9 ms·

Worst economic crisis since 1930s depression, IMF says

110 points by pmoriarty 7y ago

mLuby 7y ago
And yet the stock market is already recovering. I guess "worst crisis since Great Depression" has been priced in?
- seanmcdirmid 7y ago
  There is always lots of volatility at a bottom. The stock market thought that the Great Depression was over quickly also. At the end of the day, either the market is right or wrong.
  - peteretep 7y ago
    How can the market be wrong?! The market is the market.
    - AnimalMuppet 7y ago
      The market today strongly disagrees with the market yesterday.
      - peteretep 7y ago
        That means the market is volatile, not wrong. For the market to be wrong, there has to be some truth against which the market is being measured, and there is only the market.
    - seanmcdirmid 7y ago
      The market is based on information known by people playing it. That information can be wrong, or at least very inaccurate, meaning the market will be in an incorrect position that will have to be corrected when better information is available. Of course, our information is always imperfect, especially about the future but even about the present, so it is constantly being corrected. So maybe being right or wrong is the wrong way to put it.
    - deleted 7y ago
      [deleted]
- lihaciudaniel 7y ago
  It is unsure if it's the first and last wave
- jonathanjaeger 7y ago
  There were some bull markets within the Great Depression, so like then, maybe the green days aren't here forever and we'll test new lows.. but for some reason I feel like it'll be bad but we'll be more resilient than the Great Depression (eternal optimist!).
- mdgrech23 7y ago
  Give it some time - way to early to say it's recovering. Yes it's gone up, like a lot but that may be temporary.
  - mraudiobook_com 7y ago
    This is how this one's going to go down, it's the insanity of runaway inflation. We'll all be living in million dollar homes but won't be able to afford an avacado.
- voisin 7y ago
  Taking the S&P 500 as an example, it is trading roughly where it was last May, so I guess last May’s optimism was actually “worst crisis since Great Depression” pessimism. /s
- pjmorris 7y ago
  There's a reason for the term 'dead cat bounce.'
  - trhway 7y ago
    especially when it is propelled up by $4T...
    - AnimalMuppet 7y ago
      Dead cat rocket? Sure, it goes up pretty well - until the fuel runs out...
- baby 7y ago
  The increase we’ve seen in the last two weeks make zero sense to me. It’s almost making me lose trust in the market as I feel like it’s rigged. We’re in a complete state of unknown, nobody knows when this will be over, unemployment raises like crazy, the US now realizes that coronavirus is hitting them the hardest...
  - alephnan 7y ago
    It’s rigged insofar that maybe people have insider information we don’t
    - chroem- 7y ago
      There's no downside risk. The USG and Fed will do everything in their power to keep us in a continuous state of "numbers go up." Borrowed billions of dollars to buy your own stock, and now you're underwater? Don't worry! We'll bail you out.
      - monocasa 7y ago
        They're on the edge of what they can do with that and not kick off an inflationary spiral.
        nradov 7y ago
        No one knows where the edge is. Deflation might be a bigger concern right now due to accelerating loan defaults.
        mindslight 7y ago
        "Inflationary spiral" is the explicit policy. The assertions seem to be that stocks must always go up, and housing must always go up. That's inflation. Manufactured goods don't go up as much because they continually cost less to make and distribute, usually through offshoring and consolidation, hollowing out local economies.
        7y ago
- icelancer 7y ago
  If we are focused on job losses (and this article is), then it's a false comparison, since many of these job losses are temporary. Some amount of the contraction should rebound as the disease abates. It's still a massive problem, but the Fed intervening quickly and the fact that many of these jobs are coming back (plus the healthy unemployment payments/bonuses) mean comparing straight up unemployment claims is disingenuous, and the stock market reflects that. Still the SPY500 is down 500 points, which isn't "recovering" yet.
