Which is/will be worse? The Great Recession or Covid-19 crisis

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CS
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by CS »

@chenda
That makes more sense than anything else I've read.

jacob
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by jacob »

That's not just some economist. That's Dr Doom himself. One of the few (or many depending on how you count) who predicted the GFC in great detail (US housing, PIIGS in the eurozone) and sounded the alarm in 2006 two years before things unraveled.

Augustus
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Augustus »

“It’s ironic in a middle of a pandemic that health care spending would be down,” said Larry Levitt, the executive vice president for health policy at the nonprofit research group, the Kaiser Family Foundation. “But the losses in March and April have been astounding.”
https://www.cnbc.com/2020/05/05/hospita ... demic.html

https://www.bloomberg.com/news/articles ... -onslaught

It may be a good time to start licking elevator buttons, because in a few months your local ICU may close down due to bankruptcy proceedings. :lol:

Alphaville
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Alphaville »

chenda wrote:
Fri May 22, 2020 3:06 pm
A more negative assessment from some economist who appears to know what he is talking about. Decade long depression, food riots and climate change shocks all might be heading our way.

https://nymag.com/intelligencer/2020/05 ... l#comments
climate shocks you say? but nobody saw this coming! china lied and obama didn’t leave us any notes! :lol:

irony aside, i like nouriel roubini, and i see he’s taking a broader view, which makes sense. the v-shaped recovery model is posited for all other things being equal, which isn’t guaranteed. he’s also looking at the coming decade, not the short term, so it makes even more sense.

a black swan on top of a black swan would make a special kind of sandwich... why am i suddenly thinking of frank reynolds right now? :lol:

chenda
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by chenda »

@Jacob I was been a bit ironic ;) His track record does mean we should take him seriously.

@Alphaville - Indeed, though the notion of thawing permafrost releasing hitherto unknown viruses was a disturbing idea.

Alphaville
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Alphaville »

chenda wrote:
Fri May 22, 2020 5:48 pm
@Alphaville - Indeed, though the notion of thawing permafrost releasing hitherto unknown viruses was a disturbing idea.
this reminds me of an episode of the x-files where they find the black oil in a frozen neanderthal or something? hard to remember all those convoluted plots, but yeah.

loved the article though, and i’m exhausted from a long day, but i should read it and reread it so i can research every point he makes in depth.

maybe this could be done collectively.... if not here, i don’t know where else in the interwebs...

white belt
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by white belt »

I've heard several economists argue that stagflation will be the long term outlook for the US, but Roubini's interview is the first time I've heard someone point out the negative supply shock that may result from technological stagnation.

I'm of the opinion that COVID-19 was just the pinprick that popped the debt bubble that has been propping up the economy for the last decade. Therefore, a long term recession/depression will be worse than the short term unemployment and deflationary effects of COVID lockdowns.

CS
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by CS »

Healthcare spending is down so much that my insurer sent out a spam voice message yesterday to everyone telling them they get 20% off their premiums for July and August.

This is not out of the goodness of their heart. There is that pesky law that says they have to give back money that isn't spent on healthcare over a certain amount allowed for admin. I've gotten money back from them then last time I had them, when things were good.

It must be really bad if they don't want to rack up bills starting in July.

I still am surprised to see jobs in my field coming by. But then Rad Oncology is a money maker. Administrators would probably give someone's first born (never their own of course) to get that department cranking again, along with surgery.

nomadscientist
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by nomadscientist »

The conflation of corona with any pre-existing QE-induced malinvestment makes no sense to me. Granting that QE and the resulting sky high (fake) valuations is an issue, what's the reasoning for any liquidation to coincide with corona? It certainly has not done so thus far. If anything corona has pushed the horizon out several years by giving political cover for unprecedentedly vast QE and public debt spending in peacetime. Something which doesn't seem remotely justified by the social danger posed by corona itself, which is minimal.

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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by onewayfamily »

chenda wrote:
Fri May 22, 2020 3:06 pm
A more negative assessment from some economist who appears to know what he is talking about. Decade long depression, food riots and climate change shocks all might be heading our way.

https://nymag.com/intelligencer/2020/05 ... l#comments
Link didn't work for me (maybe because I'm in Europe?). Anyway, here is a copy for anyone else having issues accessing it:
https://beta.trimread.com/articles/17549

7Wannabe5
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by 7Wannabe5 »

I think the interviewer’s thought that “class solidarity” might take precedence over nationalism was on point, especially when it comes to creation and trade of non-rival knowledge assets by knowledge workers. Also, at this stage in global development, if the situation does devolve into parallel play, the US will still hold significant advantage in the not insignificant quadrants of public and private individual production of innovation at the margin.

