US economy suffers worst decline as GDP contracts by 32.9% in the second quarter - page 3.

Lucius

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Quote from: nancy on August 01, 2020, 03:27:53 AM

Why EU is not suffering like USA from this virus?

Maybe because the EU doesn't have Trump?

Joking aside, but I remember well when Trump claimed that COVID-19 was something like the common flu that would disappear with the arrival of spring. At that time, there were less than 20 confirmed infected people in the USA, but the fact is that no mass tests were conducted. Ignoring the problem and the stubborn policy of "No one can do anything to us" with the mass protests that took place due to the pandemic led to the virus spreading to the point where it can no longer be controlled.

The economic side of the story is quite clear, everyone, including the USA, pays the lockdown tax, and it should be added that the USA is in a trade war with China and that things are not going well when it comes to Russia. Taking into account all the other countries on their blacklist, it turns out that they have bad relations with half the world - while the other half cooperates with them out of fear.

But as someone has said before, there is no need to worry about the USA, they will get out of the crisis one way or another.

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Quote from: figmentofmyass on August 01, 2020, 03:41:09 AM

Quote from: deisik on August 01, 2020, 01:53:16 AM

Quote from: figmentofmyass on July 31, 2020, 06:42:03 PM

it's upsetting to watch the stock markets pump at a time like this

Why is it upsetting?

because it shows the stock market is completely disconnected from company fundamentals. it's obviously just a game of greater fools. the fed prints money, the markets pump, and you can always sell higher

Okay, let me rephrase my point

Would you be happy if Bitcoin and other cryptocurrencies went straight downhill? But it is essentially the same money. I mean the money that gets pumped into the stock market somehow makes its way into cryptocurrencies too. It seems that the link has been firmly established by now, and Bitcoin has become part of the bigger game. Figuratively speaking, you can take Bitcoin prices out of the stock market, but you can't take stock market prices out of Bitcoin anymore. The stock market price dynamic gets mirrored in Bitcoin's prices

figmentofmyass

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Quote from: deisik on August 01, 2020, 01:53:16 AM

Quote from: figmentofmyass on July 31, 2020, 06:42:03 PM

it's upsetting to watch the stock markets pump at a time like this

Why is it upsetting?

because it shows the stock market is completely disconnected from company fundamentals. it's obviously just a game of greater fools. the fed prints money, the markets pump, and you can always sell higher.

the risk has almost been completely removed from stock investment---or rather it's been socialized across society. when investors are effectively bailed out at every turn, asset prices (like housing) more or less permanently rise. this keeps the propertied/investor class entrenched, keeps the have-nots from attaining property, and punishes all savers by devaluing our currency, further compounding the problem.

in a true free market, people who make bad investments and buy into grossly over inflated markets would pay the price for their mistakes. we shouldn't be bailing these investors out. if we're tossing around bailouts, we might as well go full blown socialist---at least then there is some commendable goal ("to each according to his needs"), as opposed to just kowtowing to the investor class and making sure they never lose money.

nancy

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Why EU is not suffering like USA from this virus?

deisik

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Quote from: figmentofmyass on July 31, 2020, 06:42:03 PM

it's upsetting to watch the stock markets pump at a time like this

Why is it upsetting?

Would you be happier if the stock market went crashing down? Many people sold out earlier, and they are not quite happy with Bitcoin surging today. But plunging stocks would bring down cryptocurrencies too. Maybe, that's what you are looking for? But the market always fools us. We sell at the bottom and buy at the top. That's life, if I can say so

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Quote from: odolvlobo on July 31, 2020, 05:17:38 PM

Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

... the US GDP has contracted by 32.9% in the second quarter...

It must be noted that the actual decline is 9.5% from the previous quarter. The 32.9% number assumes that the 9.5% decline continues for an entire year.

granted, but it was still the worst economic contraction in history by far---since they started keeping records anyway.

Quote from: gentlemand on July 31, 2020, 12:43:13 PM

Things like evictions haven't gotten started yet and there's a whole wave of business death yet to come too.

Nobody knows where this going to end but it's going to get worse and take longer than initially expected.

i'm nervous to see what happens next. the beefed up unemployment payments are over. lots of moratoriums on evictions (including the one on federally subsidized housing) are ending. unemployment claims are on the rise again. this is all happening in the context of surging coronavirus outbreaks, which i expect to bring more economic slowdowns and retail closures.

it's upsetting to watch the stock markets pump at a time like this.

odolvlobo

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Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

... the US GDP has contracted by 32.9% in the second quarter...

