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“A Mild Recession”

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Re: “A Mild Recession”

#61

Post by vorpalhex »

samsonradu wrote: post #51
vorpalhex wrote: post #47

Earlier quoted context omitted.

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

That sounds a bit rude, but I'll try to answer anyway. No, I don't have the statistics at hand but I think we can agree that a lot of people go through financial hardship during a recession - basically what a recession means. What part of my comment do you disagree with exactly? That people, in general, overestimate their financial security and capacity to overcome recessions?

I disagree with this:

> First of all, the recessions tend to last longer than most people expect/plan for. Statistically, it will turn out their 'secure' jobs will be less 'secure' than expected. Meanwhile their emergency funds will start shrinking (slowly at first, then all at once) due to loss of purchasing power & eventual job loss.

Those predictions are not supported by the data, and are distinct from your description of them. I disagree with your implied statistics and sloppy use of words. I am skeptical that you can forecast the length of the recession, job loss, or changes in consumer behavior.

Re: “A Mild Recession”

#62

Post by claytongulick »

danaris wrote: post #59
atlgator wrote: post #29

Earlier quoted context omitted.

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…

From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…

The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth.

It's a great exercise to research the effects of this type thing historically.

Re: “A Mild Recession”

#63

Post by voisin »

pwinnski wrote: post #53
samsonradu wrote: post #6

Earlier quoted context omitted.

Too young to understand what happened in the 2008 GFC but I doubt the 'feeling prepared' part works like this. First of all, the recessions tend to last longer than most people expect/plan for. Statistically, it will turn out their 'secure' jobs will be less 'secure' than expected. Meanwhile their emergency funds will start shrinking (slowly at first, then all at once) due to loss of purchasing power & eventual job l…

I'm old enough to remember 2008 and several other recessions as well, and "feeling prepared" works exactly like that. Not all jobs are secure during a recession, but job security is relative--and often knowable. Emergency savings are something few people actually have, and can make a world of difference when times are hard. On the other hand, there is no guarantee whatsoever that capital will be better allocated afte…

> On the other hand, there is no guarantee whatsoever that capital will be better allocated after a downturn. After all, 2008 came post-2001, and here we are post-2008, with capital as misallocated as ever!

I think the mis-allocation is due to rates not rising fast enough after the crisis is over. Terrifyingly fast to drop and equally terrifying (in retrospect) how slow they rise.

Re: “A Mild Recession”

#64

Post by voisin »

kiba wrote: post #19
nh23423fefe wrote: post #3

I actually feel really prepared for this one. 2007 made me nervous, but not this one. I feel secure in my employment and I finally have a real emergency fund even if I lose my job. I'm not optimistic about long term though. The infinite growth delusion seems like it will break in my lifetime, retirement is scary

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.

Growth should approximate population growth over time. It doesn’t have to match it step for step every single year. It bothers me that the central banks use inflation targets as an excuse to not raise rates - inflation is lumpy and not linear, as we see today. They should have raised rates much earlier and allowed for zero inflation, so that today we wouldn’t be in such a precarious situation needing dramatic rate increases to counter dramatic inflation.

Re: “A Mild Recession”

#65

Post by jszymborski »

claytongulick wrote: post #62
danaris wrote: post #59

Earlier quoted context omitted.

From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…

The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.

Has this happened often in free democracies? Would be interested in seeing what the outcomes there would be.

Re: “A Mild Recession”

#66

Post by wjamesg »

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.

‘09 college grad here…can the economy just level out and be stable for folks for a while in my lifetime? Guess not

Re: “A Mild Recession”

#67

Post by formerkrogemp »

lesuorac wrote: post #60
Shikadi wrote: post #39

Earlier quoted context omitted.

Why do people believe this? The earth has limited resources

The earth having limited resources is just the inverse of the market can stay irrational longer than you can remain solvent. Eventually we'll hit that limit [1] but the idea that its going to happen soon is undefended. The issue right now for growth is that we can't mine the earth's resources fast enough right not that we've used it up. [1]: https://en.wikipedia.org/wiki/Heat_death_of_the_universe

Its hilarious how often people who bring up "the market can stay irrational longer than you can remain solvent" also believe in the free market being capable of solving any- and everything. Claiming breathlessly that the efficient market hypothesis is true while also stating the market can be irrationally/inefficiently allocated longer than someone who knows better can remain solvent. Efficiency is not usually tied to irrational behavior.

Re: “A Mild Recession”

#68

Post by gpsx »

claytongulick wrote: post #62
danaris wrote: post #59

Earlier quoted context omitted.

From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…

The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.

Wage inflation could accomplish this without forced redistribution. I’m hoping we get out if this with more wage inflation than price inflation, but monetary authorities don’t have the control to get a good outcome here (regarding inflation), and business is against it.

Re: “A Mild Recession”

#69

Post by nh23423fefe »

symlinkk wrote: post #30
nh23423fefe wrote: post #3

I actually feel really prepared for this one. 2007 made me nervous, but not this one. I feel secure in my employment and I finally have a real emergency fund even if I lose my job. I'm not optimistic about long term though. The infinite growth delusion seems like it will break in my lifetime, retirement is scary

What do you consider to be a real emergency fund?

1 year cash, 1 more year tied up in stock i could sell. before i was at like 3 months of cash

Re: “A Mild Recession”

#70

Post by toomuchtodo »

claytongulick wrote: post #62
danaris wrote: post #59

Earlier quoted context omitted.

From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than…

The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.

Labor unions and taxes on the wealthy? Works out well. Cutting taxes to wealth inequality reduction is a fool's errand.

https://www.cnbc.com/2017/08/09/the-happiest-countries-in-th...

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