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Raldikuk posted:To an extent they can be but the markets can remain irrational longer than one can often remain solvent so it can be quite risky even if you notice all the right boxes being ticked.
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Jun 26, 2017 08:11
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Grouchio posted:So you're implying that recessions can be predicted to an extent if you're smart enough? Yes. Economists have successfully predicted 14 of the last 5 recessions.
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Jun 26, 2017 08:12
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Grouchio posted:So you're implying that recessions can be predicted to an extent if you're smart enough? They can be guessed based on variables but they can never be predicted by any scientific standard. There's no real method even though there are plenty of valid indicators to look for. MiddleOne fucked around with this message at 08:23 on Jun 26, 2017 |
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Jun 26, 2017 08:20
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Grouchio posted:So you're implying that recessions can be predicted to an extent if you're smart enough? You can make an educated guess that a particular risk factor might be enough of a problem to cause a recession and there are leading indicators that you can (try to) use to predict whether economic activity is slowing down. Keep in mind that the NBER won't even say for sure that the economy is in recession until we're actually well into a recession, because the the definition requires several months of past data.
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Jun 26, 2017 08:38
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the heat goes wrong posted:Yes. Economists have successfully predicted 14 of the last 5 recessions.
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Jun 26, 2017 08:39
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Cicero posted:Similarly, there can't be another recession, as goons pointed out in many threads, this last one was the one that finally death spiralled and destroyed capitalism. I think we're still pretty strongly in that recession to be honest. We've seen some recovery but that doesn't mean we're out of the woods yet. Recovery from the Great Depression started 3 years after it hit but it lasted a decade easily.
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Jun 26, 2017 08:51
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Cicero posted:Similarly, there can't be another recession, as goons pointed out in many threads, this last one was the one that finally death spiralled and destroyed capitalism. Are corporations as invincible and 'too big to fail' as they'd like us to believe?
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Jun 26, 2017 09:09
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Ccs posted:Well, I was hoping it was rising due to the "fundamentals" that people always talk about. Like our productivity has increased and is compounding so that's leading to awesome gains. As opposed to it being out of a sense of desperation to somehow beat inflation. It is. The value of stocks and the market are not a magic number people just make up. It's based on revenue, profit, growth, and projections of all of the above. If a company earns $X per year and is growing at a certain rate, or is projected to grow at a certain rate, investors are willing to pay a multiple of $X to own a part of that company, and by extension, receive the profits of that company. Right now that multiple is a little higher than the historical average, and maybe that's because there aren't as many attractive alternatives with rates so low. Of course it might also make sense for the multiple to be higher: higher growth companies get higher multiples. You'd pay more for a company that earns $X but is growing 50% a year than you for a company earning $X that's growing 10% a year. If the revenue of the companies in the market is going to grow more than average in the next couple of years, the market is priced fairly.
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Jun 26, 2017 12:28
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ToxicSlurpee posted:I think we're still pretty strongly in that recession to be honest. We've seen some recovery but that doesn't mean we're out of the woods yet. Recovery from the Great Depression started 3 years after it hit but it lasted a decade easily. Grouchio posted:That's bullshit and you should know it, considering that the entire globalist capitalist system has not yet reached it's black Thursday. Which will happen sooner or later.
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Jun 26, 2017 13:35
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I'm the millions employed in 0 hour contracta
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Jun 26, 2017 13:47
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Cicero posted:There are still some major economic issues obviously, like rural towns basically dying, hollowing out of the middle class, labor force participation slowly trending downwards, etc. but having issues != being in a recession. GDP hasn't decreased in a long time, and the unemployment rate is very healthy. Underemployment is still rampant and there are like three years ever where productivity didn't increase. Growth is pretty "meh" right now and all those things you mentioned make our economy absolute garbage for most Americans.
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Jun 26, 2017 13:51
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ToxicSlurpee posted:Underemployment is still rampant and there are like three years ever where productivity didn't increase. Growth is pretty "meh" right now and all those things you mentioned make our economy absolute garbage for most Americans. How is the economy garbage for 'most Americans' in a way that wasn't also true in, say, 2005?
