Global Economy, recession, depression, or...

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Re: Global Economy, recession, depression, or...

Post by admin » Sat Jun 27, 2020 12:24 pm

here is an opinion piece that does a fairly good job of summarizing the laundry list of headwinds coming for the United States economy, that could push it in to depression:

https://www.marketwatch.com/story/the-c ... 2020-06-26

I would be hard pressed to come-up with a list even a fraction as long that would save it from a depression.

The U.S. economy is just a canary in the global economic coal mine.

In short, a V-shaped recovery is a pipe dream any time soon. even if the virus "magically disappeared" tomorrow, there is no "magical" economic recovery tomorrow, next month, or even next year. This is global damage that will take years to repair.
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Re: Global Economy, recession, depression, or...

Post by admin » Mon Jun 29, 2020 9:16 am

the clock is ticking down on the American cash cliff. looks like about 30 to 60 days, and someone better come up with a plan.

https://mobile.reuters.com/article/amp/idUSKBN24014U

but, it is election year and everyone in Washington seems intent on digging in their heels.

It is also not just individuals, states and local cities are facing a cash cliff too. Many were not in the best of financial conditions before the pandemic.
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Re: Global Economy, recession, depression, or...

Post by nikotromus » Fri Jul 03, 2020 10:44 am

admin wrote:
Mon Jun 29, 2020 9:16 am
It is also not just individuals, states and local cities are facing a cash cliff too. Many were not in the best of financial conditions before the pandemic.
Not to mention the fake money debt mountain which the whole world resides under. I couldn't think of a more perfect, blameless and apparently believable event to the masses than Cooties to tie it all up in a big bow and reset this broken down 1975 Plymouth Duster.

Can't you just envision president Ding Dong right now behind a podium saying something like: "We had the greatest economy the world had ever seen folks, we really did. It was powerful enough to face down Cooties part 1 and get right back up from that sucker punch. You all saw those stock market numbers right? However, the second wave proved to be too much of a burden. Who could have seen that coming?"

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Re: Global Economy, recession, depression, or...

Post by admin » Tue Jul 07, 2020 1:07 pm

The one I am blown away is Trump's ICE declaration that foriegn students in the United States will have to leave or face deportation if their school goes online. That is just straightforward racism for trump to play to his anti-education red neck base, and at the same time force schools to open-up with in person classes or loose those students.

over a million students are affected. I actually think it is more.

For many of these students it is an all in bet for them and their families to go to school in the united states. many are on third party scholarships. They can not go back, even when the crisis is over.

I got two friends that were planning to send their kids next year to the United States to school. who wants to gamble several hundred thousand dollars and years on the possibility they 'might' be able to finish their program.

even for the universities, the foriegn students pay higher tuition rates, subsidies the schools.

That is all beyond the issue of the benfits that the united states gains by having so many foriegners study there. That one is pretty well documented. everything from the raft of CEOs running / starting American companies, to foriegn leaders that went to school in the U.S. (e.g. pinera, etc).

The u.s. can not recoup a generation of talent lost to this stupidity, not to mention global influence.
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Re: Global Economy, recession, depression, or...

Post by admin » Tue Jul 07, 2020 3:40 pm

the head of homeland security just admitted in an interview they are doing this to force schools to open.

and claimed it was because of visa fraud.

$41 billion dollars....
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Re: Global Economy, recession, depression, or...

Post by admin » Wed Jul 08, 2020 9:33 pm

well, seems harvard and some other schools are trying to get a restraining order against ICE.
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Re: Global Economy, recession, depression, or...

Post by admin » Wed Jul 08, 2020 9:46 pm

so, here is my short-term guestimate of what is coming down the pipe.

Trump is trying to force open schools this fall. he has about 30 days. everything from cutting off federal funding to lowering the CDC guidelines.

federal unemployment subsidies run out about the same time.

no schools, no buisness reopening, no jobs. In many communities the schools are some of the biggest employers.

parents and communities are going to revolt.

