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By 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 lon

By 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 ago
Also global, not just US or EU alone.
- adventured 4y ago
  Definitely 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 ago
So... what do I do?
- deleted 4y ago
  [deleted]
- jstepka 4y ago
  secure a good job now before the job openings freeze up.
- alchemyromcom 4y ago
  I 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.
- time_to_smile 4y ago
  If people knew we wouldn't be in an economic crisis. There are absolutely no right answers at this point, but there will be in hindsight. Imagine someone in 1999 saying they're going to join Amazon (or even Apple for that matter) it would have seemed crazy and foolish. Some people at Pets.com might have decided to stay put as to not be a new hire at another company doing layoffs. At the same time someone might have left a job a at a bank they hated to start a new career at Pets.com. It's impossible to know in the moment. The trick for both companies and individuals in down turns is adaptability. Some people will say "stay put!" other will say "find your next job quick before it's too late", but you can be sure of neither of these. The only dangerous plan is to try to find stability in unstable times. This is a trap a lot of people fall into. Make sure your resume is up to date, think about what's important to you, and keep any eye on where the world is evolving. A lot of career changes happen during down turns so don't expect to do what you're doing this year next year. This is more true the more severe the situation. The key to survival if it gets that bad is not hesitating to adapt and try something new, this is also the key to finding success in these times if you're looking for more than survival.
- wing-_-nuts 4y ago
  You need an emergency fund. 6 months in savings, preferably another 6 months in ibonds. After a year you can roll the 6mo in savings into another tranche of ibonds. Of course, this may not be necessary if you have 3x your yearly expenses in investments you can cash out if needed, but better safe than sorry.
xyzzyz 4y ago
Smaller run? Such an optimist.
- AnimalMuppet 4y ago
  We had 14% inflation in 1979, and it had been building up to that for decades. No, this isn't going to be as severe as 1980.
encoderer 4y ago
I think this is going to look a lot more like 2001-02 than 1980-82. But in any event it might get worse before it gets better.
- dragonwriter 4y ago
  > I think this is going to look a lot more like 2001-02 You mean Mar-Nov 2001? That’s kind of my fear. Because while it was an extremely mild and short recession in aggregate terms, the recovery afterward had the worst distributional profile of any recovery in recent memory, seeing declines in the bottom three quintiles, the second-from-the-too quintile mostly flat, and almost all the gains concentrated in a very narrow slice at the top of the top quintile, which was a big reason for how bad the Great Recession was. And there is a lot of indication that a 2024-ish recession could see a similar, or even worse, policy environment in the US to the one that produced the bad outcomes of the recovery from the 2001 recession.
  - ars 4y ago
    That's exactly what it will be. Unless we dramatically increase energy usage. By not being permitted to increase energy usage, all the money is being made with capital, instead of physical things, which helps those at the top. The only fields "available" if you will, to making money with are those that are intangible, capital, intellectual property, things like that. And those types of things help those at the top.
  - encoderer 4y ago
    So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? Sure, but I will still take a mild recession over the multi year double dip 1980 variety. Seems like what you are really saying is that you want an 80s style boom recovery - me too!
    - dragonwriter 4y ago
      > So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? No, I’m worried that the recession, even if not severe in aggregate terms, will be the occasion of a policy response that will set us up for an extended period of bad economic experience for most of the population despite a strong aggregate economy culminating in a catastrophic aggregate collapse both caused by and compounding the bad experience of the bulk of the population. Top line aggregate numbers don't capture the general experience of the economy. > Seems like what you are really saying is that you want an 80s style boom recovery No, I am saying (to the extent a recent historic precedent is the model, though I don't expect the specific causes can or should be replicated) I want a 90s style boom recovery; the 80s “boom“, while not as bad as the 2000s expansion in distributional terms, was far worse than the 90s boom (e.g., real hourly wages fell through 1980s expansion, while rising overall—leveling out in the first few years, and rising strongly after—in the 1990s expansion.)
criddell 4y ago
> The recession has already begun. Are you saying it feels like a recession or that we have already had two quarters of declining GDP?
- pfortuny 4y ago
  That is just an irrelevant convention. We are in a recession, whatever the GDP says. Otherwise, language would be impossible.
  - pavlov 4y ago
    What is your definition of recession if not the conventional one?
    - pfortuny 4y ago
      I know when I see it. What is the definition of “being sick”? You can see prices going up, people losing huge amounts of buying power, companies laying off people, all at the same time and almost none of the opposite. Whatever the time it takes, that is a recession.
      - criddell 4y ago
        Or maybe it's stagflation right now and a recession is coming in 2024?
