Topic: U.S. Recession short term (Read 361 times)
It's really suspicious how china's economy already doing well after the virus outbreak in their country. But so much with conspiracy theories, i think 1987 and 2008 recession wont compare to this one because the fed is printing unlimited money to inject into the system and would be buying bonds, treasures and in the future corporate debt. If this recession came through then this would end the USD.
Brutal US unemployment numbers just came out, eclipsing last week. 6.6 million!
https://www.nbcnews.com/business/economy/record-6-6-million-americans-filed-unemployment-last-week-n1174776
SPX futures have already dumped 75 points on the news. BTCUSD is still looking strong though. Let's see if it can shake off that stock market correlation.
https://www.nbcnews.com/business/economy/record-6-6-million-americans-filed-unemployment-last-week-n1174776
Quote
A record 6.6 million Americans filed for unemployment benefits last week, the latest brutal reminder of the toll the coronavirus pandemic is taking on the U.S. economy.
Still, some economists said the actual number of unemployed could be much higher, since many applicants had experienced trouble filing a claim, as state labor departments became overwhelmed.
Still, some economists said the actual number of unemployed could be much higher, since many applicants had experienced trouble filing a claim, as state labor departments became overwhelmed.
SPX futures have already dumped 75 points on the news. BTCUSD is still looking strong though. Let's see if it can shake off that stock market correlation.
This recession will have a big impact on the deciding factor whether the US economy will head to a long recession or a short one, China is making a good move, I commend that because for me that is how you play politics, you make a good decision out of the bad situation.
There can not be a long or short-term recession, or there is a recession, and it causes enormous damage to the economy, even if it occurs in a relatively short period of time, or it does not occur, there are no other options. And a recession in a country like the United States will surely hit everyone else.
Each recession to one degree or another is not similar to the previous one.
As a rule, the stronger the economic ties between countries have grown, the more these countries are dependent on each other,
which means that a sharp break in such ties can easily lead to disastrous consequences for the economy.
As a rule, the stronger the economic ties between countries have grown, the more these countries are dependent on each other,
which means that a sharp break in such ties can easily lead to disastrous consequences for the economy.
This is a clear reason that countries should try and move away from total dependence. With the current situation of covid-19, the dependent countries are the ones suffering more.
I hope that after this episode, so many countries would try and be a strong competitor in the global economy by becoming technologically advanced.
The United States will be in a recession. The question is, will this be a 1987 type of recession or a 2008/2009 type of recession.
I don't know what the globe stands to actually gain with the desire of people hoping the America economy plunges into a recession. The proposed/expected recession may not even happen only to the US, givien the pandemic situation the world in faced with now. It will also hit many other countries. However, whatever happens I don't believe the US recession (if it eventually happens) will be anything deep like what the US experienced in 2008 financial meltdown. 
The United States will be in a recession. The question is, will this be a 1987 type of recession or a 2008/2009 type of recession.
I'm not so sure about that, and I'm also questioning whether there was any type of recession in 1987. I'm aware that the stock market plunged in October of that year, but it rebounded relatively quickly and the bull market didn't implode until April 2000. That crash in 1987 wasn't even related to the economy if I remember correctly--there were a lot of folks blaming it on programmed trading.they say it was a black swan caused by algorithmic trading. there was no recession afterwards, but i think that speaks past what rambogoham1 is saying: could this be another black swan event followed by a hasty recovery like in 1987, or is it a more prolonged and much more painful collapse like 2008?
looking at the all the headlines and projections, the situation in the USA is gonna get much worse over the next couple weeks. i'm betting on something more like 2008.
And yeah, unemployment has spiked but there's a very clear cause for that--a lot of businesses have been forced to shut down. That's not a permanent thing, though.
but how long could it last? that's what the markets are freaking out about.
China appears to actually be ahead in the stock market for the month of March compared to all the other nations.
I just imagine how China keeps doing this. Despite the fact that the virus started from them, they are still ahead in stock market which I believe will continue to top because a lot of businesses are already starting to operate back. even wuhan in which the virus pandemic first started is no more locked down. All these are really unbelievable. 
The United States will be in a recession. The question is, will this be a 1987 type of recession or a 2008/2009 type of recession.