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Jun 26, 2017 13:53
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paternity suitor posted:It is. The value of stocks and the market are not a magic number people just make up. It's based on revenue, profit, growth, and projections of all of the above. If a company earns $X per year and is growing at a certain rate, or is projected to grow at a certain rate, investors are willing to pay a multiple of $X to own a part of that company, and by extension, receive the profits of that company. Right now that multiple is a little higher than the historical average, and maybe that's because there aren't as many attractive alternatives with rates so low. Of course it might also make sense for the multiple to be higher: higher growth companies get higher multiples. You'd pay more for a company that earns $X but is growing 50% a year than you for a company earning $X that's growing 10% a year. If the revenue of the companies in the market is going to grow more than average in the next couple of years, the market is priced fairly. This is all correct but what you're leaving out with this part is that the stock markets follow basic rules of supply and demand. Stocks are investment avenues and as stocks are limited in supply if demand becomes higher than supply then stock value inflates beyond what can be justified by for example book value or growth analysis. Currently many of the traditional capital soaks of the economy are kinda dead in the water due to the low-rate environment which makes capital move increasingly towards stocks and high-risk bonds. With this increased demand prices go upwards, even though the underlying assets and their expectations remain the same. Wealth inequality is also playing into this as savings in the economy are increasing faster then the need for investment. With no where else to go this aggregate capital ends up largely on the stock market as stocks while risky are highly liquid.
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Jun 27, 2017 23:24
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I'm seeing a few of my boxes being ticked right now. One of them is insanely low travel prices. I can book a round trip flight from Seattle to Kona for $360 right now, a Denver to Reykjavik nonstop for $300, etc, prices I haven't seen since right before/after the last crash. I can't imagine a plane full of people going from SEA to KOA for $180 each including tax is making the airlines much money.Cicero posted:Growth being 'meh' doesn't mean there's a recession. Words mean things. Housing is just as expensive, or MORE expensive in many areas (and in a way that won't likely pop as dramatically as it did in 2008), education is vastly more expensive (a UC degree costs 2-2.5x as much over that timeframe), and there are limits on consumer debt creation to paper over lack of wages. Jobs were about 10,000x as easy to get in 2005, too, and paid better. call to action fucked around with this message at 00:23 on Jun 28, 2017 |
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Jun 28, 2017 00:21
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Haven't flights to Iceland been cheap forever? What were those prices 2 years ago?
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Jun 28, 2017 00:22
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Can you explain more about the significance of low priced flights? I don't get it.
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Jun 28, 2017 01:19
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FourLeaf posted:Can you explain more about the significance of low priced flights? I don't get it. I think it's a signal that people don't have enough money to spend.
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Jun 28, 2017 01:54
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Is it possible that any upcoming crisis is artificial, at least in part? Wage growth being purposely repressed as corporate policy and governments globally practicing austerity ideologically seem to greatly contribute.
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Jun 28, 2017 02:03
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Define "artificial".
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Jun 28, 2017 02:11
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Lightning Lord posted:Is it possible that any upcoming crisis is artificial, at least in part? Wage growth being purposely repressed as corporate policy and governments globally practicing austerity ideologically seem to greatly contribute. If it's artificial then somebody is deliberately causing a recession to cause a recession. That isn't what's going to happen; what will happen is short-sighted decisions from the rich and powerful doing those things you mentioned for no reason other than short term profits. That's all that matters; higher profits every quarter, more money for the billionaires right loving now. Demand is what drives an economy and the 99% being able to loving buy things is what drives demand. A rich guy throwing bigger and bigger numbers into the Cayman Islands where they are never seen again generates gently caress all when it comes to demand. This is why there are indicators if you know where to look; the flight cost is one of them. There are certain things that get hit first when people start feeling a financial crunch. People are obviously not going to quit buying food but they'll travel less, eat out less often, tip worse, etc. You can't totally predict a recession on that but those can be good indicators. Excessive debt is another one and all I have to say about that one is "student debt." A recession is coming if nobody bothers trying to head it off.
