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(CNBC)   The US economy is 'nowhere near a recession this year,' says economist nowhere near morning sober   (cnbc.com) divider line
    More: Obvious, Inflation, Monetary policy, interest rate hikes, high inflation, Federal Reserve System, Federal Reserve, annual rate, Goldman Sachs  
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367 clicks; posted to Business » on 20 May 2022 at 12:20 PM (6 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-05-20 12:24:55 PM  
But the LIBERAL MEDIA(R) says Biden has destroyed everything TFG built up!
 
2022-05-20 12:48:18 PM  
The article that the linked article links to has much more information.

https://www.cnbc.com/2022/04/28/us-q1-gdp-growth.html

We are on the edge of a major recession. Looking at Bonehead McDiamondhands at Pantheon Macro claim the decreasing rate of GDP growth is due to foreign imports makes me wonder what kind of scam he is trying to pull off.

Housing prices are stratospheric. Inflation is out of control. The market is in bear territory. Once some major companies start laying people off due to the increased cost of inputs, we're in for a world of hurt.
 
2022-05-20 1:01:12 PM  

We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.


These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.
 
2022-05-20 1:03:34 PM  
many Americans are wondering if the economy is heading toward a recession.

Goldman Sachs chairman Lloyd Blankfein said last weekend that "it's certainly a very, very high risk factor," and consumers should be "prepared for it."


Great advice Lloyd.

Here's my advice.  You should always prepare for a recession because you're going to eventually get one and it's not going to be on your timetable.
 
2022-05-20 1:06:14 PM  

Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.


Unless it's a tiny group of developers and outside investors jacking up all these prices.
 
2022-05-20 1:06:49 PM  

Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.


I'm pointing out what I think are signs that we are on the edge of a cliff. Maybe I'm wrong and there is still a lot more mountain to climb, but with growth in demand slowing and costs rising rapidly, I think the brink is very close and we won't have a quarter to navel gaze before real people are impacted.
 
2022-05-20 1:10:35 PM  

We Ate the Necco Wafers: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

I'm pointing out what I think are signs that we are on the edge of a cliff. Maybe I'm wrong and there is still a lot more mountain to climb, but with growth in demand slowing and costs rising rapidly, I think the brink is very close and we won't have a quarter to navel gaze before real people are impacted.


Or nothing much interesting happens at all, growth returns to its anemic 2010 through 2019 levels of between 1.5 and 2.5%, and housing prices stay flat for 10 years.  There are possible outcomes besides boom and bust.  I realize this is boring.
 
2022-05-20 1:13:17 PM  

Rapmaster2000: We Ate the Necco Wafers: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

I'm pointing out what I think are signs that we are on the edge of a cliff. Maybe I'm wrong and there is still a lot more mountain to climb, but with growth in demand slowing and costs rising rapidly, I think the brink is very close and we won't have a quarter to navel gaze before real people are impacted.

Or nothing much interesting happens at all, growth returns to its anemic 2010 through 2019 levels of between 1.5 and 2.5%, and housing prices stay flat for 10 years.  There are possible outcomes besides boom and bust.  I realize this is boring.


If inflation weren't so bad and the market weren't in the tank, I'd be of the same mind. Back in January, that's where I thought things would be heading as well.

Here's to hoping that you're right.

But, like you said in your previous comment, I'm taking my precautions now. Just in case.
 
2022-05-20 1:14:02 PM  

UltimaCS: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

Unless it's a tiny group of developers and outside investors jacking up all these prices.


That's great.  It means they'll suffer when valuations crater and they're unable to refinance their exotic mortgages or their rents will decrease and they will be unable to service the bonds that they sold to get the capital to buy the houses which will make the houses fall in price greater than their actual utility value.

The same thing that happened 15 years ago, but in a different manner.
 
2022-05-20 1:15:18 PM  

We Ate the Necco Wafers: If inflation weren't so bad and the market weren't in the tank, I'd be of the same mind. Back in January, that's where I thought things would be heading as well.

Here's to hoping that you're right.

But, like you said in your previous comment, I'm taking my precautions now. Just in case.