- quickthrowman 7y ago
  The market is pricing in a smooth recovery without a second wave of infection. It is not pricing in how much this will affect the poor, due to a cultural and class disconnect. I bet 50% of residential renters don’t pay rent for May. It seems we’re wildly overextended, but I booked a loss on some short-term puts today so maybe my judgement isn’t the best. I’m still holding longer dated puts because I think we go down, the pre-pandemic economy is gone, we don’t know what’s left. Edit: There were large outflows from equity mutual funds and ETFs last week. The most ever.
  - AznHisoka 7y ago
    Just hearing Powell, members of the Fed and the talking heads in CNBC makes me think they live in some sort of crazy bubble. To think we can bounce back immediately is absolutely bonkers. Half my tenants can’t pay the rent the next few months, some have lost their jobs, layoffs are now happening in non-consumer industries and software spend is mostly halted. Everyone will be cautious in traveling to public venues, let alone spending a lot on frivolous goods for the rest of the year. There just won’t be a quick bounce back. But I guess if you live in the Hamptons and have a nice comfy job interacting with the rich all day, you probably are unaware of all this..
    - sillyconvalley 7y ago
      They don't think we can bounce back, but they sure as hell WANT us to. Why? The market goes up and they profit. Look at what motivates people and then the things they say start to make a lot more sense.
- three_seagrass 7y ago
  It hasn't. The finance industry is full of well-wishers and optimistic people right now. My complete outsider and uneducated hypothesis is that the fund managers are still trying to figure out what to do in this unprecedented crisis and are watching each other like lemmings. While millions go without jobs and we head towards an inevitable spike in bad debt. My wife watches CSPAN in the background and they dance around the phrase "depression" by calling it the D-word in their commentary.
- cloudking 7y ago
  Look at the VIX (volatility index), as long as it remains elevated there is fear in the market that further volatility is expected.
- ravenstine 7y ago
  The stock market isn't the economy. It's related to the economy, but it's not a good measure of how the economy as whole is doing, nor does it say anything about how well the average person benefits from the economy.
- avalys 7y ago
  One major difference between the Great Depression and the current situation is that the government has made it very clear that they will do whatever it takes to soften the economic ramifications of the pandemic. A huge contribution to the Great Depression was the government’s deliberate inaction. “Regarding the Great Depression...we did it. We’re very sorry...we won’t do it again.” - Ben Bernanke, 2002 Normally government intervention in an economic crisis is opposed by one of the two political parties, for whatever reason - often a desire to avoid rewarding “bad behavior” that led to the crisis in the first place. In this case, the only bad behavior was on the part of the government and their total failure to plan for this scenario, and so the entire political spectrum is willing to spend money in order to fix it. So I think there is optimism not just that the health consequences may not be as severe as was originally forecast, but that there is a path and political consensus for the government to manage the economic fallout as well.
- vkou 7y ago
  The printing presses injecting four trillion dollars into it over the past few weeks are to thank for that 'recovery'. The fed is lending money to companies that would otherwise be going bankrupt, and is buying junk bonds from anyone they can. The prior owners of the junk bonds then turn around, and spend that money on buying stocks. It's madness.
- lisper 7y ago
  Stock prices are being propped up in part by easy credit from the Fed, which is a very dangerous position to be in. If investors get spooked at all, the unwinding of this credit bubble will get very ugly very fast. The fact of the matter is that Covid-19 is causing a substantial real loss of productive capacity, and barring some unforeseen breakthrough in treatment options, this is likely to continue for at least a year, possibly two or more. So I'd be very careful not to take too much comfort in the DJIA chart at the moment.
