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Why a global recession is inevitable in 2023

economist.com

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Re: Why a global recession is inevitable in 2023

#181

Post by wonderwonder »

olonn wrote: post #158
hdjjhhvvhga wrote: post #134

Earlier quoted context omitted.

> The threat of Russia's aggression affecting other countries remains. Like what countries exactly? They can't even hold the ground they conquered in the previous months in Ukraine. Armenia already asked Russia's help and they refused - it was effectively a fatal blow to CSTO and has far-reaching consequences to the way Russia is perceived among its current and former allies.

probably finland and other countries near russia

Traditionally western aligned non nato countries are probably safe from Russian aggression. Finland and Sweden are 2 votes away from joining NATO as it is. America just has to park troops and equipment in any threatened country and they are essentially immune from invasion. Their military is also a good deal better equipped that Ukraine's was. Finland has the largest artillery capability in western Europe and a strong anti - air capability. Short of nukes, I'm relatively certain Finland would chew up any invading Russian force, especially as depleted and exposed as they are from the war in Ukraine.

Re: Why a global recession is inevitable in 2023

#182

Post by Izkata »

gruez wrote: post #75
netman21 wrote: post #19

Signs I look for of an impending recession: Stagnation. Inflation is a sign of a booming economy. Unemployment. I see help wanted signs everywhere Huge building projects abandoned. Here in SE Michigan I am seeing active construction sites everywhere. The Economist runs headlines like "Are Recessions a Thing of the Past?

>Signs I look for of an impending recession: >Stagnation. Inflation is a sign of a booming economy That's not borne out by the data. If you look at the graph for inflation[1], you see that falling inflation comes after recessions (helpfully shaded grey), not before. In other words, by the time you see stagflation, you're already deep in recession, or it has already passed. Therefore using it as a sign for "impending"…

Likewise the spikes in unemployment, they happen after the recessions begin: https://fred.stlouisfed.org/series/UNRATE

Re: Why a global recession is inevitable in 2023

#183

Post by ac29 »

jasonwatkinspdx wrote: post #144
yucky wrote: post #125

Earlier quoted context omitted.

> Then everyone - the sellers, the agents, even the bank - push you to borrow the max allowed and spend it. You are not forced to spend above your ability to pay. People used to be ok with buying smaller homes, or in less hip neighborhoods. If you can afford a $500k house you can also afford a $350k house. People need to stop making excuses for living above their means.

You are ignoring the reality many are facing, where essentially all the available options are above their means. Back in the late 80s Elizabeth Warren and coauthors showed that the most common reason American families went bankrupt was because their high housing costs were an attempt to get their kids into better schools. The blunt truth is the 20 major metro areas are where nearly all the high income jobs are, so we…

>The result is increasingly people facing the dilemma where the best economic option for their family is for them to spend 3+ hours of their day commuting to an urban core from an outlying area they can just barely afford to rent in. And god help you if your kid gets sick or your car gets totaled. This is the reality for most working class Americans.

The average commute time for Americans in 2019 (pre-pandemic) was 27.6 minutes each way: https://www.census.gov/newsroom/press-releases/2021/one-way-...

Yes, there are supercommuters out there with very long commutes, but saying 3+ hours a day describes "most" Americans simply isnt true.

Re: Why a global recession is inevitable in 2023

#184

Post by lamontcg »

hyperpape wrote: post #146
lamontcg wrote: post #140

Earlier quoted context omitted.

Because unemployment is low that means that the Fed can't drop rates at all or else inflation will come back. And it is likely that if the Fed pauses rate hikes and the economy doesn't fall into recession that there will be another boom and high inflation again, which will kick off more rate hikes. This is the difference between short-term reactions of inflation to rates and long-term reactions. What the Fed needs to…

You should say more about why you think 6-8% unemployment is required. From September 2014 - February 2020, unemployment was below 6% without signs of significant inflationary pressure. I'm not saying you're wrong (those periods are different from the present in a lot of ways), just that your reasoning isn't very apparent.

I didn't say that inflation would reappear at 5.99% unemployment.

They need >6% so there's a gap between here and there. Right now we're clearly at the rail and unemployment has not budged. The jobs overhang has significantly abated, but that has been a short-term reaction to the policy changes, and it can change back on just as short of a term.

Re: Why a global recession is inevitable in 2023

#185

Post by FooBarBizBazz »

dcolkitt wrote: post #164
samwillis wrote: post #47

Disclaimer, I have no idea if this is even slightly logical, I'm not an economist. House prices have increased significantly above inflation for decades to the point of absurdity, many multiples of a households income. People in their 20s (and 30s) increasingly don't believe they will ever own a home. If we have a period of inflation, with increased wages (obviously with a painful lag), but house prices remain stagna…

No, the fundamental reason for lack of housing affordability is a lack of supply relative to demand. Since 2008 we've dramatically under built new housing units relative to household formation. Playing with inflation or interest rates may change who loses out, but it still doesn't change the fundamental problem that we don't have enough housing to go around.