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Jun 28, 2017 02:14
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Rime posted:Define "artificial". Meaning it was forced to happen not because of market forces, but because of capitistic ideology
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Jun 28, 2017 02:15
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call to action posted:I'm seeing a few of my boxes being ticked right now. One of them is insanely low travel prices. I can book a round trip flight from Seattle to Kona for $360 right now, a Denver to Reykjavik nonstop for $300, etc, prices I haven't seen since right before/after the last crash. I can't imagine a plane full of people going from SEA to KOA for $180 each including tax is making the airlines much money. Don't make logical fallacies like this; correlation does not equal causation. Just because you noticed something before the last recession does not make it predictive in any way. Also, this is off topic, but airlines price their seats based on demand and fragmentation theory. Not everyone is paying that $360 for their tickets to Hawaii - once the seats start to fill up the airlines will charge more. On top of that there's first class and economy plus seats. Also, don't forget all the fees outside of the ticket that provide for alternative sources of revenue for the airlines. edit: I forgot to mention that one of the primary costs for airlines, JET A fuel, costs less than half of what it did in 2007. Seph fucked around with this message at 02:30 on Jun 28, 2017 |
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Jun 28, 2017 02:15
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FWIW, I was reading these forums around 2007 or so and goons were very saavy at seeing the signs of the impending sub-prime mortgage catastrophe that eventually led to the 2008 GFC. Much more so than any mainstream economic coverage that was, like today, breathlessly reporting how amazing everything was. I feel as though the big catalyst for the next recession will be the continued collapse of retail.
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Jun 28, 2017 02:27
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Lightning Lord posted:Is it possible that any upcoming crisis is artificial, at least in part? Wage growth being purposely repressed as corporate policy and governments globally practicing austerity ideologically seem to greatly contribute. When did wage growth suppression start being corporate policy? Is there a real change that was recent?
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Jun 28, 2017 02:43
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sitchensis posted:FWIW, I was reading these forums around 2007 or so and goons were very saavy at seeing the signs of the impending sub-prime mortgage catastrophe that eventually led to the 2008 GFC. Much more so than any mainstream economic coverage that was, like today, breathlessly reporting how amazing everything was. The collapse of retail is a symptom not a disease.
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Jun 28, 2017 03:04
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sitchensis posted:FWIW, I was reading these forums around 2007 or so and goons were very saavy at seeing the signs of the impending sub-prime mortgage catastrophe that eventually led to the 2008 GFC. Much more so than any mainstream economic coverage that was, like today, breathlessly reporting how amazing everything was. We're about due for another recession. The test will be if it is just a normal one or another "Great Recession". Housing is in a pretty unique position to gently caress the global financial system. Subjunctive posted:When did wage growth suppression start being corporate policy? Is there a real change that was recent? About 2 seconds after the first guy paid another guy to do work.
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Jun 28, 2017 03:09
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ToxicSlurpee posted:The collapse of retail is a symptom not a disease. that would mean the death of retail outlets has no impact on the economy? idk if that is true, especially if you focus locally
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Jun 28, 2017 06:59
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Lightning Lord posted:Meaning it was forced to happen not because of market forces, but because of capitistic ideology That's literally every recession we've had since the 1980's back when monetarism came into fashion by that definition.
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Jun 28, 2017 07:09
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I couldn't honestly attribute other types of recession than debt crises to monetarism. Monetarism's idea is that recessions could always be fixed with essentially central bank -backed credit-fueled spending, and 2007 was when the first monetarist credit bubble popped. If you discount the bubble and simultaneously happening but not explicitly monetarist stuff like wage suppression, monetarism was pretty good at ending recessions, and those recessions were just as organic as any. Even 2007 was semi-organic in the sense that it was the private profit motive that made banks create the bad debt, you could eventually have had the same outcome with just deregulation and no monetarism. And I feel like calling the consequences of deregulation products of ideology is a slippery slope, you could as well call private profit-motive-based banking as a whole ideological (because at this moment in history it is economically counterintuitive and exists only to serve bankers) and after that, nothing that banks cause could be considered truly organic. The existence of both is the result of organic profit-driven lobbying, we just had ideologues explaining why those would actually be good things for the economy.
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Jun 28, 2017 08:20
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Monetarism explicitly favors the interest of creditors over those of debtors by curbing inflation and therefore drives income inequality, by depressing wages as you mentioned, which leads to wealth inequality in the long-term. Since high earners spend less and save more then low-income earners an overabundance of capital is created within the economy. With nowhere productive for that capital to go (due to the aforementioned wage supression and its effects on demand) speculation bubbles pop up (either domestically as in the US or exported abroad as with Germany) that inflate asset values and when they pop we inevitably find ourselves in a recession. You can't de-couple monetarism from ideology because it was a development that was driven explicitly by ideological interests. Similarly, there's nothing organic about the de-regulated environment that sparked 2008. It was ideological from the ground-up and was over 30 years in the making. MiddleOne fucked around with this message at 09:24 on Jun 28, 2017 |
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Jun 28, 2017 09:19
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Xae posted:About 2 seconds after the first guy paid another guy to do work. No, I mean it was presented as something that might trigger a recession, but AFAIK it's nothing new, and has been present through every economic cycle.
