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Atlanta Fed predicts -2.8% GDP

219 points by awnird 2y ago

fabiofzero 2y ago
[flagged]
- brink 2y ago
  [flagged]
H8crilA 2y ago
All due to exports collapse (scroll to the bottom): https://www.atlantafed.org/cqer/research/gdpnow#Tab3 https://www.atlantafed.org/cqer/research/gdpnow#Tab3 May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession.
- JumpCrisscross 2y ago
  Full forecast: https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf https://www.atlantafed.org/-/media/documents/cqer/researchcq...
  - lotsofpulp 2y ago
    It is funny seeing this thread's title compared to the disclaimer right on the title page (specifically that the numbers in this report are NOT an official forecast of the Atlanta Fed): >Note: The Atlanta Fed GDPNow estimate is a model-based projection not subject to judgmental adjustments. It is not an official forecast of the Atlanta Fed, its president, the Federal Reserve System, or the Federal Open Market Committee. Actually, it says that in the first sentence of the second paragraph on OP's link too: >GDPNow is not an official forecast of the Atlanta Fed.
    - rybosworld 2y ago
      Seems like a disclaimer more than anything. GDPNow is a forecast. And it's a forecast coming from the Atlanta Fed. The fact it's not "official" means what exactly?
      - dash2 2y ago
        It means they’re not prepared to stand behind it and stake their reputation on it.
      - JumpCrisscross 2y ago
        > fact it's not "official" means what exactly? It means no humans in the loop. GDPNow is a tracking model designed for reading by experts. In this case, the context is the ISM Manufacturing report recorded a surge of imports while corresponding inventory numbers are still coming in. Once they do, the model will rebalance. To the extent the model is saying something, it’s that we need to watch inventories, particularly in construction.
- toomuchtodo 2y ago
  https://tradingeconomics.com/united-states/exports-by-country https://tradingeconomics.com/united-states/exports-by-countr... https://tradingeconomics.com/united-states/exports/canada https://tradingeconomics.com/united-states/exports/canada https://tradingeconomics.com/united-states/exports/mexico https://tradingeconomics.com/united-states/exports/mexico https://tradingeconomics.com/united-states/exports/china https://tradingeconomics.com/united-states/exports/china https://www.canada.ca/en/department-finance/news/2025/02/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-february-4-2025.html https://www.canada.ca/en/department-finance/news/2025/02/lis...
- AnimalMuppet 2y ago
  > May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession. For those of us not in the know, could you give some more detail? What is 2s10s, what does it mean that it's deinverted, and why is that typically the last stage pre-recession?
  - 0cf8612b2e1e 2y ago
    My searching turned up this: https://www.simplify.us/blog/trading-2s10s-inversion https://www.simplify.us/blog/trading-2s10s-inversion So the difference in 2 year vs 10 year treasury bonds. If they are not trending in the same direction, the near term thinking is that the market is doing poorly.
  - nostrademons 2y ago
    I assume they mean the 2 year Treasury vs. 10 year treasury yield curve (dunno what the s stands for). https://fred.stlouisfed.org/series/T10Y2Y https://fred.stlouisfed.org/series/T10Y2Y Normally long-term bonds have higher interest rates than short-term bonds, because investors need to be paid more money to take the risk of locking up their money for longer time period. The exception is that when you expect interest rates to fall in the near future, it makes more sense to hold long-term bonds, because you lock in today's rates for a longer time period, while the investor that picks up 2 year bonds will have to roll them over at whatever they can get in two years. That bids up the price of long-term bonds, which makes the effective interest rate fall. This situation is called an "inverted" yield curve, because it is the opposite of the normal situation. A "deinverted" yield curve is when you have an inverted yield curve but the difference suddenly goes positive again. That's the situation we're in now, as you can see from the graph. And usually you get into that situation because the scenario investors feared actually happens: short-term interest rates drop, partially as a response from the Fed to inject more money into the economy and stave off the recession, and partially because stocks become very risky in a recession and so investors flee them and go to short-term bonds instead to preserve capital.
    - ummonk 2y ago
      The deinverting isn’t so much due to the Fed injecting money as it is an anticipation the Fed will inject money by cutting rates in the coming future. The 2 year yield drops in anticipation of the Fed dropping interest rates in the next couple years. That’s what makes it a leading indicator.
- whatshisface 2y ago
  After decades of seeing various administrations get blamed for economic downturns that were set up by conditions well preceding their terms, I guess it will be interesting to see what happens now that we're finally heading towards one that actually was caused by a discrete, identifiable policy, all within a couple of months.
  - CamperBob2 2y ago
    Easy enough to forecast: he'll blame Biden, and his cult will lap it up.
    - throwup238 2y ago
      I feel like the defining feature of modern American conservatism is now a pathological inability to distinguish cause and effect.
      - kevin_thibedeau 2y ago
        Critical thinking makes baby Jesus cry.
        MrMcCall 2y ago
        But adult Jesus says, "Whatever you do to anyone, you have done to me." Fakeass Christians don't understand that means undocumented folks, non-white folks, non-Christian folks, women, and folks of other sexual preferences and gender identities. "That which you do to the least of my brothers and sisters, that you do unto me." --Jesus of Nazareth "Love your neighbor as yourself." --Jesus of Nazareth The thing about the "No true Scotsman fallacy" is that the person does have to at least be a Scotsman, if that's what they're calling themself.
        prewett 2y ago
        > folks of other sexual preferences and gender identities Since Jesus was an observant Jew, who explicitly said that not a letter of the Mosaic Law would pass away, I don't think he would be support of sexual "preferences" and "gender identities". The Law pretty much placed everything except sex within marriage as out of bounds, and not only did Jesus uphold the Law, but he even upped the requirements from actions to unexpressed desires. For instance, the Law only required not committing the act of adultery, but Jesus said that even looking at someone lustfully was adultery. So I can't see Jesus being supportive, but rather saying "go and sin no more". Actually, I think Jesus was rather opposed to people who had identities of any sort, since he called people to an identity in himself. He had the harshest words for the Pharisees, who had an identity of "holy". The prostitutes and tax collectors and other "sinners" that Jesus hung out with agreed that they were not keeping the Law and repented of it, but if you've got an identity (that is, it is what you define yourself by), by definition you aren't going to be repentant about it.
- deleted 2y ago
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- throw0101d 2y ago
