[HN Gopher] US Gross Domestic Product, Second Quarter 2022 (Adva...
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US Gross Domestic Product, Second Quarter 2022 (Advance Estimate)
Author : mrep
Score : 140 points
Date : 2022-07-28 12:35 UTC (4 hours ago)
(HTM) web link (www.bea.gov)
(TXT) w3m dump (www.bea.gov)
| ramesh31 wrote:
| So it's official now
| [deleted]
| iamricks wrote:
| According to the White House, it is not
|
| [1] https://www.whitehouse.gov/cea/written-
| materials/2022/07/21/...
| rufus_foreman wrote:
| According to many of Biden's economic advisers, it is.
|
| For example: "Of course economists have a technical
| definition of recession, which is two consecutive quarters of
| negative growth."
|
| -- The head of Biden's National Economic Council, in a past
| life, apparently.
|
| You can find many other examples in the past of his advisors
| defining a recession as two quarters of negative GDP. And you
| can find many examples in the past of the press defining a
| recession as two quarters of negative growth.
|
| "two negative quarters in a row is a standard indicator for
| an economic recession."
|
| -- Washington Post, fact checking Donald Trump
|
| What has changed?
| refurb wrote:
| _What has changed?_
|
| The party in power.
| joshuahedlund wrote:
| honest question: has there ever been two quarters of negative
| GDP with this much job _growth_?
| boredumb wrote:
| Government forcing people out of their jobs and then
| allowing them to come back into the work force is not job
| growth in the sense of anything meaningful. So no it
| probably hasn't been seen before, but it's irrelevant, if I
| took your 10 dollars today and gave you back 8 dollars next
| week, your bank account isn't growing unless you only look
| at this weeks balance and choose to ignore the extremely
| recent past.
| loeg wrote:
| Employment is higher than it was before Covid and
| unemployment is down at around the same level. To put it
| in terms of your metaphor, the bank has given you back
| $10.10 or so for your $10.
| rabuse wrote:
| Unemployment doesn't account for people not actively
| seeking work, which is on the rise.
| s1artibartfast wrote:
| Except it isn't actually higher.
|
| https://www.bls.gov/charts/employment-situation/civilian-
| lab...
| loeg wrote:
| You can quibble with the exact threshold, but it
| certainly isn't 80% of pre-Covid employment:
|
| https://www.statista.com/statistics/269959/employment-in-
| the...
|
| https://fred.stlouisfed.org/series/PAYEMS
| s1artibartfast wrote:
| Certainly not 80%, but by all metrics, both mine and
| yours, it is still below what it was before.
| jsight wrote:
| Those charts don't seem to be lower now than before.
| loeg wrote:
| Actually, 158 is greater than 157.
| s1artibartfast wrote:
| 158 is a projection into the future, not a current
| number.
|
| It is also not adjusted for population growth, the way
| labor participation is.
| jaywalk wrote:
| But when you give back the $8, you just need to tell them
| that "bank account growth" only matters week to week.
| Boom, they're now $8 richer thanks to you!
| Workaccount2 wrote:
| That doesn't make sense since employment is near capacity
| right now and the worker shortage is still very real.
| Mind you this is now long after all the covid benefits
| have dried up.
| BuyMyBitcoins wrote:
| Kind of amazing how this administration isn't getting the
| kind of ridicule that would be expected if the previous
| administration tried to deny a recession was happening
| according to the objective definition by including a
| subjective qualifier.
|
| Is this not the same thing as 'alternate facts'?
| everdrive wrote:
| I believe they are getting quite a bit of ridicule for it.
| shusaku wrote:
| The announcement was like an hour ago and we're already
| trying to measure the amount of ridicule?
| collegeburner wrote:
| i don't much like the former guy but there's def a slant.
| i'm pretty sure joe is this close sharpieing in "no" in
| front of "recession" on his slides.
|
| up until literally 2 weeks ago the media was on about the
| "biden boom" (lmao)
| jasonlotito wrote:
| No.
|
| They are basing it off facts. The NBER is the one who
| defines a recessions. They haven't done so (that I'm aware
| of) as of right now.
|
| It might be that it will eventually be the case, but the
| arbitrator of this hasn't ruled on it.
|
| Calling it a recession officially now would be the
| alternate fact.
|
| Basically, it's like how someone can be guilty of
| something, but you still have to say "alleged" before
| referencing the crime.
|
| Yes, you might have a million witnesses, but they aren't
| guilty until they are guilty.
|
| And I'd much rather have a government that abides by these
| rules than not. Offhanded remarks based on willful
| disregard to order should not be encouraged.
| peyton wrote:
| Come on. The NBER is not a government organization. This
| sophistry is just that.
| refurb wrote:
| That's because it's not politically convenient to hold to
| that definition. When the other party is in the Whitehouse
| it will be though.
|
| "It's not about what's true, it's what you can get people
| to believe."
| actusual wrote:
| What do you mean they aren't being ridiculed? Biden's
| approval rating is literally worse than Trump's was ->
| https://projects.fivethirtyeight.com/biden-approval-
| rating/?...
| MattGaiser wrote:
| But it is not the objective definition:
|
| https://www.politifact.com/factchecks/2022/jul/27/instagram
| -...
| boredumb wrote:
| It's fairly obvious there are political bias in american
| media and always has been. If your party is hostile to
| increasing federal government or regulatory capture you
| will be under a microscope and even sacrifice some
| credibility to attack you, otherwise you can bumble around,
| redefine common terms, deflect and mislead and have the
| entirety of relevant and 'trusted' media sources run cover
| for you indefinitely.
| weberer wrote:
| >and always has been
|
| Even just 15 years ago it was nowhere this overt or
| coordinated. The turning point seems to be shortly after
| JournoList and CabalList started when different
| independent media organizations began to collude to push
| a unified "narrative" rather than the truth.
| Workaccount2 wrote:
| >If your party is hostile to increasing federal
| government or regulatory capture
|
| You're talking about the party who just completed their
| 40 year goal of stacking the supreme court so they can
| dictate bodily autonomy? That "free from government"
| party?
| hedora wrote:
| In fairness, the "free from government" party has direct
| ties to foreign powers that are openly trying to drive us
| to a civil war.
|
| Taking away bodily autonomy is just a minor skirmish; and
| the means justify the ends, after all.
|
| Wait till next year when the sodomy and birth control
| laws start to pass, along with the plans to erect border
| checkpoints within the US to prevent people from entering
| and leaving certain states.
|
| Those are enabled by existing supreme court rulings.
| They've already taken up a case for next year that will
| allow state legislatures (that are already controlled via
| gerrymandering, and often elected by a minority) to just
| ignore vote tallies and appoint whoever they want.
|
| I'm curious to see who the military sides with during the
| inevitable 2024 coup. Last time, they made it clear they
| would remove Trump by force if needed. Presumably they're
| not becoming more loyal to him, given that he's out of
| office, but it will be dicey when they have to choose
| between ending democracy in the US or overriding the
| supreme court and also the house or senate.
| [deleted]
| 2OEH8eoCRo0 wrote:
| What conclusion are you trying to draw from this subjective
| view?
| pgrote wrote:
| That the definition of a recession has always been 2
| quarters of negative GDP. The administration now believes
| there is nuance in the numbers, so what was the accepted
| definition in the past is no longer.
|
| The fact the media on whole has decided it's ok to
| redefine a commonly accepted definition when the
| administration promotes it lends itself to the media
| being a mouthpiece for the administration.
|
| I am willing to understand nuance and a changing
| definition, as I am sure there are parts of the economy
| people are learning to deal with. Gig workers, workers
| headed back from retirement and more. This doesn't even
| touch on the self fulfilling prophecy of hearing that the
| country is in a recession.
|
| I am less willing to accept a change in a short timeframe
| and right before numbers are released.
| [deleted]
| chrisco255 wrote:
| > This doesn't even touch on the self fulfilling prophecy
| of hearing that the country is in a recession.
|
| That's not how recessions work. There is always people
| predicting a recession and always people predicting a
| turnaround or growth. It's quite simple, however, to
| engineer a recession when you raise interest rates for
| such a heavily indebted economy.
| pgrote wrote:
| >That's not how recessions work.
|
| I am unsure the point you are making. My point was
| related to mindset and I should have clarified. If a
| group of people, normal non economic expert citizens,
| believe a recession is here they change their behavior.
| The media plays a part in amplifying it. At that point it
| doesn't matter what is happening at a macro economic
| level.
|
| I am for introducing nuance to the judgement of a
| recession or not. I am not for doing it right before
| numbers are released the admin saying, "Well, there is
| nuance in the determination" before the numbers are
| released. At best all you are doing is introducing
| confusion to the non economic expert citizens and at
| worst you are attempting to gaslight people.
|
| I hope that helps explain my thoughts.
| NovemberWhiskey wrote:
| > _That the definition of a recession has always been 2
| quarters of negative GDP._
|
| Well, if you want to be specific, the NBER (which calls
| the game on what is a recession or not) defines it as "a
| significant decline in economic activity that is spread
| across the economy and that lasts more than a few
| months."
|
| The "two quarters of declining real GDP" (GDP increased
| by 7.8% in nominal terms) is the pop-economics yardstick.
|
| Are you aware we had a recession in 2001? And yet that
| managed to happen without having two consecutive quarters
| of negative GDP.
| kevstev wrote:
| I mean I hear you on "changing the definition" from the
| commonly accepted two quarters of declining GDP numbers-
| though that was never actually official, you are mistaken
| about that- the NBER is the "official" source and they
| declare it based on a range of factors that there is some
| subjectiveness to- its not a direct formula.
|
| However, wouldn't you agree there is nuance here? In Q4,
| GDP rose 6.9%, a number so big that we haven't seen that
| in decades- it appears around the early 1980s was the
| last time we saw those kinds of numbers. There has been a
| lot of whipsaw effects as we get out of covid- supply
| chains are all over the place, companies placing orders
| to get goods in to avoid snarls, only to now find that
| demand for goods, which boomed during the pandemic, has
| now eased as people have reverted to spending on going
| out and traveling, etc... There seems to be a lot of
| mismatch in supply and demand again.
|
| The unemployment rate is at 3.6%- an astonishingly low
| number- these lows were last seen in the 1960s and 1970s.
|
| On the flipside, inflation is high, gas prices are high
| and that hurts a lot of people- I live in a city, so this
| is mostly irrelevant and driven by forces out of anyone
| in the US govt's control.
|
| There is evidence of some rockier times ahead, but when I
| think "recession" I think of a lot more pain than what we
| are currently experiencing.
| BuyMyBitcoins wrote:
| The news media is not nearly as objective as they claim
| to be. And, they exercise a considerable amount of
| discretion when it comes to either amplifying a potential
| controversy or downplaying it.
| jeffbee wrote:
| You beclown yourself by believing there is or has ever been
| an objective definition. There is not and has never been.
| The business cycle committee looks at the situation and
| calls it. Their procedure is subjective. Also, they call
| recessions far in arrears.
| BuyMyBitcoins wrote:
| >"You beclown yourself by believing there is or has ever
| been an objective definition. There is not and has never
| been."
|
| Okay, consider myself beclowned then. So how did
| economists define all of the previous recessions on
| record? I know that 'a recession' is not a scientific
| measurement, it is a conventional definition.
|
| But don't you find it odd that the administration wants
| to jettison the conventional definition when it applies
| to the economy under their leadership? _Right_ before the
| midterms, no less?
| collegeburner wrote:
| a lot of economists use 2 consecutive quarters negative
| bc
|
| 1. the business cycle committee is slow af
|
| 2. they only cover the U.S. so we gotta have something a
| bit consistent across countries
| bumby wrote:
| Their procedure is subjective, but there is still a
| standardized measure of convenience, no?
|
| Just like there is an "official kilogram". We can say,
| "That's an objective measurement of weight on Earth" but
| it's not. It's the measurement of the standard kilogram
| in France. And that "objective" measure can change [1].
| It doesn't mean there isn't a consensus on what a
| kilogram is.
|
| Yellen was on Meet the Press last week explaining there
| is a difference between the "official" measure of a
| recession and the "two quarters of negative growth"
| heuristic. That's not to say that politicians can't, or
| won't, play wordsmith games.
|
| [1]https://www.sciencedaily.com/releases/2007/09/07092111
| 0735.h...
| jeffbee wrote:
| The kilogram is a quite poor analogy. The GDP is not an
| objective indicator of recession for the exact reasons
| you see around you right now. Contraction of economic
| activity caused by supply bottlenecks doesn't fit the
| pattern of recession. The labor situation is still white
| hot, prices are going up etc.
| bumby wrote:
| Are you saying there can't be a standardized definition
| of "recession"?
|
| What your alluding to seems to indicate that the
| definition of "two quarters of negative GDP growth" is
| incorrect (according to Yellen). It doesn't mean there
| can't be a more accurate definition.
|
| That's where the kg analogy fits. There was one
| definition that is now considered incorrect by consensus.
| jeffbee wrote:
| No, I'm saying there is not one, and defining it strictly
| as two quarters of gdp decline removes much of the
| utility of the business cycle dating process.