I'm not saying at all that I'm right.  I have zero idea if I'm right.  That's why I'm taking my precautions always.  Just in case.
 
2022-05-20 1:15:46 PM  
These "economists" are the same as the end of the world people. Keep saying the same shiat over and over and eventually, it will happen and you can say you were right, even though your batting average is .00001

Plus, people with money want us to hit a recession because that's when they pump money into the market so when it rebounds they make a fortune.

/won't be pretty because Biden/Dems will get the blame and we'll end up with Nazis in government in 2023 and probably 2025 after elections, so more tax cuts for the wealthy when the market rebounds from Dem policies once they right the shiatship from TFGs debacle.
 
2022-05-20 1:18:02 PM  

OhioUGrad: These "economists" are the same as the end of the world people. Keep saying the same shiat over and over and eventually, it will happen and you can say you were right, even though your batting average is .00001


I see you've heard of Nouriel "Dr. Doom" Roubini who has called 797 of the last 4 recessions.
 
2022-05-20 1:30:35 PM  
75bips and a bear market.

/Good luck in November
 
2022-05-20 1:37:21 PM  
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Eh, I think we're OK for now.
 
2022-05-20 1:38:29 PM  

AsparagusFTW: 75bips and a bear market.

/Good luck in November


When do you think the Fed gives in and lowers the rates just to juice the stock market?
 
2022-05-20 1:52:12 PM  

Rapmaster2000: AsparagusFTW: 75bips and a bear market.

/Good luck in November

When do you think the Fed gives in and lowers the rates just to juice the stock market?


2 more 50bips [1.75%] is my guess. They have never gotten rates above previous cycle highs since 1980s. That was 2.25 for us in 18' (Corp bond markets imploded and they intervened then). We are already half way to a recession with the last GDP print.

Could go a million ways so who knows. But bond markets are imploding right now. The next rate increase is 4 weeks away, followed by the next one. They will already have Q2 preliminary data before then. They will start to get extremely wishy-washy.

/Again, who knows
//But imo it doesn't bode well
 
2022-05-20 3:07:41 PM  
"How did you go bankrupt?"
"Two ways. Gradually, then suddenly." ― Ernest Hemingway
 
2022-05-20 3:24:06 PM  

We Ate the Necco Wafers: Rapmaster2000: We Ate the Necco Wafers: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

I'm pointing out what I think are signs that we are on the edge of a cliff. Maybe I'm wrong and there is still a lot more mountain to climb, but with growth in demand slowing and costs rising rapidly, I think the brink is very close and we won't have a quarter to navel gaze before real people are impacted.

Or nothing much interesting happens at all, growth returns to its anemic 2010 through 2019 levels of between 1.5 and 2.5%, and housing prices stay flat for 10 years.  There are possible outcomes besides boom and bust.  I realize this is boring.

If inflation weren't so bad and the market weren't in the tank, I'd be of the same mind. Back in January, that's where I thought things would be heading as well.

Here's to hoping that you're right.

But, like you said in your previous comment, I'm taking my precautions now. Just in case.


The market isn't tanking - it's giving up paper gains it recorded during the absolute peak of ZIRP. Even with the drop in value, were still largely in the same place where we were at about this time in 2021. Yes, a 'lost year' isn't great, but it's not bad when you realize that last year was a colossal shiat show of a financial mess, and literally everyone was waiting with baited breath for the bullshiat to end.

Think of it like someone taking steroids -- when they stop, they don't immediately go to being a weakling, they just return to where they were before they started.
 
2022-05-20 3:26:09 PM  

UltimaCS: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

Unless it's a tiny group of developers and outside investors jacking up all these prices.


There. Are. Not. Enough. Houses.

This is not controversial. Millennials are buying houses, and they don't want to live in Nebraska.  Generally people are moving to larger cities, where other people live.  There are a lot of those people and they need somewhere to live.

The problem is two fold at this point - (1) during the last housing crash they stopped building houses, and didn't really ramp it up until (2) covid farked supply chains.  So not only are they behind on building houses, they are further behind because covid.