  > May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession. Perhaps worth noting that Harvey's original paper was about 3-month and 10-year Treasuries, but 2-year is now used by some folks: > To determine whether the yield curve is inverted, it is a common practice to compare the yield on the 10-year U.S. Treasury bond to either a 2-year Treasury note or a 3-month Treasury bill. If the 10-year yield is less than the 2-year or 3-month yield, the curve is inverted.[4][5][6][7] * https://en.wikipedia.org/wiki/Inverted_yield_curve https://en.wikipedia.org/wiki/Inverted_yield_curve * https://people.duke.edu/~charvey/Term_structure/Harvey.pdf https://people.duke.edu/~charvey/Term_structure/Harvey.pdf > Harvey: Flat or inverted yield curves are historically associated with slow economic growth or recessions. I did notice that the yield curve inversion of the 10-year Treasury bond and the 3-month Treasury bill yield curve preceded all four recession since the 1960s. My dissertation committee at the University of Chicago was concerned that this might be a fluke given there were only four recessions. Frankly, I was nervous too because it is well known in science that strong findings become weaker after publication -- or sometimes vanish. However, in my case, this did not happen. Yield curve inversions preceded each of the next three recessions, including the important global financial crisis. * https://www.linkedin.com/pulse/yield-curve-inversion-explained-campbell-harvey https://www.linkedin.com/pulse/yield-curve-inversion-explain...
  - smallmancontrov 2y ago
    I always wondered about the choice of 2 years, it's fascinating to learn that the original choice was 3 months. What motivated the change? Is 3 months so short that it captures "noise" not related to long term planning or something?
    - H8crilA 2y ago
      It's not really clear which one is "objectively better" to look at. The tradeoffs are exactly those that you've listed. But you know, for a given point of time you can look at the entire yield curve - that's what I usually do. And when it comes to plotting you can plot both differences (it's easy to do in FRED, you can do many fun things with time series there).
- hn_throwaway_99 2y ago
  Looking at that graph, though, while exports collapse is certainly the biggest factor, it's not the only one. That is, looking at the March 3rd entry, "Residential Investment" is now negative, and if I'm reading it correctly (I hate it when colors on a graph are too similar) consumer spending is now zero when it was recently quite positive.
JumpCrisscross 2y ago
Not the Atlanta Fed, the Atlanta Fed’s GDPNow model [1]. It’s pretty good [2]. And we are seeing a flattening of 2024’s aggregate wage growth of 4.15%. But the difference in wages is like 0.42% which is indistinguishable from noise. (GDPNow predicted a phantom recession in 2022.) In this case, the model is probably recording a surge in January imports without “an offsetting increase in inventories,” as “that is a lagging indicator” [3]. [1] https://www.atlantafed.org/-/media/documents/research/publications/wp/2014/wp1407.pdf https://www.atlantafed.org/-/media/documents/research/public... [2] https://caia.org/blog/2024/08/15/increased-accuracy-gdp-models-raises-some-questions https://caia.org/blog/2024/08/15/increased-accuracy-gdp-mode... [3] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html?m=1 https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...
- bb88 2y ago
  That's important because it's a pure mathematical model which may be wrong as it cannot take in all influences that drive it.
  - deleted 2y ago
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  - nimish 2y ago
    Ding ding ding "All models are wrong, some are useful"; Why should I care what the ATL Fed's GDPNow model predicts? By all accounts a mathematical model is only as good as its assumptions and we know even the best economic models have spherical cow level assumptions
    - whatshisface 2y ago
      Mathematical models are so inflexible and unresponsive to real-world, commonsense facts, that as far as I know the value of what's in my pocket goes up at the grocery store. What we need is a grounded, grassroots approach to banking that eschews the elitism of sums involving numbers that, as far as anyone knows, are no more real than Plato's perfect spheres.
drivebyhooting 2y ago
Just wondering: If we magically made the federal government 20% more efficient would that decrease GDP substantially?
- JumpCrisscross 2y ago
  > If we magically made the federal government 20% more efficient would that decrease GDP substantially? Not in the long run. (Particularly not if being done in the current deficit-increasing way.)
- CamperBob2 2y ago
  I don't know. If we had a time machine, we could go back to the 1950s and defund government-sponsored education and research programs instead of increasing spending on them, and see how things turn out, GDP-wise. Trouble is, that could easily do enough damage to prevent the invention of our time machine in the far future, or at least seriously delay it. Maybe not such a good experiment after all.
- klodolph 2y ago
  The question is underparameterized. 20% more efficient happens when you accomplish 20% more work with the same amount of money. It also happens when you accomplish the same amount of work with 17% less money. Right now it looks like neither option is happening.
  - ArnoVW 2y ago
    Ah yes but you see, all that government spending was just waste. So in the mind of the administration (or at least their public statements) they have miraculously achieved the second case.
  - Tempest1981 2y ago
    What percent of government spending is due to federal employee payroll? I heard it was 3% to 5%. If so, then 20% layoffs would save < 1%. Unless they have a "trickle down/up" effect? Similar data downthread: https://news.ycombinator.com/item?id=43246891 https://news.ycombinator.com/item?id=43246891
hn_throwaway_99 2y ago
Easy fix for that! Just change the definition of GDP by excluding government spending: https://apnews.com/article/trump-gdp-economy-government-spending-lutnick-7414ba1bd441bd4bf64620bfd66923b2 https://apnews.com/article/trump-gdp-economy-government-spen...
- criddell 2y ago
  There are easier ways. I'll write a poem and sell it to you for $50 trillion and you draw a picture and I'll buy it for $50 trillion from you. We could get this done today and bump GDP by $100 trillion.
  - saulpw 2y ago
    Sales or income tax will be a problem though.
    - onlyrealcuzzo 2y ago
      Not if you sell in a state without income tax. And I imagine someone creative can probably find ways to make this not classify as income.
    - criddell 2y ago
      True. We'll probably have to make the poem and picture about Jesus and do it through our new church in New Hampshire.
    - 0cf8612b2e1e 2y ago
      Solve the deficit at the same time!
    - arunabha 2y ago
      I hear the standard practice is to have the IP of the poem owned by a foreign entity(Ireland is pretty popular) and then for the US entity to pay a royalty of $50 trillion to the foreign entity so that the net revenue in the US is zero. I believe it has it's own name - The double Irish.
psunavy03 2y ago
Hire clowns, get a circus.
- notepad0x90 2y ago
  it's more like the circus hired psychotic villains because they thought it would be funny. The state of things is a direct result of a functioning democracy.
  - mvelbaum 2y ago
    it's more like the previous guys were so bad that people said that the guy the media lied to them about from 2015 until 2024 wasn't that bad after all. - we now see that "bidenomics" was a disaster after the media decided to stop lying about it and blaming the people for not believing "the stats". job numbers revised down massively after it was no longer viable to lie during the election. - crime rates revised silently UP: https://www.realclearinvestigations.com/articles/2024/10/16/stealth_edit_fbi_quietly_revises_violent_crime_stats_1065396.html https://www.realclearinvestigations.com/articles/2024/10/16/... - apparently there was no need for a "bipartisan border bill" or for "congress to act" in order to shut down the border as encounters are down 90% now. people have their panties in a bunch about tariffs, but I don't understand why reciprocal tariffs are so bad. it appears that people here are happy for things to go south just so that they could shit on trump. how about having a bit more optimism for the future, even if the near term will be a bit shakey?
    - timeon 2y ago
      > it's more like the previous guys were so bad that ... Current "guy" used to be previous as well.