- DennisP 7y ago
  Look at the stock market from 1930 to 1932, and you'll see a series of dramatic upswings, even while the overall trend was steep down.[1] Lots of people lost fortunes trying to jump back in when they saw the market "recovering." I'm not making any particular prediction for this time. I'm just saying, don't get overconfident just because it's going up lately. [1] https://www.macrotrends.net/2484/dow-jones-crash-1929-bear-market https://www.macrotrends.net/2484/dow-jones-crash-1929-bear-m...
- pmoriarty 7y ago
  I'd argue that the market was really slow to crash in the first place. It was obvious for at least a month that the pandemic would have a massive impact on the economy due to China shutting down and the near certainty that it would spread all over the rest of the world and cause massive economic damage and loss of life. Yet the market kept on trucking until it finally crashed. If it had really priced in all that information, it would have crashed way sooner.
- senectus1 7y ago
  ironically the gains made by globalization has made the world more resilient than in the 1930's
- tim333 7y ago
  I'm part of that - I was buying stocks a couple of weeks ago after nothing for ages. My hypothesis was largely that things are peaking and at the time I thought it will be over soon. I'm a little less optimistic now. I don't think we have much danger of the main failing of the great depression - a collapse of the money supply because governments wouldn't step in. They seem pretty willing now but the virus itself remains a problem.
- DiogenesKynikos 7y ago
  Or it's priced in the Federal Reserve buying up trillions of dollars in junk debt: https://www.bloomberg.com/news/articles/2020-04-09/fed-unleashes-fresh-steps-for-as-much-as-2-3-trillion-in-aid https://www.bloomberg.com/news/articles/2020-04-09/fed-unlea....
galacticaactual 7y ago
How a pandemic of this nature was not planned for, war gamed, and drilled until we could gain SOME intuition as to the optimal actions and effects countries should take to avoid economic meltdown while doing the vulnerable population right is beyond me. The U.N. was created to promulgate this kind of cooperation, and here it has utterly failed.
- magicsmoke 7y ago
  The UN was created so countries like the US and USSR could have a forum to talk with each other and avoid nuking the entire world. How well do you think the UN would have helped those two cold war superpowers coordinate on a global pandemic? What you're looking for is a world government, not an international forum.
  - galacticaactual 7y ago
    One would surmise that when such a forum exists, it should be utilized to plan for global events that affect every country, regardless of what the original intentions were of setting it up.
    - magicsmoke 7y ago
      That assumes the countries of the world have enough common understanding and respect for each other to actually create and execute such a plan. They don't.
      - galacticaactual 7y ago
        One of the great things about HN is that ideas are put forth and discussed on how much better the world could be, not simply state how terrible it is.
  - ip26 7y ago
    Or at least some kind of world health authority, e.g. a WHO with teeth. Don't have to have the whole world government part.
noway421 7y ago
'Market learned to smooth out crises, because so many happened' is now least true than ever.
- ekianjo 7y ago
  Let's check how non-capitalistic countries do after the crisis, for good measure.
  - noway421 7y ago
    Not trying to bash capitalism, just saying that volatility never truly goes away.
  - deleted 7y ago
    [deleted]
  - dang 7y ago
    Please don't take HN threads further in a generic ideological direction. That leads to the night in which all cows are black and all threads the same. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- generalpass 7y ago
  > 'Capitalism learned to smooth out crises, because so many happened' is now least true than ever. I didn't notice that statement in the article, but I did notice this one: > Lockdowns imposed by governments have forced many companies to close and lay off staff.
- topspin 7y ago
  Who are you quoting? The only hit Google returns is you, in this thread.
