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

bloomberg.com

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

#701

Post by tacheiordache »

cpursley wrote: post #545
tacheiordache wrote: post #506

Earlier quoted context omitted.

I don't really understand what you're saying here. Can you explain what you mean?

Culture matters. The Nords are more oriented towards social harmony, are culturally homogeneous, have high transparency, low rates of corruption. This means everyone's one the same page more-or-less. Vs the large diverse cultures of the US (where I'm from) and Russia (where I now live). After living in Russia, it's no surprise that socialism did not work here. Forcing socialism onto cultures when they're not mature e…

It seems to me that the culture is largely forced down or forced to shape on us from the top, especially in the US. The elites, the billionaires and the wealth owners don't want much harmony because they can squeeze the lower layers at their benefit. The current culture appears to have something to do with this but in fact it's a side effect of this increasingly growing gap between the rich and the poor.

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

#702

Post by thephyber »

ohazi wrote: post #497
jdhn wrote: post #455

Earlier quoted context omitted.

>My question is how much, if any, social unrest this will lead to. The only social unrest that has happened so far have been the protests about wanting to lift or ease restrictions on states, and they were widely panned as a bunch of nutjobs. I doubt there will be any "unrest" beyond the protests.

> I doubt there will be any "unrest" beyond the protests. > No school means poor kids roam the street like packs of feral dogs asking for money for food around here. What was that quote about society being three meals away from anarchy?

Speaking of meals: US food banks have been reported as having 6 mile long lines and were required by Dept of Agriculture to maintain a 5-6 minute questionnaire (per meal recipient) up until a week ago.

Unemployment rate is underreported because states can't bring applicants onto their rolls fast enough for demand (if the state even accepts the applicant).

Rent payments, Mortgages, credit cards defaults are all growing. Once people exhaust their stopgap measures, the pressure for civil unrest grows quicker.

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

#703

Post by mullingitover »

JoeAltmaier wrote: post #692
mullingitover wrote: post #690

Earlier quoted context omitted.

Sharing anecdotes about pulling yourself up by your bootstraps doesn't change the fact that the biggest predictors of your life outcomes are your parents incomes and your zip code.

{citation}

"Parental Income Has Outsized Influence on Children’s Economic Future"

https://www.pewtrusts.org/en/about/news-room/press-releases-...

"Your ZIP Code Might Determine How Long You Live—and the Difference Could Be Decades"

https://time.com/5608268/zip-code-health/

"New U.S. Census Bureau Research Maps the Roots of Social Mobility"

https://www.census.gov/newsroom/press-releases/2018/opportun...

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

#704

Post by stcredzero »

mbgerring wrote: post #698
stcredzero wrote: post #479

Earlier quoted context omitted.

The only social unrest that has happened so far have been the protests about wanting to lift or ease restrictions on states, and they were widely panned as a bunch of nutjobs. It's easy to look down on people lower on the socioeconomic ladder. They're still human beings. They've been given this raw deal: For the greater good, you will now give up your job for an indefinite period of time, with no prospect of finding…

> It's easy to look down on people lower on the socioeconomic ladder. That's not who's protesting with assault rifles demanding that their hairdresser show up to work. People who are "lower on the socioeconomic ladder" are the ones going on strike for PPE, hazard pay and sick leave that the media are dutifully ignoring.

That's not who's protesting with assault rifles demanding that their hairdresser show up to work

Again, it's easy to paint a group as a "type" to justify disregarding their viewpoint. There are opportunists at any large protest. Ultimately, the protest is a collection of individuals, each with their own story.

People who are "lower on the socioeconomic ladder" are the ones going on strike for PPE, hazard pay and sick leave that the media are dutifully ignoring.

Noted!

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

#705

Post by lazerpants »

at-fates-hands wrote: post #464
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.

I'm guessing this had largely to do with the recession? People weren't buying new cars and so the supply for used cars dropped (I remember dealers calling me begging me to sell my Ford Edge) but the demand increased exponentially because it made more sense to buy a used car, then to get a new one. This is turn increased the price to many models and in some cases, a lot. Hybrids and electrics shot through the roof bec…

Don't forget that the government paid $3B to destroy 665k perfectly good cars in order to drum up demand for new cars.

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

#706

Post by zerocrates »

lotsofpulp wrote: post #419
thescriptkiddie wrote: post #394

Earlier quoted context omitted.