    - dalyons 2y ago
      The 25p tariffs on ca and mx are not reciprocal. It’s hard to have optimism when there seems to be no plan to make the economy better, only destruction
    - notepad0x90 2y ago
klodolph 2y ago
This surprises nobody. People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP. Greater economic uncertainty and higher savings rates. Difficult labor market. The only question is the depth and the duration of the dip.
- onlyrealcuzzo 2y ago
  It's interesting that the Great Depression was triggered by tariffs.
  - silveira 2y ago
    https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac... That's what put "Great" in Great Depression. Let's see if this one will be "great again".
  - zippy5 2y ago
    My understanding is that it was more the 9000 bank failures effectively created a credit crunch. Like if a bank closes and there's no replacement, then most small business were unable to get loans. Farmers who couldn't afford to plant new crops, factories can't improve equipment, inventory get's squeezed across the supply chain, ect. Exports were about 5% of GDP, suggesting that maybe tarrifs may have been the trigger but weren't the primary cause of the depression. https://www.sjsu.edu/faculty/watkins/depression.htm https://www.sjsu.edu/faculty/watkins/depression.htm
    - agent281 2y ago
      Then after that, they passed Hawley Smoot Tariff Act to make up for the budget short fall. That caused an already bad situation to get much, much worse.
    - onlyrealcuzzo 2y ago
      Banking crises are largely accounting problems and can - mostly - be fixed from accounting. There will be winners and losers, and many people won't like the result, but it's not going to end in a Great Depression. Tariffs - on the other hand - can break your actual, real, non-financial economy - which cannot be fixed by accounting.
nwiswell 2y ago
I believe this is due to a surge in imports in response to looming tariffs - supply chains are trying to stockpile before they hit. I am skeptical that this stockpiling is significantly displacing real investment. The way that the figures are calculated views imports as a negative factor to GDP (because NET exports is an input to the model). Please correct me if I am wrong. In any event, view the headline with suspicion.
- bryanlarsen 2y ago
  Imports are neutral to GDP. The reason they're subtracted in the standard formula for GDP is that makes it easier to count. GDP = Consumption + Investment + Government Spending + Exports - Imports The reason that imports are subtracted is because Consumption, Government Spending and Exports all have a domestic and imported component. So instead you could have GDP = (Domestically produced consumption) + Investment + (Government spending on domestic products) + (Domestically produced Exports) and not subtract imports. But that's a lot harder to measure than measuring totals and subtracting imports.
  - 827a 2y ago
    Imports may be neutral to GDP, but they aren't neutral to this forecasting model [1] [1] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...
    - bryanlarsen 2y ago
      Yes, they're part of the model because they're not excluded during consumption calculations.
- JumpCrisscross 2y ago
  > this is due to a surge in imports in response to looming tariffs “GDPNow is an excellent tracking model, however, the January surge in imports - especially for gold - caused the model to move negative. As the Atlanta Fed noted: ‘the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points’. Usually there would be an offsetting increase in inventories, but that is a lagging indicator. This is a short-term distortion and will balance out over the next month or so. I don't expect negative GDP in Q1.” [1] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...
Y_Y 2y ago
You know things are bad when you have negative GDP!
- onlyrealcuzzo 2y ago
  With a 6% deficit and growing.
killerteddybear 2y ago
Hey e/acc subset who were pro-Trump because of how much he was recruiting from Silicon Valley, is this the whole massively revitalized economy we were supposed to be getting?
- mikevm 2y ago
  [flagged]
  - skyyler 2y ago
    Is woke in the room with us now?
  - nobunaga 2y ago
    You really love commenting in this thread don’t you? Are you Russian or American? Can’t tell. Either way, americas downfall is Gloria to watch. If you’re Russian, well you can’t really fall further down. lol
  - dralley 2y ago
    How does economic decline "kill woke"?
  - mcphage 2y ago
    Boy are you going to feel silly when the economy tanks and only woke survives.
  - antifa 2y ago
    Self-imposing Great Depression 2.0 just to get revenge on all those black people, women, disabled people, and veterans who dared to infringe on your right to not know they exist.
    - mikevm 2y ago
      [flagged]
      - 2y ago
morkalork 2y ago
https://i.redd.it/9wrb5nbycyle1.jpeg https://i.redd.it/9wrb5nbycyle1.jpeg
cs702 2y ago
Uh-oh. I wonder how all the Ayn Rand acolytes in power today will react to the bad news. Their approach to macroeconomics can be summarized as: first, they always blame bureaucrats for bad economic conditions; and second, they believe that if they can get the bureaucrats out of the way, they need only to inspire people, to get everyone's animal spirits roaring, so the economy can grow, because they believe "growth is a choice." I'm exaggerating, but only slightly. Well, all these Rand devotees are successfully destroying the federal bureaucracy, or at least preventing it from functioning, as they have always dreamed, and they're constantly chanting about making things great again, to inspire people. So far, they're getting everything they want, and yet... here we are, seemingly headed for a recession. Could it be they don't understand things as well as they think they do? It sure could. Alas, they won't want to change their minds. As J. K. Galbraith wrote, "faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." If we indeed have a recession, my best guess is that we'll see them repeatedly calling for more optimism, or something like that.
- killerteddybear 2y ago
  Turns out that one of the best things for a healthy economy is a stable economic infrastructure provided by a reliable government! Not randomly and rapidly disintegrating conditions and unclear directions.
  - EasyMark 2y ago
    Businesses like predictability and if there is change, steady predictable change. Across the board tariffs on our closest trading partners and allies results in recessions and depressions. It doesn't take a genius, it just takes a bunch of yes men and a cult leader.
    - 5PY_HUN73R 2y ago
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    - killerteddybear 2y ago
i_have_an_idea 2y ago
This looks like the work of a team of stable geniuses.
deleted 2y ago
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resters 2y ago
Trump wants lower interest rates. The road to getting there will inevitably involve some pessimistic forecasts. That benefits Trump too because he can say "they all said the economy was going to be bad, but look what I accomplished" when the higher rates heat things up.
stego-tech 2y ago
