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Ask HN: Is this the beginning of the 'Greater Recession'?
6 points by patientplatypus 5 months ago | hide | past | web | favorite | 6 comments
So we are currently seeing a severe market downturn over the past few weeks, China/Eastern markets have been taking a severe beating over the last year. We've also seen the collapse of the bitcoin/coin markets.

I'm wondering if people are worried that this could turn into a generalized global market collapse like 2008 (but this time worse!), and if so, what the solution will be to prevent it being as bad as 2008?

Seen it all before. If you think about it there is always an incoming "severe market downturn" - it's just that very few people can predict exactly when it will happen (look at 2008).

What really matters is this: do you have a strategy in place should things go south? Have you learned the lessons of 2008?

1) Do you have decent liquidity? 2) Do you have a diversified portfolio? 3) Have you been continually improving your skills and knowledge and expanding your types of skills? 4) Have you created multiple streams of income (both active and passive)? 5) Have you minimized your ongoing costs and developed a frugal lifestyle, or do you have an excessively high "burn rate"? 6) Have you kept debt to a reasonable and manageable level (i.e. you pay off your full balance on credit cards, you have a manageable fixed interest low interest rate mortgage). 7) Do you have an emergency fund in place?

You can't control the global economy. There will be wars including trade wars and corrupt politicians etc etc What you CAN predict is your own strategies, behaviours and preparedness.

It could be the early warning signs of such a collapse, but I suspect that the market is instead increasingly reflecting the costs of the unnecessary trade war the US administration is pursuing.

If these are early warning signs, that same trade war (or direct effects therefrom) is most likely to be the proximate trigger, although there could always be a black swan event of some sort instead (for example a data breach large and complete enough to actually ruin the credit of many USAians).

I think the Bitcoin variable sits separately to the others. That IMO is still purely speculative investment and not indicative to market strenght. E.g. I know more people that invested in it than use it with any form of regularity. This seems a pattern beyond my circle.

But greater recession... we seem due for downturn. And don't have the benefit of booming developing nations to help skip the cycle this time. Monetary policy is largely maxed out. And politicians these days seems reluctant to use fiscal policy if it involves increasing taxes to create 'trickle up'. This combined with massive government leverage at so many levels and regions, I think it's fair to say a resession, and our options to soften the severity or length, seem likely both in event and to be drawn out.

....but who knows maybe we can do more and more quantative easing amd go into negative interest rates... Or something totally new...

If this is a huge recession/depression forming, it's too late to prevent it.

I've seen many explanations by people I respect of why it is going to happen but likely won't be as bad as 2008. It's all speculation though.

It might be, it might not be. 3 months down the line it could be like nothing has happened.

We've had sharp drops like this in the last couple of years, then 3 months later recovered.

Investors are getting jittery about interest rates, trade wars etc. It only takes a couple to start pulling out, for the rest to follow suit.

It could, but probably not.

Things are going to slow down a bit, because China and the US are raising interest rates/cutting credit, and Trump is slowing trade.

That will expose some markets that are overleveraged, but hopefully we can do some weaning without causing a cataclysm in anything that would squeeze the money supply suddenly.

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