Alphaville
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Alphaville »

another variation on the same theme. a month old! so maybe that was the original theme and we just heard what followed:

https://www.theguardian.com/business/20 ... able-covid

Seppia
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Seppia »

Roubini predicted the GFC but he also predicted that we would have runaway inflation immediately after due to QE.
When I look at the future I always think/hope for a Japan style outcome.
They are a country that has had demographic decline, a ballooning public debt and zero inflation for a long while now.
And things are fine.

I think predicting things a decade away is very, very hard, so hoping Roubini is right on less than 50% of his points.

Alphaville
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Alphaville »

Seppia wrote:
Sun May 24, 2020 1:04 am
Roubini predicted the GFC but he also predicted that we would have runaway inflation immediately after due to QE.
When I look at the future I always think/hope for a Japan style outcome.
They are a country that has had demographic decline, a ballooning public debt and zero inflation for a long while now.
And things are fine.

I think predicting things a decade away is very, very hard, so hoping Roubini is right on less than 50% of his points.
i hear you on the debt front. in the comments under that new york mag a poster comments on how we don’t owe that debt to space aliens but to ourselves. japan has indeed stretched our understanding of what is possible in economics, so we’ll see how that shapes up.

but on the other hand i think that predicting things to happen *within* a decade is sort of easy. so many things happen in a long span that it’s easy to guess at least a couple of them— a bit like psychics, ha ha ha.

the specter of climate change really looms large in the near future. it’s usually not a single thing that brings us ruin, but the one thing on top of another thing on top of another, and climate change brings a host of variables with it: ecological/agricultural, epidemiological, demographic, etc.

greater automation is inevitable too, but that doesn’t need to be bad.

it’s not that all changes will necessarily be bad in the end, but our ability to adapt will be strained. we seem to be a reactive species, always fighting the last battle instead of preparing for the next one, so the faster change comes the more we’ll stress.

Seppia
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by Seppia »

Alphaville wrote:
Sun May 24, 2020 8:04 am
but on the other hand i think that predicting things to happen *within* a decade is sort of easy. so many things happen in a long span that it’s easy to guess at least a couple of them— a bit like psychics, ha ha ha.
Agreed, but he's basically predicting something close to the apocalypse, so he can't exactly call it a win if he hits on 3 of the 10 predictions :lol:
Alphaville wrote:
Sun May 24, 2020 8:04 am
greater automation is inevitable too, but that doesn’t need to be bad.
That's another one that I never understood. Greater automation is a trend that's been in place since the industrial revolution, and while it did create some downsides locally, it generally has had a net positive effect on the overall well being of people.
Now all of a sudden it's 100% bad? I don't get it.

daylen
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by daylen »

@Seppia It seems like there is a positive correlation between automation and socialistic policies(*)? If so, then perhaps the argument is that such policies will not be able to keep up any longer to decelerate inequality? Even with an increase in absolute well-being this could still pose a treat due to the psychological effects of relative well-being.

This is just speculation on my part. I am out of my depth.

(*) Perhaps with some lag due to slow governmental reaction time.

7Wannabe5
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Re: Which is/will be worse? The Great Recession or Covid-19 crisis

Post by 7Wannabe5 »

@daylen:

Your take is pretty much the thesis of “The Technology Trap: Capital, Labor, and Power in the Age of Automation” by Frey. Well worth a read.

I am currently attempting to read Paul Romer’s Nobel Prize merit paper on innovation and technology. I thought it was kind of amusing that he defined L = labor as something apart from H = human capital as being a healthy human with usual level of eye to hand coordination. Especially since it takes more brain work to walk without falling then to play chess.

I hang out with a lot of Big 3 engineers, and it is my understanding that it is currently the case that automation is greatly preferred for dangerous tasks that might result in liability if human was injured, but humans are more cost effective for tasks that require any degree of flexibility. For instance, if you know a task might vary somewhat for each new model line in ways not easily predicted, it would be easier/cheaper to retrain humans than to install new machines.

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