        Apocryphon 4y ago
        Good point, recessions and depressions aren't the only type of economic malaise.
      - pavlov 4y ago
        You don't see anyone hiring in America? Everywhere in New York I see "help wanted" signs. That's the problem with applying "I know it when I see it" to an economy. Anecdotes from our daily lives and viral social media posts don't even begin to tell the full picture of activity among 330 million people. And the aggregate indicators are necessarily lagging.
emodendroket 4y ago
I mean they don’t “have to;” it’s a deliberate policy decision, as it was then, to slow economic growth, increase unemployment, and lower wages, in order to curb inflation and discipline labor. We have a political culture where everyone pretends this is a law of the universe but it isn’t really.
- rayiner 4y ago
  I think it’s more than “political culture” that drives the Fed to not allow its balance sheet to grow indefinitely.
  - emodendroket 4y ago
    You could even agree with the decision but it’s not presented as a decision at all.
- themgt 4y ago
  The Federal Reserve is given a "dual mandate" written into US law by Congress and signed by the President? So not exactly a "law of the universe" but I wouldn't recommend going around arguing you don't "have to" do things if they don't meet that standard. https://www.chicagofed.org/research/dual-mandate/dual-mandate https://www.chicagofed.org/research/dual-mandate/dual-mandat...
  - vlovich123 4y ago
    I’m eagerly looking forward to the logical pretzeling SCOTUS will engage in to pretend Congress can’t delegate regulating making authority to the EPA but it can do this for the FED.
    - jdhn 4y ago
      I for one hope that there's no pretzeling, and that the standard that's applied to the EPA is equally applied to the Fed.
- colechristensen 4y ago
WoahNoun 4y ago
I would be very surprised if it's a mimic of the early 1980's. It's a different employment and consumer spending environment. BoA CEO is fairly optimistic. https://www.cnbc.com/2022/05/24/bank-of-america-ceo-says-nothing-will-slow-us-consumer-from-spending-money.html https://www.cnbc.com/2022/05/24/bank-of-america-ceo-says-not...
- wing-_-nuts 4y ago
  It's the latest recession I know of where the fed raised rates with the explicit purpose of killing inflation. The tricky thing about inflation, is once people start to believe inflation will continue it takes a whole lot of pain to stop the wage / price spiral and convince them otherwise. Let inflation get out of hand, and it's very hard to put back in the bottle.
  - WoahNoun 4y ago
    The 80s was a period of stagflation though and not just inflation. I don't see even the most bearish analysts predicting stagflation. Inflation combined with low unemployment and wage growth is a whole new territory.
melling 4y ago
The unwinding started yesterday https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... The effects of raising interest rates in May take at least 12 months
ren_engineer 4y ago
>smaller lol no, US didn't have 30 trillion in debt last time and didn't have a peer competitor to offer an alternative currency like China. Eventually other countries are going to get tired of subsidizing poor US government decision making and move to something else. The US pulling financial stunts like they did with Russia is making even neutral and allied countries look for alternative or backup financial systems US has to stop inflation which also makes their debt more expensive to manage. Worst case scenario is basically a death spiral. Best case is still vastly lowered living standard for US citizens. our economy has been propped up by massive debt spending that hasn't been efficient at all. Productivity can't be faked using financial tricks, only innovation that boosts productivity matters https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S
- jdhn 4y ago
  >an alternative currency like China Until China is a lot more transparent, the yuan won't be a major reserve currency.
- voz_ 4y ago
  This is a fantasy. China is not even close to a peer competitor if you look at the amount of food insecurity it has. China is hard pegged to the US wether you like it or not. > US didn't have 30 trillion in debt That's not how national debt works, like, at all.
  - ayende 4y ago
    Unless I missed something, China just got the biggest wheat export in the world in its pocket (Russia). And the fifth is Ukraine. That means that food security issue is far less of a problem.
  - ren_engineer 4y ago
    I was talking financially for investment, not in terms of warfare but China won't have many worries about food or energy insecurity now because US sanctions have forced Russia into their arms. China will have all the food and oil they need via Russia and they'll get it cheap >That's not how national debt works, like, at all. rapidly increasing debt with no economic growth is a good thing?
altdataseller 4y ago
I am ignorant. How does the Fed unwinding its balance sheet and raising it rates affect things in the real economy like consumer demand/spending, unemployment, production?
- dragonwriter 4y ago
  In simple terms, all those things make borrowing more expensive, reducing effective money supply and aggregate demand, slowing the economy (and inflation), while loose money policies do the opposite. That's pretty much the whole point of Fed monetary policy, balancing the desire for price stability (low volatility) and low inflation with that for full employment by moving the right money vs. loose money lever. (Fine tuning distributional impacts is not their job, but retained by Congress which has more levers to pull, but unfortunately Congress tends to be asleep at the switch on economic policy when they aren't actively pushing in the wrong direction.)

