7 ms·

Anticipating vaccine, forecast expects recovery to begin in spring 2021

52 points by wikibob 6y ago

burnthrow 6y ago
Part of it will be the Biden admin. rolling back Trump's trade wars. They've weighed on the economy.
wikibob 6y ago
The UCLA press release on the report: https://newsroom.ucla.edu/releases/ucla-anderson-forecast-better-than-expected-sept-2020 https://newsroom.ucla.edu/releases/ucla-anderson-forecast-be... Seeking alpha disagrees: https://seekingalpha.com/article/4393503-roaring-20s-fundamental-problem-of-bullish-view https://seekingalpha.com/article/4393503-roaring-20s-fundame...
- kitotik 6y ago
  A few key points from the seeking alpha article that seem to not get the attention they deserve: - “over the last decade, as the Federal Reserve and government have pumped more than $36 trillion into the economy” - “for each dollar of economic growth since 2008, it required $12.67 of monetary stimulus” - “during the last decade, economic ‘growth’ was a function of population growth“
  - 01100011 6y ago
    I usually ignore Seeking Alpha since it generally appears to be a blog for randos to spout their half-baked opinions but I think that's worth a read. The bailouts seem to be removing some features, some better and some worse, of capitalism without giving any of the benefits of central planning. It will take decades to fully appreciate the effects I think. As much as I really want to be a pessimist, I've been starting to wonder if a better outcome is possible. I think it was an article in the recent issue of the Economist which suggested that the disruption due to COVID-19 may actually cause long-term productivity gains by forcing inefficient processes to die. I am cautiously optimistic that this may be the case. I'm not quite ready to enter the market yet. It is far too volatile and may see an overdue correction before or around the new year. I will probably get back in, albeit in a balanced fashion due to being 45, early next year. Yes, timing the market vs time in the market. I'm willing to take that chance.
- burnthrow 6y ago
  Seeking Alpha doesn't "disagree", they host literally every market view.
mark-r 6y ago
This seems far too optimistic on its face. Even if COVID were to disappear tomorrow, real economic damage has already occurred. That damage isn't going to disappear just because it stops getting worse. The people who lost their jobs aren't going to start buying flights and hotel reservations for their next vacation, or even start going back out to restaurants.
- dhnajsjdnd 6y ago
  The economy has contracted substantially. This report projects growth from this lower base. That will leave an output gap between where we would have been sans pandemic (if growth had continued normally) and where we are. That effects you describe make up that output gap.
  - mark-r 6y ago
    I still assert that the damage done limits the potential growth rate. It's going to be baby steps in the beginning.
- yagi_baba 6y ago
  Odds are the stock market comes back, CARES put in a decent amount of backstops for things like the mortgage industry and other 'big' sectors do they'll have available capital as we come out of this to start doing things that make their stocks more attractive. Also generally speaking good odds that industries like airlines and such can successfully lobby for more bailouts. So I buy the S&P will be up and we'll just all be ignoring the total gutting of small businesses. Plus if say you're a chain restaurant right now, the future probably looks bright. You had the credit to weather a year of takeout only. Meanwhile three of the four family restaurants nearby that you competed with are dead and gone. Basically very few folks who trade on the S&P went out of business, but a lot of their competitors did. Sure you'll have an entire cohort of newly impoverished that can't spend, but a bunch of your competitors went away. Going to be one of those summers where my ETFs are going up at the same time the food pantry is seeing record usage.
  - 6y ago
Mediterraneo10 6y ago
Perhaps things will come roaring back in the USA quickly – the linked article is very American-centric. But considering that some European governments have been hinting that COVID restrictions will last throughout 2021, since it will take all of next year to vaccinate a large enough portion of the population to stem infections, are there any grounds for claiming a worldwide economic recovery before 2022?
- tonyedgecombe 6y ago
  I suspect they will only need to vaccinate the most vulnerable before things start opening up again. Once hospitalisation rates fall restrictions will get lifted.
  - Mediterraneo10 6y ago
    Vaccinating just the vulnerable isn't enough for some countries, they want full herd immunity. For example, the Polish minister of health gave a press conference last week in which he said that restrictions cannot be lifted until half of the country's population has been vaccinated, and he expects that to take all of 2021. I suspect that he was only saying out loud what other EU countries have been tacitly planning for.
    - tonyedgecombe 6y ago
      Once hospitalisation rates fall the press will be all over them if they don't open up. Most of Western Europe has been struggling to get people to comply as it is.
      - Mediterraneo10 6y ago
        Last spring I might have agreed, but mass resistance to restrictions never materialized. Protests have never attracted more than a fringe of conspiracy theorists etc. As for the press, the media in Poland is nearly wholly controlled by the government, and so will not necessarily challenge the minister of health. Then there are countries like Finland where politics is consensus-based, and so is the press, so once all parties have broadly agreed on restrictions, it is unseemly to raise objections. Apparently politicians in many EU countries have decided that they are politically vulnerable if they open up, not if they simply keep the status quo of restrictions going. As for "struggling to get people to comply", actually EU countries have been quite effective in ensuring that restaurants and theatres ordered to close stay closed. There are some countries elsewhere on earth where business owners have been able to bribe the authorities to look the other way, but that doesn't happen in EU countries.