| bumby wrote:
| Yellen seems to disagree, although she said the two
| quarters definition is too blunt and the "official"
| definition, the one used by NBER, takes a much more broad
| picture of the economy.
|
| "There's an organization called the National Bureau of
| Economic Research that looks at a broad range of data in
| deciding whether or not there is a recession. And most of
| the data that they look at right now continues to be
| strong. I would be amazed if the NBER would declare this
| period to be a recession, even if it happens to have two
| quarters of negative growth."[1]
|
| I think maybe you're conflating "standardized fact" with
| "objective fact." A kilogram is a standardized fact, even
| though the objective weight of the object may change. We
| agree there isn't an objective definition of a recession;
| I'm saying that despite that, there is a standardized
| definition. And it isn't "two consecutive quarters of
| negative growth."
|
| [1] https://www.nbcnews.com/meet-the-press/meet-press-
| july-24-20...
| chiefalchemist wrote:
| > Kind of anazing...
|
| Get used to it. We're back to the status quo (of
| incompetent media). In fact, it was the same for the
| previous admin, just in a different way.
|
| The System doesn't like outsiders. If you haven't paid your
| dues, sucked up, kissed the ring, etc. then you're
| marginalized. Put another way, how would it look if someone
| with no experience was decently effective? Say about as
| effective as the current highly experienced (politician)
| that's POTUS?
|
| I'm no fan of Don T, but given humam nature and The System,
| he was doomed to "fail" no matter what. As in, perception
| is reality (and most people now have a bias that isn't
| going to change).
| jddddd wrote:
| Nope.
|
| Saying something is objective doesn't make is so.
| jddddd wrote:
| pgrote wrote:
| >don't understand what NBER is.
|
| There is a consideration that NBER isn't the issue. yes
| you are correct, they make a determination. I think the
| difference this time is that you have what was commonly
| accepted among normal people that 2 quarters negative
| meant recession. This time there is pushback against it.
|
| I think the hang up is more political than technical.
| When the opposing party controls the white house there
| wouldn't be broad support for "let's wait and let NBER
| make a determination."
|
| Hope that helps somewhat.
| willcipriano wrote:
| Soon people will start disappearing from photos, back to
| the future style.
| mokanfar wrote:
| Or Stalin Style.
| bushbaba wrote:
| It's because the media leans democrat. But make no mistake
| Fox News, BBC, and other moderate or right leaning news
| sources will call this a recession.
|
| The news has for the most part has not called out Biden's
| many missteps. Not even John Oliver is making fun of it.
| throwawaycuriou wrote:
| Oliver's most recent ditty did roast Biden remarking 'I
| can taste it. I think he could've done more to roast
| previous administration policies.
| Der_Einzige wrote:
| Oh man if you think the BBC is even "moderate" than I
| have a bridge to sell you.
| newaccount2021 wrote:
| If it were Trump in office, that article would been
| disembowelled all over Twitter
| alldayeveryday wrote:
| Funny how the news media has been inb4'ing the recession.
| ddorian43 wrote:
| It's probably lower. Just like the previous quarter GDP was
| revised lower.
| jasonlotito wrote:
| No.
| nimbius wrote:
| seems so, although id argue the recession light came on in the
| cockpit sometime around late 2020...we just chose to ignore it.
| doubling down on 2010s speculative monetary policy of near
| negative interest is just wishful thinking, but directing
| relief grants to multibillion dollar industries was bad comedy.
|
| its really hard to imagine how the fed assumed 'free money' was
| a sober policy to drive one of the worlds largest economies on.
| the best we can hope for now is the student and automotive
| credit bubbles dont burst under the strain of half-percentage-
| point increases, which i suspect will continue throughout 2023
| as inflation crests 15%.
| qclibre22 wrote:
| Congress and the previous and current administrations are
| also responsible for the "free money", not just the Fed. Lot
| of blame to go around.
| slaw wrote:
| Is dollar going to stop being world reserve currency with 15%
| inflation?
| shagie wrote:
| If we survived the economics of the 80s, we can survive the
| 2020s.
|
| Next, pick a country and its inflation rate. The Euro?
| https://www.nytimes.com/2022/07/01/business/eurozone-
| inflati...
|
| Pick another currency that meets the requirements of being
| a reserve currency and then look at its inflation rate.
| slaw wrote:
| In the 80s inflation was high, but interest rate was
| above inflation. This time inflation is 8% above interest
| rate.
| shagie wrote:
| That is the result from the rate of inflation changes
| being so steep. As it is, the interest rate is being
| adjusted at the fastest reasonable (and predictable)
| rate. There were more than a few people shocked with the
| first 0.75% increase... not so many this past time.
|
| For addressing inflation, the fed's tools are rather
| blunt (adjusting interest rate). The issues of disrupted
| logistics and energy cost increases are ones that the fed
| has little direct control over. The monetary policy tools
| are being used to the greatest degree they can. The
| fiscal policy tools have been left rather idle as those
| require political will to use.
|
| Returning to the reserve currency question - is there
| another currency that meets the requirements? Saying "the
| euro" is ok - and that represents the second largest
| reserve currency holdings, but, if you are pointing to
| inflation, it is hitting just as hard in Europe. The yen
| and the pound sterling have their own issues and China's
| currency has another set of issues.
|
| The crystal ball gazing of "what about 15% inflation and
| reserve currency" misses out on what is happening to the
| rest of the world and what can and is being done to
| address inflation.
| dr_faustus wrote:
| Not if the rest of the world is at 30%...
| [deleted]
| melling wrote:
| Not according to many commentators on CNBC.
|
| I don't understand all the details.
|
| Personally, I think it would be great to understand the economy
| at a more basic level rather than what's put out for the
| general public to consume in the often overly simplified terms.
|
| For example, the condition of the economy vs the Fed raising
| rates will be interesting.
|
| The Fed is trying to slow the economy but much of the inflation
| problem is supply side related.
| roamerz wrote:
| CNBC? That's a great non-partisan source you cited there.
| tapoxi wrote:
| Are you confusing CNBC with MSNBC?
| tiahura wrote:
| They clearly have a mix of D R and I.
|
| Have you ever actually watched?
|
| If you want cable news that isn't complete D good R bad, or
| the reverse, CNBC is the way to go.
| melling wrote:
| Yes, it is actually pretty good. In the morning, Joe tends
| to lean a bit right and Andrew leans a bit left.
|
| Ever watch Fox Business? They talk politics all day long. I
| try to deal with it during commercial breaks but it can't
| seem to stick to business.
| throw8383833jj wrote:
| I don't like GDP as a measure of how well our economy is doing.
|
| We need a whole new measurement. A quality of life index, which
| measures the real cost of living, not in dollars, but in number
| of hours required to earn the necessities of life: shelter, food,
| water, and by extension, the things required to get those:
| transportation (to and from work, avg distance), certification
| (aka education), and medical insurance.
| swayvil wrote:
| We recently redefined recession, pandemic and gender. Any more?
| I'm compiling a list.
| txsoftwaredev wrote:
| Female, according to Merriam-Webster: "having a gender identity
| that is the opposite of male"
|
| I would be incredibly offended if I was an actual woman.
| smiddereens wrote:
| ishjoh wrote:
| I was surprised that one of the definitions of Female is
| exactly as quoted so I looked up male and one of the
| definitions is:
|
| > having a gender identity that is the opposite of female
|
| we have achieved word definition stack overflow!
| strongpigeon wrote:
| Since "male" and "female" are the last words of both, I'd
| argue that with tail-call optimization this turns into an
| infinite loop.
| h2odragon wrote:
| "Ownership" is morphing into paying rent. all property is
| becoming more like "intellectual property" with both time
| components and a public interest.
| twh270 wrote:
| Ownership of products (especially software) is turning into a
| license that allows you to use the product as long as the
| manufacturer allows it (i.e., under certain conditions which
| of course are revocable or amendable at the corporation's
| whims).
|
| I'm pretty sure that if they could get away with it (today),
| some companies would love to sell you a license to breathe
| the air inside their buildings. On account, of course, of
| that air being expensive to suck into the building and clean
| and pipe throughout said edifice, and they need to 'recover'
| the costs associated with that.
| recyclelater wrote:
| Peaceful Protest Coup
| smiddereens wrote:
| tiahura wrote:
| deltasevennine wrote:
| peteradio wrote:
| To be fair, there is very little point in saying we are headed
| towards recession.
| [deleted]
| czstar wrote:
| Do you have evidence she was lying versus being wrong? A number
| of notable economists thought inflation was transitory. It's
| hard to predict things like the effect the war in Ukraine would
| have and the effect the shipping industry doing its thing would
| have.
| [deleted]
| hackerlight wrote:
| They lied when they blamed inflation on Putin's invasion,
| only one week into the invasion. At best Putin's invasion
| explained 5% of that number at that early stage, given the
| lead-lag in the CPI number and the predominant causal factors
| being supply chain issues from COVID and recent monetary and
| fiscal stimulus.
| czstar wrote:
| I'm not an economist. A number of respected economists
| believed a year ago that inflation was mostly supply chain
| issues and was transient. Now, with new information,
| opinions are changing. I believe the monetary stimulus
| mostly occurred the first year of the pandemic but maybe
| it's continuing. I don't know. Since inflation is a global
| phenomenon it seems reasonable to conclude that fiscal
| stimulus in the U.S. is not the cause.
|
| I believe the statements regarding the Ukraine war were
| that it was going to increase inflation and not that the
| current level of inflation was due to the war. The
| statements I recall were of the form, "due to the war
| inflation will be exacerbated."
| hackerlight wrote:
| The statement from Psaki in an early press conference was
| that the invasion explained the observed CPI number. She
| wasn't referring to inflation that was yet to come. She
| knowingly lied, probably rationalizing it as spin or a
| half-truth.
| czstar wrote:
| I remember when Palin ran for Vice President she had a
| day of interviews for local media types from various
| parts of the country. She did a number of consecutive
| interviews and in one made a dumb mistake conflating
| North Korea with South Korea. She was ridiculed by people
| for not knowing the difference. Now, I believe Palin is
| profoundly dumb and ignorant but she didn't deserve to be
| attacked for making a mistake during a full day of
| interviews.
|
| You mention one statement from the Press Secretary
| ascribe to it malice. Do you know she lied rather than
| was misinformed? Assume she is lying. Does this mean the
| whole administration lied? The discussion at hand is
| about Yellen (and by extension economists at NBER and
| other agencies). One statement by the Press Secretary is
| evidence of a lie by these people? I don't think so.
|
| It's believable that Yellen and Biden and Pskai did lie
| because in politics you try to sway public perception and
| opinion. I don't believe NBER has lied and to blame
| inflation on fiscal stimulus that largely occurred two
| years ago seems outright bad thinking. Especially to then
| blame the current administration for it. Inflation is
| going on all over the world. It's not Biden's fault.
| There's a collection of reasons and mechanisms at play
| and Biden can only do so much.
| hackerlight wrote:
| It wasn't one statement. This was early in the invasion
| so I was glued to the press conferences. It was
| deliberate messaging delivered more than once. If there's
| transcripts you could grep search for inflation.
| "I don't believe NBER has lied and to blame inflation on
| fiscal stimulus that largely occurred two years ago seems
| outright bad thinking. Especially to then blame the
| current administration for it. Inflation is going on all
| over the world. It's not Biden's fault. There's a
| collection of reasons and mechanisms at play and Biden
| can only do so much."
|
| I'm not sure what you think you're arguing against. Never
| said that it's one hundred percent down to fiscal policy
| from two years ago (although both loose fiscal and
| monetary policy of Trump and Biden are undeniably a non-
| trivial part of it -- money supply and inflation are
| inextricably linked). I also wasn't saying it was mostly
| Biden's fault.
| tiahura wrote:
| The lying is the present attempt to tell us we're not in a
| recession.
|
| And her failure to appreciate the scale of the price
| inflation problem was not just a case of being "wrong." She
| was unable to see the worst inflation in 40 years when it was
| standing right in front of her.
|
| She's a miserable failure.
| czstar wrote:
| In January of 2007 President Bush said the economy was
| doing fine. Much later in the year the NBER said that the
| recession began in January. Was Bush lying or did he lack
| foresight? Determining when a recession began usually
| happens after the fact because of how "recession" is
| defined.
| spywaregorilla wrote:
| You're changing your story now though. You now have new
| information that wasn't available at the time of the
| transitory comment. Information that would all but
| guarantee large inflation problems.
| andrew_ wrote:
| I believe they had numbers on how much money was injected
| into the economy from the money printer, they had numbers
| around how many people had exited the workforce and
| available jobs versus filled. These folks are supposed to
| be analytical, intelligent, skilled statisticians.
| Instead, we're getting politically-minded loosely-
| defined-economists that are ignoring the breadth of
| information in favor of a cozy narrative.
| czstar wrote:
| If it was caused by money injection into the U.S. economy
| then how do you explain inflation being a worldwide
| phenomenon? Quite a few experts believe a year ago that
| inflation was a result of imbalance in supply chains due
| to lockdowns. New information arises and a reevaluation
| of old ideas occurs. No evidence of lying as far as I can
| see.
| s1artibartfast wrote:
| I think it is pretty clear. Wrong once, Wrong twice, and
| then now misleading.