I'm not so sure about that, and I'm also questioning whether there was any type of recession in 1987. I'm aware that the stock market plunged in October of that year, but it rebounded relatively quickly and the bull market didn't implode until April 2000. That crash in 1987 wasn't even related to the economy if I remember correctly--there were a lot of folks blaming it on programmed trading.And yeah, unemployment has spiked but there's a very clear cause for that--a lot of businesses have been forced to shut down. That's not a permanent thing, though. With an outbreak like with this strain of coronavirus, there's no way the whole world needs to be on lockdown for an extended period of time. IMO there's been a lot of overreaction to this thing, though the consequences have been quite real.
What China is doing is not a permanent solution neither, what USA has always done and is doing is not a solution neither. By giving companies a lot of money you are not fixing the problem, these companies will need money again next time there is a crisis.
You need to build a federal branch that is like insurance, FED is obviously in love with these huge banks so there should be laws preventing FED from doing whatever the hell they want as well, people keep saying that FED is independent but that doesn't mean it is unregulated neither, can they print out 500 trillion!!! dollars tomorrow? No, that would be suicide, so that means there is a limit, there is a regulation, that should be tighter. Every company should be paying federal taxes, and every company should pay some sort of voluntary "insurance" money as well, if they don't pay that, when they crash, nobody helps them, if they do pay, during these days they get bailed out.
You need to build a federal branch that is like insurance, FED is obviously in love with these huge banks so there should be laws preventing FED from doing whatever the hell they want as well, people keep saying that FED is independent but that doesn't mean it is unregulated neither, can they print out 500 trillion!!! dollars tomorrow? No, that would be suicide, so that means there is a limit, there is a regulation, that should be tighter. Every company should be paying federal taxes, and every company should pay some sort of voluntary "insurance" money as well, if they don't pay that, when they crash, nobody helps them, if they do pay, during these days they get bailed out.
Short term ?
Is this it ?
No I do not think this recession is going to last short term , the people are already getting into the line and doing what they can do , people are jobless , how are they supposed to feed their families ?
How is anything going to happen normally now ? People are not understanding the severity of the situation and still roaming around the streets .
I do think this won't be short term until and unless , they are able to control the graph .
Is this it ?
No I do not think this recession is going to last short term , the people are already getting into the line and doing what they can do , people are jobless , how are they supposed to feed their families ?
How is anything going to happen normally now ? People are not understanding the severity of the situation and still roaming around the streets .
I do think this won't be short term until and unless , they are able to control the graph .
The problem is that no matter how wealthy the state no matter how you reduce your necessities, there won't be money, plus you need a lot of money to start again the entire economy. We might be safe for a few months, if this goes beyond June we're all going to experience a true recession, unlike 2007 which will be a joke compared.
Absolutely, people need to eat and pay the bills so for as long as the state can shoulder some of that burden, it'll be fine. Same as what I always say about Bitcoin (people aren't gonna go out and buy more in crisis, they're gonna buy rice and bread first). But it's not going to work out if things go on like this, economy wise. The system really needs to break beyond repair.
This will be bad, and like you, I feel terrible about those whose livelihoods rely on mobility. My two siblings work in event management and hotel industry, so those were actually going down even second half of 2019. Then when Chinese tourists and businessmen stopped coming, that was it.
@stompix where are you located? I got family in SEA and almost everyone has been asked to go on leave without pay indefinitely. No welfare protection like in Europe.
Yeah, I'm in Europe, not the northern part but still, we have some measures in place.
But the numbers don't look good at all, the villages that rely on tourism are dead, the ones that relay only one big factory like the audi plant or skoda are also hanging by a thread, they have money to pay the employee for a while but what will happen next? What if there is no demand for cars?
One of my friends started a luxury barbershop in a mall in December....I have no courage to start chatting with him and ask how he is...
The problem is that no matter how wealthy the state no matter how you reduce your necessities, there won't be money, plus you need a lot of money to start again the entire economy. We might be safe for a few months, if this goes beyond June we're all going to experience a true recession, unlike 2007 which will be a joke compared.
It's unbelievable that Trump is becoming so popular during this crisis
Nothing about Trump makes sense...
There was virtually zero coordination of an epidemic response at the national level.
When Trump say it's just the flu, the others say it's far worse and he should take measures, then he goes 180 degrees with his stance and it's a pandemic and he wants to close NY but the others now oppose...yeah you're far worse than us here in Europe with our failed Chinese testers and masks that let butterflies go though...
