
Bank of America says the recession is already here - spking
https://www.cnbc.com/2020/03/19/bank-of-america-says-the-recession-is-already-here-jobs-will-be-lost-wealth-will-be-destroyed.html
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mywittyname
Certain sectors of the US economy (mining, agriculture, manufacturing) have
already been in and out of recessions for a few years now. These sector
recessions have largely been hidden from the public because the banking sector
is so much larger and has growth that outpaces the losses from the other
sectors. So when you look at total GDP, the US economy was growing. But when
you break GDP down into specific industries, you'll see that many of them have
been struggling for a few years.

The US BEA website has some great tools for exploring industry-specific
economic output.

Everyone wants to blame COVID-19 for the economic mess that's unfolding. But
in reality, the trade war we went through with China hurt sectors of the
American economy a lot. The country has been in a precarious position
throughout 2018. It was just overlooked due to the performance of the
financial industry, which is now beginning to wane.

Edit: not => now

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dhagz
Yeah, I really think COVID-19 is the straw that broke the camel's back, so-to-
speak.

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twomoretime
What recession? Market is dropping 1-2 times faster than it did in 1928. The
entire economy is about to shut down for two months - the world over. Treasury
Secretary predicting up to 20% unemployment, and I bet they were being
conservative to prevent even more of a panic, because in the last 20s we also
had 20% unemployment.

This isn't a recession. It's a depression. The US is about to experience true
hardship for the first time in decades.

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usaar333
> Market is dropping 1-2 times faster than it did in 1928.

That doesn't mean anything in itself. The market is much more efficient and
communication is faster now.

> Treasury Secretary predicting up to 20% unemployment,

If no government actions were taken.

> The entire economy is about to shut down for two months - the world over.

The "economy" isn't shutting down, only certain sectors (travel being the most
notable). Obviously this has ripple effects on everything.

Fun fact: The Chinese stock market only fell about 10% during the lockdown.
You should expect a U-shape recovery, just with some permanent loss (lack of
cash flow, expensive containment measures that must be maintained, etc.)

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twomoretime
>That doesn't mean anything in itself. The market is much more efficient and
communication is faster now

>If no government actions were taken

Points taken, but as for the rest, I think you're underestimating the scale
and ripple effects of shutting down an economy built around consumption. And
your optimism also seems to assume that the market was healthy before all of
this kicked off. That's where our perspectives differ. Airline industry, auto
industry, tourism, consumer goods and especially electronics, what proportion
of the economy do those sectors alone represent?

>Fun fact: The Chinese stock market only fell about 10% during the lockdown.

Considering that China has only tightened it's red curtain and the propaganda
machine is at full steam, I'm not so sure we can trust any positive news out
of China. Especially considering the regulated semi-private nature of the
Chinese Economy. Face is everything to an authoritarian government - without
the appearance of strength and/or competence, opressed peoples revolt. This is
why authoritarian states tend to have work camps.

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boulos
Huh! I was about to say "no, we have to see two quarters of decline". Except,
NBER no longer uses that rule and hasn't for a _decade_ :

> The NBER does not define a recession in terms of two consecutive quarters of
> decline in real GDP. Rather, a recession is a significant decline in
> economic activity spread across the economy, lasting more than a few months,
> normally visible in real GDP, real income, employment, industrial
> production, and wholesale-retail sales. For more information, see the latest
> announcement from the NBER's Business Cycle Dating Committee, dated 9/20/10.

