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Old 05-01-2020, 09:25 AM
 
1,988 posts, read 503,478 times
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Worth quoting here from today's Krugman column:

Quote:
Originally Posted by Paul Krugman
Well, whenever you consider the economic implications of stock prices, you want to remember three rules. First, the stock market is not the economy. Second, the stock market is not the economy. Third, the stock market is not the economy.

That is, the relationship between stock performance — largely driven by the oscillation between greed and fear — and real economic growth has always been somewhere between loose and nonexistent. Back in the 1960s the great economist Paul Samuelson famously quipped that the market had predicted nine of the past five recessions.
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Old 05-01-2020, 09:37 AM
 
6,889 posts, read 3,109,754 times
Reputation: 20868
Quote:
Originally Posted by Therblig View Post
Worth quoting here from today's Krugman column:

Basically, if Paul Krugman writes it, I ignore it. I don't care if he has ten Nobel prizes to his name.

In the late 90s, he famously predicted the Internet would be no more consequential to the economy than the fax machine.



He egged on the housing bubble and was completely blindsided by the inevitable crash that followed--even as a lot of us knew it was coming a year or two in advance.



After the banking crash, he forecast massive deflation which, of course, didn't happen.



In 2008 and 2009, he predicted to everyone who would listen that fracking would have zero effect on oil prices or the United States' dependency on foreign oil.



He spend considerable energy at the end of the last decade talking about how much stronger and better positioned for growth the EU's economy was compared to the United States.



And when Donald Trump won the presidency, he predicted a massive stock market crash immediately after the inauguration. Of course, the stock market did crash three years later, but because of the pandemic.

In other words, Krugman is nothing more than a bloviating hack who cashed in his economics credentials decades ago to become a pundit. And not a very good one at that.

Here's the thing. Economists are pretty terrible forecasters when it comes to the economy. They are almost never right. But even among economists, Krugman is pretty much the bottom of the barrel.

There's a reason he's earned the sobriquet, "Lord Of Wrong Predictions." Because he can be trusted to predict almost the complete opposite of what actually happens.

https://bongino.com/paul-krugmans-wo...c-predictions/

https://mises.org/library/fact-check...out-everything

https://www.bizpacreview.com/2018/01...ictions-592049

Last edited by MinivanDriver; 05-01-2020 at 10:32 AM..
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Old 05-01-2020, 11:42 AM
 
Location: Oregon, formerly Texas
6,384 posts, read 4,326,658 times
Reputation: 11073
Quote:
Originally Posted by MinivanDriver View Post
Basically, if Paul Krugman writes it, I ignore it. I don't care if he has ten Nobel prizes to his name.

In the late 90s, he famously predicted the Internet would be no more consequential to the economy than the fax machine.



He egged on the housing bubble and was completely blindsided by the inevitable crash that followed--even as a lot of us knew it was coming a year or two in advance.



After the banking crash, he forecast massive deflation which, of course, didn't happen.



In 2008 and 2009, he predicted to everyone who would listen that fracking would have zero effect on oil prices or the United States' dependency on foreign oil.



He spend considerable energy at the end of the last decade talking about how much stronger and better positioned for growth the EU's economy was compared to the United States.



And when Donald Trump won the presidency, he predicted a massive stock market crash immediately after the inauguration. Of course, the stock market did crash three years later, but because of the pandemic.

In other words, Krugman is nothing more than a bloviating hack who cashed in his economics credentials decades ago to become a pundit. And not a very good one at that.

Here's the thing. Economists are pretty terrible forecasters when it comes to the economy. They are almost never right. But even among economists, Krugman is pretty much the bottom of the barrel.

There's a reason he's earned the sobriquet, "Lord Of Wrong Predictions." Because he can be trusted to predict almost the complete opposite of what actually happens.

https://bongino.com/paul-krugmans-wo...c-predictions/

https://mises.org/library/fact-check...out-everything

https://www.bizpacreview.com/2018/01...ictions-592049
Who does predict anything right? Some economists who correctly called the Grest Recession, also became hackish once their services as a pundit came into demand. e.g.: Nouriel Roubini.