Even if Corona goes way sometime in the next 3-6 months, it doesn't mean the SP500 or DOW30 will hit a new ATH very soon. You need to understand that the US stock markets were very stretched and inflated. People were buying stocks like crazy, and there was less supply, and hence why we kept getting new ATH every few weeks for years. Similar to what happened with BTC in 2017.
So if the bear market is over, it could be 10 years before we break those highs again. Also keep in mind that the Boomers who got tons of money in their retirement, will most likely start cashing out in the near future and it will lead to oversupply of shares and cause the markets to trade sideways or downwards. So it might not be a repeat of 2008 where it hit a new ATH a few years later.
So if the bear market is over, it could be 10 years before we break those highs again. Also keep in mind that the Boomers who got tons of money in their retirement, will most likely start cashing out in the near future and it will lead to oversupply of shares and cause the markets to trade sideways or downwards. So it might not be a repeat of 2008 where it hit a new ATH a few years later.
People are expecting 2008 crisis repeat, but 2008 crash wasn't as sudden as upcoming one. So 1987-like crash model is more correct for the current situation.
I've been anticipating a 1987-style recovery for weeks. However, now that the course of the pandemic is becoming so bad in the US (infections not expected to peak for another month) I'm not sure anymore. My model was based on the idea that infections would quickly peak over a few-week period and then we would enter the recovery stage.
I didn't plan on the US government blundering the pandemic response so carelessly and negligently. The misinformation about masks from the CDC, the mask and ventilator shortages, the complete lack of urgent response was all very unexpected to me. It's unbelievable that Trump is becoming so popular during this crisis because his administration (and the Obama administration) completely eradicated any chance of a fast recovery. Neither administration re-stocked medical stockpiles after the H1N1 outbreak. Trump even dismantled the NSC pandemic office charged with responding to these emergencies. There was virtually zero coordination of an epidemic response at the national level.
This whole experience is a monumental failure of the US government and I'm beginning to worry the markets (and everyday American workers) are going to pay very dearly for it over the next year.
@dothebeats, 1987 repeat will be good for the US, but so will the 1950s flu that also brought on a recession. Recovery as almost as swift and as steep as the downturn. A lot like Bitcoin trajectory in short timeframes, really. Massive crashes, and then parabolas.
@stompix where are you located? I got family in SEA and almost everyone has been asked to go on leave without pay indefinitely. No welfare protection like in Europe.
@stompix where are you located? I got family in SEA and almost everyone has been asked to go on leave without pay indefinitely. No welfare protection like in Europe.
China appears to actually be ahead in the stock market for the month of March compared to all the other nations.
Which makes me think that this is an elaborate plan for the world economies to crash while China stays afloat. Then again, it must be more of me being into conspiracies but who knows?
Nope, not a conspiracy, just a lot of cash injected in the last two months, with hundreds of billions being offered from the start of February.
The fed is really out of control and the oil with its decreasing supply and the pandamic making it much worse.
Why would the price of oil be a major player in this? It's peanuts money compared to the stimulus package to prop shale drillers for years, and the US benefits from cheap oil prices.
The United States will be in a recession. The question is, will this be a 1987 type of recession or a 2008/2009 type of recession.
If it's the 1987 type of recession, USA will have it good. The plunge will be sudden, but the recovery will also be doable within a short span of time.
North Dakota and Texas won't have oil jobs anymore with how low the price is now.
True. With the sudden decrease on oil demands all over the world, there is no reason why would oil refineries would be wanting to ramp up production--or to even sustain their volume of production currently. The best thing these oil companies could see as to save some money during this crisis is to lay off some employees and just hope for the best.
Unemployment insurance filings have got up 200-1000% within the last week for some states from the lock down.
Their is a 2 trillion dollar stimulus package but I'm not entirely sure how that will help for the most part. Involves giving everyone around 1,200 USD and 500 USD a child.
Their is a 2 trillion dollar stimulus package but I'm not entirely sure how that will help for the most part. Involves giving everyone around 1,200 USD and 500 USD a child.
This would further cripple the economy as everyone and their mothers are eagerly wanting to take out cash from insurance and from the government as a response to the COVID-19 threat. The thing is, the US government never anticipated the worst case scenario and thought that they are somewhat immune against the ravages of the disease, and look where it got them.
China appears to actually be ahead in the stock market for the month of March compared to all the other nations.
Which makes me think that this is an elaborate plan for the world economies to crash while China stays afloat. Then again, it must be more of me being into conspiracies but who knows?
