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U.S. economy shrank at a 1.4% annual rate in the first quarter

wsj.com

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Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#31

Post by Balero »

incomingpain wrote: post #18
JKCalhoun wrote: post #10

Earlier quoted context omitted.

> A civil pillar like food scarcity will spark more than civil unrest. Probably will be civil war before midterms happen. Like what happened with the Great Depression? I saw no mention of food shortages in the article. My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest.

Arab spring is a more modern example. https://www.businessinsider.com/ukraine-russia-bread-food-pr... https://medium.com/something-about-everything/food-riots-and... >My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest. What happens when food is scarce and people are starving for possibly the first time in their life? Anxiety, depression, etc is wel…

The food scarcity we have experienced in the pandemic is more like people wondering why there are no peppers or chicken this week. But there is plenty of other food to eat.

I think any issues we have will be people not having their first option of food, not going hungry.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#32

Post by matthewdgreen »

incomingpain wrote: post #18
JKCalhoun wrote: post #10

Earlier quoted context omitted.

> A civil pillar like food scarcity will spark more than civil unrest. Probably will be civil war before midterms happen. Like what happened with the Great Depression? I saw no mention of food shortages in the article. My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest.

Arab spring is a more modern example. https://www.businessinsider.com/ukraine-russia-bread-food-pr... https://medium.com/something-about-everything/food-riots-and... >My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest. What happens when food is scarce and people are starving for possibly the first time in their life? Anxiety, depression, etc is wel…

Having a well-functioning democracy is probably the best insulation against this. You don't need a civil war when you can vote for a different government.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#33

Post by mtoner23 »

bko wrote: post #21
MaysonL wrote: post #5

US economy grew at a 6.9% rate in the fourth quarter last year.

How much of that was due to inflation? Remember these numbers are nominal GDP. So if price levels doubled and nothing else changed, GDP would more or less double as consumption went up due to higher prices. The worrying thing is there are no monetary levers available without the risk of higher inflation. And if people don't think GDP matters, its actually a very good indicator of all sorts of well being measures such…

This is real gdp

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#34

Post by boringg »

incomingpain wrote: post #2

GDP: -1.4% DOW: -8.36% YTD S&P500: -12.22% YTD NASDAQ: -20.17% YTD Inflation: 8.5% Interest rate: 0.5%(increasing once by 0.25%) Balance of trade: $-89.2B >they still think the Fed will be able to rein in inflation without triggering a recession. It was raised once and everything is collapsing underneath. Don't know how you look at all this and think 'it'll be fine'. There's a general rule that this kind of behaviour…

I think you are living too deep in your fears - lots of doom and gloom here. There isn't anything relative to a food shortage about to happen in the US and certainly we aren't on the cusp of a civil war. DC is actually less acrimonious than it was.

The equity market is not the economy and a lot of the financial websites make money on hyping up the latest quarterly numbers. Are there concerns here? Yes, there always are - is the world about to end from this? Absolutely not.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#35

Post by altacc »

incomingpain wrote: post #2

GDP: -1.4% DOW: -8.36% YTD S&P500: -12.22% YTD NASDAQ: -20.17% YTD Inflation: 8.5% Interest rate: 0.5%(increasing once by 0.25%) Balance of trade: $-89.2B >they still think the Fed will be able to rein in inflation without triggering a recession. It was raised once and everything is collapsing underneath. Don't know how you look at all this and think 'it'll be fine'. There's a general rule that this kind of behaviour…

From a non-US perspective, it seems that a lot of Americans are quick to conclude that a civil war is around the corner, even on HN where one would hope for a more nuanced analysis. There can't be that many boogaloo boys on this forum, so I wonder how common this narrative is in the US at the moment to make it a go-to conclusion. Is it really common to hear talk of this in the US?

From what I see of human nature, most people are willing to accept a good deal of change and discomfort before they are willing to jeopardise their relatively stable & comfortable lives (relative compared to countries where you actually see armed uprisings, revolutions & civil war).