| jasonlotito wrote:
| The NBER defines when a recession starts. That's how it's
| always worked.
|
| You can disagree with how that is done, sure, but that's
| meaningless to the discussion.
|
| Officially, we aren't in one.
|
| Claiming otherwise is like me saying you are guilty of a
| crime before you are found guilty of a crime.
| megaman821 wrote:
| NBER tells us when the recession started only after
| months of being in a recession. Unless you can travel to
| the future, you have no way of knowing if we are
| officially in a recession now.
| NovemberWhiskey wrote:
| > _her failure to appreciate the scale of the price
| inflation problem was not just a case of being "wrong."_
|
| If ever there were a case of 20:20 hindsight, that's one of
| them.
| tiahura wrote:
| Every day for a year, every single business leader in
| every single industry, has been on CNBC warning about
| inflation.
|
| The only ones who didn't get it are in the present
| administration.
| [deleted]
| NovemberWhiskey wrote:
| Not so much.
|
| https://www.nytimes.com/2021/07/17/business/dealbook/infl
| ati...
| tiahura wrote:
| Austen Goolsbee? He was part of the Biden campaign and
| not a CEO. He seems like a good guy, but he's a hack.
|
| Most of the executives quoted said inflation was an
| issue, but that they thought they would be able to raise
| prices to match (ie we're going to do our part to make it
| persistent).
|
| Edit: A very important article. Basically the academic
| center-left consensus was 100% wrong, and everyone else
| was right.
| NovemberWhiskey wrote:
| The academic center-left consensus like the CEO of Citi?
|
| > _"Will inflation be transitory? There are many reasons
| that the peaks we'll see at the moment will be. But
| what's the longer-term trend? That, I think, everyone
| will be keenly watching. We think the jury is out." --
| Jane Fraser, chief executive of Citigroup_
| sschueller wrote:
| They tried to kick the can down the road like the previous
| administrations. Just it doesn't work anymore.
| mckirk wrote:
| Seeing as initially, inflation was primarily driven by Covid-
| related supply chain issues, which itself would have been
| 'transitory', I think it was quite reasonable to call the
| resulting inflation 'transitory' as well. Crucially, inflation
| is in part also a social phenomenon, as far as I understand it:
| if I expect prices to rise, I have to try and price that in,
| resulting in rising prices. Therefore, the initial attempt of
| keeping people's inflation expectations in check might have
| done us all a favor, because it could have worked out.
|
| The situation changed when a war broke out in Europe at the end
| of February, and I don't think it's fair to hold Yellen et al
| accountable for not taking that into account beforehand.
| andrew_ wrote:
| While I do believe supply chain issues had a lot to do with
| triggering, I cannot look past the invention of 1.5 trillion
| dollars that were injected into the economy, nor can I look
| past the hit to labor resulting from government policies
| around covid . The use of "temporary" or "transitory" was
| political damage control, the tail wagging the dog.
|
| I view your comment as more of the kind of spin that we're
| seeing in the media right now; conveniently ignoring larger
| and more obvious sources of trouble, in order to deflect and
| downplay the seriousness of the situation.
| disantlor wrote:
| But you DO look past the purpose of that injection of
| money, which was to protect jobs/economy. Whether it could
| have been implemented is one thing to be debated; to
| assume/pretend it had absolutely no positive effect, and
| that we would have been off than we are currently without
| it, seems disingenuous.
| andrew_ wrote:
| To the argument within my comment, the purpose of the
| money is of no consequence. It is merely fact that the
| money was injected. The moral consequences or beneficiary
| of that money don't have bearing on the fact that the
| money was injected, and would have negative long-term
| effect.
| disantlor wrote:
| Right, and not injecting the money would have a negative
| long-term effect. I'm saying while it's difficult to be
| sure, it's at least reasonable to conclude that we traded
| a short term disaster for smaller long-term pain.
|
| Maybe you disagree, but I don't get why people are acting
| like this is sinister.
| 0x7265616374 wrote:
| Why are your kind so desperate to spin this situation
| into anything remotely positive? Is it buyer's remorse?
| Tribalism? Desperation?
|
| We're in deep shit. A lot of people saw it coming, a lot
| of people ignored the warnings. A lot of people tried to
| spin this like it was no big deal "nothing to see here,
| all is well." It doesn't matter if this is a damned-if-
| you-do-damned-if-you-dont - we're in the shit now, and
| that's all that matters.
| andrew_ wrote:
| it would seem that you are basing aspects of argument on
| feelings, perceived individual benefit, and speculation.
| That's not a debate I'm interested in engaging in. I
| prefer to look at the facts as they are at present.
| librish wrote:
| But how can you argue that we're living in a world that's
| worse than if we hadn't done the stimulus when you
| haven't lived in that world?
| andrew_ wrote:
| I'm not and have not argued that. That's where I believe
| you may be leading with emotion.
| digdugdirk wrote:
| Does your explanation for inflation have zero impact from
| general social sentiment? i.e. - Purely due to the levers
| of monetary and labour policies?
|
| If so, what is the explanation for inflation occurring in
| countries all over the globe, even those without monetary
| injections or business closures?
|
| If not, and there is some level of impact from individuals
| thinking "it feels like there's about to be inflation, so
| I'm going to act like there's inflation now", wouldn't
| there be a net benefit to that kind of messaging?
| misiti3780 wrote:
| that is basically everyone in politics at this point. i cant
| think of a single, competent bureaucrat in the past 6+ years
| thepasswordis wrote:
| The way that the White House, and by extension the administrative
| branch of the government has decided to redefine "recession" and
| imply that the economy is doing really well right now is actually
| scary.
|
| These people _do_ have huge levers that control our lives that
| they can pull. Their actions _do_ have massive effects on the
| American economy, and by extension the economy of the rest of the
| world. The actions they 're taking are legitimately horrifying.
|
| I seriously don't think these people understand what the lives of
| normal people are actually like. The white house had the gall to
| put out a tweet bragging that gas prices had come down, and that
| this could be saving people $35/mo, and how much that is helping.
|
| Gas if still $4.2 national average per gallon. That's HUGE, and
| the direct actions of the administration are to blame for this.
| [deleted]
| jhoward321 wrote:
| They didn't redefine recession, that's been defined by NBER. I
| agree there's some spin, but this statement isn't correct.
| peyton wrote:
| The NBER is a private think tank. You may be confusing them
| with the Bureau of Economic Analysis, which is an independent
| federal agency.
| jmalicki wrote:
| No, it is the NBER. Even the BEA says the NBER officially
| defines recessions:
|
| https://www.bea.gov/help/glossary/recession
| tinalumfoil wrote:
| There's no official definition. It's like saying you're sick,
| you can be sick even if doctors can't point to what's wrong
| with you, and you aren't necessarily sick even if you have a
| condition. The two quarters thing is just a really widely
| recognized rule of thumb. The idea that there's some sort of
| official definition every economist agrees on is incorrect.
| The idea that there's an organization that owns the word
| recession is also wrong.
| gorwell wrote:
| "Every record has been destroyed or falsified, every book
| rewritten, every picture has been repainted, every statue and
| street building has been renamed, every date has been altered.
| And the process is continuing day by day and minute by minute.
| History has stopped. Nothing exists except an endless present
| in which the Party is always right."
| paganel wrote:
| Next thing they'll go for the statistics bureau itself in
| order to massage the numbers closer to the source as
| possible, no need anymore of this Orwellian double-talk. At
| least that's what they were doing in the '80s in the Eastern-
| European country while I was a kid, officially we had record
| maize and wheat production, in practice bread and cooking oil
| were rationed.
| dmux wrote:
| I don't remember the book ever mentioning architecture, a
| form of history itself.
| teolandon wrote:
| 1984 does not apply here in any way shape or form.
| rabuse wrote:
| Rewriting definitions to fit a narrative, in my mind, is
| very applicable.
| systemvoltage wrote:
| Wait until you hear about ESG which governs some trillions of
| dollars of assets. ESG is a way for politicians/elites to force
| ideology on the public without having to go through the
| electoral process and gaining public support. This power is
| exercised through the proxy of corporations. It is anything but
| democratic. It is totalitarian/authoritarian.
|
| Mastercard is already experimenting with CO2 emissions based
| spending habits: https://www.mastercard.us/en-us/vision/corp-
| responsibility/p...
|
| I am the last one to believe in these types of things but it is
| getting to a point where I feel like we're being boiled like a
| frog.
|
| Climate/ESG initiatives have lost respect in my eyes, I'd like
| to support sensible things but this is how we'll get
| totalitarianism on our hands. Then there is the whole WEF
| agenda.
| consumer451 wrote:
| > That's HUGE, and the direct actions of the administration are
| to blame for this.
|
| I've been hearing from some people that the rise in gas prices
| is this administration's fault.
|
| However, when I look at prices here in the EU, gas prices have
| risen much more. Is that the current US admin's fault as well?
|
| What specific tools should the exec use in this situation? EO
| no more oil exports? EO limiting the record petro industry
| profits?
|
| What is the complete argument for why this is Biden's fault?
| ceejayoz wrote:
| > Gas if still $4.2 national average per gallon. That's HUGE,
| and the direct actions of the administration are to blame for
| this.
|
| https://www.reuters.com/business/energy/shell-reports-record...
|
| "Shell (SHEL.L) posted record results on Thursday, with a $11.5
| billion second-quarter profit smashing the mark it set only
| three months ago, lifted by strong gas trading and a tripling
| of refining profit. The company also announced a $6 billion
| share buyback programme for the current quarter but did not
| raise its dividend of 25 cents per share. It said shareholder
| returns would remain 'in excess of 30% of cash flow from
| operating activities'."
| paisawalla wrote:
| Among other things, that profit owes to the fact that the
| price for their product was substantially higher at sale time
| than at the time when they bought their inputs. If your issue
| is that someone made a profit, then you want the market price
| to be lower.
|
| I personally don't think mandating all actors to
| altruistically abstain from transacting at market price would
| be a sound policy, but that seems to be what liberals want.
| ceejayoz wrote:
| https://www.usatoday.com/story/money/economy/2022/05/07/oil
| -...
|
| > The net profit margin of S&P 500 companies, which include
| energy giants such as Chevron and Exxon Mobil, in the first
| quarter has been running at 12.3% based on estimates and
| earnings reported so far, according to FactSet. That's down
| from a peak of 13.1% in the second quarter of last year,
| but above the pre-COVID-19 level of about 11%.
|
| As with food, they've realized the public will pay higher
| margins than they previously thought they could get away
| with.
| [deleted]
| s1artibartfast wrote:
| >I personally don't think mandating all actors to
| altruistically abstain from transacting at market price
| would be a sound policy, but that seems to be what liberals
| want.
|
| Ding Ding Ding!
|
| The relevant question is why isn't there competition to
| drive the market price down.
|
| If it appears that there is a monopoly or oligopoly
| extracting value from it's market position, the solution is
| diversification, not profit controls.
|
| Profit controls just drive prices higher as companies
| strive to inflate their COGs
| gorwell wrote:
| I'm liberal and don't want central planning. It terrifies
| me that we are headed down that road at all; even seeing
| trial balloons for price controls. It always ends very,
| very badly and there's no reason to think this time would
| be different.
| adgjlsfhk1 wrote:
| Price controls on medicine in Europe have worked very
| well compared to America's "free market" by pretty much
| any measure.
| namelessoracle wrote:
| what new medicines have come out of europe recently?
| (serious question)
| twoquestions wrote:
| The Pfizer vaccine for one.
| rabuse wrote:
| How's that vaccine working out?
| rabuse wrote:
| Subsidized by America's spending on R&D for the rest of
| the planet, just like the military.
| corrral wrote:
| Not just Europe--price controls (de jure or de facto, the
| latter via e.g. establishing a monopsony) are, as best I
| can tell, the main unifying factor in healthcare systems
| in the entire OECD _except_ the US. Those systems differ
| a lot, but at some point and on some level, they all fall
| back on price controls, apparently to good effect.
| paisawalla wrote:
| Just looking through the OECD's datasets [0], I see a lot
| of health care quality and utilization measures missing
| for the US and many other OECD countries. How are you
| defining "good effect"?
|
| [0] https://stats.oecd.org/Index.aspx?QueryId=49344#
|
| I was able to find some incomplete data that suggests the
| US is pretty good on the metric of wait time, compared to
| many European countries and Canada:
|
| https://www.oecd-
| ilibrary.org/sites/242e3c8c-en/1/3/2/index....
| misiti3780 wrote:
| what's your point? you dont think the administration plays
| any role in the increased gas prices, it's only the
| evil+greedy oil execs?
| blululu wrote:
| I'm sure both oil refinery executives and the executive
| branch of the us government wish that they did have that
| much control over gas prices. The reality is that gas
| prices are set by market mechanisms of an international
| commodity. Gas costs what it costs.
| jsight wrote:
| There is a regulatory aspect as well. The current
| regulatory environment is not encouraging an increase in
| refinery capacity, and that seems to be our current
| bottleneck.
|
| This is not a value judgment as to whether this is right
| or wrong.