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Jun 28, 2017 09:54
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MiddleOne posted:Monetarism explicitly favors the interest of creditors over those of debtors by curbing inflation and therefore drives income inequality, by depressing wages as you mentioned, which leads to wealth inequality in the long-term. Since high earners spend less and save more then low-income earners an overabundance of capital is created within the economy. With nowhere productive for that capital to go (due to the aforementioned wage supression and its effects on demand) speculation bubbles pop up (either domestically as in the US or exported abroad as with Germany) that inflate asset values and when they pop we inevitably find ourselves in a recession. I feel like you're conflating monetarism with the neoliberal political climate. Monetarism is just the idea that fiscal policy responses to recessions are undesirable and everything should be left in the hands of central banks. Obviously there is very significant overlap, down to central bankers being neoliberals, but I see central banks enacting pro-creditor policy as a political choice rather than an inevitability of monetarism. When fiddling with interest rates fails (this is already a crisis for monetarism, QE is definitely not a standard tool), one can have QE for the banks or QE for the people, and you're describing the results of fully supply-side QE. I'm also not trying to decouple monetarism from ideology, all macroeconomic tendencies so far represent an ideology. The question of whether a crisis has been caused by ideological or "natural" reasons is to me about whether the ideology made something happen that the natural forces would not lead to by themselves. The 1970's stagflation is very easy to tie into keynesian full-employment targeting, and it's absolutely clear that full-employment targeting is a product of ideology and not markets. Tying any of the recessions (edit: except the ones caused by a buildup of debt, which is likewise very easy to tie into monetarism) during the monetarist era to interest rate or inflation targets is a lot harder. The problems they have caused are a result of complex interactions with policies monetarism takes no stance for or against, like deregulation drives. And those policies have tended to let the "natural" market forces show their ugly face rather than trying to work against them like keynesian-era policies did. By taking a step back and letting markets do as they like, you don't create ideologically driven crises, you let capitalism naturally create its crises. uncop fucked around with this message at 10:53 on Jun 28, 2017 |
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Jun 28, 2017 10:40
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Both neo-liberalism and monetarism flow from the same base assumption that economics should be de-politicized. Independent central banks and de-regulation might be motivated differently politically but the end result is the same. The state decreases its role in the economy in favour of a laissez faire market. To curb inflation above all else is to protect debt, there is no such thing as a non neo-liberal monetarism because the two are intertwined in their goals. Protection of property rights and voluntary contracts. Your last argument threads into accelerationist territory.
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Jun 28, 2017 11:40
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uncop posted:... Generally, you only hear cries of "deregulation for the benefit of all!" from the people who will specifically benefit from that deregulation at cost to others, and any altruistic rhetoric is a facade.
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Jun 28, 2017 12:29
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On a slight tangent: I found Mark Blyth's book on Austerity really interesting. It helped me understand some aspects of the cause of the 2008 GFC. I'd like to understand what happened in the 1970's that caused the lurch towards what we have today, is there a book or a commentator as erudite and entertaining as Blyth on this subject?
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Jun 28, 2017 12:40
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The DPRK posted:On a slight tangent: I found Mark Blyth's book on Austerity really interesting. It helped me understand some aspects of the cause of the 2008 GFC. I'd like to understand what happened in the 1970's that caused the lurch towards what we have today, is there a book or a commentator as erudite and entertaining as Blyth on this subject? Look for books about the collpase of Bretton Woods and the aftermath of the second saudi oil crisis. There's been a lot of revisionism over time as in what actually happened during the stagflation years.
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Jun 28, 2017 13:20
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MiddleOne posted:Look for books about the collpase of Bretton Woods and the aftermath of the second saudi oil crisis. There's been a lot of revisionism over time as in what actually happened during the stagflation years. Thank you!