anovikov 6y ago
I hope the pandemic will finally be an eye-opener to many: millions upon millions lost jobs due to a purely non-economic reason, and nothing went broken. Many if not most jobs people are doing today are bs jobs which society doesn't need at all. We have to find ways to end it, to find these people some useful application rather than making them do what they know makes no sense and only exists to keep money moving.
- cmdli 6y ago
  Plenty went broken. People stayed inside, stopped going out to restaurants, stopped practicing their hobbies, stopped traveling to see family. Most people lost their jobs not just because the government ordered them fired, but because most people are currently going without a lot of the things that bring them joy that these workers support.
- est31 6y ago
  I don't think those people would agree that their jobs are bs. Or their customers. Many people like eating out at restaurants. If you don't, then that's your choice, but don't interpolate this to everyone.
- gizmo686 6y ago
  Except that a lot of real value was lost. Many people didn't go on cruises cruises, or visit an amusement park, or go to a theater, or eat at a restaurant, or get a haircut. We haven't noticed the loss of capacity to provide these services because there is a corresponding drop in demand. However, the drop in demand is due entirely to a temporary public health crisis. All else being equal, people much prefer to be able to take advantage of these services, and we are poorer as a society if they are not available. [0] Although, in many cases, the decline could be seen before an official policy was implemented due to individual consumer concerns.
- yardstick 6y ago
  Can you give an example of such jobs? All I can think of are retail and hospitality employees whose jobs are normally very much useful. Cooks. Waitresses. Sales assistants. Tour guides. Bus drivers. To name a few.
jackcosgrove 6y ago
> Feler expects the housing market to remain hot through at least 2023, with housing starts already at their highest levels since 2007. I am skeptical of this. A lot of housing demand was pushed back during the first half of 2020. I don't think the pushed back demand was enough to last three years. Also there are many homeowners who are unable to service their mortgages now. Once assistance for these people expires, there will be a wave of foreclosures. I think the latter half housing demand in 2020 was due to pent-up demand as well as extraordinary measures shoring up mortgage holders, thus preventing more supply coming onto the market. I don't see either trend continuing into 2023.
- edoceo 6y ago
  Also all the dead people, they don't need houses anymore either.
  - votepaunchy 6y ago
    Though increased immigration under the Biden administration.
- 01100011 6y ago
  If the wave of foreclosures is significant enough, there will be a wave of bailouts. Everyone gets a trophy now.
malikNF 6y ago
Tiny, OT complain. As someone from a country/region where we basically have one long summer every day, it's a little bit confusing when articles like this mention seasons instead of months.
- LeonB 6y ago
  If the heading said “US Economic recovery” instead of just “recovery” it would remove several layers of ambiguity in that heading, including the one you mention.
- oehtXRwMkIs 6y ago
  I imagine it's also annoying for those in the Southern Hemisphere.
  - joegibbs 6y ago
    As an Australian it was annoying at first, but after reading enough international headlines it’s pretty much just automatic to replace spring with autumn, etc in international articles.
- simonebrunozzi 6y ago
  Which country is it?
- 627467 6y ago
  I guess surviving on headines alone can be confusing
jb775 6y ago
It's kind of scary that the stock market just hit an all time high, and we're talking about an economic recovery next year. How is the (apparent) disconnect this large?
- refurb 6y ago
  It’s perfectly aligned. One prevailing theory is that stock prices reflect the value of all future earnings (dividends). So stocks go up, not because a company is making more money today, but because people think it will make even more money in the future (than is already accounted for in today’s price).
  - gizmo686 6y ago
    A) Stocks weight near term earnings higher than far future earnings. Both because of the time value of money, and less certainty of future performance. B) Stock prices reflected the future earnings before anyone knew there was going to be a pandemic this year. Even if long term revenue is not effected, stock prices should drop to compensate for the loss in short term revenue
    - refurb 6y ago
      A) Yes, and many stocks dipped then went back up. I guess I’m asking - what stock? Many of the tech companies saw no loss of short term earnings (rather a bump). B) Yes, but future earnings per-pandemic may not match estimated future earnings now. Again, much of the DJIA growth has been driven by tech stocks and their future earning could certainly be better now, with the shift to technology to support WFH.
- otabdeveloper4 6y ago
  Well, liquidity has to go somewhere. The total amount of money isn't shrinking, and is in fact only growing bigger.
- almost_usual 6y ago
  Interest rates are low and investors think the Fed will keep bailing them out so it’s all sunshine in the stock market.
refurb 6y ago
I’m not sure why people try and forecast the future, it rarely works out except for dumb luck. ”It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these Credit Default Swap transactions.” - AIG (2007)
- chewz 6y ago
  _“Prediction is very difficult, especially if it's about the future!”_ - Niels Bohr
just-juan-post 6y ago
"begin"? Sure. Lifestyle restrictions have another 9-12 months. What once started as "two weeks" will turn into almost TWO YEARS.
- kolinko 6y ago
  Any specific reason you think so?
Proven 6y ago
Have these fake experts ever predicted anything but recovery and growth in any of past 12 years? And yet every year we had nothing even close to recovery. Incredible amounts of money printed and spent just to stay in place and delay the inevitable. What a joke! Add to that the damage caused not by Covid19 but by lockdowns and Sleepy Joe behind the wheel and think again. I've no doubt whatsoever that 2021 is going to be awful.