I'm seeing a lot of "one easy answer" type posts for this data, and I thought I'd contribute my own hypothesis as to why an economic downturn of some sort seems inevitable. Bearing in mind this is grossly oversimplified, and an eensy bit hostile in tone, and written from one of the internet's multitudes of "armchair theorists", so take it all with a healthy dose of skepticism. --- On the one hand, you've got a tech industry so addicted to ZIRP that they've actively been trying to engineer a recession since COVID's interest rate hikes. They don't want to adapt to a new norm of low interest rates, they want zero interest rates so they can take out all the debt they need to justify share buybacks, AI and Quantum investments, and further industry consolidation around infinite services rather than tangible products. To those types of leaders, the pain is the point, and a means to their end of depressing wages and fueling more artificial growth. That said, they're ultimately a drop in the current bucket. Once the current President got elected, businesses immediately began bulk-importing ahead of tariffs to preserve margins, in the hopes they could lobby to get them dropped again like last time. That is not happening, partly because one of their own is President de facto if not President de jure, and this man is rampaging like a petulant toddler through the ranks of the Civil Service. Laying off and outright firing a bunch of workers - surprising absolutely nobody with a basic grasp of economics - has knock-on effects on the larger economy. Those people have bills to pay, and often took lower-paying Civil Service gigs for the stability of the role - something the economy adapted to as dependable and reliable income streams. That image has been irreparably shattered, and Civil Servants are viewed as the same unstable debtor as private sector workers, surviving not even admin-to-admin anymore. This means employers are nervous about their hiring practices, eliminating open roles (the "Job Market Freeze" as it's being called) and not backfilling others, with a prime example being the tech sector refusing to hire developers and claiming AI will replace them. Anyway, so we have tariffs squeezing already-declining consumer demand as COVID surpluses have dried up, a demolished civil servant base (the Federal Government is the single largest employer in the country, and possibly the Earth inclusive of its multitude of other, oft-excluded branches), and an unstable Executive Branch more focused on agendas of hatred and vengeance than sound economic policies. That still only scratches the surface. Compounding the above are asset prices and inflation, both of which I'm going to grossly oversimplify and lump into the "infinite growth" problem category. The only thing holding back the human species from stripmining the entire planet is policy, and that policy has been globally manipulated and hollowed out to funnel cash upward from the working class worldwide. It's not an American problem, and it's not a Capitalism problem (Communist and Feudalist countries have had the exact same issue). By funneling more wealth into fewer hands, there's less avenues for production of goods and services other than "rental" markets (like streaming, or XaaS) - a market segment that's been infamously toxic with bad returns in the long run relative to other investments, though always buoyed by better-than-expected returns in the short-to-mid terms as investors seek market capture through "disruption". Paradoxically, giving consumers the ability to own actually increases economic output to a degree, especially if products are well-made and repairable, by propping up local craftspersons and small businesses; perpetual "rental" services focus that capital into very few hands, and deter such knock-on economic expansion, which ultimately slows growth. And that growth is the problem every country faces right now. The past century (post-WW2 in particular) has been strongly focused on growth at the expense of all else, and that was never sustainable in the long run. Until and unless we actually have (practically) infinite resource extraction, refinement, and re-utilization, infinite growth is functionally impossible - and even then, growth would be limited to the sum total of the value of resources effectively exploited in a closed-loop supply chain. When growth halts or slows, we get recessions as the investor class, greed impossible to satiate even in the best of times, withdraws from markets until such time that new industry or technological innovation creates the illusion of infinite growth yet again. With population growth stagnating (due to wealth inequality - go compare birth rates to wealth inequality ratios historically to see how neatly those two inverse one another), this also threatens systems built with the presumption of infinite growth forever - like government welfare programs based on low taxes and high population/wage growth, rather than higher taxes and fixed benefits. So now we circle all the way back to the beginning, and my hypothesis on the potential recession: * Consumer sentiment is low because people keep getting laid off, wages remain flat, RTO mandates eat away at time and money savings the pandemic created, and asset prices remain unaffordably high for the 90% * Business confidence is low because higher tariffs disproportionately impact American businesses who import most goods, and a dysfunctional Federal Government more focused on tantrums, authoritarianism, and identity politics than effective governance weakens that confidence further since lobbying is no longer a guarantee of outcome * International confidence in American institutions (government and private alike) is decreasing as a result of highly-public meltdowns of both the President de jure and the President de facto, forcing many developed economies to reconsider their business and political relationships with the world's largest economy. * A hollowed out economic core that focused exclusively on services (which can and are continuously outsourced) in lieu of diversity of industry, making it incredibly vulnerable to outside market and political forces * A capital class that believes it can escape any harm by simply relocating elsewhere And that's my position. I'm definitely oversimplifying complex issues for the sake of brevity (economic diversification, asset valuations, the housing crisis, etc), but I think my core position is pretty sturdy.
pcj-github 2y ago
You ain't seen nothing yet. In a few short weeks, Trump imploded the fundamental US brand from good to um, pretty much pure evil. We are untrustworthy backstabbers. Rightly so, people hate us now; they are literally burning the American flag all over the world. USA products and services are toxic items. Not that we make much money off the travel industry, but you'd have to be a complete idiot to vacation in (or really even travel to) the US now. It's going to get really ugly; I don't think people get it yet.
- vladms 2y ago
  I think in various parts of the world people were already quite negative towards US. What happens now though is that some other countries will have second thoughts. I hope enough people can distinguish between one administration and "the people", but trust is hard to gain and easy to loose, so yes, some things will get harder.
  - jghn 2y ago
    The US was already granted its mulligan in 2020. And then 4 years later the populace went and double down on all of this. It won't be so easy going forward.
  - jajko 2y ago
    Countries? My friend right now add there all former US allies, including whole Europe and both your neighbors. Maybe gaining some new like guy from Argentina, Saudis with their murderous chieftain, and of course lets not forget biggest country on Earth by landmass. US is a bully, and extremely unreliable one. We're in a no-trust era now. You will find some sympathizers of him everywhere of course, they mainly align with russian war supporters, at least in Europe. No surprises. All this could reverse eventually but I just don't see it happening. 4 years is painfully long period and things will change forever, and I suspect not in ways 'architects' wish for. God I desperately hope we have at least some leaders with balls in Europe now that can steer adaptation to new situation quickly. We have massive potential at least matching current US one, but incorrect ideology for these times. And I suspect in 4 years situation won't change dramatically, if at all. Remember those times that were, and how they were, how world was. I slightly feels like when 60s hippie era died and one Hunter S. Thompson quote comes to mind.
EB-Barrington 2y ago
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kjs3 2y ago
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5PY_HUN73R 2y ago
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219 points by awnird 2y ago