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Jun 28, 2017 14:54
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MiddleOne posted:Monetarism explicitly favors the interest of creditors over those of debtors by curbing inflation and therefore drives income inequality, by depressing wages as you mentioned, which leads to wealth inequality in the long-term. Since high earners spend less and save more then low-income earners an overabundance of capital is created within the economy. With nowhere productive for that capital to go (due to the aforementioned wage supression and its effects on demand) speculation bubbles pop up (either domestically as in the US or exported abroad as with Germany) that inflate asset values and when they pop we inevitably find ourselves in a recession. FWIW in a high or uncertain inflation environment, creditors raise their interest rates to cover inflation expectations or price transactions in inflation-adjusted units and put all the risk on the debtors. For instance, Chile uses the unidad de formento (UF) for real estate transactions, long-term contracts, etc, and the Unidad Tributaria Mensual for taxes and fines. In general inflation will only gently caress creditors in the short term - long term it fucks everyone but fucks creditors the least.
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Jun 28, 2017 15:00
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MiddleOne posted:Look for books about the collpase of Bretton Woods and the aftermath of the second saudi oil crisis. There's been a lot of revisionism over time as in what actually happened during the stagflation years. Granted, a lot of it is due to the changing relationship between the US and the Saudis from the early 1970s to the mid-1980s. We don't want to admit that the Saudis had essentially controlled inflation during most of the 1970s through the 1980s (not to mention were the ones that kicked the Soviets in the teeth in 1985/86). Yeah, if anything the history of oil is ridiculously under studied and has almost absolutely no funding (I wonder why...).
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Jun 28, 2017 16:48
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MiddleOne posted:Both neo-liberalism and monetarism flow from the same base assumption that economics should be de-politicized. Independent central banks and de-regulation might be motivated differently politically but the end result is the same. The state decreases its role in the economy in favour of a laissez faire market. To curb inflation above all else is to protect debt, there is no such thing as a non neo-liberal monetarism because the two are intertwined in their goals. Protection of property rights and voluntary contracts. What I'm doing is trying to give monetarism some credit as a product of academia rather than right wing pundits' wet dreams like neoliberalism is. That monetarism is a tool neoliberals chose. But yeah, if we assume that current macroeconomics is essentially irredeemable as science, then you are right. I don't think asserting that capitalism creates its own crises is in any way accelerationist. Like, we were talking about creating crises, not just failing to roll them back quickly after they start. No branch of macro I know dreams of actually preventing recessions, so you can't even create one by virtue failing to prevent it, you have to actively create the mechanism through which the crisis happens for it to be attributable to you and not just markets themselves. If our disagreement was about semantics, I'm sorry. Uranium Phoenix posted:Just to clarify, markets are an ideology, as are all the different ideas about controlling them; they are not natural or a force of nature. A lot of time strong ideological proponents of markets and capitalism like to assert that markets are a natural force or some sort of way-things-are-supposed to be, rather than yet another societal construct created by people to serve a purpose. I think its a bad idea to refer to anything about markets as natural, because it tacitly accepts the idea (usually implied, but sometimes stated outright) that markets cannot/should not be controlled (and therefore deregulation is a pure, natural state), rather than the reality, which is that markets on every level are created by people and controlled by people. You are pretty radically misunderstanding what it means that markets are a system secured through state action. What you are correct about is that the state is needed to actively try to make markets act more like the idealized perfect market so that it could produce the results we expect from perfect markets, while market forces themselves act against that goal. But an illegal black market is still a market, and not a product of market ideology, but a tool created out of need. Same with other markets, they aren't products of ideology, but products of not having available non-market alternatives that would satisfy the demand the market exists to fill. And market forces are akin to a force of nature as long as you live in a capitalist society. They just are not anything like what the free market ideal would like you to think. My position is essentially that if you manage to prevent crises, that's great, but it's also fully artificial and there will be organic forces out to destroy that kind of artificial protection. Just like they drove a stake into the heart of keynesian institutions worldwide the first moment they looked weak. The reason i call this kind of political action "organic" is because it is distributed and rises straight out of the profit motive rather than any ideological motive alone. In the real world, market forces aren't just limited to fiddling with prices, but they will use every legal and sometimes illegal means to gain an edge. I will applaud whoever discovers a policy set that simultanously stabilises markets and prevents market actors from crushing it. I expect it will include far more than economic policies, and more of a full overhaul of democratic decisionmaking itself.
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Jun 28, 2017 19:33
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