52 points by wikibob 6y ago

Part of it will be the Biden admin. rolling back Trump's trade wars. They've weighed on the economy.

The UCLA press release on the report: https://newsroom.ucla.edu/releases/ucla-anderson-forecast-better-than-expected-sept-2020 https://newsroom.ucla.edu/releases/ucla-anderson-forecast-be... Seeking alpha disagrees: https://seekingalpha.com/article/4393503-roaring-20s-fundamental-problem-of-bullish-view https://seekingalpha.com/article/4393503-roaring-20s-fundame...

kitotik 6y ago
A few key points from the seeking alpha article that seem to not get the attention they deserve: - “over the last decade, as the Federal Reserve and government have pumped more than $36 trillion into the economy” - “for each dollar of economic growth since 2008, it required $12.67 of monetary stimulus” - “during the last decade, economic ‘growth’ was a function of population growth“
- 01100011 6y ago
  I usually ignore Seeking Alpha since it generally appears to be a blog for randos to spout their half-baked opinions but I think that's worth a read. The bailouts seem to be removing some features, some better and some worse, of capitalism without giving any of the benefits of central planning. It will take decades to fully appreciate the effects I think. As much as I really want to be a pessimist, I've been starting to wonder if a better outcome is possible. I think it was an article in the recent issue of the Economist which suggested that the disruption due to COVID-19 may actually cause long-term productivity gains by forcing inefficient processes to die. I am cautiously optimistic that this may be the case. I'm not quite ready to enter the market yet. It is far too volatile and may see an overdue correction before or around the new year. I will probably get back in, albeit in a balanced fashion due to being 45, early next year. Yes, timing the market vs time in the market. I'm willing to take that chance.
burnthrow 6y ago
Seeking Alpha doesn't "disagree", they host literally every market view.

mark-r 6y ago

This seems far too optimistic on its face. Even if COVID were to disappear tomorrow, real economic damage has already occurred. That damage isn't going to disappear just because it stops getting worse. The people who lost their jobs aren't going to start buying flights and hotel reservations for their next vacation, or even start going back out to restaurants.

