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Old 13th July 2022, 07:53 PM   #1
Orphia Nay
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Recession?

Will we have a global recession? Several local recessions?

Thought it was worth a thread.

Wikipedia while I'm here:

"In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropogenic or natural disaster (e.g. a pandemic). In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.

"Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply or increasing government spending and decreasing taxation."

https://en.wikipedia.org/wiki/Recession?wprov=sfti1
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Old 13th July 2022, 09:58 PM   #2
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Originally Posted by Orphia Nay View Post
Will we have a global recession? Several local recessions?
We appear to be experiencing the opposite problem ATM - inflation caused by global market shortages - especially labour.

Central banks are trying to do the opposite of recessionary measures. They are trying to restrict the money supply by jacking up interest rates.

Of course, things could change on a button considering the corona virus pandemic and the Ukranian war.
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Old 14th July 2022, 09:09 PM   #3
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Originally Posted by Orphia Nay View Post
Will we have a global recession? Several local recessions?
Probably. Certainly a slowdown, at least.

The world's second-largest economy:

China’s GDP growth misses expectations in the second quarter

Quote:
China eked out GDP growth of 0.4% in the second quarter from a year ago, missing expectations as the economy struggled to shake off the impact of Covid controls. Analysts polled by Reuters had forecast growth of 1% in the second quarter.
USA:
Bank of America slashes S&P 500 target to ‘lowest on the Street’ after recession forecast
Quote:
Bank of America has lowered its 2022 target for the S&P 500 by 900 points, to 3,600, citing its forecast for a recession this year and expectations for a Federal Reserve “pivot” in 2023.

The new year-end target is “the lowest on the Street,” said equity and quant strategists at Bank of America in a BofA Global Research report Thursday. BofA now forecasts a “mild” U.S. recession starting in the second half of 2022, they said.
Right now the Fed is more concerned with squashing inflation. They may need to cause a recession to achieve that.
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Old 17th July 2022, 07:10 PM   #4
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The US is likely to have a mild-moderate recession,like the rest of Europe and Japan. Countries in the second and third world may see food riots, like those happening in Sri Lanka.
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Old 27th July 2022, 07:38 PM   #5
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Originally Posted by Orphia Nay View Post
Will we have a global recession?
Yes.

https://www.bbc.com/news/business-62310354

From what I can see, I think USA, NZ, UK, Italy and several other countries are currently in a recession, with this being the second quarter of contraction.

Does it matter? That's the question, and I think the answer to that is probably yes as well.

People are already deciding not to eat so they can feed their kids, so if things don't improve quickly I think we'll see some very negative results.

Governments are pretty powerless, with infrastructure spending not on the table because the resources to do the work isn't there.

We need a reduction in energy prices toot-sweet, and I don't see that happening.
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Old 28th July 2022, 10:47 AM   #6
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Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.
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Old 28th July 2022, 11:01 AM   #7
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Originally Posted by Brainster View Post
Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.
I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems!



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Old 28th July 2022, 03:48 PM   #8
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For those curious, the NBER declared a 2 month long recession for Spring 2020...somewhat over a year after the end of that recession.
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Old 5th August 2022, 09:12 AM   #9
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Granted, unemployment and job gains are a lagging indicator, but seriously, 528,000 new jobs and an unemployment rate of about 3.5%? This is definitely a Jekyll/Hyde economy. Of course the jobs report could put more pressure on the Fed to raise rates again. The key will be the inflation numbers next week. I will say anecdotally that I have seen price declines on some of the food products I buy regularly; not to pre-2021 levels, but noticeable, and of course gasoline is the same. So they might get some break there but maybe not, since CPI-U excludes the volatile food and energy components.
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Old 5th August 2022, 10:16 AM   #10
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Funny how good news is bad for stocks:

Stocks fall after strong July jobs report points to more Fed action

Quote:
Stocks fell Friday in a volatile trading session after the July jobs report was much better than expected, as investors assessed what a strong labor market would mean for the Federal Reserve’s rate tightening campaign.
. . .

The labor market added 528,000 jobs in July, easily beating a Dow Jones estimate of a 258,000 increase. The unemployment rate ticked down to 3.5%, below the 3.6% estimate. Wage growth also rose more than estimated, up 0.5% for the month and 5.2% higher than a year ago, signaling that high inflation is likely still a problem.
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Old 5th August 2022, 11:32 AM   #11
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It's almost as if economies are too complex to easily attribute effects to particular immediate causes.
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Old 5th August 2022, 12:39 PM   #12
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Originally Posted by Brainster View Post
Two consecutive quarters of negative GDP growth in the US. Of course the media is quick to remind us that while that is considered the classic definition of a recession, technically it has to be announced by the wonks at the NBER, which almost certainly means there will be no announcement until after the midterms.
Originally Posted by wareyin View Post
I'm sure that you can find this "classic definition" written down somewhere, right? But that certainly doesn't matter because a non-partisan organization is definitely in the tank for the Dems! : thumbsup :



: rolleyes :
"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.
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Old 5th August 2022, 01:08 PM   #13
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I AGREE


Some analysis of the real estate crisis in China. Could be a big deal, maybe. One thing for sure is that China wants to suppress this news.
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Old 5th August 2022, 01:09 PM   #14
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Originally Posted by theprestige View Post
"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.
Or...and this is where things might be too complicated for you so stay with me...NBER doesn't use 2 quarters of negative GDP growth and only 2 quarters of negative GDP growth to declare a recession. It's not like it was even pointed out in this thread that NBER declared a 2 month (which, for those struggling with the numbers is less than 1 quarter and also a lot less than 2 quarters) recession for the spring of 2020.
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Old 5th August 2022, 01:13 PM   #15
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Originally Posted by theprestige View Post
"You know how the NBER consistently declares a recession after two consecutive quarters of negative GDP growth? Well we just had two consecutive quarters of negative GDP growth. I guess that means we're in a recession."

"No! Wrong! Only the NBER is allowed to notice those numbers and tell us about them! You can't know about a recession until the high priests issue their decrees ex cathedra! Now shut up, sit down, and recite your catechism like a good little catholic." Effing protestants I swear.
Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down.
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Old 5th August 2022, 03:41 PM   #16
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Originally Posted by Puppycow View Post
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Some analysis of the real estate crisis in China. Could be a big deal, maybe. One thing for sure is that China wants to suppress this news.
Maybe they should reach out to the NBER, make sure they don't say anything counter-productive to Chinese interests.
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Old 5th August 2022, 03:42 PM   #17
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Originally Posted by Puppycow View Post
Technically, GDP numbers are subject to revision, and numbers for the most recent two quarters will always be preliminary estimates. I don't dispute that there is a recession, but it doesn't really become official until those preliminary estimates a finalized. They could be revised up or down.
Point taken. I'll keep that in mind going forward. Thanks!
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Old 5th August 2022, 05:50 PM   #18
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Originally Posted by theprestige View Post
Point taken. I'll keep that in mind going forward. Thanks!
Actually, I should revise what I said above slightly. There are GDP numbers released each month. The first two are preliminary and the third one is final. So Q1 is now final. Q2 is still preliminary:

https://www.investing.com/economic-calendar/gdp-375

I also think that the NBER uses a more complicated formula to define a recession than two consecutive quarters of negative GDP growth:

https://www.nber.org/research/business-cycle-dating

It's very unusual to have strong job growth, like the most recent jobs report, in the middle of a recession.
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