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#36

Post by myth_drannon »

incomingpain wrote: post #18
JKCalhoun wrote: post #10

Earlier quoted context omitted.

> A civil pillar like food scarcity will spark more than civil unrest. Probably will be civil war before midterms happen. Like what happened with the Great Depression? I saw no mention of food shortages in the article. My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest.

Arab spring is a more modern example. https://www.businessinsider.com/ukraine-russia-bread-food-pr... https://medium.com/something-about-everything/food-riots-and... >My sense is that civil wars are when states/governments fight, not hungry people. You could have stopped at civil unrest. What happens when food is scarce and people are starving for possibly the first time in their life? Anxiety, depression, etc is wel…

Arab spring was instigated using social media manipulation by outside actors. Look at Russia, they understood the threat of social media and thwarted it early on, and it's calm now despite huge economical issues. The same will happen in US, no doom and gloom. Issues can be blamed on Putin and Ukraine not being able to produce enough due to Russian invasion.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#37

Post by jlmorton »

bko wrote: post #21
MaysonL wrote: post #5

US economy grew at a 6.9% rate in the fourth quarter last year.

How much of that was due to inflation? Remember these numbers are nominal GDP. So if price levels doubled and nothing else changed, GDP would more or less double as consumption went up due to higher prices. The worrying thing is there are no monetary levers available without the risk of higher inflation. And if people don't think GDP matters, its actually a very good indicator of all sorts of well being measures such…

No one reports nominal GDP changes. BEA reports real GDP changes using the GDP implicit price deflator.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#39

Post by dntrkv »

incomingpain wrote: post #2

GDP: -1.4% DOW: -8.36% YTD S&P500: -12.22% YTD NASDAQ: -20.17% YTD Inflation: 8.5% Interest rate: 0.5%(increasing once by 0.25%) Balance of trade: $-89.2B >they still think the Fed will be able to rein in inflation without triggering a recession. It was raised once and everything is collapsing underneath. Don't know how you look at all this and think 'it'll be fine'. There's a general rule that this kind of behaviour…

Oh yeah, remember the civil war of 1982? When inflation was 14% and The Fed raised rates to purposefully start a recession?

Give me a break, we’ve been through much worse. Let’s stop with the FUD please.

Re: U.S. economy shrank at a 1.4% annual rate in the first quarter

#40

Post by lumost »

bko wrote: post #28
recursivedoubts wrote: post #9

Shows just how sensitive our economy is to small interest rate fluctuations, having lived around the zero bound for over a decade. We've encouraged everyone to lever out as far as possible while at the same time making real production more and more difficult (or, during the early lock downs, impossible) and, well, the long run is here. Keynes was right: he's dead. Unfortunately, we, and our children, are not.

> We've encouraged everyone to lever out as far as possible Household debt to GDP has gone down since the low interest rate environment kicked off in 2010. Same is true for household debt as a percentage of personal income. Although I will note that its debt payments, not absolute amount of debt and obviously lower rates lower the interest portion of debt payments. I agree there is something troubling going on but it…

There are many troubling things happening at the moment. From a US centric point of view.

- Inflation is at it's highest since the 1970s in the US

- There is a large military conflict in Europe.

- There are shortages of chips, energy, and food on the horizon.

- Unprofitable growth stocks have valuations as high as 100:1 on revenue.

- There is increasing militarized tension on many portions of the global supply chain (Russia:EU, China:US, China:Taiwan).

- Housing has appreciated by up to 40% YoY in major US cities.

- A global pandemic has introduced lockdowns, and potentially permanently changed people's relationship with work. While killing a million people.

- The US legislative branch is utterly paralyzed.

- The US business cycle hasn't seen a recession since ~2010.

I'm sure I missed a few, but the fact that a recession hasn't happened should be more surprising than a recession happening.

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