8 ms·
A recession in America by 2024 looks likely
- paywallasinbeer 4y agohttps://archive.ph/Leqyz https://archive.ph/Leqyz
- xeromal 4y agoI had a friend at Discover who said their (Disovers thoughts) on the next recession was 2017 or 2018. And since COVID hit, people have been yelling recession every month since. At this point, I don't think there's much of a benefit for a regular joe to know when the recession is going to hit. Best bet is to ride it out when it does hit and have a few months (3-9) of savings to ride out the storm if you happen to lose your job.
- Melatonic 4y agoThis is generally good financial advice in even the best of times (and probably longer than 3 months)
- bee_rider 4y agoHaving a year or so of savings seems like a great idea generally, if you can swing it (and once the savings buffer is established, it doesn't require more tending). It switches many financial problems out of the "emergency" class, and emergencies are expensive to deal with. It is sort of like the opposite of an emergency credit card.
- basisword 4y agoIt requires some important tending in the current environment, as that years savings is no longer a years savings. If you're not adding to it as inflation increases and costs rise you're in for a surprise when you need it.
- wing-_-nuts 4y agoIbonds my friend. Ibonds.
- bee_rider 4y agoThat's true, a little is necessary to keep up with inflation. But, qualitatively, 11 months and 12 months are pretty similar, and I suspect lots of people track their expenses imprecisely enough that inflation is in the error bars.
- arberx 4y agoIf you look at what happened in 2017/2018 during the taper tantrum, then yes your friend would have been right but the FED actually kept stimulating.
- xeromal 4y agoI wasn't aware of that, but that's cool info. Thanks for chiming in!
- paxys 4y agoPeople have been predicting the upcoming recession every week since like 2012.
- itsokimbatman 4y agoWell economists have accurately predicted nine of the last five recessions after all!
- christkv 4y agoSeems overly optimistic. I expect the slowdown to hit the EU after summer with layoffs accelerating towards winter. But then I hope I'm wrong.
- wing-_-nuts 4y agoBy 2024? Really? The recession has already begun. It started as soon as the fed started to unwind its balance sheet and raise rates. It will continue so long as the fed has to keep raising rates to get inflation under control. Go back and study the 1980 recession. This is going to be a smaller rerun of that recession. Buckle up everyone, it's going to get worse before it gets better.
- xvilka 4y agoAlso global, not just US or EU alone.
- adventured 4y agoDefinitely global. China is a disaster economically as well. Europe is getting a double shot with Russia and the Ukraine war, energy, trade, war costs, etc.
- monkeybutton 4y agoSo... what do I do?
- deleted 4y ago[deleted]
- jstepka 4y agosecure a good job now before the job openings freeze up.
- alchemyromcom 4y agoI would suggest keeping a good relationship with your current employer and network of business contacts. If you do end up losing your job, a recession is a great time to go back to school for additional training or to get more certification. A short college program with a job placement can especially be helpful. At least, that's how I usually handle recessions. I'm trying to sync my training, so that it finishes at about the same time as the economy is improving.
- fosk 4y agoThis is one of those instances where everybody screams for a market crash and we may just not get it. Too many people are positioned to benefit from a crash right now, which is exactly why it's not going to happen.
- rewtraw 4y agohave you seen the markets lately?
- jonas21 4y agoThe ones that are up 50% over the last 3 years?
- Izkata 4y agoYep, food markets are up, don't think it's that bad yet though.
- neogodless 4y agohttps://imgur.com/a/Fuwnmgn https://imgur.com/a/Fuwnmgn Yup - the growth the past 2 years has been great. Up 33%! Over the past 5 years, 70% growth. Looking at short timelines doesn't tell you much. There's some fear in the investment world, but the market is not "the economy." It's more of an indicator of what's going on in the minds of investors. They might think we're already in a recession, or are heading towards one, that doesn't make it so.
- fullshark 4y agoYep people/firms with money have no where to put it and are salivating at companies becoming bargains after a chaotic summer, greed will overtake fear before you know it.
- walleeee 4y agothe idea that there's nowhere to put capital without a ballooning or nosediving market is a thread in the mental straitjacket that untethered us from reality in the first place there is an ocean of opportunity, it's just that investing in it is less likely to maximize alpha and more likely to benefit all our children and grandchildren at some immediate financial risk to ourselves and direct dependents
- HPsquared 4y agoMeanwhile, in the UK the "real GDP per capita" is still below its 2007 peak, as have a lot of Western economies. In other words, if you count it differently much of the world has been in a sort of "real terms depression" for several years. It's pretty amazing that the US has continued to grow over the last 15 years.
- acchow 4y ago> It's pretty amazing that the US has continued to grow over the last 15 years. Aggressive quantitative easing since 2008, and then a short pause, and then tons more of that in 2020
- deleted 4y ago[deleted]
- wbsss4412 4y agoReal gdp per capita has grown fairly steadily in PPP terms in the UK since 2007, the issue is that the pound has been devalued against the dollar over that period, whereas the dollar is always worth a dollar.
- subsubzero 4y agoThe UK doesn't have Apple, Google, Microsoft, Tesla and every other major tech company, I think tech really gave the US economy a shot in the arm while the rest of the world(besides China?) languished after the 2008 meltdown.
- gigel82 4y agoThis always seems confusing to me. How are we not already in a recession? What specifically must happen to officially declare a recession? My savings (including 401k) have gone down 24% since a year ago. Dinner at a restaurant / UberEats costs 30% - 50% more than a year ago. What else must happen to call it what it is?
- jameshart 4y agoTwo successive quarters of negative economic growth. Stock market valuations and cost of eating out don’t factor into it.