  - noway421 7y ago
    I'm paraphrasing from memory a conversation I had. The gist is that volatility goes away with the time because market learns to anticipate and smooth out the crises, even if it's an unexpected out-of-blue event, since over sufficient enough time it would have happened at least once. Maybe this still holds true, but the time frame for that must be massive.
swsieber 7y ago
At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc. I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over the top. Nowhere have I seen a discussion of where to stop with the measures because of diminishing returns and increasingly negative economic (and indirect human life loss) impact.
- Ididntdothis 7y ago
  I am sure a lot of politicians are struggling with this decision right now.
  - threeseed 7y ago
    Not really. Consensus from almost all countries is that you need to quarantine and shut down the economy in order to beat this. Those that believed that they could get around this with herd immunity are either paying a huge price (UK) or about to (Sweden). And those politicians that took hard measures actually have been rewarded (Australia) and those that didn't punished (UK, US).
    - Ididntdothis 7y ago
      But when do you open up again? We can't keep the lockdown until there are no cases.
      - pmorici 7y ago
        If you use China as a guide they were shut for ~8 weeks and then opened up slowly over the course of a month.
    - logicchains 7y ago
      You conveniently ignore Korea and Taiwan, where the curve has been flattened without shutting down the economy or closing "non-essential" businesses.
TechBro8615 7y ago
Ok, but how noteworthy is this really? I mean, what do people expect to happen when 90% of the human race stops going to work for multiple months? And in the US, the government has incentivized small businesses to furlough employees so they can collect unemployment benefits. I realize that was not Mnuchin’s intention, but it seems to be widespread in the service industry, for example. Because of this, unemployment data is unfortunately meaningless for the time being. I’m optimistic we’ll see this elusive “V shaped recovery.” But we won’t have a clear picture of what this recession really looks like until people are allowed back to work and we can see what the unemployment numbers revert to. That said, I’m also worried about downstream effects like changed habits after quarantine, and avoidance of activities like going out to dinner.
dmfdmf 7y ago
I predicted this 2 weeks ago; https://news.ycombinator.com/item?id=22699657 https://news.ycombinator.com/item?id=22699657 Addendum; With the Fed printing money like there is no tomorrow the US dollar could lose reserve currency status and if that happens then it will make the '29 crash look like a cake walk. Overnight the US standard of living will drop 20-30% and slowly grind even lower over the next decade. Silver lining? It will finally put an end to the parasitic Military Industrial Complex and endless "regime change wars" (as Tulsi Gabbert would say) but also end the welfare state overnight. There will no longer be Magic Monetary Theory money to fight over for either political party. Losing reserve currency status is not a fait accompli at this point so watch the dollar/bond market and price of gold as this will tell the tale. Because there is no real alternative to the dollar at this point, they could still pull a rabbit out of their hat and save the system. Beware that your precious 401K/IRA money is not your money and is the only pile of cash that the politicians can use to slow a dollar sell off. Look for bank bail-ins and mandatory 401K/IRA purchases of US Bonds as cover for Fed bond buying.
yumraj 7y ago
And the market in the US went up today. Are people in denial, algos are driving this, or something else?
- tim333 7y ago
  It's not all bad news out there. Didier Raoult was reporting today the results of testing anyone who turns up and treating with hydroxychloroquine and z-pak. Looks like 0.5% mortality mostly in the over 80s, and the infection rates for Marseille as a whole coming down I think from 350 cases a day to 100 or so, the ICU emptying. I know people are saying it's all unproven but at some point they'll probably say oh look it actually works, kinda.