I think Krugman alternates between good and bad writing, altbough more bad than good lately. But the point that the stock market is not the economy is a good one.

I've been trying to read everything I can on the Spanish Flu, and my takeaway so far is that pandemics are very, very bad for an economy. Both the disease and the reactions. A Great Depression situation is possible here if we don't play our cards right.

I read one article that looked at the economy of a couple cities that locked down in 1918-19. It found thst closing schools had a significant deleterious effect. We have closed down much more than schools, and with the schools themselves, may be closed through 2020.
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Old 05-01-2020, 12:11 PM
 
1,988 posts, read 503,478 times
Reputation: 3196
Quote:
Originally Posted by MinivanDriver View Post
Basically, if Paul Krugman writes it, I ignore it. I don't care if he has ten Nobel prizes to his name.
Funny, the similarities here.
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Old 05-01-2020, 02:13 PM
 
Location: Orange County, CA
2,700 posts, read 2,191,277 times
Reputation: 1451
Quote:
Originally Posted by mitchmiller9 View Post
A lot of financial talking heads are predicting that eventually, the Fed will do a "reset" and cancel all of its US Treasury obligations. By that time, the Fed could be holding over $20 trillion in treasury notes. I could involve a period of "monetization" of US debt held outside the Fed, where the Fed buys up a huge chunk of US treasuries on the open market (requiring a change in the current law). I'm guessing this will be something that first world nations do in concert to prevent currency valuation disruptions. It may be something that the US does in response to a EURO debt crisis rather than a dollar crisis, or vice versa. That will be how the "debt crisis" likely ends... just cancel most of it!
Debt jubilee.
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Old 05-01-2020, 04:00 PM
 
4,557 posts, read 3,403,895 times
Reputation: 4411
Quote:
Originally Posted by seain dublin View Post
July 2021?

They won't be here in July 2020.

Many can't even qualify or get the small business loans. If you do get one in order to avoid having to pay it back one of the qualifications is you must hire back all the staff you had to let go. Now that sounds great, people get their jobs and everything is just the way it was right?

Wrong, I live in CA so for example if they allow restaurants to reopen they have to cut back on seating capacity up to 50%, I don't need to tell you this, but this will mean you need less staff. Well there goes being off the hook for the loan, in addition your business will suffer and you may end up closing. Can't survive on take out alone.

Most of these businesses are already gone for good. They can't survive paying rent on buildings that sit unoccupied.

I don't think you're getting that whether you frequent small businesses or don't or don't really care if they shut their doors forever. Well it is the American taxpayer who will be footing the bill for all the millions now on UE benefits and having to apply for food stamps.

Don't know about you but I would rather see people working than be on the dole, and most who get laid off feel the same. It's like a death in a way when you lose a job through no fault of your own.

I guess with some Americans until it's right in their face they don't get it.

Now we get to see what a Great Depression is really like, and people have a lot less civility now than they had back in the 30s.
I'm going to highlight the paragraph that is in bold. Anyone who qualified and received PPP funds are good no matter what until July 2020. The funds covered salaries for roughly 75 days. That gets through all of May and June. Some will have funding through July as they applied during the 2nd round of PPP.

We're kicking the can down the road at the moment. We won't know the true fallout of this until we suspend PPP funding going forward and permanently suspend the juiced unemployment insurance after June 2020.

Currently, we are trying to apply bandage to an economy that's mortally wounded with a gun shot wound to the head. The economy can make a recovery, but it's going to lack some function after recovery.

It will mostly be a trickle down effect in the restaurant industry with all businesses that supply to the restaurant industry. Anyone who leases a building or retail space to a restaurant tenant is and should be very nervous right now. There's just no recovery in sight for the restaurant industry. The restaurants still open and serving curbside are only doing so to remain relevant in their social media channels and also keep their existing customer base. There's always been HEAVY competition in this industry, to where people have elected to operate with razor thin profit to beats out their competition.