xvilka 4y ago

Also global, not just US or EU alone.

adventured 4y ago
Definitely 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 ago

So... what do I do?

deleted 4y ago
[deleted]
jstepka 4y ago
secure a good job now before the job openings freeze up.
alchemyromcom 4y ago
I 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.
time_to_smile 4y ago
If people knew we wouldn't be in an economic crisis. There are absolutely no right answers at this point, but there will be in hindsight. Imagine someone in 1999 saying they're going to join Amazon (or even Apple for that matter) it would have seemed crazy and foolish. Some people at Pets.com might have decided to stay put as to not be a new hire at another company doing layoffs. At the same time someone might have left a job a at a bank they hated to start a new career at Pets.com. It's impossible to know in the moment. The trick for both companies and individuals in down turns is adaptability. Some people will say "stay put!" other will say "find your next job quick before it's too late", but you can be sure of neither of these. The only dangerous plan is to try to find stability in unstable times. This is a trap a lot of people fall into. Make sure your resume is up to date, think about what's important to you, and keep any eye on where the world is evolving. A lot of career changes happen during down turns so don't expect to do what you're doing this year next year. This is more true the more severe the situation. The key to survival if it gets that bad is not hesitating to adapt and try something new, this is also the key to finding success in these times if you're looking for more than survival.
wing-_-nuts 4y ago
You need an emergency fund. 6 months in savings, preferably another 6 months in ibonds. After a year you can roll the 6mo in savings into another tranche of ibonds. Of course, this may not be necessary if you have 3x your yearly expenses in investments you can cash out if needed, but better safe than sorry.

xyzzyz 4y ago

Smaller run? Such an optimist.

AnimalMuppet 4y ago
We had 14% inflation in 1979, and it had been building up to that for decades. No, this isn't going to be as severe as 1980.

encoderer 4y ago

I think this is going to look a lot more like 2001-02 than 1980-82. But in any event it might get worse before it gets better.

dragonwriter 4y ago
> I think this is going to look a lot more like 2001-02 You mean Mar-Nov 2001? That’s kind of my fear. Because while it was an extremely mild and short recession in aggregate terms, the recovery afterward had the worst distributional profile of any recovery in recent memory, seeing declines in the bottom three quintiles, the second-from-the-too quintile mostly flat, and almost all the gains concentrated in a very narrow slice at the top of the top quintile, which was a big reason for how bad the Great Recession was. And there is a lot of indication that a 2024-ish recession could see a similar, or even worse, policy environment in the US to the one that produced the bad outcomes of the recovery from the 2001 recession.
- ars 4y ago
  That's exactly what it will be. Unless we dramatically increase energy usage. By not being permitted to increase energy usage, all the money is being made with capital, instead of physical things, which helps those at the top. The only fields "available" if you will, to making money with are those that are intangible, capital, intellectual property, things like that. And those types of things help those at the top.
- encoderer 4y ago
  So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? Sure, but I will still take a mild recession over the multi year double dip 1980 variety. Seems like what you are really saying is that you want an 80s style boom recovery - me too!
  - dragonwriter 4y ago
    > So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? No, I’m worried that the recession, even if not severe in aggregate terms, will be the occasion of a policy response that will set us up for an extended period of bad economic experience for most of the population despite a strong aggregate economy culminating in a catastrophic aggregate collapse both caused by and compounding the bad experience of the bulk of the population. Top line aggregate numbers don't capture the general experience of the economy. > Seems like what you are really saying is that you want an 80s style boom recovery No, I am saying (to the extent a recent historic precedent is the model, though I don't expect the specific causes can or should be replicated) I want a 90s style boom recovery; the 80s “boom“, while not as bad as the 2000s expansion in distributional terms, was far worse than the 90s boom (e.g., real hourly wages fell through 1980s expansion, while rising overall—leveling out in the first few years, and rising strongly after—in the 1990s expansion.)

criddell 4y ago

> The recession has already begun. Are you saying it feels like a recession or that we have already had two quarters of declining GDP?

pfortuny 4y ago
That is just an irrelevant convention. We are in a recession, whatever the GDP says. Otherwise, language would be impossible.
- pavlov 4y ago
  What is your definition of recession if not the conventional one?
  - pfortuny 4y ago
    I know when I see it. What is the definition of “being sick”? You can see prices going up, people losing huge amounts of buying power, companies laying off people, all at the same time and almost none of the opposite. Whatever the time it takes, that is a recession.
    - criddell 4y ago
      Or maybe it's stagflation right now and a recession is coming in 2024?
      - Apocryphon 4y ago
        Good point, recessions and depressions aren't the only type of economic malaise.
    - pavlov 4y ago
      You don't see anyone hiring in America? Everywhere in New York I see "help wanted" signs. That's the problem with applying "I know it when I see it" to an economy. Anecdotes from our daily lives and viral social media posts don't even begin to tell the full picture of activity among 330 million people. And the aggregate indicators are necessarily lagging.