110 points by pmoriarty 7y ago

mLuby 7y ago

And yet the stock market is already recovering. I guess "worst crisis since Great Depression" has been priced in?

seanmcdirmid 7y ago
There is always lots of volatility at a bottom. The stock market thought that the Great Depression was over quickly also. At the end of the day, either the market is right or wrong.
- peteretep 7y ago
  How can the market be wrong?! The market is the market.
  - AnimalMuppet 7y ago
    The market today strongly disagrees with the market yesterday.
    - peteretep 7y ago
      That means the market is volatile, not wrong. For the market to be wrong, there has to be some truth against which the market is being measured, and there is only the market.
  - seanmcdirmid 7y ago
    The market is based on information known by people playing it. That information can be wrong, or at least very inaccurate, meaning the market will be in an incorrect position that will have to be corrected when better information is available. Of course, our information is always imperfect, especially about the future but even about the present, so it is constantly being corrected. So maybe being right or wrong is the wrong way to put it.
  - deleted 7y ago
    [deleted]
lihaciudaniel 7y ago
It is unsure if it's the first and last wave
jonathanjaeger 7y ago
There were some bull markets within the Great Depression, so like then, maybe the green days aren't here forever and we'll test new lows.. but for some reason I feel like it'll be bad but we'll be more resilient than the Great Depression (eternal optimist!).
mdgrech23 7y ago
Give it some time - way to early to say it's recovering. Yes it's gone up, like a lot but that may be temporary.
- mraudiobook_com 7y ago
  This is how this one's going to go down, it's the insanity of runaway inflation. We'll all be living in million dollar homes but won't be able to afford an avacado.
voisin 7y ago
Taking the S&P 500 as an example, it is trading roughly where it was last May, so I guess last May’s optimism was actually “worst crisis since Great Depression” pessimism. /s
pjmorris 7y ago
There's a reason for the term 'dead cat bounce.'
- trhway 7y ago
  especially when it is propelled up by $4T...
  - AnimalMuppet 7y ago
    Dead cat rocket? Sure, it goes up pretty well - until the fuel runs out...
baby 7y ago
The increase we’ve seen in the last two weeks make zero sense to me. It’s almost making me lose trust in the market as I feel like it’s rigged. We’re in a complete state of unknown, nobody knows when this will be over, unemployment raises like crazy, the US now realizes that coronavirus is hitting them the hardest...
- alephnan 7y ago
  It’s rigged insofar that maybe people have insider information we don’t
  - chroem- 7y ago
    There's no downside risk. The USG and Fed will do everything in their power to keep us in a continuous state of "numbers go up." Borrowed billions of dollars to buy your own stock, and now you're underwater? Don't worry! We'll bail you out.
    - monocasa 7y ago
      They're on the edge of what they can do with that and not kick off an inflationary spiral.
      - nradov 7y ago
        No one knows where the edge is. Deflation might be a bigger concern right now due to accelerating loan defaults.
      - mindslight 7y ago
        "Inflationary spiral" is the explicit policy. The assertions seem to be that stocks must always go up, and housing must always go up. That's inflation. Manufactured goods don't go up as much because they continually cost less to make and distribute, usually through offshoring and consolidation, hollowing out local economies.
        7y ago
icelancer 7y ago
If we are focused on job losses (and this article is), then it's a false comparison, since many of these job losses are temporary. Some amount of the contraction should rebound as the disease abates. It's still a massive problem, but the Fed intervening quickly and the fact that many of these jobs are coming back (plus the healthy unemployment payments/bonuses) mean comparing straight up unemployment claims is disingenuous, and the stock market reflects that. Still the SPY500 is down 500 points, which isn't "recovering" yet.
quickthrowman 7y ago
The market is pricing in a smooth recovery without a second wave of infection. It is not pricing in how much this will affect the poor, due to a cultural and class disconnect. I bet 50% of residential renters don’t pay rent for May. It seems we’re wildly overextended, but I booked a loss on some short-term puts today so maybe my judgement isn’t the best. I’m still holding longer dated puts because I think we go down, the pre-pandemic economy is gone, we don’t know what’s left. Edit: There were large outflows from equity mutual funds and ETFs last week. The most ever.
- AznHisoka 7y ago
  Just hearing Powell, members of the Fed and the talking heads in CNBC makes me think they live in some sort of crazy bubble. To think we can bounce back immediately is absolutely bonkers. Half my tenants can’t pay the rent the next few months, some have lost their jobs, layoffs are now happening in non-consumer industries and software spend is mostly halted. Everyone will be cautious in traveling to public venues, let alone spending a lot on frivolous goods for the rest of the year. There just won’t be a quick bounce back. But I guess if you live in the Hamptons and have a nice comfy job interacting with the rich all day, you probably are unaware of all this..