It must be noted that the actual decline is 9.5% from the previous quarter. The 32.9% number assumes that the 9.5% decline continues for an entire year.

gentlemand

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Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

but what worries me is whether the US economy can actually bounce back this year, or even next year as Trump had claimed that the economy will definitely bounce back.

There are two economies. There's the toytown markets where anything goes and anything is thrown at it to keep the party going. Then there's the real one where real people get boned every day.

The latter can continue to spiral downwards while the former is coaxed into remaining perky on the surface at least. Things like evictions haven't gotten started yet and there's a whole wave of business death yet to come too.

Nobody knows where this going to end but it's going to get worse and take longer than initially expected.

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Quote from: Argoo on July 31, 2020, 11:06:09 AM

The US economy is special in the sense that the dollar is not backed by commodities and foreign exchange reserves, and at the same time, the dollar is used as a currency throughout the world. Therefore, the United States can artificially improve its economy by uncontrolled printing of paper dollars. In the United States, they have long been living beyond their means and in fact in debt. However, by printing dollars, they can quickly rectify the situation.
It will be much more difficult for other countries to get out of the actually begun economic crisis.

Or America can do the simple thing by raising the benchmark interest rate so that it pulls the dollar back to America and this will benefit America and will put pressure on many other countries in the world for experiencing deficits. America as a price maker can also increase the price of gold and increase its gold reserves so that similar cases of subprime mortgages do not happen again.

There is nothing to worry about for America because whatever happens America is still quite resilient and will always come out victorious because of its influence and hegemony as well as a matter of fact the current world system that designs is America, its vital keys are held by America. Many countries object, but what can they do, on the one hand, they need America and do not want to make America a bad boy.

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Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

I don’t think anyone here will be surprised to read this that the US GDP has contracted by 32.9% in the second quarter, as we all know that this is the after effect of covid19, but what worries me is whether the US economy can actually bounce back this year, or even next year as Trump had claimed that the economy will definitely bounce back. Further in more worrying news the jobless claims has risen to 1.43 million people, and this figure doesn’t look good for the US economy in the long run. Lastly with Covid19 yet wrecking havoc on US economy what chances do you see of its recovery in light of these numbers?.

Sources:

https://www.independent.co.uk/news/world/americas/us-economy-gdp-latest-coronavirus-trump-pandemic-a9645881.html

https://www.wsj.com/articles/us-economy-gdp-report-second-quarter-coronavirus-11596061406

https://www.forbes.com/sites/simonconstable/2020/05/28/look-out-democrats-the-economy-is-looking-better-for--trump-than-you-think/#3f1516e839bc

Whether next year or next quarter, the economy would continue to shrink or recover on a slowing rate that could longer for years except there is a sustainable way to manage the economy and countries get to do away with all of these proactive means of managing the crises. Vaccines development or drugs development that makes one immune to the virus that could fully open the economy is the only way out of this quagmire.

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Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

I don’t think anyone here will be surprised to read this that the US GDP has contracted by 32.9% in the second quarter, as we all know that this is the after effect of covid19, but what worries me is whether the US economy can actually bounce back this year, or even next year as Trump had claimed that the economy will definitely bounce back.

If all will go well recovery should happen in 2022. It is totally impossible to recover this year. It is highly unlikely to see a recovery until end of next year. Yes some countries will recover already next year. Countries like China or some other fast growing smaller countries. USA and EU will recover in 2022. But only if all will go fine. If vaccine will be found fast and we will not fall into depression.

Argoo

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The US economy is special in the sense that the dollar is not backed by commodities and foreign exchange reserves, and at the same time, the dollar is used as a currency throughout the world. Therefore, the United States can artificially improve its economy by uncontrolled printing of paper dollars. In the United States, they have long been living beyond their means and in fact in debt. However, by printing dollars, they can quickly rectify the situation.
It will be much more difficult for other countries to get out of the actually begun economic crisis.

ultrloa

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Quote from: plvbob0070 on July 31, 2020, 09:38:19 AM

If the number of cases in the US will continue to increase within the next months, I doubt that their economy will be able to recover within this year. However, the US can easily recover once this pandemic is done, but since the country is not showing any good sign in fighting the virus, it's like they will highly depend on the vaccine for the fast recovery of their economy.

But aside from the economic decline, I'm worried about the population if this virus will continue to spread. I mean, it's not a big percentage compare to the whole population, but the fact that already 100k+ of people died because of this in the US alone is a threat if it will last longer.

Year is nearly ending so its a though job for them to recover what they lost during this pandemic but its hard to think how deep they can go since even up till now they are been much affected by this pandemic and worse scenario on them is some of their people still under estimating the virus.