fabiofzero 2y ago

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brink 2y ago
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H8crilA 2y ago

All due to exports collapse (scroll to the bottom): https://www.atlantafed.org/cqer/research/gdpnow#Tab3 https://www.atlantafed.org/cqer/research/gdpnow#Tab3 May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession.

JumpCrisscross 2y ago
Full forecast: https://www.atlantafed.org/-/media/documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf https://www.atlantafed.org/-/media/documents/cqer/researchcq...
- lotsofpulp 2y ago
  It is funny seeing this thread's title compared to the disclaimer right on the title page (specifically that the numbers in this report are NOT an official forecast of the Atlanta Fed): >Note: The Atlanta Fed GDPNow estimate is a model-based projection not subject to judgmental adjustments. It is not an official forecast of the Atlanta Fed, its president, the Federal Reserve System, or the Federal Open Market Committee. Actually, it says that in the first sentence of the second paragraph on OP's link too: >GDPNow is not an official forecast of the Atlanta Fed.
  - rybosworld 2y ago
    Seems like a disclaimer more than anything. GDPNow is a forecast. And it's a forecast coming from the Atlanta Fed. The fact it's not "official" means what exactly?
    - dash2 2y ago
      It means they’re not prepared to stand behind it and stake their reputation on it.
    - JumpCrisscross 2y ago
      > fact it's not "official" means what exactly? It means no humans in the loop. GDPNow is a tracking model designed for reading by experts. In this case, the context is the ISM Manufacturing report recorded a surge of imports while corresponding inventory numbers are still coming in. Once they do, the model will rebalance. To the extent the model is saying something, it’s that we need to watch inventories, particularly in construction.
toomuchtodo 2y ago
https://tradingeconomics.com/united-states/exports-by-country https://tradingeconomics.com/united-states/exports-by-countr... https://tradingeconomics.com/united-states/exports/canada https://tradingeconomics.com/united-states/exports/canada https://tradingeconomics.com/united-states/exports/mexico https://tradingeconomics.com/united-states/exports/mexico https://tradingeconomics.com/united-states/exports/china https://tradingeconomics.com/united-states/exports/china https://www.canada.ca/en/department-finance/news/2025/02/list-of-products-from-the-united-states-subject-to-25-per-cent-tariffs-effective-february-4-2025.html https://www.canada.ca/en/department-finance/news/2025/02/lis...
AnimalMuppet 2y ago
> May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession. For those of us not in the know, could you give some more detail? What is 2s10s, what does it mean that it's deinverted, and why is that typically the last stage pre-recession?
- 0cf8612b2e1e 2y ago
  My searching turned up this: https://www.simplify.us/blog/trading-2s10s-inversion https://www.simplify.us/blog/trading-2s10s-inversion So the difference in 2 year vs 10 year treasury bonds. If they are not trending in the same direction, the near term thinking is that the market is doing poorly.
- nostrademons 2y ago
  I assume they mean the 2 year Treasury vs. 10 year treasury yield curve (dunno what the s stands for). https://fred.stlouisfed.org/series/T10Y2Y https://fred.stlouisfed.org/series/T10Y2Y Normally long-term bonds have higher interest rates than short-term bonds, because investors need to be paid more money to take the risk of locking up their money for longer time period. The exception is that when you expect interest rates to fall in the near future, it makes more sense to hold long-term bonds, because you lock in today's rates for a longer time period, while the investor that picks up 2 year bonds will have to roll them over at whatever they can get in two years. That bids up the price of long-term bonds, which makes the effective interest rate fall. This situation is called an "inverted" yield curve, because it is the opposite of the normal situation. A "deinverted" yield curve is when you have an inverted yield curve but the difference suddenly goes positive again. That's the situation we're in now, as you can see from the graph. And usually you get into that situation because the scenario investors feared actually happens: short-term interest rates drop, partially as a response from the Fed to inject more money into the economy and stave off the recession, and partially because stocks become very risky in a recession and so investors flee them and go to short-term bonds instead to preserve capital.
  - ummonk 2y ago
    The deinverting isn’t so much due to the Fed injecting money as it is an anticipation the Fed will inject money by cutting rates in the coming future. The 2 year yield drops in anticipation of the Fed dropping interest rates in the next couple years. That’s what makes it a leading indicator.
whatshisface 2y ago
After decades of seeing various administrations get blamed for economic downturns that were set up by conditions well preceding their terms, I guess it will be interesting to see what happens now that we're finally heading towards one that actually was caused by a discrete, identifiable policy, all within a couple of months.
- CamperBob2 2y ago
  Easy enough to forecast: he'll blame Biden, and his cult will lap it up.
  - throwup238 2y ago
    I feel like the defining feature of modern American conservatism is now a pathological inability to distinguish cause and effect.
    - kevin_thibedeau 2y ago
      Critical thinking makes baby Jesus cry.
      - MrMcCall 2y ago
        But adult Jesus says, "Whatever you do to anyone, you have done to me." Fakeass Christians don't understand that means undocumented folks, non-white folks, non-Christian folks, women, and folks of other sexual preferences and gender identities. "That which you do to the least of my brothers and sisters, that you do unto me." --Jesus of Nazareth "Love your neighbor as yourself." --Jesus of Nazareth The thing about the "No true Scotsman fallacy" is that the person does have to at least be a Scotsman, if that's what they're calling themself.
        prewett 2y ago
        > folks of other sexual preferences and gender identities Since Jesus was an observant Jew, who explicitly said that not a letter of the Mosaic Law would pass away, I don't think he would be support of sexual "preferences" and "gender identities". The Law pretty much placed everything except sex within marriage as out of bounds, and not only did Jesus uphold the Law, but he even upped the requirements from actions to unexpressed desires. For instance, the Law only required not committing the act of adultery, but Jesus said that even looking at someone lustfully was adultery. So I can't see Jesus being supportive, but rather saying "go and sin no more". Actually, I think Jesus was rather opposed to people who had identities of any sort, since he called people to an identity in himself. He had the harshest words for the Pharisees, who had an identity of "holy". The prostitutes and tax collectors and other "sinners" that Jesus hung out with agreed that they were not keeping the Law and repented of it, but if you've got an identity (that is, it is what you define yourself by), by definition you aren't going to be repentant about it.
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throw0101d 2y ago
> May still hold true, the 2s10s has recently deinverted, which is typically the last stage pre-recession. Perhaps worth noting that Harvey's original paper was about 3-month and 10-year Treasuries, but 2-year is now used by some folks: > To determine whether the yield curve is inverted, it is a common practice to compare the yield on the 10-year U.S. Treasury bond to either a 2-year Treasury note or a 3-month Treasury bill. If the 10-year yield is less than the 2-year or 3-month yield, the curve is inverted.[4][5][6][7] * https://en.wikipedia.org/wiki/Inverted_yield_curve https://en.wikipedia.org/wiki/Inverted_yield_curve * https://people.duke.edu/~charvey/Term_structure/Harvey.pdf https://people.duke.edu/~charvey/Term_structure/Harvey.pdf > Harvey: Flat or inverted yield curves are historically associated with slow economic growth or recessions. I did notice that the yield curve inversion of the 10-year Treasury bond and the 3-month Treasury bill yield curve preceded all four recession since the 1960s. My dissertation committee at the University of Chicago was concerned that this might be a fluke given there were only four recessions. Frankly, I was nervous too because it is well known in science that strong findings become weaker after publication -- or sometimes vanish. However, in my case, this did not happen. Yield curve inversions preceded each of the next three recessions, including the important global financial crisis. * https://www.linkedin.com/pulse/yield-curve-inversion-explained-campbell-harvey https://www.linkedin.com/pulse/yield-curve-inversion-explain...
- smallmancontrov 2y ago
  I always wondered about the choice of 2 years, it's fascinating to learn that the original choice was 3 months. What motivated the change? Is 3 months so short that it captures "noise" not related to long term planning or something?
  - H8crilA 2y ago
    It's not really clear which one is "objectively better" to look at. The tradeoffs are exactly those that you've listed. But you know, for a given point of time you can look at the entire yield curve - that's what I usually do. And when it comes to plotting you can plot both differences (it's easy to do in FRED, you can do many fun things with time series there).
hn_throwaway_99 2y ago
Looking at that graph, though, while exports collapse is certainly the biggest factor, it's not the only one. That is, looking at the March 3rd entry, "Residential Investment" is now negative, and if I'm reading it correctly (I hate it when colors on a graph are too similar) consumer spending is now zero when it was recently quite positive.