dhnajsjdnd 6y ago
The economy has contracted substantially. This report projects growth from this lower base. That will leave an output gap between where we would have been sans pandemic (if growth had continued normally) and where we are. That effects you describe make up that output gap.
- mark-r 6y ago
  I still assert that the damage done limits the potential growth rate. It's going to be baby steps in the beginning.
yagi_baba 6y ago
Odds are the stock market comes back, CARES put in a decent amount of backstops for things like the mortgage industry and other 'big' sectors do they'll have available capital as we come out of this to start doing things that make their stocks more attractive. Also generally speaking good odds that industries like airlines and such can successfully lobby for more bailouts. So I buy the S&P will be up and we'll just all be ignoring the total gutting of small businesses. Plus if say you're a chain restaurant right now, the future probably looks bright. You had the credit to weather a year of takeout only. Meanwhile three of the four family restaurants nearby that you competed with are dead and gone. Basically very few folks who trade on the S&P went out of business, but a lot of their competitors did. Sure you'll have an entire cohort of newly impoverished that can't spend, but a bunch of your competitors went away. Going to be one of those summers where my ETFs are going up at the same time the food pantry is seeing record usage.
- 6y ago

Mediterraneo10 6y ago

Perhaps things will come roaring back in the USA quickly – the linked article is very American-centric. But considering that some European governments have been hinting that COVID restrictions will last throughout 2021, since it will take all of next year to vaccinate a large enough portion of the population to stem infections, are there any grounds for claiming a worldwide economic recovery before 2022?

tonyedgecombe 6y ago
I suspect they will only need to vaccinate the most vulnerable before things start opening up again. Once hospitalisation rates fall restrictions will get lifted.
- Mediterraneo10 6y ago
  Vaccinating just the vulnerable isn't enough for some countries, they want full herd immunity. For example, the Polish minister of health gave a press conference last week in which he said that restrictions cannot be lifted until half of the country's population has been vaccinated, and he expects that to take all of 2021. I suspect that he was only saying out loud what other EU countries have been tacitly planning for.
  - tonyedgecombe 6y ago
    Once hospitalisation rates fall the press will be all over them if they don't open up. Most of Western Europe has been struggling to get people to comply as it is.
    - Mediterraneo10 6y ago
      Last spring I might have agreed, but mass resistance to restrictions never materialized. Protests have never attracted more than a fringe of conspiracy theorists etc. As for the press, the media in Poland is nearly wholly controlled by the government, and so will not necessarily challenge the minister of health. Then there are countries like Finland where politics is consensus-based, and so is the press, so once all parties have broadly agreed on restrictions, it is unseemly to raise objections. Apparently politicians in many EU countries have decided that they are politically vulnerable if they open up, not if they simply keep the status quo of restrictions going. As for "struggling to get people to comply", actually EU countries have been quite effective in ensuring that restaurants and theatres ordered to close stay closed. There are some countries elsewhere on earth where business owners have been able to bribe the authorities to look the other way, but that doesn't happen in EU countries.

anovikov 6y ago

I hope the pandemic will finally be an eye-opener to many: millions upon millions lost jobs due to a purely non-economic reason, and nothing went broken. Many if not most jobs people are doing today are bs jobs which society doesn't need at all. We have to find ways to end it, to find these people some useful application rather than making them do what they know makes no sense and only exists to keep money moving.

cmdli 6y ago
Plenty went broken. People stayed inside, stopped going out to restaurants, stopped practicing their hobbies, stopped traveling to see family. Most people lost their jobs not just because the government ordered them fired, but because most people are currently going without a lot of the things that bring them joy that these workers support.
est31 6y ago
I don't think those people would agree that their jobs are bs. Or their customers. Many people like eating out at restaurants. If you don't, then that's your choice, but don't interpolate this to everyone.
gizmo686 6y ago
Except that a lot of real value was lost. Many people didn't go on cruises cruises, or visit an amusement park, or go to a theater, or eat at a restaurant, or get a haircut. We haven't noticed the loss of capacity to provide these services because there is a corresponding drop in demand. However, the drop in demand is due entirely to a temporary public health crisis. All else being equal, people much prefer to be able to take advantage of these services, and we are poorer as a society if they are not available. [0] Although, in many cases, the decline could be seen before an official policy was implemented due to individual consumer concerns.
yardstick 6y ago
Can you give an example of such jobs? All I can think of are retail and hospitality employees whose jobs are normally very much useful. Cooks. Waitresses. Sales assistants. Tour guides. Bus drivers. To name a few.