People are expecting 2008 crisis repeat, but 2008 crash wasn't as sudden as upcoming one. So 1987-like crash model is more correct for the current situation.
I think this crash better parallels 1987 than 2008 but it's not because of the policies mounted in response. Trump and Obama's stimulus policies are almost exactly the same. It's a matter of circumstance. 2008 resulted from systemic failures, not an external catalyst like 2020.
Pretty much everyone who makes < $99,000 a year and has a Social Security number will get a check. Even Social Security beneficiaries who already get government checks will get one. The expansion of unemployment benefits is a separate thing. https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html
Pretty much everyone who makes < $99,000 a year and has a Social Security number will get a check. Even Social Security beneficiaries who already get government checks will get one. The expansion of unemployment benefits is a separate thing. https://www.cnbc.com/2020/03/25/congress-to-send-taxpayers-1200-checks-in-the-wake-of-coronavirus.html
IMO Trump is an advocate of allowing consumers and free markets to address and solve problems society faces. Trump's tax cuts put more money in the hands of consumers and free markets. Which gives them greater liquidity to create jobs, address unemployment, welfare, poverty and other social economic issues.
Policies of Obama and the majority of politicians in the world, are the opposite. They focus on raising taxes and increasing state spending. Under the assumption big, centralized, governments can better solve issues relating to job markets, unemployment, welfare, poverty et al.
Trump is handing out free $$. But will likely deter tax hikes which prevent his bailout programs being becoming UBI or social security 2.0.
IMO anyway.
I'm amazed at the resilience of stock markets in the face of 3.3 million American jobless claims. I had been predicting a relief rally but I had almost stopped believing it could actually happen! I don't expect this exuberance to last for too long.
I think this explains it.
Quote
The Fed caused 93% of the entire stock market's move since 2008: Analysis
The bull market just celebrated its seventh anniversary. But the gains in recent years – as well as its recent sputter – may be explained by just one thing: monetary policy.
The factors behind that and previous bubbles can be illuminated using simple visual analysis of a chart.
The S&P 500 (^GSPC) doubled in value from November 2008 to October 2014, coinciding with the Federal Reserve Bank’s “quantitative easing” asset purchasing program. After three rounds of “QE,” where the Fed poured billions of dollars into the bond market monthly, the Fed’s balance sheet went from $2.1 trillion to $4.5 trillion.
This isn’t just a spurious correlation, according to economist Brian Barnier, principal at ValueBridge Advisors and founder of FedDashboard.com. What’s more, he says previous bull runs in the market lasting several years can also be explained by single factors each time.
Barnier first compiled data on the total value of publicly-traded U.S. stocks since 1950. He then divided it by another economic factor, graphing the ratio for each one. If the chart showed horizontal lines stretching over long periods of time, that meant both the numerator (stock values) and the denominator (the other factor) were moving at the same rate.
“That's the beauty of the visual analysis,” he said. “All we have to do is find straight, stable lines and we know we've got something good.”
Scouring hundreds of different factors, Barnier ultimately whittled it down to just four factors: GDP data five years into the future, household and nonprofit liabilities, open market paper, and the Fed’s assets. At different stretches of time, just one of those was the single biggest driver of the market and was confirmed with regression analyses.
He isolated each factor in a separate chart, calling them “eras” for the stock market.
From after World War II until the mid-1970s, future GDP outlook explained 90% of the stock market’s move, according to statistical analysis by Barnier.
GDP growth lost its sway on the market in the early 1970s with the rise of credit cards and consumer debt. Household liabilities grew with plastic first, followed by home mortgages, until the real estate crash of the early 1990s. Barnier’s analysis shows debt explained 95% of the entire market’s move during this time.
The period between the mid- to late-1990s until 2000 was, of course, marked by the tech bubble. While stocks took much of the headline, that time also saw heightened activity in the commercial paper market. Startups and young companies sought cash beyond their stratospheric share values to fund their operations. Barnier’s regression analysis shows commercial paper increases could explain as much as 97% of the tech bubble.
Shortly after the tech bubble burst, a housing bubble began, once more in the form of mortgages and other debt. That drove 94% of the market’s move for the first several years of the current century.
As the financial crisis reached a fevered pitch in 2008, the Federal Reserve took to flooding the financial market with dollars by buying up bonds. Simultaneously, interest rates fell dramatically, as bond yields move in the opposite direction of bond prices. Barnier sees the Fed as responsible for over 93% of the market from the start of QE until today. During the first half of 2013, the Fed caused the entire market’s growth, he said.
