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U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

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Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#291

Post by A4ET8a8uTh0 »

owenwil wrote: post #159
A4ET8a8uTh0 wrote: post #39

I wish I could say I disagree, but to be perfectly honest, I was fully expecting a recession last year. As someone may have already mentioned though, between FED basically keeping the market afloat, stimulus working its way through the economy and dollar still riding as a safe haven, it is not that surprising that US economy did not crash, while a good chunk of population is at home and out of commission. The thing t…

> The thing that worries me is that by attempting to prolong it as long as we are, we are basically setting up a stage for a greater depression Killing thousands of people in the name of the economy would also set the stage for an even longer, deeper recession...

I wish we could not communicate in bumper stickers. I did not argue this in any way, but you jumped to a conclusion and I am not certain what that conclusion is based on.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#292

Post by RobertoG »

lisper wrote: post #97
ganeshkrishnan wrote: post #88

Earlier quoted context omitted.

It's very hard to have currency based inflation especially for USD which is in very high demand.

Have you looked at the Fed's balance sheet lately? It is quite literally off the charts. https://www.federalreserve.gov/monetarypolicy/bst_recenttren... It is no harder to inflate the dollar than any other currency. Print enough of them, and the their price will go down. It's no different from any other commodity.

The Fed balance sheet is kind of irrelevant. What that number means is the quantity of reserves in the system. Only the money that is spend in the real economy has inflationary effects. One more steep is necessary for that money to have real effect and that doesn't happen automatically in a depression.

If you increase the reserves, you are forcing the interest rate down, so you are making credit more cheaper (until it arrives zero and can't go further down).

For inflation to appear you need borrowers to who the banks think is good business to lend, and that spend that borrowed money in the economy. That it's not going to happen in a depression, when nobody wants to invest and the banks are scared to lend.

What is necessary is a decisive fiscal policy. That would increase the central bank balance sheet also, but what would cause some inflation would be the spending in the economy, not the number in the balance sheet.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#293

Post by antientropic »

lisper wrote: post #150
xxpor wrote: post #128

Earlier quoted context omitted.

Inflation has only been on a downward trend since the early 80s, despite what everyone predicted when Nixon closed the gold window.

That's because the economy has grown more or less apace with the money supply (or, more accurately, because the Fed has controlled the growth of the money supply to keep pace with the economy). Now we are pumping cash into a shrinking economy. You can't do that for very long without producing inflation.

The WSJ editorial page has been predicting hyperinflation because of QE since 2008, but it stubbornly refuses to materialize. Maybe this time...

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#294

Post by OldHand2018 »

toomuchtodo wrote: post #285
xingped wrote: post #281

Earlier quoted context omitted.

Can someone explain how this works?

OP's niece takes on the liability as the owner (ie she hits someone and causes harm her insurance doesn't cover), but OP retains legal claim against the property, preventing someone else from obtaining it through a legal judgement or similar proceedings.

Right, if it gets taken away it gets given to me as the senior lien holder. For best legal protection, I should loan her money with some nominal interest rate.

A distant family member did this on the house of one of their kids, and it saved them from losing it in a foreclosure. The other lender was so angry with them for refusing to release their lien; but they couldn't legally force them to do it.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#295

Post by Aperocky »

hn_throwaway_99 wrote: post #17
iambateman wrote: post #4

I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?

3 things: 1. People keep saying about the market being up recently, but skip the part about it still being down about 10% since the start of the year. 2. S&P is heavily weighted towards the strongest companies. Amazon, Apple, Facebook, Microsoft and Google account for 20% of S&P market cap. Most of those companies have been helped by the pandemic, or at least not hurt nearly as bad as smaller companies. 3. The market…

Add to that the feds have been quantitatively easing and the money has to go somewhere.

The market doesn't need to reflect the reality when you have an excess of cheap cash on the market.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#296

Post by amyjess »

aphextron wrote: post #145
nimbius wrote: post #98

This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. My job just cut benefits and hours but we're "essential." Remembe…

> No school means poor kids roam the street like packs of feral dogs asking for money for food around here. I think this is possibly the single biggest long term problem we're going to face as a result of all this. Economic recessions will come and go. But missing 5/8ths of a school year is going to be absolutely devastating for this generation of kids. They will be left permanently behind without a serious concerted…

When I was in third grade, we spent half the second semester learning about different kinds of whales. This is material I forgot pretty much as soon as it was over. When I graduated high school, my mom and I went through all my old elementary school material to see what we'd like to keep for sentimental value and what we're okay with throwing out to make room in the garage, and we were just overwhelmed by the sheer massive volume of paper that came out of that whale unit.

There is so much redundancy in elementary school education that you can take out a large chunk of it and still teach the same amount of information. School could be way, way denser than it is. Hell, even in high school, a full year would cover the same amount of material as a single semester of one of my college classes, and my college classes only met 3 times a week (for the same exact class length as my high school classes; or fewer than 3 times a week for longer class length).

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#297

Post by tmaly »

baron_harkonnen wrote: post #257
nimbius wrote: post #98

This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. My job just cut benefits and hours but we're "essential." Remembe…

Tech people will be hit much harder by this than they think. The STEM world is largely in denial because ultimately SV grew because of the last major recession. That won't be happening this time. Startups are having massive layoffs right now, and each week bring companies further and further down the chain lay people off. I strongly suspect we'll see more major layoffs next week. Most big tech companies are driven by…

Maybe Tech will in short term, but investors still will need to chaise yield in a zero interest rate environment.

As soon as things pass, money should start to flow back into startups.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#298

Post by hunter2_ »

grey-area wrote: post #213
MattGaiser wrote: post #148

Earlier quoted context omitted.

> Ive counted 2 furniture stores, a consignment shop, a few barber shops, and half the god damn bars Retail like that is very underrepresented in the stock market, so those losses wouldn't be reflected.

But many people invest in commercial real estate directly or indirectly, and all those travel/retail industry companies were advertising customers for google/fb, and their unemployed workers are customers for Apple and Amazon who now have no money. That the stock market doesn't reflect main street yet after the biggest stimulus in history is perhaps unsurprising but also a little worrying.

REITs are in the gutter. Look at ETFs like ARR, TWO, AGNC over the past year.

Indices like DIA, SPY, QQQ don't have much of this, though.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#299

Post by iffybookmark »

jb775 wrote: post #270

Is it outrageous to say we need to end this quarantine right now? At this point, the cure is worse than the disease.

Isn't covid-19 the #1 cause of death in NYC right now? And not, like, starvation?

Saying the cure is worse than the disease shows a frightening lack of both empathy and objective reasoning. I don't want to construct a strawman, but I worry that what "reopen" people are really saying is "I don't care if X% of the US population dies - as long as I'm not one of them - if it means I can try to go back to normal."

And try is the key word there. I would argue the main thing keeping people at home is not stay-at-home orders, but fear. Correctly-calibrated, sensible fear of getting a disease that has better odds of killing you than lots of other sources of risk in modern life.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#300

Post by SpicyLemonZest »

inscionent wrote: post #178
dudul wrote: post #112

Earlier quoted context omitted.

And this post is why I get so infuriated when I see all the blue-checkmarks on Twitter, calling people who want to go back to work "Selfish, stupid, idiot, etc". People don't want lockdown to stop because they need to go to their hairdresser, or because they need to go hangout at the pub, or whatever idiotic reason these privilege a-holes put in their tweets. People want to get back to work , because they need money…

We can print more money right. Money isn't real. Death and this virus are. How about we just take care of those who need taking care of during this disaster. How about we put all national efforts to keep the lights on, providing safe housing and keeping the food supply chains intact. Instead we are worried about corporate quarterly profits and when the Ruby Tuesday can reopen, because somehow serving burgers for $3/h…

In many parts of the world, what the original comment describes is simply a normal day; the only reason Americans typically do better than that is our strong economy. We know what economies without strong quarterly profits and Ruby Tuesday look like, and they don't support the modern American standard of living.
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