JumpCrisscross 2y ago

Not the Atlanta Fed, the Atlanta Fed’s GDPNow model [1]. It’s pretty good [2]. And we are seeing a flattening of 2024’s aggregate wage growth of 4.15%. But the difference in wages is like 0.42% which is indistinguishable from noise. (GDPNow predicted a phantom recession in 2022.) In this case, the model is probably recording a surge in January imports without “an offsetting increase in inventories,” as “that is a lagging indicator” [3]. [1] https://www.atlantafed.org/-/media/documents/research/publications/wp/2014/wp1407.pdf https://www.atlantafed.org/-/media/documents/research/public... [2] https://caia.org/blog/2024/08/15/increased-accuracy-gdp-models-raises-some-questions https://caia.org/blog/2024/08/15/increased-accuracy-gdp-mode... [3] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html?m=1 https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...

bb88 2y ago
That's important because it's a pure mathematical model which may be wrong as it cannot take in all influences that drive it.
- deleted 2y ago
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- nimish 2y ago
  Ding ding ding "All models are wrong, some are useful"; Why should I care what the ATL Fed's GDPNow model predicts? By all accounts a mathematical model is only as good as its assumptions and we know even the best economic models have spherical cow level assumptions
  - whatshisface 2y ago
    Mathematical models are so inflexible and unresponsive to real-world, commonsense facts, that as far as I know the value of what's in my pocket goes up at the grocery store. What we need is a grounded, grassroots approach to banking that eschews the elitism of sums involving numbers that, as far as anyone knows, are no more real than Plato's perfect spheres.

drivebyhooting 2y ago

Just wondering: If we magically made the federal government 20% more efficient would that decrease GDP substantially?

JumpCrisscross 2y ago
> If we magically made the federal government 20% more efficient would that decrease GDP substantially? Not in the long run. (Particularly not if being done in the current deficit-increasing way.)
CamperBob2 2y ago
I don't know. If we had a time machine, we could go back to the 1950s and defund government-sponsored education and research programs instead of increasing spending on them, and see how things turn out, GDP-wise. Trouble is, that could easily do enough damage to prevent the invention of our time machine in the far future, or at least seriously delay it. Maybe not such a good experiment after all.
klodolph 2y ago
The question is underparameterized. 20% more efficient happens when you accomplish 20% more work with the same amount of money. It also happens when you accomplish the same amount of work with 17% less money. Right now it looks like neither option is happening.
- ArnoVW 2y ago
  Ah yes but you see, all that government spending was just waste. So in the mind of the administration (or at least their public statements) they have miraculously achieved the second case.
- Tempest1981 2y ago
  What percent of government spending is due to federal employee payroll? I heard it was 3% to 5%. If so, then 20% layoffs would save < 1%. Unless they have a "trickle down/up" effect? Similar data downthread: https://news.ycombinator.com/item?id=43246891 https://news.ycombinator.com/item?id=43246891

hn_throwaway_99 2y ago

Easy fix for that! Just change the definition of GDP by excluding government spending: https://apnews.com/article/trump-gdp-economy-government-spending-lutnick-7414ba1bd441bd4bf64620bfd66923b2 https://apnews.com/article/trump-gdp-economy-government-spen...

criddell 2y ago
There are easier ways. I'll write a poem and sell it to you for $50 trillion and you draw a picture and I'll buy it for $50 trillion from you. We could get this done today and bump GDP by $100 trillion.
- saulpw 2y ago
  Sales or income tax will be a problem though.
  - onlyrealcuzzo 2y ago
    Not if you sell in a state without income tax. And I imagine someone creative can probably find ways to make this not classify as income.
  - criddell 2y ago
    True. We'll probably have to make the poem and picture about Jesus and do it through our new church in New Hampshire.
  - 0cf8612b2e1e 2y ago
    Solve the deficit at the same time!
  - arunabha 2y ago
    I hear the standard practice is to have the IP of the poem owned by a foreign entity(Ireland is pretty popular) and then for the US entity to pay a royalty of $50 trillion to the foreign entity so that the net revenue in the US is zero. I believe it has it's own name - The double Irish.

psunavy03 2y ago

Hire clowns, get a circus.