  - sillyconvalley 7y ago
    They don't think we can bounce back, but they sure as hell WANT us to. Why? The market goes up and they profit. Look at what motivates people and then the things they say start to make a lot more sense.
three_seagrass 7y ago
It hasn't. The finance industry is full of well-wishers and optimistic people right now. My complete outsider and uneducated hypothesis is that the fund managers are still trying to figure out what to do in this unprecedented crisis and are watching each other like lemmings. While millions go without jobs and we head towards an inevitable spike in bad debt. My wife watches CSPAN in the background and they dance around the phrase "depression" by calling it the D-word in their commentary.
cloudking 7y ago
Look at the VIX (volatility index), as long as it remains elevated there is fear in the market that further volatility is expected.
ravenstine 7y ago
The stock market isn't the economy. It's related to the economy, but it's not a good measure of how the economy as whole is doing, nor does it say anything about how well the average person benefits from the economy.
avalys 7y ago
One major difference between the Great Depression and the current situation is that the government has made it very clear that they will do whatever it takes to soften the economic ramifications of the pandemic. A huge contribution to the Great Depression was the government’s deliberate inaction. “Regarding the Great Depression...we did it. We’re very sorry...we won’t do it again.” - Ben Bernanke, 2002 Normally government intervention in an economic crisis is opposed by one of the two political parties, for whatever reason - often a desire to avoid rewarding “bad behavior” that led to the crisis in the first place. In this case, the only bad behavior was on the part of the government and their total failure to plan for this scenario, and so the entire political spectrum is willing to spend money in order to fix it. So I think there is optimism not just that the health consequences may not be as severe as was originally forecast, but that there is a path and political consensus for the government to manage the economic fallout as well.
vkou 7y ago
The printing presses injecting four trillion dollars into it over the past few weeks are to thank for that 'recovery'. The fed is lending money to companies that would otherwise be going bankrupt, and is buying junk bonds from anyone they can. The prior owners of the junk bonds then turn around, and spend that money on buying stocks. It's madness.
lisper 7y ago
Stock prices are being propped up in part by easy credit from the Fed, which is a very dangerous position to be in. If investors get spooked at all, the unwinding of this credit bubble will get very ugly very fast. The fact of the matter is that Covid-19 is causing a substantial real loss of productive capacity, and barring some unforeseen breakthrough in treatment options, this is likely to continue for at least a year, possibly two or more. So I'd be very careful not to take too much comfort in the DJIA chart at the moment.
DennisP 7y ago
Look at the stock market from 1930 to 1932, and you'll see a series of dramatic upswings, even while the overall trend was steep down.[1] Lots of people lost fortunes trying to jump back in when they saw the market "recovering." I'm not making any particular prediction for this time. I'm just saying, don't get overconfident just because it's going up lately. [1] https://www.macrotrends.net/2484/dow-jones-crash-1929-bear-market https://www.macrotrends.net/2484/dow-jones-crash-1929-bear-m...
pmoriarty 7y ago
I'd argue that the market was really slow to crash in the first place. It was obvious for at least a month that the pandemic would have a massive impact on the economy due to China shutting down and the near certainty that it would spread all over the rest of the world and cause massive economic damage and loss of life. Yet the market kept on trucking until it finally crashed. If it had really priced in all that information, it would have crashed way sooner.
senectus1 7y ago
ironically the gains made by globalization has made the world more resilient than in the 1930's
tim333 7y ago
I'm part of that - I was buying stocks a couple of weeks ago after nothing for ages. My hypothesis was largely that things are peaking and at the time I thought it will be over soon. I'm a little less optimistic now. I don't think we have much danger of the main failing of the great depression - a collapse of the money supply because governments wouldn't step in. They seem pretty willing now but the virus itself remains a problem.
DiogenesKynikos 7y ago
Or it's priced in the Federal Reserve buying up trillions of dollars in junk debt: https://www.bloomberg.com/news/articles/2020-04-09/fed-unleashes-fresh-steps-for-as-much-as-2-3-trillion-in-aid https://www.bloomberg.com/news/articles/2020-04-09/fed-unlea....