jackcosgrove 6y ago

> Feler expects the housing market to remain hot through at least 2023, with housing starts already at their highest levels since 2007. I am skeptical of this. A lot of housing demand was pushed back during the first half of 2020. I don't think the pushed back demand was enough to last three years. Also there are many homeowners who are unable to service their mortgages now. Once assistance for these people expires, there will be a wave of foreclosures. I think the latter half housing demand in 2020 was due to pent-up demand as well as extraordinary measures shoring up mortgage holders, thus preventing more supply coming onto the market. I don't see either trend continuing into 2023.

edoceo 6y ago
Also all the dead people, they don't need houses anymore either.
- votepaunchy 6y ago
  Though increased immigration under the Biden administration.
01100011 6y ago
If the wave of foreclosures is significant enough, there will be a wave of bailouts. Everyone gets a trophy now.

malikNF 6y ago

Tiny, OT complain. As someone from a country/region where we basically have one long summer every day, it's a little bit confusing when articles like this mention seasons instead of months.

LeonB 6y ago
If the heading said “US Economic recovery” instead of just “recovery” it would remove several layers of ambiguity in that heading, including the one you mention.
oehtXRwMkIs 6y ago
I imagine it's also annoying for those in the Southern Hemisphere.
- joegibbs 6y ago
  As an Australian it was annoying at first, but after reading enough international headlines it’s pretty much just automatic to replace spring with autumn, etc in international articles.
simonebrunozzi 6y ago
Which country is it?
627467 6y ago
I guess surviving on headines alone can be confusing

jb775 6y ago

It's kind of scary that the stock market just hit an all time high, and we're talking about an economic recovery next year. How is the (apparent) disconnect this large?

refurb 6y ago
It’s perfectly aligned. One prevailing theory is that stock prices reflect the value of all future earnings (dividends). So stocks go up, not because a company is making more money today, but because people think it will make even more money in the future (than is already accounted for in today’s price).
- gizmo686 6y ago
  A) Stocks weight near term earnings higher than far future earnings. Both because of the time value of money, and less certainty of future performance. B) Stock prices reflected the future earnings before anyone knew there was going to be a pandemic this year. Even if long term revenue is not effected, stock prices should drop to compensate for the loss in short term revenue
  - refurb 6y ago
    A) Yes, and many stocks dipped then went back up. I guess I’m asking - what stock? Many of the tech companies saw no loss of short term earnings (rather a bump). B) Yes, but future earnings per-pandemic may not match estimated future earnings now. Again, much of the DJIA growth has been driven by tech stocks and their future earning could certainly be better now, with the shift to technology to support WFH.
otabdeveloper4 6y ago
Well, liquidity has to go somewhere. The total amount of money isn't shrinking, and is in fact only growing bigger.
almost_usual 6y ago
Interest rates are low and investors think the Fed will keep bailing them out so it’s all sunshine in the stock market.

refurb 6y ago

I’m not sure why people try and forecast the future, it rarely works out except for dumb luck. ”It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of these Credit Default Swap transactions.” - AIG (2007)

chewz 6y ago
_“Prediction is very difficult, especially if it's about the future!”_ - Niels Bohr

just-juan-post 6y ago

"begin"? Sure. Lifestyle restrictions have another 9-12 months. What once started as "two weeks" will turn into almost TWO YEARS.

kolinko 6y ago
Any specific reason you think so?

Proven 6y ago

Have these fake experts ever predicted anything but recovery and growth in any of past 12 years? And yet every year we had nothing even close to recovery. Incredible amounts of money printed and spent just to stay in place and delay the inevitable. What a joke! Add to that the damage caused not by Covid19 but by lockdowns and Sleepy Joe behind the wheel and think again. I've no doubt whatsoever that 2021 is going to be awful.