What you're saying matches up with the reports I've been seeing.
I think a lot of HN readers are simply unable to believe such a thing can occur; the recessions of the past thirty years were mild compared to what's happening right now. Personally, I'm absolutely terrified.
Not having much luck myself, I don't think anyone knows how to make sense of it. Its either going to be worse than the great depression or no big deal.
Have been scanning HN a lot for anything related to the economy and found little except for this post.
You're absolutely right. You don't have to believe me but I called the last recession. It's not bad news that's frightening. It's a disproportionate government and market reaction. Governments making a lot of noise to protect weak hands. There are a lot of weak hands, many created since we "survived" the last scare, and it's not going to take much to bust them. Stay safe everybody and enjoy living history as usual.
It should terrify all those who believe they are safe from this type of thing. Most on this forum are doing well, but there could come a time when they look upon all the people judging them for not having the 'obvious' foresight to prepare for economic changes. Thats the fun thing about economic changes, sometimes they don't go the way that the "experts" expect. Even the smartest people predict wrong.
I think it's sheer ignorance to believe that this current economic situation is just going to "blow over" like the last recession we had.
We're not just going to spend and leverage our way out of this one (as we have with previous recessions) because the trust and confidence in credit is extremely shaky. The last 30 years, since about 1980, have been fueled by a ridiculous amount of credit and the bills are coming due.
It's now an issue of people and their confidence. The whole system of credit works because of trust, and with each bank failure and company fallout confidence is going to drop. This isn't just consumer confidence too, but also confidence on the part of foreign countries to believe that we'll make good on our insane level of debt.
We haven't had a negative quarter or high unemployment yet because 2008 just marked the significant beginning of this erosion of confidence and the revaluing of the massive bullshitting of on-paper "value" created by abnormal demand (fueled by credit). This "confidence crunch" is far from over.
Can you or someone else tell me what exactly that means for me?
I have my savings in a 401k with a mix of index funds stocks and bonds and to be honest I am quite happy that the government is stepping in and not letting everything go down.
I'm sure there is a downside, but can you make it clear what that is?
I noticed a lot of HN folks just love to be alarmist when it comes to the economy. I am sure this time you are right, but I've been reading HN comments like yours every single week for almost a decade now, always suggesting that we are on the verge of an impending doom...
I've been seeing a lot of calls about this incoming downturn (especially HN), does anyone have any articles/analysis they can point me to? Would love to read up on the state of it.
Am I the only one with a sinking, gut instinct, that this is indicative of a deeper problem in the economy? It feels like a crash is lurking... Maybe I'm just paranoid?
Color me skeptical - sounds like more anti-administration FUD from the WSJ (or because it gets clicks). It seems to me that the malaise is more irrational than backed by any actual macroeconomic circumstance.
I have the same fear. And more I read about the macro outlook it looks more grim.
Consider this situation - inflation is now what at 8%. That means the prices were up by 8% than last year. If it stays this high, federal reserve will raise rates but how high can the rates go? Turns out every 1% rate raise causes almost 33billion debt payment by US Treasury since US at this point has close to 33 trillion debt and growing.
A rate raise by 5% means around 150 billion for just the debt payment alone. This is obviously unsustainable as the Treasury doesn’t get more income unless it substantially raises taxes.
If we somehow come out of this situation, the debt will continue to rise since the US has a balloning social security spending and it’s only going to get worse due to more and more aging population.
So our generation (GenZ and millennials) are kind of screwed. I can’t see how we get out of this.
Interesting interpretation. I hadn't thought about it that way. Instead, I got a very different impression from the article -- more that this is the next big scare for the global economic system. Like the US subprime mortgage crisis in the previous decade, or the Russian/Asian debt crisis that sank Long Term Capital Management in the late 90's.
I don't think that massive downturn people are thinking is coming ... is going to come. The job market is too strong (because of lower immigration, and how many exited the job market during covid) and so is the housing market.
I thinks its going to be more like this for the next 8-12 months, until the fed stops raising interest rates, and then it will be a mad dash to get everything going again.
What "scare story"? Financial collapse already happened in 2008.
People paid a trillion in the US alone, out of their pockets, to ameliorate it (plus close to another trillion they lented to Detroit). And tons of middle/working class jobs are not coming back in the foreseeable future.
And that's the US. For some European economies it is even worse -- they got from 30% unemployment to double the suicide rates in 3-4 years time.
I was under the impression that lots of people saw this coming. Obviously as credit and loans are used more and more eventually it has to reach a limit. I personally had no reason to believe it would happen when it did, but over the years I've heard a lot of people warning of an economic collapse, especially with reference to the housing market. Of course there were people that vehemently denied it, but that will always be the case.
Am I the only one that thinks we DID see it coming?
Most companies latest quarterly earnings reports are great, unemployment is at record low. This is not a financial crisis based on reality, this is a crisis driven by fear of what could possibly happen, not what is actually happening and also the 2008 financial crisis is still in people’s mind, most of us would rather get out now than go through another 2008... I’m expecting this meltdown to be very short(less than a year), but we’ll get the real meltdown a few years later, resulting in a double-hump chart.
Edit: why the downvote, I’m really starting to hate the HN platform
I think a lot of HN readers are simply unable to believe such a thing can occur; the recessions of the past thirty years were mild compared to what's happening right now. Personally, I'm absolutely terrified.
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