| throwaway5959 wrote:
| Should Joe Biden get some streamers and make a poster to
| show his support for oil refineries? He isn't in charge
| of spending; that's Congress. Maybe he should issue an
| executive order forcing oil refining capacity back
| online? Then you'd bitch about government overreach.
| misiti3780 wrote:
| i pointed that out below and got downvoted.
| twoquestions wrote:
| Correct, the last POTUS that did something to
| meaningfully impact gas/oil prices was Bush II when he
| invaded Iraq, and Obama a little bit when he decreased
| Iranian oil sanctions.
|
| For better or worse, we don't live in anything resembling
| a command economy.
| ceejayoz wrote:
| > you dont think the administration plays any role in the
| increased gas prices
|
| Essentially correct. Presidents have very little control
| over this.
| misiti3780 wrote:
| Yes, they do. They control things like this.
|
| https://www.cnbc.com/2022/02/24/biden-administration-
| pausing...
|
| We could drill our away out of this problem, but we are
| not, because the the biden administration is being held
| hostage by the progressive left. And before you start
| calling me a republican, im not one, but this is just a
| really stupid idea because it's decisions like this that
| will cause republicans to be elected in 2022 and 2024 -
| the american public isnt going to take higher gas prices
| for the team to fight climate change at this point, they
| are going to vote people into office that will lower
| them. biden doesnt realize this because he is surrounded
| by people that think a like and are too rich to be
| unaffected by inflation, or he doesnt care -- either way,
| it s a bad position
| shagie wrote:
| https://www.marketplace.org/2022/03/07/why-do-we-import-
| russ...
|
| > Now, you could be excused for asking yourself: "Wait a
| second, I thought the U.S. had a bunch of oil in the
| Permian Basin in Texas and the Bakken Shale in North
| Dakota. Why the heck are we importing oil?" Turns out the
| answer is part chemistry and part economics.
|
| > ...
|
| > That's because they take longer to process and need
| specialized refining equipment. This cheap, lower-quality
| crude comes from Canada, Venezuela and Russia, among
| other spots. Back in the late 1990s and early 2000s, it
| was the product U.S. refiners were buying.
|
| > "A lot of refineries, especially in the Gulf Coast,
| made a very expensive bet to invest in this equipment
| that would allow them to save money on input costs by
| processing, you know, lower-quality crude," said Richard
| Sweeney, an assistant professor of economics at Boston
| College.
|
| ---
|
| We can't drill our way out of this because we can't
| refine the oil that we produce.
|
| Here's another article from 2019 -
| https://financialpost.com/commodities/energy/the-great-
| oil-p...
|
| > Refiners who invested billions to turn a profit from
| processing cheap low-quality crude are paying unheard of
| premiums to find the heavy-sour grades they need. The
| mismatch is better news for such OPEC producers as Iraq
| and Saudi Arabia, who don't produce much light-sweet, but
| pump plenty of the dirtier stuff.
| ceejayoz wrote:
| > We could drill our away out of this problem, but we are
| not, because the the biden administration is being held
| hostage by the progressive left.
|
| Saying this doesn't make it true.
|
| https://apnews.com/article/fact-checking-452931879750
|
| > The U.S. was producing 11.185 million barrels of crude
| oil per day in 2021, compared with an average of 11.283
| million barrels per day in 2020, according to data from
| the U.S. Energy Information Administration. The latest
| data shows that for the week of March 4, 2022, the U.S.
| is producing 11.6 million barrels per day.
|
| > While there was a dip in oil production in February
| 2021 due to winter storms in Texas, said Mark Finley, a
| fellow in energy and global oil at Rice University in
| Houston, the U.S. remains the world's biggest producer of
| crude oil.
|
| https://apnews.com/article/joe-biden-business-science-
| enviro...
|
| > Approvals for companies to drill for oil and gas on
| U.S. public lands are on pace this year to reach their
| highest level since George W. Bush was president,
| underscoring President Joe Biden's reluctance to more
| forcefully curb petroleum production in the face of
| industry and Republican resistance.
| nightski wrote:
| You can't look at the oil market in isolation like that.
| Saudi was dumping oil at that point, producing way more
| than necessary. So much so futures went negative. That is
| not the case today.
| ceejayoz wrote:
| > That is not the case today.
|
| As a deliberate political choice by the Saudis.
|
| https://theintercept.com/2022/02/15/saudi-arabia-gas-
| price-o...
| nightski wrote:
| Which is largely irrelevant.
| ceejayoz wrote:
| As is the President re: gas pricing.
| nightski wrote:
| Which is not true either, as the dip we've seen over the
| past several weeks can attest. We've deeply tapped into
| our reserves (much more than expected as released
| yesterday) to achieve this. It seems like it might be
| short sighted and short lived.
|
| Also if the president has no effect on gas prices why was
| ours groveling at the feet of the Saudi Prince?
| ceejayoz wrote:
| > Also if the president has no effect on gas prices why
| was ours groveling at the feet of the Saudi Prince?
|
| Because they're the people who _can_ have an effect?
|
| If Biden could tweak gas prices, he wouldn't have to do
| that.
| namelessoracle wrote:
| Then why is the Biden admin bragging about lowering
| prices this summer?
| ceejayoz wrote:
| If the other side claims you can control them to score
| points when they go up, why would you not point out when
| they go down?
| s1artibartfast wrote:
| If inflation stays around 9%, you can expect many companies
| to post record profits every quarter in dollar terms.
|
| Companies with heavy capital investment will see huge gains
| in % profit as their debt obligations are inflated away.
| gorwell wrote:
| Is the idea here that SHEL.L suddenly became a profit focused
| company after all these decades?
| thepasswordis wrote:
| What do you think this is the type of comment, which the
| administration also keeps making, actually means?
|
| The subtext is: these companies are doing well, _and that 's
| a bad thing_. How do you think that effects their desire to
| bring down costs for consumers?
|
| And also: yeah, their profits are up, because due to the
| actions of the administration people are uncertain about
| their ability to buy this stuff in the future, and the
| futures cost goes up.
|
| Watch the end of this clip:
| https://www.youtube.com/watch?v=0tOQ5AaFJdU
|
| The question is: do you think this will accelerate us towards
| a a green energy future.
|
| Her answer: yes, and that's a good thing for the following
| reasons.
|
| BTW, a green energy future is one where these oil companies
| are out of business. The energy secretary is saying that she
| wants these companies to accelerate their own demise at a
| decreased profit, and how there eventual disappearance is a
| good thing.
|
| Yeah, gas prices are up. No kidding.
| selimthegrim wrote:
| These companies are not going to invest in new production
| anyway, they are going to return dividends to shareholders.
| You are setting up a straw man.
| frankharv wrote:
| After watching sleepy Joe cancel the Keystone pipeline
| who in their right mind would invest in new
| infrastructure?
| collegeburner wrote:
| they can't bc investors are scared af about what the
| future is. biden and his buddies been attacking oil and
| gas for years now then they wanna flip a switch and have
| everybody go back to investing in production. then 2 yrs
| from now they gonna go back to attacking it and straight
| up cancelling projects and refusing to permit shit and
| companies won't be able to pay off the assets.
|
| it was a mistake to focus on attacking o&g when
| alternatives still aint ready yet.
| namelessoracle wrote:
| Haven't the oil companies stated they feel its doing more
| right by their investor putting the money back to the
| shareholders than invest in a project that has a
| likelihood of getting shut down by the government?
| duped wrote:
| > and imply that the economy is doing really well right now is
| actually scary.
|
| We're not seeing a decline in employment or spending. The
| really bad symptoms of a bad economy aren't there yet.
|
| > Gas if still $4.2 national average per gallon. That's HUGE,
| and the direct actions of the administration are to blame for
| this.
|
| Which direct actions? And frankly, gasoline prices do not
| amount to a signficant amount of spending by American families.
| Food and housing costs are also up and wages down (adjusted for
| inflation) which account for a lot more money that people
| actually spend than energy. However gasoline prices are also
| way _down_ from a month ago, yet food /rent are still up.
| nightski wrote:
| It's been suggested the employment is because people are
| being forced to take on multiple jobs to make ends meet, not
| because there are more people getting jobs.
|
| Gas affects the prices of nearly everything in the economy so
| I have no idea how you would conclude it's not a large
| portion of spending. I work in commodities and we are seeing
| massive price increases simply due to fuel & freight costs.
| snikeris wrote:
| The government can stimulate employment by pumping money
| into its favored causes. So what you end up with is plenty
| of people employed but not producing things that people
| actually want. Unfortunately, we can't even imagine the
| wonders that people might have produced if their resources
| were instead allocated towards satisfying consumers.
| dazhengca wrote:
| https://fred.stlouisfed.org/series/LNS12026620
|
| https://fred.stlouisfed.org/series/U6RATE
|
| That doesn't appear to be the cae
| jeffbee wrote:
| Direct actions like what? U.S. crude production is near all-
| time highs. Gas is expensive because ridiculous Americans will
| pay it and the oil companies figured that out. Shell just
| announced a $12 billion quarterly profit.
|
| The only thing I want to see out of Biden on gas prices is a
| windfall tax on oil companies where the funds are dedicated to
| lithium exploration.
| thepasswordis wrote:
| Direct actions like immediately cancelling the keystone XL
| pipeline.
|
| Imagine you're a company which builds refining and extraction
| infrastructure. The government wants you to build more
| capacity to bring down the cost fuel, but 18 months ago. you
| watched them just straight up _cancel_ a project which was
| already half finished.
|
| Would you go for this? I wouldn't.
|
| And you have a bunch of land lease contracts which allow you
| to extract oil. Without these contracts your business will
| collapse. The government has said that they won't give you
| any more until you use the ones you have. But again: they've
| spent the last 18 months cancelling projects, and talking
| about how we need to make a transition away from your
| business.
|
| Do you trust that once you use up the remaining leases you
| have, that they're _really_ going to give you more? I wouldn
| 't trust that.
| [deleted]
| ceejayoz wrote:
| > Direct actions like immediately cancelling the keystone
| XL pipeline.
|
| It's unlikely an unfinished pipeline for export purposes
| had a significant impact on current gasoline prices.
|
| https://apnews.com/article/fact-checking-895299166310
|
| "Experts tell The Associated Press that the Keystone XL
| pipeline cancellation isn't affecting what's happening in
| the oil market today. It was never operational when it was
| shut down, and was not slated to go into service until
| 2023, according to a press release from TC Energy, the
| company constructing the project."
|
| "Even if the Keystone XL pipeline had been completed, the
| amount of oil it was designed to transport would have been
| a drop in the bucket for U.S. demand, experts noted. The
| U.S. used nearly 20 million barrels of oil a day last year,
| while global consumption of oil was near 100 million
| barrels. The pipeline would have contributed less than 1%
| to the world supply of oil, according to AP reporting."
| thepasswordis wrote:
| ceejayoz wrote:
| You mean like saying "it must be Biden's fault oil is
| expensive" during the Ukraine war?
| willcipriano wrote:
| Gasoline was expensive before the war.
| dfxm12 wrote:
| Yes, _because of a worldwide pandemic_.
|
| https://wtop.com/national/2021/10/covid-19-drives-gas-
| oil-pr...
| willcipriano wrote:
| Pandemic started in December 2019, gas prices started
| getting high in early 2021 after keystone was cancelled
| and the Biden admin began slow rolling drilling permits.
| ceejayoz wrote:
| The _start_ of the pandemic reduced gas demand.
|
| The returning to normal(ish) phase - in late 2020, early
| 2021 - increased it.
| willcipriano wrote:
| If things returned to normal, then you can't really blame
| the pandemic. When this thread started the war in Ukraine
| was the issue.
| ceejayoz wrote:
| > If things returned to normal, then you can't really
| blame the pandemic.
|
| We're still dealing with supply chain issues, and will
| for a while. The idea that you can turn the economy down
| 30% and back up 30% in less than a year with no lasting
| effects is silly.
|
| > When this thread started the war in Ukraine was the
| issue.
|
| Yes. Starting from an already-disrupted screwed-up
| economic baseline certainly doesn't help.
| willcipriano wrote:
| Aren't pipelines part of the supply chain?
|
| Simply put we were net oil exporters under Trump, all of
| the sudden we are back to begging the Saudis. Given the
| environmental retoric of this administration it isn't
| unreasonable to conclude that they had a hand in that.
| jeffbee wrote:
| https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&
| s=M...
|
| Please peddle your disinformation elsewhere.
| willcipriano wrote:
| Net exporter under Trump:
| https://www.bloomberg.com/news/articles/2018-12-06/u-s-
| becom...
|
| Begging the Saudis under Biden:
| https://www.npr.org/2022/06/25/1107628743/biden-will-
| visit-s...
| jeffbee wrote:
| One of us has the evidence on his side and the other is
| just doubling down on poor reading comprehension.
| thepasswordis wrote:
| What? Biden and other world government officials placed
| massive sanctions on Russia exports of oil. They seized
| hundreds of billions of dollars of their deposits at the
| federal reserve. Forget about the fact that his
| administration had already been driving up the price of
| fuel, this had a huge effect on the futures prices,
| driving them up to where they are now.
|
| Their actions do have effects and sometimes a corrupt
| group of lifetime government grifters make bad decisions
| that have bad effects. The Orwellian framing is that
| nothing these people do could ever be wrong.
|
| Open your eyes. The sanctions have done nothing to stop
| Russia, have driven up the cost of fuel (which benefits
| them, an energy exporter), and have dramatically
| heightened geopolitical tensions all over the world. We
| went from a situation where Russia was going to end up
| with a land bridge to Crimea, to a situation where Russia
| is likely going to end up controlling _all_ of Ukraine,
| is substantially richer, and has driven a wedge between
| the US and India.
| selimthegrim wrote:
| And in your ideal world where Russia has zero
| consequences for anything are you fine with them invading
| the Middle East for more oil?
| thepasswordis wrote:
| Is that what I said?
| twoquestions wrote:
| > have driven up the cost of fuel (which benefits them,
| an energy exporter),
|
| Urals crude is trading $20-$30 below Brent, and China and
| India have Russia over a barrel when negotiating prices.
| https://www.neste.com/investors/market-data/urals-brent-
| pric...
|
| The war has not been going well for Russia at all,
| stagnant at best
| https://understandingwar.org/project/ukraine-project
|
| > is substantially richer
|
| Russia has been putting out very cherry-picked data on
| their economy, which Western journalists have been taking
| at face value. They've been unable to make more PGMs, and
| their civilian sector is getting savaged.
