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We'll be stuck in this recession for years, economists say

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Re: We'll be stuck in this recession for years, economists say

#131

Post by maerF0x0 »

danhak wrote: post #115
maerF0x0 wrote: post #102

Earlier quoted context omitted.

I'd love to see a multi-currency valuation of the S&P 500 over the next few years. Part of the issue of saying the Market is "up" is that we keep changing the size of the unit. Is the market worth more now in Yen, Indian Rupees etc? Or are people just willing to part with more USD (that asset specifically) for the underlying asset (the stock)?

> Is the market worth more now in Yen, Indian Rupees etc? Or are people just willing to part with more USD (that asset specifically) for the underlying asset (the stock)? Those are...pretty easy questions to answer. The dollar is down about 10% since its March high compared to a basket of other major currencies: https://www.marketwatch.com/investing/index/dxy

Can you help me figure out the maths on that. So how much of the stock gain is from currency devaluation (against other currencies) and how much is due to appreciation (of investors willing to pay more real value) ?

Say .INX was 3250 in Jan and is 3500 now. -> 7.7% increase. But currency has lost about 10% of its underlying value.

If something loses 1/10th of it's value we expect people to pay 11% (1/.9) more of that currency. So the 7.7% increase in stock market is actually a 3.3% decrease in a mixed currency basket?

Re: We'll be stuck in this recession for years, economists say

#134

Post by save_ferris »

eloff wrote: post #113
save_ferris wrote: post #104

Earlier quoted context omitted.

The problem I have with economics after reading Debt: The 5000 years by David Graeber[0] (solid read, btw) is that the field was founded on some fundamentally flawed assumptions about its own history. The biggest one being that there's no evidence that a barter economy preceded a cash economy. We've all been taught that this was the case when there's no evidence it was true and there are a lot of unexplained problems…

> In our lifetimes, economists largely balked at the idea that the housing market could collapse, and then boom, 2008 happens. I don't buy that without citations. Everyone knows housing markets are like most other markets and go both up and down in cycles. Like most other markets, the bigger the boom, the bigger the bust that follows. To say that a majority of economists believed otherwise seems like pure hyperbole t…

From an analysis by the Wharton school[0]:

“It’s not just that they missed it, they positively denied that it would happen,” says Wharton finance professor Franklin Allen, arguing that many economists used mathematical models that failed to account for the critical roles that banks and other financial institutions play in the economy. “Even a lot of the central banks in the world use these models,” Allen said. “That’s a large part of the issue. They simply didn’t believe the banks were important.”

They were fundamentally unprepared and many were unwilling to even entertain the idea that the housing market could collapse. That’s what made stories like The Big Short so surreal, they had all these experts telling them that they were wrong, and economists played a major role in that episode.

0: https://knowledge.wharton.upenn.edu/article/why-economists-f...

Re: We'll be stuck in this recession for years, economists say

#135

Post by sunopener »

lotsofpulp wrote: post #75
sunopener wrote: post #51

Earlier quoted context omitted.

Why not? The Federal Reserve has been printing up their own money this year like there's no tommorow. “To lend to a bank, we simply use the computer to mark up the size of the account they have with the Fed. So it’s much more akin, although not exactly the same, to printing money, than it is to borrowing.” --Former Fed Chairman Ben Bernanke Employers could simply use the same Sorcery to supply digital jobs.

The Federal Reserve is not "employers".

The Ploy thickens! I get so excited about stories.

Re: We'll be stuck in this recession for years, economists say

#136

Post by warkdarrior »

tsimionescu wrote: post #118
joshuaheard wrote: post #70

We aren't "stuck" in a recession. It is entirely man-made. In the past, a recession was significant because it was a market indicator. Now, however, this recession is artificial, so it does not indicate any market defects. I believe we will have a V-shaped recovery and we will get back to normal soon. In a market-based recession, the fear is how to get back to normal. In this artificial recession, there is no fear, w…

If we get rid of all of the lockdowns, and force people to act as if everything is normal (they won't) how will we handle the millions of people dying?

On the plus side, the few left alive will be able to command any salary they wish for.

Re: We'll be stuck in this recession for years, economists say

#137

Post by TheCowboy »

twblalock wrote: post #108
TheCowboy wrote: post #92

The grandstanding against economists is disappointing. Let's say you were driving at night with someone in the country, and because they either knew the road or could see farther ahead they said, "There's a boulder in a road ahead, we're likely going to hit it if you don't slow down and turn to avoid it." And you do slow down and it allows you to turn to avoid a crash. How do you respond? Mock them for always being w…

> There's no credit given to economists for the recessions or depressions avoided. I don't think we have avoided any recessions, ever, based on the advice of economists. They just aren't that good at forecasting. They don't even agree on the policy that is appropriate to fight recessions when we know there is one. The "grandstanding" against economists in this thread is entirely justified.

Public policy, monetary policy, and fiscal policy all have empirical evidence in support of them, demonstrating the usefulness of the field. Your comment does not.

Re: We'll be stuck in this recession for years, economists say

#138

Post by icedchai »

nonford150 wrote: post #89
icedchai wrote: post #46

Earlier quoted context omitted.

They're pointing out the obvious. Do you think tons of people are going to start dining out again? Going to gyms? Going to the movies? Large parts of the economy will be soft for years. Much of it will never come back due to semi-permanent shifts in behavior.

And maybe we'll start to realize our 'robust' economy was based on so many frivolous activities instead of durable manufacturing and private home ownership.

People are going to realize how much of their spending was unnecessary. For example, did I really need to be going to coffee shops 5x or 6x a week? Dining out every other meal? It's healthier for me and my wallet to make this lifestyle change... covid accelerated it. I should've done it anyway.

Re: We'll be stuck in this recession for years, economists say

#139

Post by lostmsu »

disgruntledphd2 wrote: post #90
EasyTiger_ wrote: post #68

Earlier quoted context omitted.

I’ve seen impending economic doom being pushed on HN since 2016

To be fair, the insanity of both the stock and bond markets started becoming really apparent around then. Still hasn't gotten any more sane, unfortunately.

Or maybe it is perfectly sane, and you just don't understand mechanisms at play?

Re: We'll be stuck in this recession for years, economists say

#140

Post by lostmsu »

jug wrote: post #25
hbosch wrote: post #19

Are we actually in a recession right now?

Was just about to say this. My equity funds are back to ≈85% before pandemic on average. One of them is better than before it. And that is coming from a very highly valued market due for a correction for years.

Many here are doing much better, because they invested in specific tech.
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