galacticaactual 7y ago

How a pandemic of this nature was not planned for, war gamed, and drilled until we could gain SOME intuition as to the optimal actions and effects countries should take to avoid economic meltdown while doing the vulnerable population right is beyond me. The U.N. was created to promulgate this kind of cooperation, and here it has utterly failed.

magicsmoke 7y ago
The UN was created so countries like the US and USSR could have a forum to talk with each other and avoid nuking the entire world. How well do you think the UN would have helped those two cold war superpowers coordinate on a global pandemic? What you're looking for is a world government, not an international forum.
- galacticaactual 7y ago
  One would surmise that when such a forum exists, it should be utilized to plan for global events that affect every country, regardless of what the original intentions were of setting it up.
  - magicsmoke 7y ago
    That assumes the countries of the world have enough common understanding and respect for each other to actually create and execute such a plan. They don't.
    - galacticaactual 7y ago
      One of the great things about HN is that ideas are put forth and discussed on how much better the world could be, not simply state how terrible it is.
- ip26 7y ago
  Or at least some kind of world health authority, e.g. a WHO with teeth. Don't have to have the whole world government part.

noway421 7y ago

'Market learned to smooth out crises, because so many happened' is now least true than ever.

ekianjo 7y ago
Let's check how non-capitalistic countries do after the crisis, for good measure.
- noway421 7y ago
  Not trying to bash capitalism, just saying that volatility never truly goes away.
- deleted 7y ago
  [deleted]
- dang 7y ago
  Please don't take HN threads further in a generic ideological direction. That leads to the night in which all cows are black and all threads the same. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
generalpass 7y ago
> 'Capitalism learned to smooth out crises, because so many happened' is now least true than ever. I didn't notice that statement in the article, but I did notice this one: > Lockdowns imposed by governments have forced many companies to close and lay off staff.
topspin 7y ago
Who are you quoting? The only hit Google returns is you, in this thread.
- noway421 7y ago
  I'm paraphrasing from memory a conversation I had. The gist is that volatility goes away with the time because market learns to anticipate and smooth out the crises, even if it's an unexpected out-of-blue event, since over sufficient enough time it would have happened at least once. Maybe this still holds true, but the time frame for that must be massive.

swsieber 7y ago

At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc. I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over the top. Nowhere have I seen a discussion of where to stop with the measures because of diminishing returns and increasingly negative economic (and indirect human life loss) impact.

Ididntdothis 7y ago
I am sure a lot of politicians are struggling with this decision right now.
- threeseed 7y ago
  Not really. Consensus from almost all countries is that you need to quarantine and shut down the economy in order to beat this. Those that believed that they could get around this with herd immunity are either paying a huge price (UK) or about to (Sweden). And those politicians that took hard measures actually have been rewarded (Australia) and those that didn't punished (UK, US).
  - Ididntdothis 7y ago
    But when do you open up again? We can't keep the lockdown until there are no cases.
    - pmorici 7y ago
      If you use China as a guide they were shut for ~8 weeks and then opened up slowly over the course of a month.
  - logicchains 7y ago
    You conveniently ignore Korea and Taiwan, where the curve has been flattened without shutting down the economy or closing "non-essential" businesses.

TechBro8615 7y ago

Ok, but how noteworthy is this really? I mean, what do people expect to happen when 90% of the human race stops going to work for multiple months? And in the US, the government has incentivized small businesses to furlough employees so they can collect unemployment benefits. I realize that was not Mnuchin’s intention, but it seems to be widespread in the service industry, for example. Because of this, unemployment data is unfortunately meaningless for the time being. I’m optimistic we’ll see this elusive “V shaped recovery.” But we won’t have a clear picture of what this recession really looks like until people are allowed back to work and we can see what the unemployment numbers revert to. That said, I’m also worried about downstream effects like changed habits after quarantine, and avoidance of activities like going out to dinner.

dmfdmf 7y ago

I predicted this 2 weeks ago; https://news.ycombinator.com/item?id=22699657 https://news.ycombinator.com/item?id=22699657 Addendum; With the Fed printing money like there is no tomorrow the US dollar could lose reserve currency status and if that happens then it will make the '29 crash look like a cake walk. Overnight the US standard of living will drop 20-30% and slowly grind even lower over the next decade. Silver lining? It will finally put an end to the parasitic Military Industrial Complex and endless "regime change wars" (as Tulsi Gabbert would say) but also end the welfare state overnight. There will no longer be Magic Monetary Theory money to fight over for either political party. Losing reserve currency status is not a fait accompli at this point so watch the dollar/bond market and price of gold as this will tell the tale. Because there is no real alternative to the dollar at this point, they could still pull a rabbit out of their hat and save the system. Beware that your precious 401K/IRA money is not your money and is the only pile of cash that the politicians can use to slow a dollar sell off. Look for bank bail-ins and mandatory 401K/IRA purchases of US Bonds as cover for Fed bond buying.

yumraj 7y ago

And the market in the US went up today. Are people in denial, algos are driving this, or something else?

tim333 7y ago
It's not all bad news out there. Didier Raoult was reporting today the results of testing anyone who turns up and treating with hydroxychloroquine and z-pak. Looks like 0.5% mortality mostly in the over 80s, and the infection rates for Marseille as a whole coming down I think from 350 cases a day to 100 or so, the ICU emptying. I know people are saying it's all unproven but at some point they'll probably say oh look it actually works, kinda.