Will the Covid-19 Recession Turn Into a Covid-19 Depression? (credit, paycheck, interest)

[blahblahyoutoo]

Originally Posted by Philip T

In the case of the US it is just showing the underlying conditions that will cause US Recession -> Depression -> Fail.

+ Compounding Debt + Refusal to Tax Corporations and Imports.
+ Overspending on Military -- and going more so every year.
+ Price Gouging US on Medical + Refusal to go to Medicare for All.
+ Sticking with outdated technology (Oil and ICEs)
+ Do not support actual education

If we moved past these and instead -- Taxed Corporations and Imports, cut the US Military, set US up with M4A, Moved our technology up to 2020, and educated the kids . . . .

We would sail to the top. But we will not until the [Boomer/Reaganomics/Neo-Liberal/Hayek] Die-off.

This last 40 years of Stupid + Greed has really taken US down.

Covid-19 is not the real problem. It is just making it show through.

^^
someone that has not drunk the MSM kool-aid.
we were under mountains of debt prior to covid. covid merely pricked the bubble causing it to pop sooner (and magnified it).

[BobNJ1960]

We created a terrible economic decade to come, via massive closures. Fixed costs will crush the industries needing personal interaction: Hotels, restaurants, bars, airlines , entertainment.

NONE will recover at anywhere near pre covid size.

I am optimistic the false band aids such as the $600 sit home/week will end soon. That is terrific, as we need to take our medicine of high unemployment , mainly amongst less skilled professions, for being stupid enough to shut down the economy, and do so w/o subsidies other than typical ui via states.

In a year or so, a giant % of Americans will recognize our over-reaction caused more deaths and misery than covid, via economic destruction.

[Dd714]

Originally Posted by blahblahyoutoo

a well performing economy does not need low interest rates.
a well performing does not QE.
a well performing does not to step into the repo markets to provide liquidity.
a well performing does not deficit spend.
a well performing would not see the yield curve invert.

I would argue some of those points, deficit spending has been a feature of the economy since the beginning of time (with a few exceptions) and interest rates were on an upwards trend basically from 2015 until the virus. Yield curve invert was the doom and gloom recession prediction indicator from early 2019, yeah I remember it (and then it was "the sky is falling") - and it puffed out into nothing. It went away. Yeah nice try. The current one is from the virus impact.

[Oklazona Bound]

Originally Posted by redguard57

They're going to restore it soon. Trump and the Republicans' resistamce is wearing down.

Reckless government spending creates more problems but it does kick them down the road a bit.

[animalcrazy]

Here's the thing. The CBO estimates that we will take ten years to recover from this. We have unemployment on a scale never seen before. Big stores are already filing bankruptcies, foreclosures are waiting in the wings as well as evictions. During the financial melt down of 2008, it's estimated that ten million American's lost their homes. Our unemployment numbers are far worse with Covid. In 2008, the worst day was 3 million filing for unemployment with an annual average unemployment rate of 5.8%. With Covid so far it's 44 million in just 7 months, and those are the ones that got through, with an average unemployment rate of 15%.

We know how bad it was in 2008. These numbers are down right frightening.

This is not going away, and until we get this virus under control, our economy is trashed.

Right now people with money are buying houses like crazy here. We are busting buns to get the vacant rental property on the market asap. Economies move slowly. These unemployed people are going to be with us for quite awhile. Just look at the meltdown in 2008 and multiply it x3. Next year is going to be very bad, and so will the next 9 or so after that.

It's infuriating because our economy was so strong. It's not going to be again for quite awhile. That V shaped recovery? More lies.

Why does every major financial melt down happen under Republican presidents?

[blahblahyoutoo]

Originally Posted by Dd714

I would argue some of those points, deficit spending has been a feature of the economy since the beginning of time (with a few exceptions) and interest rates were on an upwards trend basically from 2015 until the virus. Yield curve invert was the doom and gloom recession prediction indicator from early 2019, yeah I remember it (and then it was "the sky is falling") - and it puffed out into nothing. It went away. Yeah nice try. The current one is from the virus impact.

deficit spending being a "feature" of the economy doesn't mean that it's healthy.
it just means borrowing from the future to pay for today's lavish lifestyle, which equates to a false illusion of wealth. exactly like the poor person maxing out credit cards to buy luxury goods while making minimum monthly payments. every thinks he's rich, but in actuality it's a facade of wealth.

your statement on interest rates rising is a lie and just plain wrong.
https://www.macrotrends.net/2015/fed...storical-chart
starting in 2/19, we stair stepped down from 2.5 to 1.5 on 12/19 (pre-covid) because the fed knew what was happening behind the curtains.

yield curve predicted exactly what we have today, a recession. because covid came along and exacerbated the situation does not mean it was wrong.

