4 ms·

What makes it an (almost) certainty?

abcd_f 1y ago
Political volatility and the dirty nasty hustle on the Trump/republicans' part that will precede the mid-terms. Combined with the general state of bizarre market bonanza of the past few months. It's a powder keg just waiting for a match.
JKCalhoun 1y ago
Long overdue? Fairly constant stream of bad news in other sectors of the economy?
fragmede 1y ago
Reminder that economist have predicted 9 of the past 7 recessions. General handwavy statements like "there's a bubble" aren't worth paying attention to. Ones with specific timelines attached to it (like the one above, or the article we're commenting on), are worth listening to a bit more, but unless they have the funds to back it up (like Michael Burry has put down here), it's still hot air.
- blitzar 1y ago
  Economist have predicted 179 of the past 7 recessions.
- darth_avocado 1y ago
  Palantir has a market cap of $400B+ and Nvidia is $5T. This short translates to 0.225% and 0.00374%. This mostly translates to a thesis that the stocks would “probably” go down a bit than a bet that predicts recession.
  - ambicapter 1y ago
    What do the percentages 0.225% and 0.00374% mean here? Is that the size of his position relative to the company's market caps?
- jkelleyrtp 1y ago
  It seems like the economy is on a “K” shaped flywheel. How much worse can the economy get for the regular worker before the systems just pops? We’ve put so much speculation into an AI/tech salvation that seems premature, especially when you look at ROI vs depreciation timelines. I’m not sure what timeline to place on that but there has to be a floor for how bad it can get for the regular man. Shit is just expensive. Young people can’t buy houses, good jobs are drying up, and inflation isn’t stopping.
  - deleted 1y ago
    [deleted]
  - astrange 1y ago
    Graph looks like it's going up to me. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
    - rurp 1y ago
      I'm sure the Fed chart is accurately measuring what it's measuring but when I was a kid in Southern California it was normal to buy a house and raise kids on a single teacher or construction worker salary. That has become nearly impossible over the past couple decades. Many others have seen similar changes in their own areas and I don't think they're being crazy when they say it has gotten much harder to finance a normal household on a normal salary. I don't know what the disconnect is with that chart and people's observations. Is that chart controlling for number of incomes and hours worked? If a household income increases by 20% because the members are working a combined 80% more hours that's not great. Category differences in inflation might be another factor. Sure TVs and other niceties are a lot cheaper, but essentials like housing and medical care eat up a huge portion of most budgets.
      - solumunus 1y ago
        Inflation measures aren’t fit for purpose. The biggest expense is housing and housing as a proportion of income is what is killing people financially.
- themafia 1y ago
  > Reminder that economist have predicted 9 of the past 7 recessions. Is there someone with a better record then?
  - astrange 1y ago
    Recessions can be avoided if you know about them ahead of time, so if you ever successfully predicted one your central bank isn't good enough.
    - dragonwriter 1y ago
      Intervening as if there were a recession inminent when it is not also has harms (the exact same as the harms when recession interventions are maintained too long or employed too intensely, in terms of inflation, etc.), so I wouldn't agree that your central bank is bad if you happened to have guessed right once, but only if you have a demonstrably accurate objective method.
      - astrange 1y ago
        > the exact same as the harms It actually appears that the alternative harms aren't as bad; that is, recessions aren't caused by prior expansions and we don't get one by "deserving" them. https://eml.berkeley.edu/~enakamura/papers/plucking.pdf https://eml.berkeley.edu/~enakamura/papers/plucking.pdf Hyperinflation is of course still not good, and it's hard to avoid a recession caused by a natural disaster or something.
    - themafia 1y ago
      Is there a way to predict when central banks aren't "good enough" then? Point is, for a 100% positive case rate, I have to tolerate a 22% false positive rate. What exactly is the complaint here? Was this line of logic meant to make people who make these predictions look stupid or foolish somehow? To me, it mostly fails to.
      - astrange 1y ago
- rufus_foreman 1y ago
  >> Reminder that economist have predicted 9 of the past 7 recessions Historically I think the reality has been the opposite of that, economists have been extremely reluctant to make predictions of an oncoming recession. This was certainly true during the great recession when economists were denying that a recession was coming even after one had actually started. That is to say, economists could not even predict the present. There are a few economists who are predictably gloomy ("permabears", I suppose Nouriel Roubini would qualify) and I guess now there is political pressure to predict a recession anytime the other political party is in power, but from my perspective, if mainstream economists are predicting a recession, that likely means the recession is almost over.
legitster 1y ago
It being a certainty is wrong, but there is a huge differential between the growth of total market value and the lackluster fundamentals, GDP growth, and jobs numbers. To put another way, there's a lot of "potential energy" being built up in the markets right now. That doesn't necessarily mean they'll pop like a bubble - but there's really no precedent for them to continue rising.
- 0cf8612b2e1e 1y ago
  That pre-tariff stockpiles have been depleted is going to make some hidden pain more visible.
- WheatMillington 1y ago
  6 months ago you could accurately say there's "no precedent for them to continue rising". You may be saying the same thing 6 months from now.
  - legitster 1y ago
    It could be true that the market can continue to grow well past 15% above fundamentals for the indefinite future. But the more it goes up, the more improbable it becomes. If you've flipped heads three times in a row, you're right that I would look foolish saying the next one can't be heads. But at the same time you cannot keep flipping heads forever.
    - bdangubic 1y ago
      true on all accounts but comment like OP made is ridiculous. to say “for sure XYZ will happen to the market by this date” is childish/funny/insane. to say “eventually” there will be a correction is similar cause of course there will be. so all this talk about bubble and other shit is just nonsense all around
fullshark 1y ago
He has no idea, I'm guessing it's wishful thinking, likely from a political partisan, or someone with a lot of dry powder trying to enter the stock market after a correction.

