“A Mild Recession” • Hacker News Board

Re: “A Mild Recession”

#41

Post by upupandup » Thu, Jul 14, 2022, 2:41 PM UTC

We enjoyed 12+ years of cheap capital. Our stock market were largely bubble of tech companies that used this cheap capital to achieve insane market cap.

Those days are over and will not come back for a loooong time. ex) Japan has not reached its 1989 peak and its nearly going into 40 years no sign of stopping.

Globalization is also come to an end and our economy built around cheap capital and Chinese labor is over.

This is the end of cheap goods, cheap travels, and the middle class. I do not want to be here when it gets bad. Just head over to r/vancouver to see people casually blaming their situation on immigration.

Re: “A Mild Recession”

#42

Post by twelfthnight » Thu, Jul 14, 2022, 2:43 PM UTC

Shikadi wrote: post #39

kiba wrote: post #19

Earlier quoted context omitted.

Infinite growth forever is a truism that isn't very useful. Growth can continue indefinitely, but we will hit limiting factors relating to how we structured our economy.

Why do people believe this? The earth has limited resources

One explanation is technological progress. You can imagine if we were to figure out a good way to make space travel cheaper, for example, we'd no longer be limited to earth's limited resources. Of course, in the _long long_ term, entropy increase and indeed we do run out of the ability to grow or even maintain.

Re: “A Mild Recession”

#43

Post by peyton » Thu, Jul 14, 2022, 2:45 PM UTC

throwaway5959 wrote: post #5

atemerev wrote: post #2

Oh, this is just the beginning. Ten years of “oh, just buy index funds” strategy will unwind with a huge snap.

Please show on the S&P 500 graph where buying to sell now hasn’t been a great opportunity in the last 100 years minus the last twelve months.

True only for US stocks—possibly cherry-picking.

Re: “A Mild Recession”

#44

Post by jpadkins » Thu, Jul 14, 2022, 2:46 PM UTC

Shikadi wrote: post #39

kiba wrote: post #19

Earlier quoted context omitted.

Infinite growth forever is a truism that isn't very useful. Growth can continue indefinitely, but we will hit limiting factors relating to how we structured our economy.

Why do people believe this? The earth has limited resources

why do you believe wealth or value is limited by natural resources? That hasn't been the case for a very long time. I'd say the limiting factor on wealth is smart, productive people's time (given we are in the information age, and the bottleneck for value creation is specialized humans, not raw resources).

Re: “A Mild Recession”

#45

Post by m3kw9 » Thu, Jul 14, 2022, 2:47 PM UTC

“ That’s 33 consecutive weeks of more stocks making new lows than making new highs. As you can see, this is historically as bad as it gets with the lone exception of the Great Financial Crisis in 2008-2009. Again, this is not the future, this is the present. We have already been living through it.”.

This is a classic mistake people make when predicting the future: using historical prices.

Re: “A Mild Recession”

#46

Post by jpadkins » Thu, Jul 14, 2022, 2:48 PM UTC

upupandup wrote: post #41

We enjoyed 12+ years of cheap capital. Our stock market were largely bubble of tech companies that used this cheap capital to achieve insane market cap. Those days are over and will not come back for a loooong time. ex) Japan has not reached its 1989 peak and its nearly going into 40 years no sign of stopping. Globalization is also come to an end and our economy built around cheap capital and Chinese labor is over. T…

what tech companies were using cheap capital to achieve insane market cap? Very few tech companies borrow money. Unless you meant people were buying tech stocks with leverage, which I agree with...

Re: “A Mild Recession”

#47

Post by vorpalhex » Thu, Jul 14, 2022, 2:48 PM UTC

samsonradu wrote: post #35

nh23423fefe wrote: post #28

Earlier quoted context omitted.

But you just responded point by point with non-sequiturs. I made a comparison between 2007 and now, while you just stated ignorance of the past and made pessimistic assertions of my ability to estimate relative security. Meanwhile you hold a belief like, "the future will be good because capital will be allocated better"

I used the word ‘statistically’ to underline the fact that it will not happen to everyone, and specially not to you in particular. > Meanwhile you hold a belief like, "the future will be good because capital will be allocated better" Yes

Do you have any actual statistics or are you just saying you do to borrow an air of authority?

Re: “A Mild Recession”

#48

Post by tmountain » Thu, Jul 14, 2022, 2:52 PM UTC

SketchySeaBeast wrote: post #21

Jensson wrote: post #13

Earlier quoted context omitted.

You cherry picked the companies though. Take the index for the top companies in some other country than USA and that investment no longer looks as secure. USA did great the past 100 years, many other countries didn't.

OK, so I didn't make the original S&P market argument, I think they should go bigger and focus on globally diversified broad market funds, but, to get back to my original point, what's the alternative here?

There isn't one. People love to spread doom and gloom without any real solutions. Real estate, gold, crypto, bonds, etc... are all either affected or soon to be affected by these economic conditions. Panic sellers will lose big and folks that don't have the means to weather the storm will suffer. Personally, I still believe in a well diversified portfolio being the best option (as do many), but the truth is, nobody really knows.

Re: “A Mild Recession”

#49

Post by m3kw9 » Thu, Jul 14, 2022, 2:54 PM UTC

This piece is basically telling people just because historically things “doesn’t really happen” a certain way, it assigns it a probability based on it

Re: “A Mild Recession”

#50

Post by seanmcdirmid » Thu, Jul 14, 2022, 2:55 PM UTC

atlgator wrote: post #29

epups wrote: post #22

Honestly I don't think the issue is that another recession is coming. It's going to be the fourth or fifth serious economic crisis I've experienced in my lifetime. What worries me is that the quality of our political leadership and in general our ability to diagnose and address complex issues is, in my view, at an all-time low.

They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. T…

They really don’t have much of a choice. None of those issues can be solved in the near term, and many of them were setup 10-15 years ago. Both parties have been irresponsible when it comes to spending, interest rates, and inflation. We should have been tightening up on interest rates and taxes during boom times so we could loosen during bust times, but it’s just been loosen loosen loosen since 2001 or so. No one is interested in evening out the economic cycle.

And the parties have been irresponsible because we the voters wanted that.