[Hemlock140]

The big difference between the great recession of 2008 and now, is that in 2008 it affected just about everyone. With the pandemic many of us are not only not affected, able to work from home, but saving money by not commuting or going out as much, plus getting stimulus money. It's basically the lower income jobs such as retail and hospitality that are unemployed or laid off temporarily. Now some public agencies (state, county and city) are cutting personnel costs due to less tax revenue, but a small percentage of layoffs compared to 2008. At 11.1% unemployment rate today, 88.9% are working. At worst in 2009 it was less, at 10%, but that included people in all salary ranges.

[redguard57]

Originally Posted by Oklazona Bound

Reckless government spending creates more problems but it does kick them down the road a bit.

It can be kicked indefinitely. With the new Fed paradigm, there is no such thing as consequence anymore.



To put this into perspective - the SECOND $1 Trillion dollar stimulus proposed by Republicans is larger than what Obama proposed in 2009 to counteract the financial crisis. That's after a $2T stimulus earlier this year and $3T from the Fed. The Democrats are calling for $3T, so $8T total stimulus vs. Republicans $6T. $8T is over 40% of annual GDP.



In 2009 Paul Krugman called for the stimulus to be $1.2T instead of $800B. If we'd had this activist of a Fed and congress in 2008 there would never have been a great recession.

[Dd714]

Originally Posted by blahblahyoutoo

deficit spending being a "feature" of the economy doesn't mean that it's healthy.
it just means borrowing from the future to pay for today's lavish lifestyle, which equates to a false illusion of wealth. exactly like the poor person maxing out credit cards to buy luxury goods while making minimum monthly payments. every thinks he's rich, but in actuality it's a facade of wealth.

your statement on interest rates rising is a lie and just plain wrong.
https://www.macrotrends.net/2015/fed...storical-chart
starting in 2/19, we stair stepped down from 2.5 to 1.5 on 12/19 (pre-covid) because the fed knew what was happening behind the curtains.

yield curve predicted exactly what we have today, a recession. because covid came along and exacerbated the situation does not mean it was wrong.

In terms of interest rate, you put a trend line to it over a period of time (5 years), it was upwards. They are constantly tweaking the interest rates up and down, look at that link you sent me you will see it from period to period. Who really knows what the future would be, maybe the fed would have raised it again. But I suspect they were reacting to political pressure to drop rates, as well as some external issues such as brexit, China trade, and other countries that weren't doing so well. I think in January they indicated that rates would remain unchanged.
But, of course you know, raising rates can be a bad sign as well - inflation, overheating economy, etc.
Anyways look after COVID and you can see the bottom dropped out, again your link shows that. 1.5 is no comparison to today. That's all COVID.

[seahawks404]

Originally Posted by animalcrazy

Here's the thing. The CBO estimates that we will take ten years to recover from this. We have unemployment on a scale never seen before. Big stores are already filing bankruptcies, foreclosures are waiting in the wings as well as evictions. During the financial melt down of 2008, it's estimated that ten million American's lost their homes. Our unemployment numbers are far worse with Covid. In 2008, the worst day was 3 million filing for unemployment with an annual average unemployment rate of 5.8%. With Covid so far it's 44 million in just 7 months, and those are the ones that got through, with an average unemployment rate of 15%.

We know how bad it was in 2008. These numbers are down right frightening.

This is not going away, and until we get this virus under control, our economy is trashed.

Right now people with money are buying houses like crazy here. We are busting buns to get the vacant rental property on the market asap. Economies move slowly. These unemployed people are going to be with us for quite awhile. Just look at the meltdown in 2008 and multiply it x3. Next year is going to be very bad, and so will the next 9 or so after that.

It's infuriating because our economy was so strong. It's not going to be again for quite awhile. That V shaped recovery? More lies.

Why does every major financial melt down happen under Republican presidents?

The economy wasn't strong. Businesses and millions of workers couldn't afford rent in April, not even a month into stay at home orders. There were just a bunch of people working low wage jobs, living paycheck to paycheck. And businesses surviving on credit.