notepad0x90 2y ago
it's more like the circus hired psychotic villains because they thought it would be funny. The state of things is a direct result of a functioning democracy.
- mvelbaum 2y ago
  it's more like the previous guys were so bad that people said that the guy the media lied to them about from 2015 until 2024 wasn't that bad after all. - we now see that "bidenomics" was a disaster after the media decided to stop lying about it and blaming the people for not believing "the stats". job numbers revised down massively after it was no longer viable to lie during the election. - crime rates revised silently UP: https://www.realclearinvestigations.com/articles/2024/10/16/stealth_edit_fbi_quietly_revises_violent_crime_stats_1065396.html https://www.realclearinvestigations.com/articles/2024/10/16/... - apparently there was no need for a "bipartisan border bill" or for "congress to act" in order to shut down the border as encounters are down 90% now. people have their panties in a bunch about tariffs, but I don't understand why reciprocal tariffs are so bad. it appears that people here are happy for things to go south just so that they could shit on trump. how about having a bit more optimism for the future, even if the near term will be a bit shakey?
  - timeon 2y ago
    > it's more like the previous guys were so bad that ... Current "guy" used to be previous as well.
  - dalyons 2y ago
    The 25p tariffs on ca and mx are not reciprocal. It’s hard to have optimism when there seems to be no plan to make the economy better, only destruction
  - notepad0x90 2y ago

klodolph 2y ago

This surprises nobody. People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP. Greater economic uncertainty and higher savings rates. Difficult labor market. The only question is the depth and the duration of the dip.

onlyrealcuzzo 2y ago
It's interesting that the Great Depression was triggered by tariffs.
- silveira 2y ago
  https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac... That's what put "Great" in Great Depression. Let's see if this one will be "great again".
- zippy5 2y ago
  My understanding is that it was more the 9000 bank failures effectively created a credit crunch. Like if a bank closes and there's no replacement, then most small business were unable to get loans. Farmers who couldn't afford to plant new crops, factories can't improve equipment, inventory get's squeezed across the supply chain, ect. Exports were about 5% of GDP, suggesting that maybe tarrifs may have been the trigger but weren't the primary cause of the depression. https://www.sjsu.edu/faculty/watkins/depression.htm https://www.sjsu.edu/faculty/watkins/depression.htm
  - agent281 2y ago
    Then after that, they passed Hawley Smoot Tariff Act to make up for the budget short fall. That caused an already bad situation to get much, much worse.
  - onlyrealcuzzo 2y ago
    Banking crises are largely accounting problems and can - mostly - be fixed from accounting. There will be winners and losers, and many people won't like the result, but it's not going to end in a Great Depression. Tariffs - on the other hand - can break your actual, real, non-financial economy - which cannot be fixed by accounting.

nwiswell 2y ago

I believe this is due to a surge in imports in response to looming tariffs - supply chains are trying to stockpile before they hit. I am skeptical that this stockpiling is significantly displacing real investment. The way that the figures are calculated views imports as a negative factor to GDP (because NET exports is an input to the model). Please correct me if I am wrong. In any event, view the headline with suspicion.

bryanlarsen 2y ago
Imports are neutral to GDP. The reason they're subtracted in the standard formula for GDP is that makes it easier to count. GDP = Consumption + Investment + Government Spending + Exports - Imports The reason that imports are subtracted is because Consumption, Government Spending and Exports all have a domestic and imported component. So instead you could have GDP = (Domestically produced consumption) + Investment + (Government spending on domestic products) + (Domestically produced Exports) and not subtract imports. But that's a lot harder to measure than measuring totals and subtracting imports.
- 827a 2y ago
  Imports may be neutral to GDP, but they aren't neutral to this forecasting model [1] [1] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...
  - bryanlarsen 2y ago
    Yes, they're part of the model because they're not excluded during consumption calculations.
JumpCrisscross 2y ago
> this is due to a surge in imports in response to looming tariffs “GDPNow is an excellent tracking model, however, the January surge in imports - especially for gold - caused the model to move negative. As the Atlanta Fed noted: ‘the contribution of net exports to first-quarter real GDP growth fell from -0.41 percentage points to -3.70 percentage points’. Usually there would be an offsetting increase in inventories, but that is a lagging indicator. This is a short-term distortion and will balance out over the next month or so. I don't expect negative GDP in Q1.” [1] https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpnow.html https://www.calculatedriskblog.com/2025/03/a-comment-on-gdpn...

Y_Y 2y ago

You know things are bad when you have negative GDP!

onlyrealcuzzo 2y ago
With a 6% deficit and growing.

killerteddybear 2y ago

Hey e/acc subset who were pro-Trump because of how much he was recruiting from Silicon Valley, is this the whole massively revitalized economy we were supposed to be getting?

mikevm 2y ago
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- skyyler 2y ago
  Is woke in the room with us now?
- nobunaga 2y ago
  You really love commenting in this thread don’t you? Are you Russian or American? Can’t tell. Either way, americas downfall is Gloria to watch. If you’re Russian, well you can’t really fall further down. lol
- dralley 2y ago
  How does economic decline "kill woke"?
- mcphage 2y ago
  Boy are you going to feel silly when the economy tanks and only woke survives.
- antifa 2y ago
  Self-imposing Great Depression 2.0 just to get revenge on all those black people, women, disabled people, and veterans who dared to infringe on your right to not know they exist.
  - mikevm 2y ago
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    - 2y ago

morkalork 2y ago

https://i.redd.it/9wrb5nbycyle1.jpeg https://i.redd.it/9wrb5nbycyle1.jpeg

cs702 2y ago

Uh-oh. I wonder how all the Ayn Rand acolytes in power today will react to the bad news. Their approach to macroeconomics can be summarized as: first, they always blame bureaucrats for bad economic conditions; and second, they believe that if they can get the bureaucrats out of the way, they need only to inspire people, to get everyone's animal spirits roaring, so the economy can grow, because they believe "growth is a choice." I'm exaggerating, but only slightly. Well, all these Rand devotees are successfully destroying the federal bureaucracy, or at least preventing it from functioning, as they have always dreamed, and they're constantly chanting about making things great again, to inspire people. So far, they're getting everything they want, and yet... here we are, seemingly headed for a recession. Could it be they don't understand things as well as they think they do? It sure could. Alas, they won't want to change their minds. As J. K. Galbraith wrote, "faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." If we indeed have a recession, my best guess is that we'll see them repeatedly calling for more optimism, or something like that.

killerteddybear 2y ago
Turns out that one of the best things for a healthy economy is a stable economic infrastructure provided by a reliable government! Not randomly and rapidly disintegrating conditions and unclear directions.
- EasyMark 2y ago
  Businesses like predictability and if there is change, steady predictable change. Across the board tariffs on our closest trading partners and allies results in recessions and depressions. It doesn't take a genius, it just takes a bunch of yes men and a cult leader.
  - 5PY_HUN73R 2y ago
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  - killerteddybear 2y ago

i_have_an_idea 2y ago

This looks like the work of a team of stable geniuses.