Since the Fed stopped buying bonds in late 2014, the S&P 500 has been batted around in a 16% range and is more or less where it was when the QE came to a close. Investors need to anticipate the next driver, said Barnier.
“Quantitative easing has stopped, but now we're into the interest rate world,” he said. “That means for any investor trying to figure out what to do, step one is starting with a macro strategy.”
https://finance.yahoo.com/news/the-fed-caused-93--of-the-entire-stock-market-s-move-since-2008--analysis-194426366.html
The bull market just celebrated its seventh anniversary. But the gains in recent years – as well as its recent sputter – may be explained by just one thing: monetary policy.
The factors behind that and previous bubbles can be illuminated using simple visual analysis of a chart.
The S&P 500 (^GSPC) doubled in value from November 2008 to October 2014, coinciding with the Federal Reserve Bank’s “quantitative easing” asset purchasing program. After three rounds of “QE,” where the Fed poured billions of dollars into the bond market monthly, the Fed’s balance sheet went from $2.1 trillion to $4.5 trillion.
This isn’t just a spurious correlation, according to economist Brian Barnier, principal at ValueBridge Advisors and founder of FedDashboard.com. What’s more, he says previous bull runs in the market lasting several years can also be explained by single factors each time.
Barnier first compiled data on the total value of publicly-traded U.S. stocks since 1950. He then divided it by another economic factor, graphing the ratio for each one. If the chart showed horizontal lines stretching over long periods of time, that meant both the numerator (stock values) and the denominator (the other factor) were moving at the same rate.
“That's the beauty of the visual analysis,” he said. “All we have to do is find straight, stable lines and we know we've got something good.”
Scouring hundreds of different factors, Barnier ultimately whittled it down to just four factors: GDP data five years into the future, household and nonprofit liabilities, open market paper, and the Fed’s assets. At different stretches of time, just one of those was the single biggest driver of the market and was confirmed with regression analyses.
He isolated each factor in a separate chart, calling them “eras” for the stock market.
From after World War II until the mid-1970s, future GDP outlook explained 90% of the stock market’s move, according to statistical analysis by Barnier.
GDP growth lost its sway on the market in the early 1970s with the rise of credit cards and consumer debt. Household liabilities grew with plastic first, followed by home mortgages, until the real estate crash of the early 1990s. Barnier’s analysis shows debt explained 95% of the entire market’s move during this time.
The period between the mid- to late-1990s until 2000 was, of course, marked by the tech bubble. While stocks took much of the headline, that time also saw heightened activity in the commercial paper market. Startups and young companies sought cash beyond their stratospheric share values to fund their operations. Barnier’s regression analysis shows commercial paper increases could explain as much as 97% of the tech bubble.
Shortly after the tech bubble burst, a housing bubble began, once more in the form of mortgages and other debt. That drove 94% of the market’s move for the first several years of the current century.
As the financial crisis reached a fevered pitch in 2008, the Federal Reserve took to flooding the financial market with dollars by buying up bonds. Simultaneously, interest rates fell dramatically, as bond yields move in the opposite direction of bond prices. Barnier sees the Fed as responsible for over 93% of the market from the start of QE until today. During the first half of 2013, the Fed caused the entire market’s growth, he said.
Since the Fed stopped buying bonds in late 2014, the S&P 500 has been batted around in a 16% range and is more or less where it was when the QE came to a close. Investors need to anticipate the next driver, said Barnier.
“Quantitative easing has stopped, but now we're into the interest rate world,” he said. “That means for any investor trying to figure out what to do, step one is starting with a macro strategy.”
https://finance.yahoo.com/news/the-fed-caused-93--of-the-entire-stock-market-s-move-since-2008--analysis-194426366.html
Their is a 2 trillion dollar stimulus package but I'm not entirely sure how that will help for the most part. Involves giving everyone around 1,200 USD and 500 USD a child.
It's said that the stimulus amounts to $6T which will be around $46k per family. There's another thread for this specific topic --> https://bitcointalksearch.org/topic/6000000000000-of-helicopter-money-is-coming-5235342China appears to actually be ahead in the stock market for the month of March compared to all the other nations.
With what I have read, they've bought a lot of cheap stocks. Jump to: