What are some of the signs in terms of economics / financial markets that you think are giving us indications that another recession will come? Also in what time frame?
Tech Industry
5h
307
Musk screwing up Tesla with his political narrative
Tech Industry
Yesterday
2097
So hard being a women in tech industry
2024 Tax
Yesterday
3871
Bidenās new tax proposal is wild
2024 Presidential Election
Yesterday
2516
Biden ruined America and tech! Tax plans are insane
India
Yesterday
1655
Please vote sensibly š
No one knows. People who guess right make a shitload of money and don't tell anybody else
That's not completely true. People who guess right have an incentive to tell after they're fully into their position, since sharing their reasoning could help the bubble deflate earlier and get their positioned closed sooner, and holding big shorts for a long time is expensive.
Thatās like having a crystal ball
Or balls of crystal
Inverted yield curve
US bonds yield curve has inverted which has happened before every recession in last 5 decades. Sooner or later it is coming
Bingo! The 10 year to 3 month yield curve had been inverted for the last month. My best guess is a recession starting mid-2020 https://fred.stlouisfed.org/series/T10Y3M
Only sure thing is two quarters of negative gdp growth. Itāll be too late by then though.
Problem of correct prediction is everyone knows and takes corrective actions. This delays the recession. Recession is technically 2 back to back quarters of negative GDP growth. But this is post facto. To predict , yield curve is one of the most consistent indicator. This is difference of rate of interest for short term vs long term borrowings. Business Sentiment is another indicator. There are many institutions which run periodic sentiment check. This can predict recession before it happens. Job market conditions. Every job market boom is followed by a recession. Once everyone is hired and hiring becomes costly/very hard, businesses start to shrink. Apart from these, large banks and governments build recession models in an attempt to predict . Here is one example from New York fed: https://www.newyorkfed.org/medialibrary/media/research/capital_markets/Prob_Rec.pdf If it was only up to the markets without government intervening, recession would have long come. But Fed bank cutting rates is delaying the inevitable.
I've heard many people say over the years that raised rates will trigger a recession because too many companies have bad debt and are dependent on cheap financing. There's a clear catalyst for higher rates now, which is the trade war, as it can speed up inflation substantially.
Except cpi is still suppressed to the downside, companies are eating the higher prices rather than passing it to the consumer
In that case, are you short the market yet? I am :)
Agreed! Low interest and corporate buy backs are still there. Once interest rates go up, the cooperations will start sell off, cut backs and lay offs will follow. So as long as the federal reserve plays ball, recession will be delayed. Truthfully, this is not how capitalism should work. This is more of a socialist economy and was Obama Project...When government regulates markets.
I think there's something to be said about the fact that Keynesian economics can sort of find a way for surplus production to be used and achieve gains through scale and stability. However it's a very dangerous tool since everyone has the short term incentive to just keep borrowing and printing money. The fed kept QE and low rates too long, and the federal government used up all its budget for potential stimulus, so now our economy is highly unstable.
Reagans economy was also Keynesian. Spent an insane amount of money pumping up the Cold War machine, which was an economic stimulus. It faded like many Keynesian efforts, with additional tax hikes and massive debt. Keynesian works better when money is spent in areas that have a ROI, like world class infrastructure and education, or NASA. Donāt discount all the tech born out of the space race that led to lots of commercial innovation. Governments are better ran like Amazon, specifically investing in growth, than short term tax cuts that fizzle out eventually and leave behind a boat load of debt. Or just stay out of market manipulation entirely. But Iām sure no sane person wanted the feds to let the last recession just play itself out. Weād be fucked.
Exactly 4 months
The real question is what does the fed do when the recession hits? Going back to quantitative easing or 0 interest won't solve the problem as them doing that caused this problem. So you'll have inflation building up from all the spending in the last decade + recession = stagflation.
Fed bailed out the investment banks last time. This time, itās the fed that will need to be bailed out. The IMF will do it by printing SDRs (world currency).
Yep I think it's going to be inflation triggered rate increases that then trigger a recession. I kind of wonder if the Fed would allow "hyperinflation" to stimulate employment and melt away some of the debt.
If Trump doesn't get reelected
You got to be kidding, he is racist
If Trump doesnt get reelected I predict instant +3% to all markets. Then another 10 once the trade wars go away