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People have been saying this since 2015. While the conditions for debt refinancing have certainly changed, it's not clear by any means that this is the sort of
by zjaffee 8y ago
People have been saying this since 2015. While the conditions for debt refinancing have certainly changed, it's not clear by any means that this is the sort of problem that would cause any sort of cascading recession all at once.
- jcranmer 8y agoThere's a great saying... economists have predicted the last 7 of 5 recessions. A more interesting question to ask is why we shifted from the student loan crisis to corporate debt as the very-definite-hiding-in-plain-sight cause of the impending crash.
- anongraddebt 8y agoMy two cents: (Full disclosure. Not an economist) The great depression seemed to have ~5-8 primary causes to it. These causes came from many different directions and converged on a single year (or handful of years) in time. Since then, the recessions we've had have seemed to have occured due to a single or unitary primary cause. That is, they did not seem like the convergence of a multitude of quite distinct causes. A problem here is how fine a line you draw between separate causes. On one interpretation, there was a convergence of a multitude of causes leading up to 2008. The only thing I will say here is that the multitude of causes for 2008 seem much fewer in number and distinctness than 1929, and our present situation feels more similar - in that way - to 1929 than 2008.
- onlyrealcuzzo 8y agoRay Dalio is saying our current situation most closely resembles 1937, and 2008 most closely resembled 1929.
- aaronblohowiak 8y agoSource? I’d love to learn more
- onlyrealcuzzo 8y agohttps://www.principles.com/big-debt-crises/ https://www.principles.com/big-debt-crises/
- anongraddebt 8y agoInteresting. I would very much love for him to be right.
- dpc_pw 8y ago1939
- anongraddebt 8y ago[Insert healthiest year for American economy ever]
- zjaffee 8y agoIt's really odd that he says that considering how different unemployment is today compared to 2008, where as in 1937 unemployment had consistently been bad starting back in 1929.
- orblivion 8y agoPeter Schiff and Ron Paul have been saying this since 2008. I used to believe them. I stopped when the fed ended QE and started raising rates despite Schiff's predictions.
- UncleEntity 8y agoSome might say the end of QE and the forced budget cuts due to the Tea Party shenanigans is the reason the predictions didn't come true... --edit-- I also find it amusing, in an ironic sort of way, how the Austrians get a bunch of flack for not accurately predicting future events when large parts of their economic theory is based upon not being able to predict future events.
- sonnyblarney 8y agoIt's a very dry patch of grass waiting to be lit by something like a set of defaults in Asia which sets of a minor panic elsewhere.
- pishpash 8y agoThere have been corporate defaults in Asia since 2015-2016. This looks more like a soft landing at this point, unless Powell decides to keep tightening. But all signs point to this rate-raising cycle being over, and in anticipation of that, financial conditions have already substantially eased just in the last couple of months.