But we know the america is great so provably they will recover since they still ha e resources compares to the countries who are in 3rd world since for sure they will struggle to stand up after this covid ends.

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If the number of cases in the US will continue to increase within the next months, I doubt that their economy will be able to recover within this year. However, the US can easily recover once this pandemic is done, but since the country is not showing any good sign in fighting the virus, it's like they will highly depend on the vaccine for the fast recovery of their economy.

But aside from the economic decline, I'm worried about the population if this virus will continue to spread. I mean, it's not a big percentage compare to the whole population, but the fact that already 100k+ of people died because of this in the US alone is a threat if it will last longer.

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The analogy with the results for the second quarter of this year will give us inaccurate results. The global closure was a reason for the slowdown in global growth and many economic distortions.
The bounce will be rapid before the end of next year, but the economic distortions that took place need a lot of time to restore and make them before 2020.

mu_enrico

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I have read many articles stated the same situation across countries, isn't it predictable?

Anyways, I'm still sure we will bounce back globally in about Q1 2021

Quote from: mu_enrico on March 25, 2020, 02:04:12 AM

I voted for Q1 2021

The vaccine will be the main reason we will quickly bounce back to the "old" normal. It's already on phase three (for some brand)!

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Quote from: enhu on July 31, 2020, 01:21:11 AM

Quote from: davis196 on July 31, 2020, 12:26:42 AM

The US economy(and every other economy in the world) will bounce back only after the pandemic ends.
Unfortunately the pandemic is here to stay and I assume that it will end after most of the world population gets infected with coronavirus and survives that illness,so the pandemic might continue for 2-3 years.
The 32.9% decline looks scary,but the US economy was on steroids due to the massive money printing,so I assume that such rapid decline is kinda normal.The economic growth of the US from the previous years was more or less artificial.

That's one problem with this virus, its not going anywhere which will really make every country's economy crumble to pieces including US. And then there is a threat about China going full steam to thier economy which likely going to make them the strongest around. It would be easy for US to just keep printing while they still can than gonna be crushed.

Its economy is fueled by war but there ain't gonna be war goingto happen unless they can lure Iran to shoot first or probably China which can literally crush thier economy. They got to find another way to make thier economy alive again.

The best thing they could do is to discipline their citizens first since if everyone will follow the protocol for sure they will not suffer to much from huge economic recession, look at what happen on other countries they manage to handle covid-19 nicely and their lives came back to normal. Maybe they will learn a big lesson after this pandemic since in early days they are downplaying this and for this huge suffering they will surely know on what is the next actions for economic counteractions.

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Quote from: Juggy777 on July 30, 2020, 11:19:05 PM

I don’t think anyone here will be surprised to read this that the US GDP has contracted by 32.9% in the second quarter

Atrocious numbers, worse than many analysts had anticipated. Yet it seems like the markets had already priced it in anyway. As soon as the news dropped, S&P 500 futures rallied ~2% over the next 8 hours.

It's becoming very typical now: terrible economic news keeps triggering rallies!

I guess that's how things work now that the Fed has proven they can just pump the markets to infinity. Roll Eyes

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Quote from: davis196 on July 31, 2020, 12:26:42 AM

The US economy(and every other economy in the world) will bounce back only after the pandemic ends.
Unfortunately the pandemic is here to stay and I assume that it will end after most of the world population gets infected with coronavirus and survives that illness,so the pandemic might continue for 2-3 years.
The 32.9% decline looks scary,but the US economy was on steroids due to the massive money printing,so I assume that such rapid decline is kinda normal.The economic growth of the US from the previous years was more or less artificial.

That's one problem with this virus, its not going anywhere which will really make every country's economy crumble to pieces including US. And then there is a threat about China going full steam to thier economy which likely going to make them the strongest around. It would be easy for US to just keep printing while they still can than gonna be crushed.

Its economy is fueled by war but there ain't gonna be war goingto happen unless they can lure Iran to shoot first or probably China which can literally crush thier economy. They got to find another way to make thier economy alive again.

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Trump's promises were merely political in my view and a bid to instill voter confidence as elections draw near. So much damage has already been done to businesses and as such there has to be a period of recovery where the market normalises (or the economy ceases to contract), after which, the nation can enter a period of economic expansion. Which is the phase the U.S has been in since the last recession.

The economic decline is the direct result of the effect of a pandemic, so trying to flatten the curve is one of the best routes to rebuilding the economy and not pumping more money into the market. Although this is needed to keep businesses afloat, but needs to be done in hand with slowing the spread of the virus and it also needs to be done holistically; injection funds into select businesses could create a greater gap between classes and further hurt the economy to the gain of a few.

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