Only 52% of americans own any stock whatsoever [0], and the richest 10% of americans own 84% of all stock. [0] https://news.gallup.com/poll/190883/half-americans-own-stock... [1] https://www.nber.org/papers/w24085

All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices.

The number of people in the US with defined benefit pensions is quite low and consistently falling.

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

#707

Post by thephyber »

lotsofpulp wrote: post #509
ardy42 wrote: post #495

Earlier quoted context omitted.

> All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices. But that needs to be put in its proper context. Even if you have a small amount of stock or indirectly benefit from stock prices in some way, it'd be stupid if you let that mentally tie yourself to the…

Not if the shortfall is made up via asset price inflation and dollar devaluation. Then the non asset owning class takes the brunt of the pain. Which is what I believe has been happening for decades. Progressive taxation can help, but I doubt the political will exists to tax capital gains.

> I doubt the political will exists to tax capital gains

A friendly reminder that capital gains is taxed (when it is realized).* I assume that you are actually complaining about closing loopholes that exist for avoiding paying the full rate.

* Obviously this comes with the caveat that the tax code is large with lots of "loopholes" (in quotes because they were mostly intentionally created). Capital gains losses are somehow socialized as tax deductions and the "carried interest loophole" allows certain fund managers to treat capital gains as a different class of income.

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

#708

Post by klmadfejno »

ModernMech wrote: post #445
klmadfejno wrote: post #169

Earlier quoted context omitted.

> I don't need to explain what a 10-20% death rate would do to society, however. Not much if 80% of them are very old and sick.

Keep in mind death is not the only negative outcome of this. My wife's uncle is relatively young (50s), completely healthy, gainfully employed, and has contracted Covid. He's been in the hospital for over a month, has been on a ventilator for weeks, is currently off but has been in and out of the ICU, his lung has collapsed, he can't feed himself, he can't walk, and he's currently re-learning how to swallow. If he ma…

I'm sorry to hear that. I'm not arguing that covid only impacts old people, I'm saying 4 things (in general, maybe not the one particular quote above):

a ) covid won't destroy society in any case

b ) we cannot endure a lockdown until the disease is eradicated or a vaccine is produced

c ) a lockdown ended before the disease is eradicated or a vaccine is produced will just lead to a second wave of the disease

d ) the economic burden of the lockdown will increase exponentially as more businesses run dry

I don't want your uncle to be sick. But I'd rather your uncle get sick than have you, your wife, and your uncle lose your jobs; and then have your uncle get sick anyway.

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

#709

Post by greedo »

stcredzero wrote: post #641
kilroy123 wrote: post #602

Earlier quoted context omitted.

I completely agree with you, but... How about don't vote in leaders that only care about helping out their rich buddies then? The Scandinavian countries have moved to pay all payrolls to keep people paid during all this madness, instead of just bailing out large debt holders.

I completely agree with you, but... How about don't vote in leaders that only care about helping out their rich buddies then? Tone deafness in the media and the social and governmental leadership of any country is a key reason why demagogues and sociopaths get into power. This has been the case across time and cultures. The Scandinavian countries have moved to pay all payrolls to keep people paid during all this madn…

Oh they're definitely written by and for people who actually know how things work. They're written by Congressional aides and advisors who do exactly what they're told by the donors to the politicians. The politicians don't care what's in the bills, they care how the voters will react.

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

#710

Post by jkqwzsoo »

hn_throwaway_99 wrote: post #17
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?

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…

> 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.

I thought I'd look up the performance of various indexes for the past month (as of the time I looked them up):

* S&P 500: +15.2%

* Dow Jones Industrial Average: +14.1%

* Nasdaq Composite Index: +17.9%

* Russell 2000: +21.7%

* Russel 3000: +16.0%

* Wilshire 5000: +16.3%

I then looked at the YTD, and didn't bother comparing them because they all essentially looked identical to one another.

Note that the DJIA and NDQ are mostly contained within the S&P are they are highly correllated. Weighting aside (I'm not actually sure what differencs their might be), the S&P is contained in R3k and W5000, but not R2k.

So no, I don't think the idea that Apple and Facebook are doing well (thus keeping hte S&P numbers inflated) holds weight. In fact, the Russell 2000 does not include the top 1000 companies (like the Russell 3000) and shows the highest return for the past month.

Rather, it seems like all of these indices are correlated. It reminds me of the Hillary Clinton autoregression of prediction markets during the 2016 election: immune to new information.

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