This is one of the problems with rate hikes. They reduce production and investment. New home builds are down. Manufacturing is down. All of this is exactly the opposite of what we should want, which is low prices due not to a scarcity of money but to an abundance of wealth.

Re: Why a global recession is inevitable in 2023

#186

Post by ianai »

gruez wrote: post #136
ianai wrote: post #41

Earlier quoted context omitted.

Buybacks were rampant through this era. Difference without a distinction.

>Difference without a distinction. No, you're just playing fast and loose with facts. The fed also financed the federal government through treasury purchases, and the federal government sent out stimulus checks to americans, some of which bought crypto/meme stocks, but it would be disingenuous to write a screed about how bad the fed is because they bought "crypto/meme stocks" using the aforementioned reasoning.

You got personal there.

Re: Why a global recession is inevitable in 2023

#187

Post by dragonwriter »

Izkata wrote: post #180
dragonwriter wrote: post #173

Earlier quoted context omitted.

> The low unemployment rate indicates we’re likely either in or about to start a recession. Sure, I mean, we might only be ~4 years from a recession (see 1966). It's true that, as recession is defined roughly as the period of decline from an economic peak, they usually start during a period of low unemployment, but that doesn't mean low unemployment signals being in a recession. Most low unemployment periods are outs…

Take a look at the comment I was responding to, as well as some others on this page: It's a common misconception that the unemployment rate spikes ( spikes , not fluctuates slightly higher ) before recessions. It doesn't.

The fact that you were responding to an incorrect description does not make your description that “The low unemployment rate indicates we’re likely either in or about to start a recession” correct. 1+1=3 is wrong, but that doesn’t make the response “1+1 is actually 1” correct.

Re: Why a global recession is inevitable in 2023

#188

Post by gambiting »

hdjjhhvvhga wrote: post #134
oliwarner wrote: post #116

Earlier quoted context omitted.

Major economies are already in deepening recessions. Major producers are starting the year with significant impairment from COVID and supply line pressures. The threat of Russia's aggression affecting other countries remains. Energy prices are still obscene in Europe. I hope things get better, but I think you'd be mad to plan for global growth this year.

> The threat of Russia's aggression affecting other countries remains. Like what countries exactly? They can't even hold the ground they conquered in the previous months in Ukraine. Armenia already asked Russia's help and they refused - it was effectively a fatal blow to CSTO and has far-reaching consequences to the way Russia is perceived among its current and former allies.

As a Pole, I'm very much nervous about the fact that China is not outright denouncing the aggression on Ukraine, and instead keeps promising tighter alliance with Russia. It could be just that they want to reap all the benefits of Russian resources by being the only place that will really trade with them in any capacity, but if they start supplying Russians with weapons and pushing towards escalating the conflict.....who knows what will happen. I really don't think a conflict with NATO is completely off the table, as suicidal as it would be for Russia(and everyone else). And with China's backing, they could be emboldened to do something that will push everyone over the edge.

Re: Why a global recession is inevitable in 2023

#189

Post by mccorrinall »

Zaskoda wrote: post #69
paulpauper wrote: post #3

Hasn't it been inevitable every years? It seems like the media writes this headline every year. Anyone can find reasons for recession if you look hard enough. Who knows. I am not selling stocks.

I'm certainly not well educated in finance - but having had my business crushed by the events of 08/09, I started paying a lot more attention to economics than I had previously. From what I can gather, I think part of what is happening is that "the can" keeps getting kicked further down the road. That is to say, we should have already been in or even through a recession. By postponing it, it's just going to be that m…

Isn’t a recession necessary to curb inflation? Powell said that economy needs to cool down:

When rates are hiked, a home with a mortgage, using credit cards or seeking loans to start a business become much more expensive. That results in people stopping purchasing homes, cut down on spending, think twice about starting a business. In addition to that companies will lay off workers and enact hiring freezes.

Everyone says it, the signs are obvious, and people here still think we won’t land in a recession.

Kinda feels similar to the irrationality of tesla investors, where everyone knew that the company is overvalued and needs to come down. Yet people continued buying or didn’t want to sell. Why? I would like to know.

Re: Why a global recession is inevitable in 2023

#190

Post by ianai »

spacemadness wrote: post #153
speakfreely wrote: post #131

Earlier quoted context omitted.

> Right, they bailed out corporations and threw people out of their homes. Never forgive, never forget. So you would've preferred that the whole system came crashing down and believe that average people would've had a better long term outcome from that?

I think there’s a good argument to be made that lots of companies doing bad things and taking bad risks socialize their failure, thus learning nothing except they can get away with it again on the publics dime. Being too big to fail is an added bonus. How is the public better off in that scenario? Regulation can act as a bandaid but there is always another loophole to exploit.

There could have been a round of modern “trust busting” ala Teddy Roosevelt. Too big to fail is a clear center of too much market power. (That the smaller banks like credit unions weathered that era better underscores the need for some “right sizing”.)
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