[1] [https://www.nber.org/cycles.html](https://www.nber.org/cycles.html)

~~~
charwalker
In some areas it is still technically 2 quarters of negative growth however
manufacturing has been in a recession for a few quarters now using this
definition.

It is ongoing but previously limited to specific sectors that were hard hit by
tariffs and other policy decisions.

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tathougies
The current recession (which we are undoubtedly technically in) is mainly due
to governments everywhere mandating that the economy go into recession due to
a public health emergency. Once that's done, business will almost certainly
bounce back. Of course the economy is in a recession when all world
governments have essentially mandated that it do so.

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dgritsko
Is that entirely true, though? At least some folks are losing their jobs, and
at least some businesses are not able remain solvent. The effects from these
events can't simply be reverted once the emergency is "done" (if we can even
hope to be able to use the term "done" at some point), and it seems like they
will almost certainly have at least some long-term negative impact. "How much"
and "how long" remains to be seen.

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tathougies
Given that the government is being generous with a stimulus, and that most
banks will see the writing on the wall which is that these businesses are not
insolvent due to lack of demand, but rather the fact that demand was
legislated away, only to be reintroduced in (hopefully) a few months), most
banks and financial institutions will almost certainly salivate at the thought
of almost guaranteed loan yields if they have the funds to wait it out. And
banks of course certainly do have the funds to wait it out.

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Johnny555
Since the last time we've seen an economic disruption like this has been
decades, if not a century ago (the World Wars and the Great Depression come to
mind), I don't think our modern definitions of "recession" or economic
response really apply to this current situation.

Government should be focused on keeping people healthy, fed and sheltered
first, then focus on how to help businesses recover. For example, airlines are
effectively shut down right now, only carrying a fraction of their normal
passenger load, so there's not much that can be done to revive them until
people can fly again.

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sharadov
Recession is a weak word for this pandemonium that we are experiencing. We
need to coin a new word for this.

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pmoriarty
It's going to be the Great Depression of the 21st Century.

Only unlike the American Great Depression that happened about 100 years ago,
it will be world-wide.

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AnimalMuppet
What is your basis for calling the 1929 crash "the American Great Depression"?
It began with Creditanstalt in Austria, and affected far more than the US.

And what is your basis for saying that it _wasn 't_ worldwide?

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elliotec
How has this not been painfully obvious to everyone in the world for weeks? I
really don't understand why it is taking so long for people to accept this.

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twomoretime
The west has grown fat after decades of easy living. The reaction thus far
from the public has convinced me that the vast majority of people are helpless
and ignorant. This virus was an obvious threat in early January - long before
the WHO was turning a blind eye to China's censorship.

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Priem19
I wonder how Bitcoin is going to fare during all of this.

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Priem19
Why the down votes? Bitcoin was invented for times like these. E.g. criminal
banks receiving bailouts, and governments printing money. You can't keep
printing money to solve problems...

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D2187645
Bitcoin and cryptocurrency markets were shocked last week when the bitcoin
price briefly plunged to under $4,000 per bitcoin, sparking fears of a crypto
wipeout.

The sudden fall was led by Seychelles-based bitcoin and cryptocurrency
exchange BitMEX, with the bitcoin price dropping to a low of $3,600 on the
exchange before it was closed for "maintenance."

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hammock
Maybe the markets will start to flatten out now?

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baron_harkonnen
Not even close. I think everyone knows things will get worse, but at this
point there are too many unknowns to quantify that. The market will remain
stable for a few days, but there will continually be more data that will cause
the market to continue to drop.

We still haven't seen any country match China as far as total cases. Once
Italy gets to 80k and then 160k 4 days later a new wave of anxiety will pass
through people.

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brummm
When did Italy lock down the country? Last week? So then next week should
hopefully be their peak.

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baron_harkonnen
Hopefully you're right and this is why the market is stable for now. Maybe it
will happen that Italy will stabilize. I don't think there are any
epidemologists right now who don't think that Italy will reach 80k cases and
160k as well, but the distance between 80k cases and 160k might be much longer
than I mention.

But this brings its own uncertainty. If we succeed in not overwhelming the
medical system then everyone will remain on lockdown longer which will have
it's own unique economic impact.

The point I'm making is that it most certainly will get much worse, but
exactly how and what that means is very uncertain right now so virtually
impossible to price correctly.

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jsnider3
Have we considered rescheduling?