- mtoner23 4y agoRead gdp decrease sustained. And increse in uneployment are good indicators. Not much is budging on either front. The economy is not based on uber eats costs.
- jjeaff 4y agoBut funny enough, the fact that Uber eats costs so much is a factor of how much money people have and are willing to spend on a luxury service.
- mym1990 4y agoIn the US, traditionally it has been marked by 2 consecutive quarters of declining GDP but I think the definition is moving away from that, in part because it is such a lagging indicator, and may not be representative of a lot of other factors within an economy. Generally though we are looking for a couple month period of time in declining employment, GDP, etc...overall health of the economy.
- Izkata 4y agoThe official statement of whether we're in a recession or not comes from the National Bureau of Economic Research, and the definition has been more complicated since at least 2008: https://www.nber.org/news/business-cycle-dating-committee-announcement-january-7-2008 https://www.nber.org/news/business-cycle-dating-committee-an... > The committee places particular emphasis on two monthly measures of activity across the entire economy: (1) personal income less transfer payments, in real terms and (2) employment. In addition, we refer to two indicators with coverage primarily of manufacturing and goods: (3) industrial production and (4) the volume of sales of the manufacturing and wholesale-retail sectors adjusted for price changes. We also look at monthly estimates of real GDP such as those prepared by Macroeconomic Advisers (see http://www.macroadvisers.com http://www.macroadvisers.com). Although these indicators are the most important measures considered by the NBER in developing its business cycle chronology, there is no fixed rule about which other measures contribute information to the process.
- yieldcrv 4y agoDoesn't it only take two quarters of lower GDP growth from the prior two quarters for it to be a recession? Like there is no moving average, there is no high watermark, its such a easy to hit metric that its remarkable we don't have this more often.
- jameshart 4y agoNot lower growth than the previous quarter. Lower GDP.
- formerkrogemp 4y agoExpect this trend of choppy real GDP growth to continue.
- ianferrel 4y agoNot "lower" GDP growth. Negative growth.
- dragonwriter 4y ago> Doesn't it only take two quarters of lower GDP growth from the prior two quarters for it to be a recession? No, the usual rule of thumb is “two quarters of negative GDP growth” not “two quarters of lower GDP growth than the prior two quarters”. (Though for the US, the closest thing to an “official” recession definition—which is neither official nor even government—is “the NBER has declared a recession”, which is done based on multiple dimensions with no explicit criteria.)
- mgh2 4y agoPeople have it backwards. *Will be downvoted due to contrarian view A recession happened in 2008-2009 due to greedy mortgage investments, and the fed stepped in with quantitative easing (QE) to fix it. Yes, many people lost their jobs and houses, but for the next 10 years, the economy recovered and GDP boomed. A pandemic hit in 2020, the fed stepped in w/ QE again. Inflation and war today, fed steps in again w/ quantitative tightening (QT). The masses are always so prone to basic survival instincts of fear (FUD) and greed (FOMO). On the backstage, businessman & financiers take advantage of this psychology for economic gain: selling gold, crypto, ICOs, IPOs, SPACs, pulse oximeters, mortgages, what have you... While these elite brainwash the masses (via search, social media, trad. media, entertainment, etc.), the fed is "demonized" for keeping the country hustling, producing, and growing [1]. Printed money? It is to keep you productive and prevent you from loosing your mind...be grateful for having a government that can step in to help instead of actually stealing from people [2] and having a work culture that can justify/fuel this [3]. As long as these tenets stay, demand for the American dream/way of life/dollars will survive, so take a deep breath... [1] Insider's POV: https://news.ycombinator.com/item?id=31589103 https://news.ycombinator.com/item?id=31589103 [2] https://en.wikipedia.org/wiki/Corruption_Perceptions_Index https://en.wikipedia.org/wiki/Corruption_Perceptions_Index [3] https://news.ycombinator.com/item?id=29903457 https://news.ycombinator.com/item?id=29903457
- colechristensen 4y agoBetween the housing crisis and COVID-19 the Fed never really pulled back, interest rates stayed at almost zero. As a result the economy was overinflated going right into covid and then we had the unusual economic steps during covid and now an enormously larger amount of money in the economy that can only get sucked out with high fed rates or by being inflated away (and can't be justified with growth because actual growth isn't happening anywhere remotely near where the supply of money has grown)
- mgh2 4y agoThe answer is straightforward, as a system (input, output): COVID decreased productivity (lockdowns, deaths, supply chains, etc.), so money was created to recover and boost this loss, to restore the balance [to the force ;D].
- post_break 4y agoIt's hitting for me. My electricity price doubled, gas for the house is up, home insurance up $450 over last year, 401k in the red. I'm cutting back on everything I can because I have to. I don't know how people scraping by are going to survive this. It's not like there aren't jobs, it's just the amount they pay doesn't offset the cost of food or fuel at this point.
- CSMastermind 4y agoThis is the resource I look at for predictions about recessions: https://www.franklintempleton.com/insights/anatomy-of-a-recession#recession-risk https://www.franklintempleton.com/insights/anatomy-of-a-rece... Just sharing because I think it's a helpful tool.
- wuliwong 4y agoThanks, that's a neat tool. What a bummer that wages are the only recession indicator right now. Particularly painful for the average person. :/
- d23 4y agoCool stuff, thanks for sharing.
- ShamelessC 4y agoWould be a lot more helpful if it wasn't trying to access DRM.
- jackallis 4y agoat least not till Apr, 23, if we were to take this[1] to heart. [1]https://www.newyorkfed.org/research/capital_markets/ycfaq#/interactive https://www.newyorkfed.org/research/capital_markets/ycfaq#/i...
- running101 4y agoIf you make a lot of predictions you’re bound to get a few of them correct.