Here's the thing going forward, the rise in trendy restaurants (farm to table type restaurants) are going to disappear. What's going to remain and survive are national and global chain restaurants, as they have the pull and volume to influence supply prices. Farm to table does not have that luxury and when consumer confidence wanes, consumers begin looking for cheaper options to eat. In comes fast food, as well as, your 2 can dine for $20 and 3 courses for $10 chains. These offerings made restaurants like Chili's, Applebees, Fridays, etc very popular during the Great Recession in 2008.

Fast food restaurants are booming right now, since it fits a price point that most consumers can afford. Your trendy farm to table restaurant just can't compete, sadly.
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Old 05-01-2020, 11:25 PM
 
Location: Oregon, formerly Texas
6,384 posts, read 4,326,658 times
Reputation: 11073
Quote:
Originally Posted by weezerfan84 View Post
I'm going to highlight the paragraph that is in bold. Anyone who qualified and received PPP funds are good no matter what until July 2020. The funds covered salaries for roughly 75 days. That gets through all of May and June. Some will have funding through July as they applied during the 2nd round of PPP.

We're kicking the can down the road at the moment. We won't know the true fallout of this until we suspend PPP funding going forward and permanently suspend the juiced unemployment insurance after June 2020.

Currently, we are trying to apply bandage to an economy that's mortally wounded with a gun shot wound to the head. The economy can make a recovery, but it's going to lack some function after recovery.

It will mostly be a trickle down effect in the restaurant industry with all businesses that supply to the restaurant industry. Anyone who leases a building or retail space to a restaurant tenant is and should be very nervous right now. There's just no recovery in sight for the restaurant industry. The restaurants still open and serving curbside are only doing so to remain relevant in their social media channels and also keep their existing customer base. There's always been HEAVY competition in this industry, to where people have elected to operate with razor thin profit to beats out their competition.

Here's the thing going forward, the rise in trendy restaurants (farm to table type restaurants) are going to disappear. What's going to remain and survive are national and global chain restaurants, as they have the pull and volume to influence supply prices. Farm to table does not have that luxury and when consumer confidence wanes, consumers begin looking for cheaper options to eat. In comes fast food, as well as, your 2 can dine for $20 and 3 courses for $10 chains. These offerings made restaurants like Chili's, Applebees, Fridays, etc very popular during the Great Recession in 2008.

Fast food restaurants are booming right now, since it fits a price point that most consumers can afford. Your trendy farm to table restaurant just can't compete, sadly.
I'm not sure if this is true. Chains like TGI Fridays, Applebees, etc.. were already hurting really bad. Millennials hate those kinds of places.

I think fast casual places like Chipotle will see a boost.

I live in a place that saw a micro-brewery explosion in the past 5 years. Not to say that I don't like micro-breweries, but honestly I could not taste the difference between many of the new entrants. I expect a number of those will go under.
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Old 05-02-2020, 12:04 AM
 
17,804 posts, read 21,958,630 times
Reputation: 36085
Quote:
Originally Posted by weezerfan84 View Post
I'm going to highlight the paragraph that is in bold. Anyone who qualified and received PPP funds are good no matter what until July 2020. The funds covered salaries for roughly 75 days. That gets through all of May and June. Some will have funding through July as they applied during the 2nd round of PPP.

We're kicking the can down the road at the moment. We won't know the true fallout of this until we suspend PPP funding going forward and permanently suspend the juiced unemployment insurance after June 2020.

Currently, we are trying to apply bandage to an economy that's mortally wounded with a gun shot wound to the head. The economy can make a recovery, but it's going to lack some function after recovery.

It will mostly be a trickle down effect in the restaurant industry with all businesses that supply to the restaurant industry. Anyone who leases a building or retail space to a restaurant tenant is and should be very nervous right now. There's just no recovery in sight for the restaurant industry. The restaurants still open and serving curbside are only doing so to remain relevant in their social media channels and also keep their existing customer base. There's always been HEAVY competition in this industry, to where people have elected to operate with razor thin profit to beats out their competition.