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=41671
| 93
|
| Perun's Youtube channel has been a great deep-dive source
| into the war economy in general. If you're at all
| interested in how governments acquire arms, he's an
| indispensable watch. TL;DW: The time for Russia to win
| the war was February, now it's a matter of how many
| people and how much wrecked steel and how much of Ukraine
| he wants to make into a wasteland before he says uncle.
|
| https://www.youtube.com/channel/UCC3ehuUksTyQ7bbjGntmx3Q
| ceejayoz wrote:
| > Russia is likely going to end up controlling all of
| Ukraine...
|
| > Open your eyes.
|
| Use your eyes to see how the Russian offensive is going.
|
| > Biden and other world government officials placed
| massive sanctions on Russia exports of oil.
|
| China, India, Africa, etc. are happily buying it up.
| Oil's a fungible commodity.
|
| (We already imported basically no oil _directly_ from
| Russia pre-war, already, but uncertainty of any global
| scale is bad for prices. Find the tiny little Russia line
| on https://upload.wikimedia.org/wikipedia/commons/6/6d/US
| _oil_p...)
| recyclelater wrote:
| You are talking past parent. They are saying the
| cancellation is a signaling mechanism that gives them no
| confidence to build out new refineries and other infra
| that is required to lower prices.
| causi wrote:
| $11.5 billion in profits on $103.06 billion in revenue is a
| profit margin of less than nine percent. That doesn't seem
| all that unreasonable to me.
| jeffbee wrote:
| Oil is the textbook commodity and the expected profit
| margin on commodities is ~zero. That's the nature of a
| commodity: a good so interchangeable, with so many
| competing producers, that the profit margins are inevitably
| minimized.
| kgwgk wrote:
| By ~zero do you mean "covering just the cost of capital
| over a full cycle"? This is a textbook example of a
| capital intensive and cyclical industry.
| jsight wrote:
| The problem is that supply naturally reacts slowly and
| ~1/10th of the supply was removed from the global market.
| I've heard people act as if that's a small shift, but its
| really not small at all over the short term.
| jsight wrote:
| 9% is exceptionally high for some industries (eg,
| commodities or retail). For example, Wal-Mart is closer to
| 3%. Its not unusual to see targets of close to 4%.
|
| I do agree with you that it isn't unexpected during a
| period of sanctions on a country that produces ~10% of the
| worldwide oil supply, though. Profits naturally will rise
| for the remaining players.
| rabuse wrote:
| Now do Apple/Google/Facebook.
| ken47 wrote:
| No group of people, Republican or Democrat, can stop the
| perpetual cycles of human history. At best, we can only delay the
| inevitable.
| sethjr5rtfgh wrote:
| wallawe wrote:
| But we can stop lying about the definition of a recession.
| Biden admin changing the definition to avoid loss political
| points is about as nonsensical as blaming inflation squarely on
| Putin. The disinformation needs to stop.
| rajin444 wrote:
| bandyaboot wrote:
| It's similar to global warming/climate change. Moving from
| the former to the latter wasn't some nefarious plot to move
| the goalposts. The former is an imprecise term which hadn't
| mattered very much until that imprecision began to be
| weaponized by those with an agenda.
|
| Same thing with vaccines, the previous definition was
| inaccurate--but up until the covid vaccines, nobody
| pretended to be bothered by it. There hasn't been any
| notable effort to discredit flu vaccines because they don't
| offer permanent, or even particularly reliable immunity in
| the many years that they have existed. Along came the anti
| covid vaccine folks to weaponize the inaccurate definition
| --so, in response, the definition is updated to be more
| accurate.
| ifyoubuildit wrote:
| > nobody pretended to be bothered by it
|
| How often do you get to a successful resolution of a
| dispute when you start from the position that one side's
| concerns are made up (pretended, imagined, etc)?
|
| > There hasn't been any notable effort to discredit flu
| vaccines because they don't offer permanent, or even
| particularly reliable immunity in the many years that
| they have existed.
|
| These are the reasons that I never opted to get the flu
| shot, and I never had my professional and social lives
| threatened as a result.
| jsight wrote:
| That change isn't significant. Vaccines in the past have
| not had 100% effectiveness, and we all know that. There've
| been mumps outbreaks that were primarily among the
| vaccinated, despite that vaccine having a very high
| effectiveness. The reason they were primarily among the
| vaccinated? Vaccination rates were well over 90%, so even
| with a 90% rate of success the odds favored some getting
| the illness.
|
| Cases were mild as the vaccine provided the expected
| protection. This is not new.
| deltasevennine wrote:
| If a placebo can cure an ailment caused by sentiment then
| should the patient be lied to? How much of a recession is
| consumer sentiment? And is lying always a bad thing?
| headsoup wrote:
| I think the more harmful thing this extreme political
| shitfighting is doing is stopping just seriously getting on
| with doing everything possible to improve things.
|
| "We're not _actually_ in a recession. " So what?! Just
| acknowledge things aren't good and get to fixing them, be
| honest with the public and have some bloody integrity for
| once.
|
| The US (and UK, and Australia, etc) partisan political
| playground fighting is ridiculous and the media (inc. social
| media) spends far too much time supporting it.
| TigeriusKirk wrote:
| And the political gain is so minor. It's not like people are
| unaware of their own economic experiences and this will
| change any minds.
|
| The cost in trust is very high, and the gain so small.
| rajup wrote:
| I don't get why people are getting all riled up by this. Of
| course the White House will try to put a positive spin on
| things, the same would have been done by the Republican party
| (or any other political party in the world). As noted above
| the President can't technically change the definition of a
| recession anyway, it's another agency that does that. So much
| ado about nothing...
| dfxm12 wrote:
| _I don 't get why people are getting all riled up by this._
|
| Because conservative media is feeding people the talking
| point, and they are aren't really applying too much
| critical thought to the matter.
| yieldcrv wrote:
| left wing media is making fun of this guy too
|
| protip: everyone can perceive which ways the parties are
| different, when people refer to both sides they are
| referring to the ways they are the same, not the ways
| they are different
| hedora wrote:
| Yeah; but people get cranky when you point out that one
| side is propped up by foreign propagandists that have
| explicitly said they're trying to destabilize the US.
| sethjr5rtfgh wrote:
| deltasevennine wrote:
| Not even science can prove that the observed cycle is
| inevitable.
|
| There have been people in the past who noticed the cycle and
| came up with methods at stopping the cycle.
| namelessoracle wrote:
| Rocks when dropped will eventually fall. You can catch the
| rock and hold on to it, but will eventually put it down, you
| can do something crazy like build a wind machine that keeps
| the rock afloat, but entropy demands the machine go out one
| day and the rock will fall.
|
| Best case is you catch the rock, and put it down gently so it
| doesn't break, but rock will go down.
| hedora wrote:
| In this analogy, political corruption is playing the role
| of gravity.
|
| Covid could have been prevented by mechanisms that Trump
| removed. The US inexplicably kept juicing the economy with
| zero interest rates through the end of Obama and all of
| Trump. 2008 could have been prevented by depression-era
| regulations that were removed due to heavy lobbying and
| traceable payments to (bipartisan) politicians. Whatever
| bubbles pop next (crypto seems likely to be one of them)
| will probably have been fueled by that same deregulation.
| ConceitedCode wrote:
| In the USA, "officially" a group of 8 economists at the National
| Bureau of Economic Research decides when a recession starts. I
| suspect other countries have their own definitions.
|
| "The NBER's definition emphasizes that a recession involves a
| significant decline in economic activity that is spread across
| the economy and lasts more than a few months. In our
| interpretation of this definition, we treat the three criteria--
| depth, diffusion, and duration--as somewhat interchangeable. That
| is, while each criterion needs to be met individually to some
| degree, extreme conditions revealed by one criterion may
| partially offset weaker indications from another. For example, in
| the case of the February 2020 peak in economic activity, the
| committee concluded that the subsequent drop in activity had been
| so great and so widely diffused throughout the economy that, even
| if it proved to be quite brief, the downturn should be classified
| as a recession." [1]
|
| Planet Money (podcast on NPR) did an episode [2] a little while
| ago about it that I recommend listening to. They talk with one of
| the 8 economists. It was honestly refreshing hearing the
| economist talk about it, I got the impression that it was a more
| neutral take on the circumstances rather than pushing a
| narrative.
|
| [1] https://www.nber.org/research/business-cycle-dating
|
| [2] https://www.npr.org/2022/06/24/1107581150/recession-referees
| safog wrote:
| Has a technical recession ever not resulted in an actual
| recession as declared by NBER?
| ConceitedCode wrote:
| Great question! Not that I'm aware of (EDIT: sseagull
| provided a good example in 1947). To be fair, I can't think
| of any time where we've seen 2 quarters of negative GDP
| growth while maintaining "full" employment and wage growth.
| This is an unusual recession if it is a recession.
| pclmulqdq wrote:
| This is a recession. During a recession, the economy tends
| to lose 10% of its employment or more. Usually this is from
| loss of jobs. This time, inflation has cut everyone's pay
| by between 10 and 30% depending on who you ask. The CPI
| says 10%, but a lot of necessities, like energy and food,
| are up a lot more.
| [deleted]
| yieldcrv wrote:
| they're all unusual at the time
|
| there are too many variables for a circumstance that
| doesn't happen very often for it to ever be the same
| sseagull wrote:
| Yes. In 1947.
|
| "And it's rare for there to be two consecutive quarters of
| negative GDP without a recession. In fact, George Washington
| University professor Tara Sinclair said the only time on
| record appears to have been 1947."
|
| From:
| https://www.washingtonpost.com/politics/2022/07/25/biden-
| adm...
| tlogan wrote:
| In other words, if it looks like a recession and quacks like a
| recession then it might be a recession.
|
| And yes it much more complicated - especially it also depends
| on how much outside pressure NEBR has. I think there is a large
| pressure not to declare recession since we still have a high
| inflation and feds needs to continue raising rates.
| zenithd wrote:
| the reason for the weirdness is that it doesn't look like a
| recession in the labor market. Layoffs have been almost
| exclusively limited to tech, and within tech pre-profit or
| highly speculative (cryptoshovels) companies. This is
| important because in the US economic system labor power
| drives income drives inflation. (This isn't true in all
| countries.)
|
| When the employment outlook changes, and I expect it will, we
| will be in a traditional recession.
| tlogan wrote:
| I was under impression that unemployment is a lagging
| indicator. The last thing employers want to do is let
| people go - they will try to cut here, cut there, stop
| hiring etc.
| hotpotamus wrote:
| What if it looks like a bug and it sounds like a humming
| noise?
|
| https://www.nytimes.com/2022/07/12/opinion/employment-
| wages-...
| Unklejoe wrote:
| My problem with that is:
|
| > significant decline in economic activity
|
| What is "significant"?
|
| > more than a few months
|
| How long exactly?
|
| All I gather from their description is that they basically just
| get a "feel" for it. That's why so many people choose to follow
| the two negative quarter thing - it's objective and clearly
| defined, but maybe less accurate (particularly in cases like
| now where unemployment is still really low).
| ericmay wrote:
| You're approaching it from the standpoint that it's an exact
| science, but it's more of a social science and you can't
| really pin down exact specifics, but only best guesses.
| Unfortunately (and I fell into this camp for a long time)
| many people see economics and see the mathematical models and
| assume that it must be scientific or precise, but the
| marketing campaign to legitimize economics unfortunately
| confused many of us into that misconception.
|
| It's helpful to think of economics as a field under the
| branch of political science, which itself isn't very
| scientific.
| efsavage wrote:
| Economics is a social science. It is probably the most data-
| driven of the set, but it is inescapably human, and therefore
| ultimately comes down to judgment.
| ConceitedCode wrote:
| Both of those are up to the consensus of the group of
| economists. They regularly talk about it with each other and
| compare with historical data mostly. Keep in mind economics
| is a social science, not exact science.