Political volatility and the dirty nasty hustle on the Trump/republicans' part that will precede the mid-terms. Combined with the general state of bizarre market bonanza of the past few months. It's a powder keg just waiting for a match.

JKCalhoun 1y ago

Long overdue? Fairly constant stream of bad news in other sectors of the economy?

fragmede 1y ago

Reminder that economist have predicted 9 of the past 7 recessions. General handwavy statements like "there's a bubble" aren't worth paying attention to. Ones with specific timelines attached to it (like the one above, or the article we're commenting on), are worth listening to a bit more, but unless they have the funds to back it up (like Michael Burry has put down here), it's still hot air.

blitzar 1y ago
Economist have predicted 179 of the past 7 recessions.
darth_avocado 1y ago
Palantir has a market cap of $400B+ and Nvidia is $5T. This short translates to 0.225% and 0.00374%. This mostly translates to a thesis that the stocks would “probably” go down a bit than a bet that predicts recession.
- ambicapter 1y ago
  What do the percentages 0.225% and 0.00374% mean here? Is that the size of his position relative to the company's market caps?
jkelleyrtp 1y ago
It seems like the economy is on a “K” shaped flywheel. How much worse can the economy get for the regular worker before the systems just pops? We’ve put so much speculation into an AI/tech salvation that seems premature, especially when you look at ROI vs depreciation timelines. I’m not sure what timeline to place on that but there has to be a floor for how bad it can get for the regular man. Shit is just expensive. Young people can’t buy houses, good jobs are drying up, and inflation isn’t stopping.
- deleted 1y ago
  [deleted]
- astrange 1y ago
  Graph looks like it's going up to me. https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
  - rurp 1y ago
    I'm sure the Fed chart is accurately measuring what it's measuring but when I was a kid in Southern California it was normal to buy a house and raise kids on a single teacher or construction worker salary. That has become nearly impossible over the past couple decades. Many others have seen similar changes in their own areas and I don't think they're being crazy when they say it has gotten much harder to finance a normal household on a normal salary. I don't know what the disconnect is with that chart and people's observations. Is that chart controlling for number of incomes and hours worked? If a household income increases by 20% because the members are working a combined 80% more hours that's not great. Category differences in inflation might be another factor. Sure TVs and other niceties are a lot cheaper, but essentials like housing and medical care eat up a huge portion of most budgets.
    - solumunus 1y ago
      Inflation measures aren’t fit for purpose. The biggest expense is housing and housing as a proportion of income is what is killing people financially.
themafia 1y ago
> Reminder that economist have predicted 9 of the past 7 recessions. Is there someone with a better record then?
- astrange 1y ago
  Recessions can be avoided if you know about them ahead of time, so if you ever successfully predicted one your central bank isn't good enough.
  - dragonwriter 1y ago
    Intervening as if there were a recession inminent when it is not also has harms (the exact same as the harms when recession interventions are maintained too long or employed too intensely, in terms of inflation, etc.), so I wouldn't agree that your central bank is bad if you happened to have guessed right once, but only if you have a demonstrably accurate objective method.
    - astrange 1y ago
      > the exact same as the harms It actually appears that the alternative harms aren't as bad; that is, recessions aren't caused by prior expansions and we don't get one by "deserving" them. https://eml.berkeley.edu/~enakamura/papers/plucking.pdf https://eml.berkeley.edu/~enakamura/papers/plucking.pdf Hyperinflation is of course still not good, and it's hard to avoid a recession caused by a natural disaster or something.
  - themafia 1y ago
    Is there a way to predict when central banks aren't "good enough" then? Point is, for a 100% positive case rate, I have to tolerate a 22% false positive rate. What exactly is the complaint here? Was this line of logic meant to make people who make these predictions look stupid or foolish somehow? To me, it mostly fails to.
    - astrange 1y ago
rufus_foreman 1y ago
>> Reminder that economist have predicted 9 of the past 7 recessions Historically I think the reality has been the opposite of that, economists have been extremely reluctant to make predictions of an oncoming recession. This was certainly true during the great recession when economists were denying that a recession was coming even after one had actually started. That is to say, economists could not even predict the present. There are a few economists who are predictably gloomy ("permabears", I suppose Nouriel Roubini would qualify) and I guess now there is political pressure to predict a recession anytime the other political party is in power, but from my perspective, if mainstream economists are predicting a recession, that likely means the recession is almost over.

legitster 1y ago

It being a certainty is wrong, but there is a huge differential between the growth of total market value and the lackluster fundamentals, GDP growth, and jobs numbers. To put another way, there's a lot of "potential energy" being built up in the markets right now. That doesn't necessarily mean they'll pop like a bubble - but there's really no precedent for them to continue rising.

0cf8612b2e1e 1y ago
That pre-tariff stockpiles have been depleted is going to make some hidden pain more visible.
WheatMillington 1y ago
6 months ago you could accurately say there's "no precedent for them to continue rising". You may be saying the same thing 6 months from now.
- legitster 1y ago
  It could be true that the market can continue to grow well past 15% above fundamentals for the indefinite future. But the more it goes up, the more improbable it becomes. If you've flipped heads three times in a row, you're right that I would look foolish saying the next one can't be heads. But at the same time you cannot keep flipping heads forever.
  - bdangubic 1y ago
    true on all accounts but comment like OP made is ridiculous. to say “for sure XYZ will happen to the market by this date” is childish/funny/insane. to say “eventually” there will be a correction is similar cause of course there will be. so all this talk about bubble and other shit is just nonsense all around

fullshark 1y ago

He has no idea, I'm guessing it's wishful thinking, likely from a political partisan, or someone with a lot of dry powder trying to enter the stock market after a correction.