Here's the thing going forward, the rise in trendy restaurants (farm to table type restaurants) are going to disappear. What's going to remain and survive are national and global chain restaurants, as they have the pull and volume to influence supply prices. Farm to table does not have that luxury and when consumer confidence wanes, consumers begin looking for cheaper options to eat. In comes fast food, as well as, your 2 can dine for $20 and 3 courses for $10 chains. These offerings made restaurants like Chili's, Applebees, Fridays, etc very popular during the Great Recession in 2008.

Fast food restaurants are booming right now, since it fits a price point that most consumers can afford. Your trendy farm to table restaurant just can't compete, sadly.
You're right about the supplement unemployment. Three months will fly by and than for example I believe the maximum amount in CA is $900 a month. If you're getting the extra amount of $2,400n a month that could equate to their actual salary. But than it goes away.

Because when you get laid off people get depressed and there aren't going to be enough jobs. Who cares if Amazon or some of these other companies are hiring. Too many people who haven't been impacted at least not yet, are very quick to say go deliver groceries. That's not going to pay the bills unless you're 22 and still live at home.

Great, America already has an obesity problem, fast food and sitting around the house.
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Old 05-02-2020, 07:32 AM
 
Location: Loudon, TN
7,071 posts, read 5,695,624 times
Reputation: 24335
Not all parts of the country are being impacted as heavily by the virus, or the unemployment situation. Not one business that I frequent has closed permanently. Most are still operating in some limited fashion, and a few are actually finding ways to thrive (delivery, take out, new business models). Others are just waiting to be allowed to reopen the same as before. Once things are given the go ahead to start opening back up, people who were laid off will find work again, and many will be called back to their old jobs. People who've been cooped up will want to eat out, shop, recreate en masse, again. The pent-up demand will cause a surge in business. I just don't have the feeling that all this economic collapse doom and gloom stuff will happen. Call me crazy, but it's been like pushing the "pause button" on the economy. It will take several months to a year to get it all up and running again, once the "go button" is pressed, but I think we will pull out of this much faster than most realize or predict. Hang on, stay the course, don't get yourself in a lather. This too shall pass, and it will happen sooner than most of you here seem to want to believe.
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Old 05-02-2020, 12:42 PM
 
6,889 posts, read 3,109,754 times
Reputation: 20868
Quote:
Originally Posted by redguard57 View Post
Who does predict anything right? Some economists who correctly called the Grest Recession, also became hackish once their services as a pundit came into demand. e.g.: Nouriel Roubini.

I think Krugman alternates between good and bad writing, altbough more bad than good lately. But the point that the stock market is not the economy is a good one.

I've been trying to read everything I can on the Spanish Flu, and my takeaway so far is that pandemics are very, very bad for an economy. Both the disease and the reactions. A Great Depression situation is possible here if we don't play our cards right.

I read one article that looked at the economy of a couple cities that locked down in 1918-19. It found thst closing schools had a significant deleterious effect. We have closed down much more than schools, and with the schools themselves, may be closed through 2020.

This is absolutely true. But the fundamental different between Krugman and the rest is the he shouts loudest and with the greatest degree of sureness into his megaphone. He flashes his Nobel, ignores all the times he was spectacularly wrong, and those lacking critical thinking skills swoon because he bats for their team.



Roubini is also of the same stripe, but not nearly as ubiquitous. He's the guy who got it right once and has been wrong ever since.



Pandemics are indeed awful in the short term. But, human costs aside, they do have their silver linings in terms of shaking out the economic deadwood. If you really want a fantastic example, look at the Black Plague. It killed an estimated 25%-33% of the world population. At the same time, it effectively ended feudalism in Western Europe and let to the Renaissance.



Unlike Krugman, I don't claim to have a crystal ball. However, I'm guessing that there will be foundational changes to how we do things from an economic and societal standpoint.
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