|
| It would strike me more as "feeling it out", but they are not
| in a rush to announce it is or is not a recession until they
| have a better feel. Everyone seems to be rushing to call it a
| recession as early as possible. The economist I heard talking
| had a "wait and see" attitude on the podcast which was
| refreshing to hear.
| chrisco255 wrote:
| So it depends on if it's an election year and how much
| pressure is on them? Got it.
| ConceitedCode wrote:
| I'd say listen to the economists that are actually apart
| of the group and form your own opinion. I didn't get that
| impression personally. Although I'm sure there is some
| impact.
| pm90 wrote:
| Of _course_ it does. It _always did_ at least at the
| margins.
| ggm wrote:
| The swing in the higher granularity data going to quarterly is ..
| impressive. Scary impressive. If its not a measurement artifact,
| its a real quirk of the situational pressures.
| oofbey wrote:
| Wow the scale on the historic chart on that page is just nuts!
| Looking at Q2 & Q3 of 2020 - it just dwarfs everything and nearly
| makes the chart unreadable for the scale of numbers that we
| usually think of as important - where a full percent is real and
| two percent is big. I mean it makes sense given the pandemic, but
| seeing the economy shrink at a 30% annual rate one quarter and
| then bounce right back by the same amount the next quarter is
| insane. I wonder the last time it changed that quickly.
| yuan43 wrote:
| > Real gross domestic product (GDP) decreased at an annual rate
| of 0.9 percent in the second quarter of 2022 (table 1), according
| to the "advance" estimate released by the Bureau of Economic
| Analysis. In the first quarter, real GDP decreased 1.6 percent.
|
| That makes two back-to-back quarters of real GDP contraction. To
| some, this is a recession, but it's the NBER that puts the stamp
| on it. AFAIK, NBER has never failed to put the recession stamp on
| back-to-back drops in GDP.
|
| It's worth noting that yield curve inversion predicted recession
| four months ago:
|
| > The 2-year and 10-year Treasury yields inverted for the first
| time since 2019 on Thursday, sending a possible warning signal
| that a recession could be on the horizon.
|
| https://www.cnbc.com/2022/03/31/2-year-treasury-yield-tops-1...
|
| It's also worth noting that 2y-10y yields have been deeply
| inverted (~20 basis points) for most of July and are in that
| state today.
|
| Still one more thing to note: the earliest warning signal of them
| all appears to be an inversion of the eurodollar futures curve:
|
| https://www.reuters.com/business/finance/eurodollar-futures-...
|
| It started inverting last year. The inversion steepened. It is
| now in a very deep inversion in the long end that is marching
| steadily to lower maturities.
| _marlowe_ wrote:
| 2-10 spread went through the pre-GFC record of -28 bps a day or
| two ago.
| djbusby wrote:
| GFC = Global Financial Crisis (2007-08)
| NovemberWhiskey wrote:
| I'm a little sanguine about the inverted yield curve as a
| real signal this time around, to be honest.
|
| We're in an environment of very rapidly rising short-term
| interest rates, specifically as the Fed attempts to try to
| manage inflation; with back-to-back 0.75% increases. That
| tends to have a curve flattening effect as the yield curve is
| nominal; short term yields rise more than longer tenors if
| the market believes that inflation will decrease as real
| yields will be higher.
| foobarian wrote:
| Is there some science to these observations or are we just
| reading tea-leaves post-facto?
| markus_zhang wrote:
| Let's see who breaks first.
| Nimitz14 wrote:
| 1947 saw two Qs neg growth amd no recession.
|
| This is something that everyone who is actually interested in
| the topic will have heard of because it's been mentioned
| repeatedly by the experts. And yet this thread is filled with
| confident statements by people who clearly have put zero effort
| into forming their opinion. Sad.
| remflight wrote:
| 1947 was 75 years ago. Taking 1 example per lifetime doesn't
| constitute any sort of evidence to the contrary.
| beebmam wrote:
| The OP comment said: "AFAIK, NBER has never failed to put
| the recession stamp on back-to-back drops in GDP."
|
| The comment you replied to gave evidence that directly
| contradicts the OP comment.
| InefficientRed wrote:
| On the other hand, we just went through a once per lifetime
| pandemic and a once per lifetime consumer stimulus package.
| Supply chains are wrecked and we're in a period during
| which international trading patterns could massively
| change. Meanwhile,
|
| * China is still purusing zero COVID.
|
| * There's a land war in Europe with Russia effectively cut
| off from the Western world.
|
| * German manufacturing, once a workhorse, is being crushed
| by energy costs
|
| * much of the developing world is swimming hard against the
| current just to stay alive.
|
| I don't think we are in a situation analogous to 1947, of
| course, and I do think we are in or at least heading into a
| more-than-technical recession. But "irrelevant because that
| only happens after once in a lifetime extremely disruptive
| events" is a pretty... odd... take in 2022.
| ChuckNorris89 wrote:
| _> German manufacturing, once a workhorse, is being
| crushed by energy costs_
|
| Hmm, maybe Germany can solve this the same way they
| "solved" ballooning Berliner rents: just pass a law
| saying how much energy should cost. Simple. They do love
| regulations over there.
|
| Or just ask Gerhard Schroder and the rest of their former
| chancellors who were in bed with Russia, to blow their
| hot air through the pipes this winter. They have enough
| of it.
| njcgbc wrote:
| Lmao yeah just cap the prices that won't cause a shortage
| melling wrote:
| Doesn't a Fed typically lower rates during a recession?
|
| At least at some point, in order to bring a country out of the
| recession.
| camhart wrote:
| Challenge is when you're facing a recession while also trying
| to control inflation. See "stagflation" [1].
|
| [1] https://www.investopedia.com/terms/s/stagflation.asp
| SkyMarshal wrote:
| The Fed learned under Volcker back in the early 80s that
| prioritizing killing inflation is the best way to ensure
| medium and long-term economic and employment growth, even if
| it causes lower growth or recession in the near-term. That's
| likely the playbook Powell is operating under now.
| ptero wrote:
| In Volker time, federal debt (as a fraction of the GDP) was
| low, he could raise rates without crippling the budget with
| interest payments.
|
| With today's federal debt level the fed is screwed: it
| cannot raise rates even close to inflation without busting
| the budget and cannot lower them (to fight a recession)
| without spiking inflation.
|
| My bet is on long term rates-below-inflation period to
| deflate debts, similar to post-war period in the 1940s. And
| lots ofrhetoric. But it will be a painful ride.
| solveit wrote:
| The Fed does not have the mandate to do what is
| convenient for the budget. That's not their problem.
| Obviously this is naive and I'm sure the Fed is under all
| kinds of pressure, but the Fed _is_ supposed to kill
| inflation by raising rates to whatever it takes, as long
| as they don 't kill jobs at the same time. The government
| is supposed to figure something out themselves.
| jjoonathan wrote:
| Perhaps, but the Fed chair is a political appointment and
| the politicians learned a different lesson.
|
| Carter appointed Volcker and put America on chemotherapy.
| He caught blame for both inflation and de-leveraging
| withdrawal symptoms. Reagan got to take America off
| chemotherapy and take credit in the popular conscience for
| both reduced inflation and the re-leveraging boom. The
| political lesson: putting America on chemotherapy is
| important but politically somewhere between "thankless" and
| "suicidal."
|
| When Powell was confirmed, it was with this context in
| mind. Politicians were thinking "do I want to be the next
| Carter"? I am worried that they only confirmed Powell
| because they thought he would _not_ be the next Volcker. Of
| course, now that he has been confirmed for the next 4
| years, he has some freedom to diverge from expectations. We
| 'll see.
| lumost wrote:
| There have been predictions that the Fed would exhaust its
| capability to regulate the economy through monetary stimulus
| for years with the end result being inflation and recession.
| Anecdotally, over the course of my life the size of fiscal
| and monetary stimulus has only increased. During the 90s we
| would stimulate with a few points of interest reduction, then
| in the 2000s we had 08 leading into permanent QE through the
| 10's. The 2020's have seen stimulus activities far in excess
| of '08.
| bandyaboot wrote:
| Though not unprecedented, they're typically not fighting
| inflation and a recession at the same time.
| jacobmarble wrote:
| In this case, the Fed is stimulating a (hopefully mild)
| recession, by raising interest rates, in order to bring
| inflation down.
| njarboe wrote:
| Until rates are above inflation (now around 8%) I would say
| the Fed is still pumping up the economy, but it's hard to
| see the Fed push up rates to that level like Volker did the
| last time the US had high inflation. The Fed set the
| federal funds rate at 20% in June of 1981 when inflation
| was about 15%. If the US has to finance much of its debt at
| 15% something will seriously break.
| VictorPath wrote:
| In 1974, President Ford had Whip Inflation Now buttons
| printed up, and 1981 was seven years later. So Volcker's
| dramatic raise was in that context. Whereas people are
| more used to a more moribund economy since 2008 with very
| low interest rates, inflation, and lots of QE, with the
| subprime bailout followed by the Covid stimulus. Actual
| non-negligible inflation and an actual interest rate is
| something people have started seeing more recently.
| dageshi wrote:
| From what I recall there was a fairly long period pre
| Volker where there were very half hearted attempts to get
| inflation under control without going for the kill so to
| speak.
|
| I think the Fed knowing that history will try to kill it
| dead first time, because if they don't they know they'll
| likely have to go even higher with interest rates at the
| second attempt and the higher they're forced to go the
| more danger there will be to US financing operations as
| you say.
| mc32 wrote:
| The extreme options look like Japan on the one hand and
| Zimbabwe on the other hand.
|
| We're not going to land on either extreme but I think it's
| clear which is the preferred option.
| slaw wrote:
| I would prefer to live in Japan than Zimbabwe.
| Unfortunately Fed likes the opposite option.
| NovemberWhiskey wrote:
| The Fed has no mandate to generate or maintain economic
| growth.
|
| The two areas in which it does have a mandate are price
| stability and sustainable employment. Usually, recessions are
| accompanied by a loss of jobs, so that's where the Fed would
| intervene; that isn't happening thus far which is another
| reason why economists are split over what is really going on
| in the economy.
| OscarCunningham wrote:
| > The Fed has no mandate to generate or maintain economic
| growth.
|
| Correct. And yet they let inflation get this bad, so it
| seems like they're trying to avoid recessions even though
| they haven't been told to.
| kube-system wrote:
| Or they believed it would be transitory and any action
| would upset longer term price and employment stability.
| ac29 wrote:
| Employment has fallen slightly recently:
| https://fred.stlouisfed.org/series/CE16OV
|
| Not dramatically though, a more charitable view would say
| that employement levels are fairly flat.
| hn_throwaway_99 wrote:
| The unemployment rate is also _extremely_ low by
| historical standards, even when taking into account the
| various measures of unemployment. There is also plenty of
| evidence that businesses are finding it unusually
| difficult to hire employees. The Fed is probably fine
| with the unemployment rate rising pretty significantly
| because they probably don 't see the current rate as
| being sustainable.
| tootie wrote:
| The Fed lowers rates when lowering rates could plausibly
| help. The Fed has a dual mandate to control inflation and
| maximize employment. Employment remains incredibly strong
| while inflation is obviously too high which is the clearest
| possible signal to tighten. The Fed won't/can't react to
| changes in the stock market, supply chain or foreign policy.
| It's not just "loosen during recession, tighten during
| expansion".
| hedora wrote:
| Also, as the Biden administration is quick to point out, US
| industrial output is up.
|
| So, people are accepting fewer, apparently better
| employment offers, manufacturing is being onshored, but
| (due to lower supply of foreign slave labor and exploitable
| US workers) profits are down, and inflation is up.
|
| Since unemplyoment is low, the Fed mandate seems pretty
| clear at this point. Interest rates should go up. The
| market will tank for a few years because inflation and
| paying workers screws with profits, then bounce back (in
| real terms) once corporate debt, etc unwinds, and
| productivity starts to rise again.
|
| Rigid and weak corporations will be displaced by startups
| and existing companies that are able to adapt/innovate.
|
| It's weird to me that Fox News's staunchly anti-China, pro-
| US manufacturing Fox News's viewership is so bent out of
| shape.
|
| Aren't we experiencing exactly the effect Trump's tariffs
| were supposed to achieve?
| badrabbit wrote:
| How can one profit from this? Any good short positions?
| s1artibartfast wrote:
| The exact opposite, Buy long positions at a discount
| digdugdirk wrote:
| But you need to time the dip with this strategy, otherwise
| you're underwater in the meantime.
|
| I think the question was, "How can I profit as things get
| worse?" Or, "What are good ways to protect myself as things
| go downhill?"
|
| My recommendation? Reduce expenses. And think about
| investing in ways to reduce those expenses - Toilet paper
| is expensive, buying a bidet can save money after X uses.
| Meat can be expensive, see if a farmer in your area is
| willing to sell you the meat of a full cow at a discount
| for you to freeze and use over the course of X months.
| s1artibartfast wrote:
| >My recommendation? Reduce expenses. And think about
| investing in ways to reduce those expenses
|
| That's funny, I would recommend the exact opposite given
| the inflationary situation.
|
| I would accelerate buying durable objects that you would
| like to have eventually, instead of waiting.