Now it is too expensive to move so the olds are not leaving their family sized houses for a smaller house.  Why downsize into a more expensive house? Which means fewer houses for millennials to buy.  Driving up the prices when people do move.

Older millennials are doing better than the younger ones.  The rest are farked until we catch up or the olds die.
 
2022-05-20 8:08:04 PM  
To have any sort of decision-making input at the Fed, you are almost required to have a PhD in economics from a school of some repute, yet the Fed is chiefly responsible for this downturn because they dumped a ton of money into the economy and didn't stop even after inflation began to skyrocket, flatly denying that the two were strongly related to each other.

The lesson here: Economics is a psuedoscience and you shouldn't trust economists.

(Disclosure: I have an MA in Economics, so don't trust the above opinion)
 
2022-05-20 8:09:34 PM  

zeroman987: UltimaCS: Rapmaster2000: We Ate the Necco Wafers: Housing prices are stratospheric. Inflation is out of control.

These are signs of a boom, not of a recession.  If I was going to pinpoint a single item, it would be that the last cyclical recession was 14 years ago.  I wouldn't go with "demand is high", therefore recession.

We might be in a recession, but those are not signs of one.  If housing prices were crashing and deflation was out of control, that would be evidence of a recession.  If you had deflation out of control, then you'd have a depression.  We had slight deflation in 2008.  We had major deflation in 1930.

Unless it's a tiny group of developers and outside investors jacking up all these prices.

There. Are. Not. Enough. Houses.


Well. There are areas where this is true, but in most of the country there are plenty of houses but not enough houses to buy. True there are supply chain issues, and you have people preventing residential real estate in some (but not all markets).

But I think there are two problematic investment-related factors in the drop in supply, in addition to standard home buyers:

First, you have foreign investors and companies like Blackrock buying homes for investment purposes. Often sight unseen. HUGE red flag there. The general plan is to bring people in to rent and use it as an investment property. That's about 15% of the current load of new purchases.

Second, you have a wealthier segment of people who currently have good credit buying houses with cash, but in order to pay cash for these new investment properties, they are borrowing the money against existing collateral (lookup margin loans).

Well what happens when the value of the collateral drops? Margin calls. They have to sell off securities to pay for their margin loans. What happens if securities keep falling? Cascading effects on housing.

Also, China has a HUGE problem with its existing real estate debt infrastructure (Evergrande) and there are potential cascading effects not only in China but here in the US.

Expect to see housing drop as a lagging indicator as the market cools off, and then real hurt a year from now. There is also an issue with commercial real estate, but let's just say, I think the potential for another crash a year from now is likely.
 
2022-05-20 8:14:03 PM  
I know that last post was TLDR, but anyway let's just say for the purposes of argument, housing prices are directly related to employment and salary, and that if unemployment goes up and wages remain stagnant and inflation eats away at other goods, which is what is slowly happening right now, then the housing market will lag but follow, and just like 2008, changes in housing could once again have some cascading ripple effect on the entire financial sector.
 
2022-05-20 11:40:37 PM  
Most of the important indicators show we're doing well. PMI is fine, ad spend is strong, consumer credit is healthy, employment is fine (unless you work at a mid-cap tech company that crashed 80%), and wage increases are actually almost keeping up with inflation. Consumer confidence is low and the stock market is taking a beating, which can often turn sentiment into a self-fulfilling prophecy. It's gross and scary that the recession stuff is being pushed so hard alongside 'Democrats in Disarray.' In an election year no less.

Given how susceptible most Farkers are to emotionally-driven media narratives that fly in the face of actual data, I'm not terribly surprised by this thread.
 
2022-05-20 11:43:15 PM  

Scythed: The lesson here: Economics is a psuedoscience and you shouldn't trust economists.


That's your take away?

Jesus Christ.

That's not what the Fed said at all. Their rhetoric was careful to include warnings about inflation, but they said (several times) that they were prioritizing employment at the risk of running the economy too hot.

You should see if it isn't to late to get a refund on your Master's.
 
2022-05-21 1:31:05 AM  
I miss morning drinking. We'll get through this, prices will come down again and all will be just as farked up as it was before,
 
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