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resters 2y ago

Trump wants lower interest rates. The road to getting there will inevitably involve some pessimistic forecasts. That benefits Trump too because he can say "they all said the economy was going to be bad, but look what I accomplished" when the higher rates heat things up.

stego-tech 2y ago

I'm seeing a lot of "one easy answer" type posts for this data, and I thought I'd contribute my own hypothesis as to why an economic downturn of some sort seems inevitable. Bearing in mind this is grossly oversimplified, and an eensy bit hostile in tone, and written from one of the internet's multitudes of "armchair theorists", so take it all with a healthy dose of skepticism. --- On the one hand, you've got a tech industry so addicted to ZIRP that they've actively been trying to engineer a recession since COVID's interest rate hikes. They don't want to adapt to a new norm of low interest rates, they want zero interest rates so they can take out all the debt they need to justify share buybacks, AI and Quantum investments, and further industry consolidation around infinite services rather than tangible products. To those types of leaders, the pain is the point, and a means to their end of depressing wages and fueling more artificial growth. That said, they're ultimately a drop in the current bucket. Once the current President got elected, businesses immediately began bulk-importing ahead of tariffs to preserve margins, in the hopes they could lobby to get them dropped again like last time. That is not happening, partly because one of their own is President de facto if not President de jure, and this man is rampaging like a petulant toddler through the ranks of the Civil Service. Laying off and outright firing a bunch of workers - surprising absolutely nobody with a basic grasp of economics - has knock-on effects on the larger economy. Those people have bills to pay, and often took lower-paying Civil Service gigs for the stability of the role - something the economy adapted to as dependable and reliable income streams. That image has been irreparably shattered, and Civil Servants are viewed as the same unstable debtor as private sector workers, surviving not even admin-to-admin anymore. This means employers are nervous about their hiring practices, eliminating open roles (the "Job Market Freeze" as it's being called) and not backfilling others, with a prime example being the tech sector refusing to hire developers and claiming AI will replace them. Anyway, so we have tariffs squeezing already-declining consumer demand as COVID surpluses have dried up, a demolished civil servant base (the Federal Government is the single largest employer in the country, and possibly the Earth inclusive of its multitude of other, oft-excluded branches), and an unstable Executive Branch more focused on agendas of hatred and vengeance than sound economic policies. That still only scratches the surface. Compounding the above are asset prices and inflation, both of which I'm going to grossly oversimplify and lump into the "infinite growth" problem category. The only thing holding back the human species from stripmining the entire planet is policy, and that policy has been globally manipulated and hollowed out to funnel cash upward from the working class worldwide. It's not an American problem, and it's not a Capitalism problem (Communist and Feudalist countries have had the exact same issue). By funneling more wealth into fewer hands, there's less avenues for production of goods and services other than "rental" markets (like streaming, or XaaS) - a market segment that's been infamously toxic with bad returns in the long run relative to other investments, though always buoyed by better-than-expected returns in the short-to-mid terms as investors seek market capture through "disruption". Paradoxically, giving consumers the ability to own actually increases economic output to a degree, especially if products are well-made and repairable, by propping up local craftspersons and small businesses; perpetual "rental" services focus that capital into very few hands, and deter such knock-on economic expansion, which ultimately slows growth. And that growth is the problem every country faces right now. The past century (post-WW2 in particular) has been strongly focused on growth at the expense of all else, and that was never sustainable in the long run. Until and unless we actually have (practically) infinite resource extraction, refinement, and re-utilization, infinite growth is functionally impossible - and even then, growth would be limited to the sum total of the value of resources effectively exploited in a closed-loop supply chain. When growth halts or slows, we get recessions as the investor class, greed impossible to satiate even in the best of times, withdraws from markets until such time that new industry or technological innovation creates the illusion of infinite growth yet again. With population growth stagnating (due to wealth inequality - go compare birth rates to wealth inequality ratios historically to see how neatly those two inverse one another), this also threatens systems built with the presumption of infinite growth forever - like government welfare programs based on low taxes and high population/wage growth, rather than higher taxes and fixed benefits. So now we circle all the way back to the beginning, and my hypothesis on the potential recession: * Consumer sentiment is low because people keep getting laid off, wages remain flat, RTO mandates eat away at time and money savings the pandemic created, and asset prices remain unaffordably high for the 90% * Business confidence is low because higher tariffs disproportionately impact American businesses who import most goods, and a dysfunctional Federal Government more focused on tantrums, authoritarianism, and identity politics than effective governance weakens that confidence further since lobbying is no longer a guarantee of outcome * International confidence in American institutions (government and private alike) is decreasing as a result of highly-public meltdowns of both the President de jure and the President de facto, forcing many developed economies to reconsider their business and political relationships with the world's largest economy. * A hollowed out economic core that focused exclusively on services (which can and are continuously outsourced) in lieu of diversity of industry, making it incredibly vulnerable to outside market and political forces * A capital class that believes it can escape any harm by simply relocating elsewhere And that's my position. I'm definitely oversimplifying complex issues for the sake of brevity (economic diversification, asset valuations, the housing crisis, etc), but I think my core position is pretty sturdy.

pcj-github 2y ago

You ain't seen nothing yet. In a few short weeks, Trump imploded the fundamental US brand from good to um, pretty much pure evil. We are untrustworthy backstabbers. Rightly so, people hate us now; they are literally burning the American flag all over the world. USA products and services are toxic items. Not that we make much money off the travel industry, but you'd have to be a complete idiot to vacation in (or really even travel to) the US now. It's going to get really ugly; I don't think people get it yet.

vladms 2y ago
I think in various parts of the world people were already quite negative towards US. What happens now though is that some other countries will have second thoughts. I hope enough people can distinguish between one administration and "the people", but trust is hard to gain and easy to loose, so yes, some things will get harder.
- jghn 2y ago
  The US was already granted its mulligan in 2020. And then 4 years later the populace went and double down on all of this. It won't be so easy going forward.
- jajko 2y ago
  Countries? My friend right now add there all former US allies, including whole Europe and both your neighbors. Maybe gaining some new like guy from Argentina, Saudis with their murderous chieftain, and of course lets not forget biggest country on Earth by landmass. US is a bully, and extremely unreliable one. We're in a no-trust era now. You will find some sympathizers of him everywhere of course, they mainly align with russian war supporters, at least in Europe. No surprises. All this could reverse eventually but I just don't see it happening. 4 years is painfully long period and things will change forever, and I suspect not in ways 'architects' wish for. God I desperately hope we have at least some leaders with balls in Europe now that can steer adaptation to new situation quickly. We have massive potential at least matching current US one, but incorrect ideology for these times. And I suspect in 4 years situation won't change dramatically, if at all. Remember those times that were, and how they were, how world was. I slightly feels like when 60s hippie era died and one Hunter S. Thompson quote comes to mind.

EB-Barrington 2y ago

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kjs3 2y ago

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5PY_HUN73R 2y ago

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