I also highly suspect this all turns in to a smoldering pile of law suits across the United States, as there is a whole slew of long standing anti-descimination laws related to health, safty, disability, and family status that they will violate if they try to open. Trump does not get to ignore those, and has no control over them. for every federal law, there is probably 50 state ones or more. which defending all those lawsuits will just put more strain on the school, state, and city finances. unions will join in, public workers of all kinds, etc. strikes and protests are completely possible, along with big losses for school boards, etc at election time that try to open.

well, that all makes the stock market panic, right in the middle of the traditional August- September-october market crash season, and man this year it sure has a lot to crash over.

in the next 30 days the market is finally going to get some cpr on just how bad a shape companies really are in, as so far most companies have simply withdrawn their guidance. quarterly reports will be out.

which by then is November election season.

oh, almost forgot. all while the pandemic rages on, pushing OVER 100,000 new cases today right smack in the middle of campaigning and voting; just accelerating the virus more while the flue season is in full force.

well... think I will wait for that next vacation in the United States for another 8 years.
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Re: Global Economy, recession, depression, or...

Post by admin » Thu Jul 16, 2020 10:38 am

unemployment benefits in the U.S. set to run out at the same time the moratorium on evictions and forclosures are set to run out in most states across the U.S. Remember, this is just a delay, not forgiven rent and mortgage payments. many states have a massive backlog of eviction and foreclosure orders, that simply have not been executed.

https://abcnews.go.com/amp/Health/wireS ... r-71801847

not sure anyone seen this too, but the Republicans in congress are insisting that any new stimulus money package include an across the board protection from law suits for anything related to covid.

companies, hospitals, nursing homes, airlines, basically everyone, and retroactively applied back to February. a truly stunning and historical piece of corruption in the making.
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Re: Global Economy, recession, depression, or...

Post by admin » Thu Jul 16, 2020 12:30 pm

51 million unemployed in the United States, and I have my doubts about that number capturing the real unemployed/ under employed.

https://www.sfchronicle.com/business/am ... 412510.php

remember, in the United States the "unemployment" stats are so politically jiggered, they are almost meaningless.

for example, someone looses their job, can not find a job, so decides to stop looking, they are no longer counted as unemployed. considering there are no jobs, and lots of competition for what jobs there is, would drive a lot of people to stop looking until things pick-up.
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Re: Global Economy, recession, depression, or...

Post by Zenth » Thu Jul 16, 2020 12:52 pm

The real number to look at is the number of employed Americans. Probably one third of the population.

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Re: Global Economy, recession, depression, or...

Post by admin » Sun Jul 19, 2020 1:12 pm

So how much worse can this get?

Much, much worse.

So, here comes Lehman Brothers 3.0, on steroids, in the middle of a REAL pandemic demand driven recession (as apposed to the paper recession in 2008).

It is the CLO market (corporate leveraged loans), American banks are up to their eyeballs in them, as they reshuffle the deck chairs on the titanic waiting for the music to stop.

https://www.theatlantic.com/magazine/ar ... se/612247/

Keep an eye on the U.S. Congress. I think they already know it is in the pipe.

In a recent interview with Pelosi, she was asked about the republican insistence that any new stimulus include law suit protection to all COVID related to liability to companies (certain to include banks and financial institutions), retroactively back to April. All she said, "let's wait and see what they propose".

3 to 6 months is all I give this musical chairs, but even that might be optimistic.

The august to October period is where bad news becomes catastrophic news in the markets and economy historically.
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Re: Global Economy, recession, depression, or...

Post by admin » Mon Jul 20, 2020 12:52 pm

There is another phenomenon that happens during a deep recession that I keep seeing pop-up, but almost no economist I have seen try to address.

people that downgrade their employment and their income. I guess generally you could call it "under employment"; but, that does not really capture it. In under employment someone say has their hours cut back.

what I am talking about is say the school teacher with a diploma, taking whatever work they can get. say a greeter at wall mart.

They take both a social productivity hit and an income hit, but are otherwise counted as employed.
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