|
| Saving money beyond a safety buffer is a bad idea when
| cash is losing 10% of its value per year and stocks are
| going down.
| outworlder wrote:
| > But you need to time the dip with this strategy,
| otherwise you're underwater in the meantime.
|
| Being temporarily underwater is fine, unless you think
| that economic growth will stop, or you are a day trader.
|
| Dollar cost average if you can.
| xeromal wrote:
| Buy SPY, wait 10 years, $$$, Profit.
| NeverFade wrote:
| > _To some, this is a recession_
|
| Not "to some", two back-to-back negative GDP stats has been the
| definition of a recession for my entire life. Now suddenly it's
| questionable, because the current administration would like to
| shrug away its failures, and too many in the media are helping
| them do it.
|
| This ad-hoc re-definition of language to suit political
| purposes is scary and Orwellian.
| ModernMech wrote:
| Has that been the definition, or has that just been your
| understanding, which may have been wrong? Has there really
| been a redefinition?
|
| I mean, if we just take Wikipedia as a gauge, they have
| defined it according to the NBER, dating back to 2008 [1].
| A recession is a significant decline in economic activity
| spread across the economy, lasting more than a few months,
| normally visible in real GDP, real income, employment,
| industrial production, and wholesale-retail sales.
|
| There _does_ appear to be a recent, ad-hoc redefinition edit
| battle going on [2][3], but it 's to redefine it as you are
| saying here rather than accepting what has been there for
| over a decade... apparently for the purpose of using it as a
| political cudgel [4]. Maybe not so Orwellian, just a
| misconception.
|
| [1] https://www.nber.org/news/business-cycle-dating-
| committee-an...
|
| [2] https://en.wikipedia.org/w/index.php?title=Recession&diff
| =pr...
|
| [3] https://en.wikipedia.org/wiki/Talk:Recession
|
| [4] https://twitter.com/RepublicanStudy/status/15516279756401
| 909...
| dougmany wrote:
| It appears, once again, the people trying to refine the
| word are accusing the people keeping the historical usage
| as the changers. It's projection all the way down.
| NeverFade wrote:
| The NBER has called a recession every single time we had
| two back-to-back quarters of negative growth. The news
| media is known to aggressively jump to conclusions to
| produce headlines. It's a notable exception that they are
| so cautious all of a sudden about what is really a foregone
| conclusion.
| ModernMech wrote:
| In those instances, were there also declines in real
| income, employment, industrial production, and wholesale-
| retail sales? In the current climate, are those things
| declining? Maybe the answer to those questions help
| explain the discrepancy.
| NeverFade wrote:
| Real earnings has been in a sharp decline since 2020, now
| mostly thanks to inflation:
| https://fred.stlouisfed.org/series/LES1252881600Q
|
| I don't have the time to link the other stats, but
| they're not so rosy either, except employment. One good
| stat and several bad ones is still a recession.
| sacred_numbers wrote:
| I think that chart shows that things are going back to
| normal. The reason weekly earnings were at an all time
| high in q2 of 2020 is because the low wage earners all
| got laid off because of the pandemic. Now that things are
| going back to normal, the low wage earners are going back
| to work at approximately the same real wage (although
| nominally it's probably a bit higher because of
| inflation).
| somenameforme wrote:
| That's quite an interesting bias and probably accurate,
| but one issue you run into here is that wages now are
| lower than even Q3 2019 which is well before any of this
| kicked off. And the current trajectory is downward.
|
| So it seems safe to say that real earnings are indeed
| decreasing, rather than regressing to some past mean.
| gorwell wrote:
| Also from Wikipedia: While national definitions vary, two
| consecutive quarters of decline in a country's real gross
| domestic product is commonly used as a practical definition
| of a recession.
|
| From the Oxford dictionary (recession): a period of
| temporary economic decline during which trade and
| industrial activity are reduced, generally identified by a
| fall in GDP in two successive quarters.
|
| It's only now that we're seeing all this slimy lawyering
| about the definition of recession. "Well acksually,
| technically..."
| ModernMech wrote:
| We can accept that lots of people believe 2 consecutive
| quarters of GDB decline define a recession, while also
| admitting that the group that officially defines a
| recession in the US hasn't done any sort of Orwellian
| redefinition at all.
| tootie wrote:
| That definition was only ever a rule of thumb. The fact is,
| you can't define it. It's like setting a temperature that is
| officially "cold". The current economic indicators are almost
| completely unprecedented in the growth is weak, inflation is
| very high and yet employment remains historically strong. As
| much as GDP represents the broadest indicator of economic
| health, if you're looking for a headline to apply to the
| masses, it's going to be when we see broad-based negative
| wealth effects in which case inflation and employment/wages
| are the most important indicators and they're flying in
| opposite directions right now. Declaring that this is or
| isn't a recession is essentially irrelevant. It's officially
| cold when you feel cold.
| NeverFade wrote:
| In the US, the NBER is the institution that calls
| recessions. The NBER has never once failed to call two
| consecutive quarters of negative growth as a recession.
| It's a foregone conclusion at this point.
|
| But wait, according to the mainstream media now, we
| shouldn't listen to the NBER either, they're all just a
| bunch of "white economists":
|
| https://www.cnn.com/2022/06/30/economy/recession-
| economists-...
| [deleted]
| engineer_22 wrote:
| CNN headline: Who decides if the US is in a recession?
| Eight White economists you've never heard of
|
| Is this a joke? It's like something you'd overhear at
| brunch from a group of co-eds
| alchemist1e9 wrote:
| Now recessions are racists then?
| snikeris wrote:
| It reads like racism to me.
| rockemsockem wrote:
| Was that actually the headline before?
|
| The title I get is the same minus the "white". I wonder
| if it's A/B testing.
| alchemist1e9 wrote:
| https://imgur.com/a/yW4IXum
|
| I took a screenshot as I had a hunch it would be changed
| once enough people saw it.
|
| Edit: shows up without the "White" also for me now:
|
| https://imgur.com/a/84X6RKj
| weakfish wrote:
| I mean, CNN is basically the left version of Fox News,
| it's not representative of center media.
| twoxproblematic wrote:
| Do you have an example of "center media"? Asking because
| I earnestly want some of that.
| disgruntledphd2 wrote:
| The Financial Times is relatively centrist in their
| coverage.
| throwaway_4ever wrote:
| Here's a couple media bias charts.
| https://www.poynter.org/fact-checking/media-
| literacy/2021/sh...
|
| Like other commenter said, AP and Reuters are best at
| being center / neutral for now.
| weakfish wrote:
| I usually just read the AP or Reuters. FiveThirtyEight is
| definitely liberal but I appreciate their numbers
| perspective as well.
| DuskStar wrote:
| It's closer to the center than the other major news
| network, MSNBC.
| westmeal wrote:
| I upvoted you because downvoting to disagree is dumb, but
| I disagree, CNN is totally way far left.
| s1artibartfast wrote:
| What is a recession if not loss of buying power and
| material wellbeing?
|
| How is more people working for less pay a counterargument
| against recession.?
| tootie wrote:
| All things being equal, more people working is a an
| increase in buying power. The decreased buying power of
| wages is only negative relative to the amount people
| being paid a wage. Which itself is a function of both
| employment opportunity and size of the labor force. The
| recent rise in inflation is definitely correlated with a
| rise in wages albeit at a slightly lower rate resulting
| in a roughly 1% lag in the past year. If you map out
| wages paid per GDP you can get an idea of how much of a
| share of economic growth has been going to workers and
| it's a been a pretty solid, steady decline since 1970:
|
| https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun
|
| So, that sucks, but it doesn't make a useful definition
| of recession. This is the result of massive, global
| macroeconomic forces. It's basically a slow reset of the
| post-WWII global order.
| s1artibartfast wrote:
| Im not sure I follow your argument.
|
| >All things being equal, more people working is a an
| increase in buying power.
|
| This isnt an absolute. If you have 1 person working for
| $1/day and go to 2 people for $0.5/day, buying power
| hasn't changed.
|
| You can have more people working, and people working
| longer, for less and less material goods.
|
| I think any meaningful definition of economic
| growth/recession must address the fundamental question of
| is there more material goods and wellbeing in a country
| today than yesterday.
|
| I agree that the allocation of those goods is a separate
| question entirely.
|
| >This is the result of massive, global macroeconomic
| forces. It's basically a slow reset of the post-WWII
| global order.
|
| I think that what we are seeing is the start of a
| realization that part of historic GDP growth was actually
| a fiction, in that more tangible goods were not produced.
|
| This is why a small increase in wages sent inflation
| through the roof.
|
| In theory, US real GDP per capita has gone up 33% since
| 2000[1]. This looks fine on paper as long as the growth
| is just accumulating in a bank account. Once people
| actually try to consume more, it becomes obvious that
| there isn't 33% more stuff to buy.
| hn_throwaway_99 wrote:
| Your conspiracy theory is laughable, primarily because "the
| current administration" doesn't have any control over the
| "official" marking of recessions, which is done by the
| National Bureau of Economic Research, which is a private,
| independent non-profit.
| djfobbz wrote:
| Why does everything you personally don't agree with have to
| be a "conspiracy theory"? Seems like a trend these days!
| hn_throwaway_99 wrote:
| The comment I am replying to is pretty clearly arguing
| that not calling the current situation a recession is due
| to the current administration not wanting to call it
| that:
|
| > Now suddenly it's questionable, because the current
| administration would like to shrug away its failures, and
| too many in the media are helping them do it.
|
| Whether or not I agree with the assessment of the current
| administration wanting to "shrug away its failures" has
| nothing to do with it. The parent comment was clearly
| arguing the theory, which is total bullshit on its face,
| that the reason it hasn't been officially designated a
| recession is because the administration doesn't want it
| to. The reason this theory is total bullshit is because
| it's pretty obvious the administration has no control
| over how the NBER marks recessions.
|
| I think it's fair to designate theories which are total
| bullshit on their faces as "conspiracy theories".
| somenameforme wrote:
| Imagine for a moment that a recession was something quite
| rare, but extremely desirable and good. But outside of
| that difference, all of the current state of the word's
| definition would remain. Do you honestly believe the
| current administration wouldn't be parading out that
| we're in a recession, along with all of the usual media
| making front page news of it?
|
| So we use the usual rule of thumb to claim it's a
| recession when it's a good thing, but instead try claim
| it's not a recession until a given think-tank says so
| when it's a bad thing.
| citilife wrote:
| Wait until this guy learns they changed the definition of
| vaccines as well...
|
| https://twitter.com/RepThomasMassie/status/14356068459268710.
| ..
|
| Or a definition of a man and a woman...
|
| https://www.dailymail.co.uk/news/article-8923283/Oxford-
| Engl...
|
| Orwellian indeed.
| jodrellblank wrote:
| Nothing says Orwellian Dictatorship like change brought by
| a "30,000-strong petition", right? Nothing says Ministry of
| Truth more than "expanding the dictionary", based on "real
| world examples of use", eh?
|
| (Hint: newspeak was not adding more to the language, was
| not based on real usage, and was not influenced by public
| petitions).
|
| Or is this you redefining "Orwellian" and I've missed the
| joke?
| kbutler wrote:
| Orwellian newspeak definitely expanded the dictionary in
| doubleplusungood ways, including redefining existing
| terms to mean the opposite ("WAR IS PEACE, SLAVERY IS
| FREEDOM" - words are violence, silence is violence, facts
| are misinformation, racism is only whites oppressing
| people of color), and by crushing any opposing wrongthink
| and oldspeak thoughtcrime, the Ministry could easily
| gather "real world examples of use" and fill petitions
| with doubleplusgoodspeak doublethink petitioners as
| desired, whether Orwell described that process or not.
|
| But are we trending toward a Brave New World rather than
| Oceania?
| [deleted]
| partiallypro wrote:
| I personally think we're in recession and the reason is
| datapoints outside of this GDP print, what companies are saying,
| and the fact I know people that have been laid off already. What
| I find pathetic is that saying we are in a recession is now a
| political stance.
|
| I think we all know that if a Republican were President the
| entire narrative would shift, with most of the press saying we're
| in recession while Fox, etc would say unemployment is still low
| which is what matters.
|
| How did we get to a point where actual data can be outright
| denied or absorbed based on your political viewpoint? It's really
| pathetic. People will go to the ends of the earth just to protect
| politicians. Worse, even if we're in recession it's pretty mild,
| so I don't even know why there is so much handwringing about it.
| smilebot wrote:
| /opinion without any evidence
|
| I like to believe that there is a bigger picture here.
| Oversimplification: An economic downturn when there is a rise
| in nationalist sentiment had given birth to people like hitler.
|
| Maybe if the majority perceives that everything is fine, when
| it isn't, might help prevent that?
| seanmcdirmid wrote:
| > Worse, even if we're in recession it's pretty mild, so I
| don't even know why there is so much handwringing about it.
|
| Ideologies tend to deal in binaries. We are either in a
| recession and the sky is about to fall or everything is great.
| Jobless recoveries or full employment recessions don't fit into
| binary narratives.
