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How we will know when a recession is coming?

brookings.edu

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Re: How we will know when a recession is coming?

#101

Post by theturtletalks »

kasey_junk wrote: post #40
theturtletalks wrote: post #29

Earlier quoted context omitted.

You're right, but what if revealing the discrepancies wouldn't be beneficial to the company? Many people knew about the subprime mortgages before the 2008 recession and no-one came forward, although some shorted it.

I worked in that industry during that time period and its just not true that no one came forward. As early as 2003 Warren Buffett straight up called them “weapons of financial destruction”. In 2005, the World Bank released a report suggesting that the derivatives the banks were holding could cause a financial crisis. I remember the day the yield curve inverted in 2005 because I was working for a company that made ris…

You’re right, it’s a bit much to say no-one came forward, but enough wasn’t done to catch what was going before it came crashing down. The comment I was replying to was implying people would notice discrepancies and we would be able to catch it.

Re: How we will know when a recession is coming?

#102

Post by refurb »

mirimir wrote: post #67

Maybe I'm just too cynical, but we know that it'll happen just before the next Presidential election. If the party in power can't get enough buy-in from enough influential people.

You believe the party is power has enough sway to move the needle on a $20T economy?

Re: How we will know when a recession is coming?

#103

Post by rubicon33 »

drevil-v2 wrote: post #56
rubicon33 wrote: post #51

> The Great Recession officially ended in June of 2009 As a "millennial" who graduated in 2008, I seriously hate reading shit like this. Maybe it recovered for the Boomer's pension funds and 401k's, but it took many of my friends over a decade to find work equal to their qualifications. They're only JUST NOW starting to get payed what they deserve (PHDs, MBAs, and Masters degree holders).

> They're only JUST NOW starting to get payed what they deserve That is absurd. In a free market with free movement of goods and people, whatever you are getting paid is what you "deserve" aka what other participants in the market are willing to pay for your services. It is only explicit government intervention that overrides this process; subsided renewal energy sources, childcare, housing etc. But with everything e…

I would have thought it was obvious what I meant by "deserve" but apparently I have to spell it out.

No, I don't mean that they are owed anything. This is life after all. You nor I, are owed a damn thing. And in a free market, that's explicitly true.

Duh.

What I mean by "deserve" is... prior generations with similar qualifications enjoyed a much smoother, and more lucrative career. Boomers were handed a golden egg, and managed to nearly destroy it. The middle class is shrinking, wages are stagnant, and frankly if you're not underemployed as a millennial you're among the lucky.

Re: How we will know when a recession is coming?

#104

Post by viraptor »

refurb wrote: post #73
lph wrote: post #69

Earlier quoted context omitted.

> ...getting exactly what the market could afford. "afford" is an odd word choice. As if to suggest that employers simply don't have any money by which they could have increased worker salaries. In this same period, average CEO compensation increased 25-50%, depending on how you measure it. So, apparently, there's lots of money, but its distribution is skewing increasingly to the very top. So let's not say "afford".

A CEO getting an extra $5M leading a 100,000 employee company means each employee could have gotten an extra $50. So i would argue it still about what the company can afford.

Thats only the CEO though. Add a few board members and VPs and it gets more significant. But even with $50 per employee - why not do that instead if you're aware of recession impacting people? (Apart from the obvious - because you want more money)

Re: How we will know when a recession is coming?

#105

Post by refurb »

viraptor wrote: post #104
refurb wrote: post #73

Earlier quoted context omitted.

A CEO getting an extra $5M leading a 100,000 employee company means each employee could have gotten an extra $50. So i would argue it still about what the company can afford.

Thats only the CEO though. Add a few board members and VPs and it gets more significant. But even with $50 per employee - why not do that instead if you're aware of recession impacting people? (Apart from the obvious - because you want more money)

CEO comp is typically mostly equity, not salary. So is it surpassing that CEO comp goes up when the markets go up? Probably not.

Re: How we will know when a recession is coming?

#106

Post by nodesocket »

iamwil wrote: post #50

For fun, I put together http://isitrecession.com , in the spirit of https://isitchristmas.com It just shows the inverted yield curve, pulling down data from the US treasury everyday, and subtracting the 1 year from the 10 year interest rate.

Can you also plot the S&P 500 (SPY) either overlayed or below the yield curve graph. Would be interesting to correlate.

Re: How we will know when a recession is coming?

#107

Post by the_watcher »

asdfman123 wrote: post #62
the_watcher wrote: post #46

Earlier quoted context omitted.

> has virtually never called a recession incorrectly since 1970. "virtually never" also sounds like weasel words considering the total number of recessions.

Also, what happened before 1970? Is it possible they're just overfitting here?

IIRC that's when the key inputs to all these recession indicators began to be collected.

Re: How we will know when a recession is coming?

#108

Post by smudgymcscmudge »

rubicon33 wrote: post #103
drevil-v2 wrote: post #56

Earlier quoted context omitted.

> They're only JUST NOW starting to get payed what they deserve That is absurd. In a free market with free movement of goods and people, whatever you are getting paid is what you "deserve" aka what other participants in the market are willing to pay for your services. It is only explicit government intervention that overrides this process; subsided renewal energy sources, childcare, housing etc. But with everything e…

I would have thought it was obvious what I meant by "deserve" but apparently I have to spell it out. No, I don't mean that they are owed anything. This is life after all. You nor I, are owed a damn thing. And in a free market, that's explicitly true. Duh. What I mean by "deserve" is... prior generations with similar qualifications enjoyed a much smoother, and more lucrative career. Boomers were handed a golden egg, a…

The historical norm is living at subsistence levels. The last several generations have been an anomaly. We will return to mean. The millennials children will be worse off and the next generation even more so.

Re: How we will know when a recession is coming?

#109

Post by rubicon33 »

smudgymcscmudge wrote: post #108
rubicon33 wrote: post #103

Earlier quoted context omitted.

I would have thought it was obvious what I meant by "deserve" but apparently I have to spell it out. No, I don't mean that they are owed anything. This is life after all. You nor I, are owed a damn thing. And in a free market, that's explicitly true. Duh. What I mean by "deserve" is... prior generations with similar qualifications enjoyed a much smoother, and more lucrative career. Boomers were handed a golden egg, a…

The historical norm is living at subsistence levels. The last several generations have been an anomaly. We will return to mean. The millennials children will be worse off and the next generation even more so.

I'm not talking about the 1400s. The context of this discussion is not ancient history. It's the last couple of generations.

Re: How we will know when a recession is coming?

#110

Post by PenguinCoder »

refurb wrote: post #73
lph wrote: post #69

Earlier quoted context omitted.

> ...getting exactly what the market could afford. "afford" is an odd word choice. As if to suggest that employers simply don't have any money by which they could have increased worker salaries. In this same period, average CEO compensation increased 25-50%, depending on how you measure it. So, apparently, there's lots of money, but its distribution is skewing increasingly to the very top. So let's not say "afford".

A CEO getting an extra $5M leading a 100,000 employee company means each employee could have gotten an extra $50. So i would argue it still about what the company can afford.

An extra $50 per what? Year? Paycheck? Month? That's key.
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