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We're also 9 years away from the end of the last recession. The longest we've gone without a recession in the past 100 years is 10 years.
by saudioger 8y ago
We're also 9 years away from the end of the last recession.
The longest we've gone without a recession in the past 100 years is 10 years.
- ProAm 8y agoIt helps that we've been at war for ~17 years straight and are still largely quantitatively easing things.
- ChrisLomont 8y agoWars don't tend to grow economies, and QE stopped in 2014.
- ProAm 8y agoQE stopped in 15, but the balance sheets were still full of them until the end of last year, we are just starting to get out of the effects of QE and to see how things will really look over the next few years [q] And war is very profitable and keeps money circulating, may not grow and economy but it will sure stabilize it while there are people to kill and things to break. [q] https://www.cnbc.com/2017/11/24/the-fed-launched-qe-nine-years-ago--these-four-charts-show-its-impact.html https://www.cnbc.com/2017/11/24/the-fed-launched-qe-nine-yea...
- ChrisLomont 8y agoThat article does not state QE purchases were made in 2015. QE "Purchases were halted on 29 October 2014" [1] [1] https://en.wikipedia.org/wiki/Quantitative_easing#US_QE1,_QE2,_and_QE3 https://en.wikipedia.org/wiki/Quantitative_easing#US_QE1,_QE...
- chrisfinazzo 8y agoTell me again how WWII didn't end the Depression because of the massive demand for workers and the associated economic activity they generated? Confused...
- ChrisLomont 8y agoCherry picking one case where one economy entered a war in a depression and exited out of a depression ignores all the other cases where wars made a country poorer. Tell me again how WWII helped all the various economies involved and was not a net loss to the majority of them? Confused...
- monocasa 8y agoThey do if you win, and don't fight the war on your own soil.
- ChrisLomont 8y agoNot even necessarily then. Wars divert resources such as metals, chemicals, food, to be consumed overseas instead of in better economic activity. The US has been in wars for decades, adding trillions to the current debt and trillions more to future liability. Those trillions spent on infrastructure, science, education, etc., would have had a far better effect on the lives of people in the US than spending it on wars. Think of the amount - trillions already spent on war. And trillions more in debt because of it.
- tastythrowaway 8y agoWe've been in armed conflict somewhere or another for over a century straight
- deleted 8y ago[deleted]
- ChrisLomont 8y agoConversely, over the last hundred years, the length between recessions has been increasing, especially compared to the previous century. [1] https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...
- kirbypineapple 8y agoWe'll likely have an inverted yield curve before the end of 2018 for sure. Go back in history to see the correlation to past recessions: https://fred.stlouisfed.org/series/T10Y2Y https://fred.stlouisfed.org/series/T10Y2Y Obviously it's not as simple as that but it certain implies that something uncommon is happening in the financial markets.
- maxlybbert 8y agohttps://www.federalreserve.gov/econres/notes/feds-notes/dont-fear-the-yield-curve-20180628.htm https://www.federalreserve.gov/econres/notes/feds-notes/dont...
- kirbypineapple 8y agoThanks for this counterpoint, it provides solid context for the data!
- maxlybbert 8y agoIt’s from the Federal Reserve, so people may discount it either from a belief the Fed doesn’t know what it’s doing, or a belief the Fed is biased in how it sees things. But I was happy when it showed up recently. It provides a good explanation about the yield curve and a more specific way to look at things.
- lesss365 8y agoAlso a correlation between low unemployment and past recessions. It's looking pretty grim...
- quotemstr 8y agoOne wonders about the extent to which this correlation is a self-fulfilling prophesy. If everyone gets skittish when indicators look too good and reduce investment, they end up causing the recession that they predict!
- 8y ago
- adventured 8y agoAustralia has not had a recession since June of 1991. That simultaneously does not mean they can go another two decades without a recession next time, and it does not mean their expansion has to end shortly. There's no rigid guide that the US expansion has to end anytime soon just because ten years was the longest expansion in the prior century. Perhaps this one will last 19 years and set a new benchmark, who knows (answer: nobody).
- rusk 8y agoThere was a wobble around about 2k just after the olympics and just before the mineral boom.