| [deleted]
| rvz wrote:
| > How did we get to a point where actual data can be outright
| denied or absorbed based on your political viewpoint? It's
| really pathetic. People will go to the ends of the earth just
| to protect politicians. Worse, even if we're in recession it's
| pretty mild, so I don't even know why there is so much
| handwringing about it.
|
| That's because all politicians are liars and the media spin
| doctors will ensure that their lies gaslight the general public
| into believing them. The problem is, they can't deny the
| numbers and they know it, hence why they are beginning to
| change definitions.
|
| Given the last administration brought the US into a recession 2
| years ago with the same opposition, media and critics screaming
| at them, there is no more denying that this is a recession with
| these figures. The difference is, the current administration is
| trying to escape by changing definitions, which doesn't give
| much confidence in them and indicates that it may get even
| worse.
|
| Now you see the same ones down-playing the inflation fears in
| November 2021 are trying to down play this recession very
| poorly with lots of damage control to save themselves and their
| careers. In reality we were no better off, and it looks like
| this is worse than the last administration.
|
| And finally, the indicators for this with surging inflation was
| there since November 2021. Instead we have _' Stock market up
| 1% today on both this news and decades-high inflation.'_ [0]
| and later _' We are most certainly not in a recession.'_ [1].
| Not only you have to look at it in the long term - not in 1
| day, but you also don't wait for the figures to come out for
| you to then prepare for the worst. By then it is too late.
|
| The denial is indeed pathetic.
|
| [0] https://news.ycombinator.com/item?id=29508238
|
| [1] https://news.ycombinator.com/item?id=31441710
| [deleted]
| mywittyname wrote:
| I agree that we are in a recession.
|
| >How did we get to a point where actual data can be outright
| denied or absorbed based on your political viewpoint?
|
| Because the actual data is sending mixed signals. People equate
| recessions with job losses, but job growth is still high and
| unemployment remains incredibly low. Businesses equate
| recessions with reduced demand for goods and and services, yet
| demand remains strong enough to push prices and profits to
| record levels.
|
| GDP has long been criticized for being a poor metric for the
| economy. But it's always been correlated enough with overall
| economic sentiment that it was Good Enough. It looks like we've
| finally gotten ourselves into a situation where the edge case
| issues with GDP surface.
|
| Lastly, not everyone feels recessions the same. I was one of
| those people who benefited from the financial crisis, because I
| kept my job and lived in an apartment, so my income was going
| up while my costs went down. That doesn't take away from the
| devastation it caused to other people.
| b0mbadilh0le wrote:
| Macro Econ 101: Unemployment is a lagging indicator. Always
| has been. Always will be. It's why it was silly for them to
| keep touting it as a measure of the economy's health.
|
| We could even enter a prolonged, severe recession with low
| unemployment. How? Labor force participation. If it is low
| enough, there aren't jobs to cut.
|
| Your last point is very valid, and much is a matter of
| perspective.
|
| As far as mixed data... the only data throwing a contrary
| signal is unemployment, previously discussed. Inflation,
| rising interest rates, low consumer confidence, home prices
| turning over (speculative market areas currently), supply
| chain issues, and loss of wealth effect (markets have lost
| approximately $30 trillion this year), are all VERY
| recessionary.
| mistrial9 wrote:
| to support your statement that unemployment is a lagging
| indicator -- very random observation of rural Carolinas
| annual horse roundup and sale. They keep and publish
| records of a traditional county horse auction there, and
| the 2006-2010 years are listed. You can see a big change in
| the prices among these relatively unconnected people and
| their auction, but it is lagging by two years versus the
| massive credit crunch that put so many high-leverage city
| companies out of business.
| njcgbc wrote:
| > Businesses equate recessions with reduced demand for goods
| and and services, yet demand remains strong
|
| This isn't true, major retailers have been reporting falling
| demand.
|
| I'd cite the WSJ but for some reason I can't paste the link
| in this box, just Google "falling demand Wal-Mart"
|
| > enough to push prices and profits to record levels.
|
| Adjust both for inflation
| bushbaba wrote:
| Falling demand of non-necessities. People aren't buying
| "TVs". Which as you call out, is a stupidly strong
| recessionary signal.
| InefficientRed wrote:
| Or, damn near every household bought a new TV during the
| pandemic lockdowns using their stimulus checks and now no
| one needs a new TV.
|
| I think Walmart's story in particular is one of stupidly
| bad demand forecasting.
| kube-system wrote:
| Not across the board. Demand for consumer discretionary
| spending _outside of the home_ is up. People are tired of
| sitting at home. They don't want to buy a TV and binge
| Netflix. They did that for 2 years. They're going out to
| eat, going on vacation. Trying to get on a flight.
| cma wrote:
| But people bought more TVs than normal during the
| pandemic, so it may also be part 'satiation' signal.
| InefficientRed wrote:
| _> This isn 't true, major retailers have been reporting
| falling demand._
|
| As OP said,
|
| _> > and services._
|
| _> Wal-Mart_
|
| WalMart's issue is that they have a massive
| inventory/demand mismatch. They already have the headwind
| of a shift from goods to services, and then on top of that
| they _also_ massively mismanaged a shift in consumer
| preference _within_ goods. I have a feeling that they are
| also feeling the squeeze from Amazon. Many households treat
| Prime as a fixed cost but the 20 minute drive out to
| Walmart is a real expense that can be substituted with
| Amazon purchases. Tonight 's earnings will be interesting.
|
| Compare to eg Visa [1].
|
| I expect that the "last hoorah" spending of this summer
| will grind to a halt in the winter and by Q2 2023 we'll be
| able to see a massive decline in consumer spending during
| Q4 in particular.
|
| But we aren't there yet, at least in aggregate, because
| consumers are spending like mad on services.
|
| [1] https://www.reuters.com/business/finance/visa-
| quarterly-prof...
| phpisthebest wrote:
| They are not mixed signals, the data we use for signaling is
| flawed for the modern area
|
| Take for example the U-3 unemployment number that you cite,
| what is missing from that is Workforce Participation, we have
| a pretty large drop-off in Work force participation which is
| leading to the false belief that employment is "fine", and
| the quote "mix signal" of being in a recession while still
| having lower unemployment.
|
| Completely absent from most of these older metrics is the
| "gig-economy" which is really screwing with the data IMO.
|
| Then you have U-6 Unemployment increasing while U-3 is
| dropping, I think U-3 is just a few months away from reversal
| and will start increasing soon
|
| >>GDP has long been criticized for being a poor metric for
| the economy.
|
| yes by MMT supporters that want to ignore the classic model
| of economics in favor of monetary manipulation for political
| purposes
| seanmcdirmid wrote:
| > Take for example the U-3 unemployment number that you
| cite, what is missing from that is Workforce Participation,
| we have a pretty large drop-off in Work force participation
| which is leading to the false belief that employment is
| "fine", and the quote "mix signal" of being in a recession
| while still having lower unemployment.
|
| Everyone is still very desparate for employees, so I don't
| think Workforce Participation is low because there aren't
| enough jobs and people are discouraged from the work force.
| Baby boomers are currently aging out of the job market at a
| n accelerated rate, so that must be one of the reasons (U-6
| doesn't include that though). I think the current drug
| disaster is another (a lot of people are simply
| unemployable), but I'm not sure how to measure that.
| kube-system wrote:
| Of course we have a large drop off of workforce
| participation. Baby Boomers are retiring en masse; they're
| reaching retirement age, and many of those who are close
| were offered buyouts to leave early.
|
| It's not the result of decreased hiring due to economic
| slowdown. It's the opposite entirely; this is a
| contributing factor to the labor shortage.
| hedora wrote:
| A reasonable definition of recession is "you can't find a
| job", but, not only are we in the middle of a labor
| shortage, traditional good-economic-times like unionization
| are ramping up, and people are successfully demanding
| raises (and some households are voluntarily moving to
| single incomes).
|
| On the other hand, the stock market is down this year, so
| if that's your definition, things are dire.
|
| Honestly, this seems like stagflation to me, which has been
| historically known for breaking the definition of
| "recession".
|
| Neither side wants to say that out loud, because it implies
| a decade-plus economic funk.
| InefficientRed wrote:
| Descriptions of economic conditions are obviously politicized.
| This was probably always true to an extent, but it really took
| off during the early Obama years.
|
| That said... my wealth manager has been and still is waffling
| when I ask him if we are in a recession. It's NOT just
| political; I don't even know my wealth manager's politics and I
| have absolutely no doubt he puts fiduciary responsibilities
| first and makes fact-based assessments.
|
| Unemployment is low and the trend is mostly flat. Housing is
| doing fine. Consumer balance sheets are strong. Are we entering
| a recession? I think so. But there are a lot of "but"s which
| really do impact how smart and impartial people are thinking
| about where and how to deploy capital.
|
| When I ask my wealth manager "are we in a recession?", he
| basically says "We might be in a recession. We might not be in
| a recession. Either way, we should not invest as if this is a
| typical recession."
|
| Which I think pretty much sums things up.
| camhart wrote:
| > Consumer balance sheets are strong.
|
| Consumer debt is at record highs for overall debt, and
| household credit card debt is climbing towards record levels.
|
| https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/hou.
| ..
|
| https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/con.
| ..
| tfehring wrote:
| The fastest-growing (and largest) category of that debt was
| mortgage debt, which is probably a positive economic
| indicator if anything, though note that that's based on Q1
| data. Household debt servicing costs as a percent of
| disposable income are still lower than at any point between
| 1980 (the earliest data available) and the start of the
| pandemic. https://fred.stlouisfed.org/series/TDSP
|
| Also keep in mind that those debt figures are in nominal
| USD. One positive effect of inflation is that it reduces
| the real cost of paying off debt.
| mym1990 wrote:
| Is this a positive effect? I think it is for lower
| inflation rates, but above a certain threshold the
| borrowing can get out of hand, people will go and get
| more loans, which will drive prices higher. Eventually
| the bubble pops and people go underwater.
| rockemsockem wrote:
| I've seen the word recession thrown around plenty in the press;
| who's avoiding saying it?
|
| As pointed out by another commenter the NBER has never failed
| to declare a recession after two consecutive quarters of GDP
| reduction. This is a preliminary report, I would expect them to
| wait for the full report to actually declare it.
|
| These things work a certain way. Whether that way is good or
| bad isn't relevant to this particular point, by expecting that
| way to change on a whim you're just being impatient.
| seizethegdgap wrote:
| > who's avoiding saying it?
|
| No one is avoiding saying the word "recession". The current
| Executive Branch and Federal Reserve are both avoiding saying
| we are _in_ a recession.
| throwaway6734 wrote:
| The average american does not know the technical definition of
| what a recession is. They just know recessions are bad. Whether
| or not it's acknowledged we're officially in a recession can
| itself have negative economic impacts due to panic.
|
| Also, Powell himself has been iffy about whether or not we're
| in a recession
| tfehring wrote:
| Because for better or worse, while some other countries have
| purely formulaic recession criteria, the US doesn't. This can
| swing either way - the US never experienced two consecutive
| quarters of negative real GDP growth during the 2001 recession,
| for example. No one is denying that real GDP has shrunk for two
| consecutive quarters, they're just correctly pointing out that
| that's not how the US government defines a recession.
|
| My impression is that layoffs have been mostly isolated to tech
| at this point. I do know a couple of recruiters (outside of
| tech) who've been laid off lately, so that could be the canary.
| But my impression is that all of the quantitative labor market
| indicators we have are still strong - likely stronger than
| we've ever seen in a recession.
| mym1990 wrote:
| Hasn't the economy always been part of a political stance? The
| economy is one of the top 2/3 factors that people consider when
| voting, hence being important for re-election. It would be in
| the best interest of anyone trying to run for election to
| strategically paint a good/bad picture of the economy. This has
| been the case probably going back to the 1930s if I were to
| guess.
| MisterBastahrd wrote:
| We have a well established definition for what a recession is,
| and none of it has to do with anecdotes or political grudges.
| rayiner wrote:
| > How did we get to a point where actual data can be outright
| denied or absorbed based on your political viewpoint?
|
| Our elites--I don't mean that pejoratively, but descriptively--
| used to adhere to institutional values. When I joined a
| prominent NYC law firm 10 years ago nobody commented on the
| fact that it was named after someone who argued the pro-
| segregation other side of _Brown v. Board_. The institution,
| not only of the firm but the legal process itself-where even
| segregationists are entitled to their day in court--was a credo
| that transcended individual politics or individual notions of
| "justice" or "human rights."
|
| That flipped sometime in the last decade. Our institutions have
| been overtaken my millenarianism:
| https://en.wikipedia.org/wiki/Millenarianism. It's a belief
| system that transcends institutional values--in the law, the
| media, everywhere.
| s1artibartfast wrote:
| I fundamentally don't understand the argument that we're not in a
| economic recession because employment is high.
|
| This is like saying sure you can't buy as much bread, but at
| least you are working longer.
|
| The fact that more people are working to produce less describes
| an economy in decline.
|
| What am I missing here?
| MaysonL wrote:
| The Sahm Rule real time recession indicator, which has been a
| pretty accurate indicator of recessions since the '60s, is saying
| that we've come out of the pandemic-induced recession, and not
| yet started a new one.
|
| https://fred.stlouisfed.org/series/SAHMREALTIME
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