investors (roughly 40%) hold their investments in retirement accounts. These people are not going to sell unless forced to because they lost their jobs. If you're looking for a huge drop in the S&P 500, then keep an eye out on laws that allow for penalty-free withdraws from reti…

The CARES act waived penalties for up to $100k in withdraws from an eligable retirement account, and lets you pay off the taxes on that ratably over the next 3 years, assuming you don't contribute them back to the plan, which you can do at any time during those 3 years.

https://www.fedweek.com/issue-briefs/covid-19-stimulus-bill-...

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

#344

Post by cletus »

So I still think there's a huge disconnect between market perception of what's going on and what's actually going on. Last month I was saying "don't treat this is a temporary dip". Many have never known anything other than a bull market. The S&P 500 has rallied some ~20% since then (after a >30% fall mind you) so I've had a couple of people point to this like I'm wrong.

The perception many seem to have is that everything is going to go back to normal in a month. But some businesses and jobs are just... gone. This will absolutely impact demand and this will be much slower to recover.

I was also surprised to learn that S&P 500 earning shave been flat since 2014 while the market has gone gangbusters. That had to come crashing back to Earth eventually.

Also, some things like social distancing are here for the long term. I've already gotten emails from airlines saying they won't be filling certain seats on the plane. It's probably going to be a lot nicer to fly in coach, which I guess many will enjoy, except it's going to have to get more expensive. Less passengers, same plane, higher price per passenger. It's just simple math.

And who's going to be traveling anyway? Business travel (the lifeblood of most airlines) is going to take a long time to recover.

The economy just doesn't shrink 5% and everything is back to normal the next month. People who think so are hopelessly naive or just plain delusional. And that GDP contraction isn't going to end here.

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

#345

Post by antientropic »

mywittyname wrote: post #118
iambateman wrote: post #4

I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?

Well, that's a 12% increase following a huge drop. So the market is still 15% or so under its February peak. A significant number of S&P 500 investors (roughly 40%) hold their investments in retirement accounts. These people are not going to sell unless forced to because they lost their jobs. If you're looking for a huge drop in the S&P 500, then keep an eye out on laws that allow for penalty-free withdraws from reti…

> So the market is still 15% or so under its February peak.

The S&P 500 was up 29% last year. It's now back to the level of October last year - when there was no pandemic or economic crisis. So you could say that the market is remarkably blasé about the current situation.

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

#346

Post by guiomie »

baron_harkonnen wrote: post #257
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…

Tech people will be hit much harder by this than they think. The STEM world is largely in denial because ultimately SV grew because of the last major recession. That won't be happening this time. Startups are having massive layoffs right now, and each week bring companies further and further down the chain lay people off. I strongly suspect we'll see more major layoffs next week. Most big tech companies are driven by…

100% agree. The housing market in the bay area will go down even more. The last year changes in tax rules such as lower deduction for mortgage interest and municipal taxes had already weakened the market. With RSUs going down, even less people will be able to buy housing, driving the price down. I think my house lost 8% in the last year, pre-COVID19. Sucks for me as a home owner, but I really believed the housing market was over-inflated. If we have layoffs, in FAANGs, I suspect a lot of folks will not be able to pay there mortgage.

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

#347

Post by ashtonkem »

eightysixfour wrote: post #222
ta1234567890 wrote: post #189

"Start of a recession"? We've been in a recession for a while now, and a global one too. The IMF and other such organizations have been saying it for over a month now. Why has the US been trying to deny it for so long?

Recession is a semi-technical term that is often defined as a fall in GDP for two successive quarters.

That’s why there’s a lot of debate about whether this is a depression or a recession, we haven’t had enough time to decide.

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

#348

Post by ghaff »

slfnflctd wrote: post #323
eppp wrote: post #268

Earlier quoted context omitted.

The used car market has been inflated for years. 100k+ mile vehicles selling for over half their new price makes no sense to me.

It makes sense if the car tends to last 350k+ miles and has only been gently used. There are at least a few models that have pretty consistently been getting up to that or higher before major repair is needed since 2010 or so. I will say I think quality hybrids (again, gently used) are worth more than a lot of their counterparts on this point.

Depends where you live and how much you drive. While the situation is much much better than it used to be, cars in places like the Northeast still tend to start getting serious rust damage after 10 years or so.

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

#349

Post by RHSeeger »

JshWright wrote: post #271
RHSeeger wrote: post #116

Earlier quoted context omitted.

It might help to remember that a recession is economic decline over a period of time, so a steep decline over a very short period is not considered a recession. As we move into a longer period of time (in the past, the rule was two quarters, but that doesn't seem to be a "rule" of the definition anymore), it starts to officially be considered a recession. So it's not that it was being dismissed as not significant bef…

> It might help How would that help...?

He seemed to be expressing frustration with the fact that the news are just starting to say "we're entering a recession" when it's been hitting a lot of the country hard for quite some time; that the news outlets were dismissing the huge impact it's already having. I was saying that the news outlets weren't dismissing it. Rather, given the time periods are extending, it is now moving from "major economic downturn" to "recession", where the later is the former over a period of time.

The specific point being made was "don't get frustrated that they are downplaying the economic impacts based on the terms they are using; because that's how the terms are defined. It's not a judgement call".

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

#350

Post by mdszy »

jb775 wrote: post #270

Is it outrageous to say we need to end this quarantine right now? At this point, the cure is worse than the disease.

Literally killing people for the sake of "the economy" is a disgusting notion to even attempt to defend.

The system is entirely broken.

Post reply on HN