emodendroket 4y ago

I mean they don’t “have to;” it’s a deliberate policy decision, as it was then, to slow economic growth, increase unemployment, and lower wages, in order to curb inflation and discipline labor. We have a political culture where everyone pretends this is a law of the universe but it isn’t really.

rayiner 4y ago
I think it’s more than “political culture” that drives the Fed to not allow its balance sheet to grow indefinitely.
- emodendroket 4y ago
  You could even agree with the decision but it’s not presented as a decision at all.
themgt 4y ago
The Federal Reserve is given a "dual mandate" written into US law by Congress and signed by the President? So not exactly a "law of the universe" but I wouldn't recommend going around arguing you don't "have to" do things if they don't meet that standard. https://www.chicagofed.org/research/dual-mandate/dual-mandate https://www.chicagofed.org/research/dual-mandate/dual-mandat...
- vlovich123 4y ago
  I’m eagerly looking forward to the logical pretzeling SCOTUS will engage in to pretend Congress can’t delegate regulating making authority to the EPA but it can do this for the FED.
  - jdhn 4y ago
    I for one hope that there's no pretzeling, and that the standard that's applied to the EPA is equally applied to the Fed.
colechristensen 4y ago

WoahNoun 4y ago

I would be very surprised if it's a mimic of the early 1980's. It's a different employment and consumer spending environment. BoA CEO is fairly optimistic. https://www.cnbc.com/2022/05/24/bank-of-america-ceo-says-nothing-will-slow-us-consumer-from-spending-money.html https://www.cnbc.com/2022/05/24/bank-of-america-ceo-says-not...

wing-_-nuts 4y ago
It's the latest recession I know of where the fed raised rates with the explicit purpose of killing inflation. The tricky thing about inflation, is once people start to believe inflation will continue it takes a whole lot of pain to stop the wage / price spiral and convince them otherwise. Let inflation get out of hand, and it's very hard to put back in the bottle.
- WoahNoun 4y ago
  The 80s was a period of stagflation though and not just inflation. I don't see even the most bearish analysts predicting stagflation. Inflation combined with low unemployment and wage growth is a whole new territory.

melling 4y ago

The unwinding started yesterday https://www.federalreserve.gov/newsevents/pressreleases/monetary20220504b.htm https://www.federalreserve.gov/newsevents/pressreleases/mone... The effects of raising interest rates in May take at least 12 months

ren_engineer 4y ago

>smaller lol no, US didn't have 30 trillion in debt last time and didn't have a peer competitor to offer an alternative currency like China. Eventually other countries are going to get tired of subsidizing poor US government decision making and move to something else. The US pulling financial stunts like they did with Russia is making even neutral and allied countries look for alternative or backup financial systems US has to stop inflation which also makes their debt more expensive to manage. Worst case scenario is basically a death spiral. Best case is still vastly lowered living standard for US citizens. our economy has been propped up by massive debt spending that hasn't been efficient at all. Productivity can't be faked using financial tricks, only innovation that boosts productivity matters https://fred.stlouisfed.org/series/GFDEGDQ188S https://fred.stlouisfed.org/series/GFDEGDQ188S

jdhn 4y ago
>an alternative currency like China Until China is a lot more transparent, the yuan won't be a major reserve currency.
voz_ 4y ago
This is a fantasy. China is not even close to a peer competitor if you look at the amount of food insecurity it has. China is hard pegged to the US wether you like it or not. > US didn't have 30 trillion in debt That's not how national debt works, like, at all.
- ayende 4y ago
  Unless I missed something, China just got the biggest wheat export in the world in its pocket (Russia). And the fifth is Ukraine. That means that food security issue is far less of a problem.
- ren_engineer 4y ago
  I was talking financially for investment, not in terms of warfare but China won't have many worries about food or energy insecurity now because US sanctions have forced Russia into their arms. China will have all the food and oil they need via Russia and they'll get it cheap >That's not how national debt works, like, at all. rapidly increasing debt with no economic growth is a good thing?

altdataseller 4y ago

I am ignorant. How does the Fed unwinding its balance sheet and raising it rates affect things in the real economy like consumer demand/spending, unemployment, production?

dragonwriter 4y ago
In simple terms, all those things make borrowing more expensive, reducing effective money supply and aggregate demand, slowing the economy (and inflation), while loose money policies do the opposite. That's pretty much the whole point of Fed monetary policy, balancing the desire for price stability (low volatility) and low inflation with that for full employment by moving the right money vs. loose money lever. (Fine tuning distributional impacts is not their job, but retained by Congress which has more levers to pull, but unfortunately Congress tends to be asleep at the switch on economic policy when they aren't actively pushing in the wrong direction.)