- oblio 8y agoAustralia had (has?) the benefit of feeding China (both actual food and minerals and other resources). At some point China will grow like a normal country.
- saudioger 8y agoNo one said it's a rigid guide, it's just a bit of a signpost. Could we double or triple the length between recessions? Sure, but I doubt it.
- shams93 8y agoGoes to show that Obama did much better than he was often given credit for. While Obamacare fell fall short of the medicare for all that is needed by business - imagine not having to worry about covering healthcare for employees for your startup - his overall job of captaining the ship through incredibly hard times was very successful.
- canada_dry 8y agoThis. Sadly, it's highly likely that the current administration will - of course take credit - but more importantly - reap all the rewards (i.e. votes) in the next federal election. I still am amazed at how Obama pulled the US from the brink of utter financial collapse shortly after taking office. Hopefully the next incoming administration will be as lucky.
- jazzyk 8y agoHe did not pull us out of anything - just delayed the inevitable and prolonged the mis-mangement of the monetary policy by the Fed (with cooperation coming from other central banks). The public debt almost doubled from 11T to 20T during his presidency). He also created moral hazard by not only NOT prosecuting people who he himself called "fat cats of Wall Street", but actually continuing to bail them out (started by W. Bush)
- skookumchuck 8y agoIf the market goes up under Trump, Obama gets the credit. If the market goes down under Trump, Trump gets the blame.
- null000 8y agoMore like, if the market continues the upward trajectory it had under Obama, he gets the credit for establishing that trend. If Trump does something stupid to upset that trend (ill advised tax cuts or tariffs, for instance) he gets the blame. He'd get the credit if he meaningfully accelerated the growth we saw under Obama, but outside of a short bump after the tax cuts that saw a predictable correction shortly thereafter, he hasnt. It's worth noting I do blame Obama era policies for wage and working condition stagnation/deterioration, which is the thing I actually care about (gdp and unemployment numbers are basically pointless if people who have jobs are living in third world conditions). That said, I have zero hope that the current administrations policies will reverse that trend in any way.
- User23 8y agoPast performance is no guarantee of future results.
- throwawaymath 8y agoBut it is a reasonable indicator. In the absence of superior evidence, it is better to intelligently work from past data than it is to throw darts.
- User23 8y agoNo, it isn't. Throwing darts is probably actually a better way to make predictions about a stochastic process than naive chartism.
- throwawaymath 8y agoI'm not going to rehash the finer points of a debate that stubbornly refuses to die among armchair economists online. But for the benefit of everyone else reading this thread: 1. The market, and the macroeconomic system in general, is not a purely stochastic process. This is a meme. 2. If by "naive chartism" you mean technical analysis, then sure, I agree. But if you're attempting to reduce the entirety of academic and industrial economic theory and practice to "naive chartism", then your middle brow dismissal here is both incorrect and breathtakingly arrogant. Our entire economic system is predicated on the idea that there exist inefficiencies that can be profitably capitalized on through cause and effect. No one professionally or academically familiar with this idea claims it's a guarantee, but they also don't dismiss the concept of past data being a useful but imperfect measurement for the future state of things. Even Fama walked back from the strong EMH, and to claim that we can derive no insight about the future from the past is to utterly dismantle everything we know about the credit debt cycle and market macrostructure. If you'd like to believe that then more power to you, but implicit in that belief is a fair amount of hubris.
- User23 8y agoYou appear to be making an effort to come off as intelligent and I thought you might like to know that your accusations of arrogance when your post drips with it seriously undermines that. You fail to grasp a fundamental reality: data about the past can only tell us about the past. Data about the present can be useful for making predictions. Some of it is so useful that using it is criminally prosecuted by the SEC. By "naive" I mean any approach that relies solely on trends rather than an actual understanding of underlying causal factors. Sadly there are so many of those factors that a correct analysis is virtually impossible, but that's no excuse not to try since some factors tend to dominate others and those can sometimes be found. https://s3.amazonaws.com/gurufocus_userupload/508204100.jpg https://s3.amazonaws.com/gurufocus_userupload/508204100.jpg
- InclinedPlane 8y agoDon't forget the N active trade wars we're in right now. Historically those have been bad for economic growth.
- LordHumungous 8y agoYeah and full employment is also a recession predictor