U.S. Economy Contracted at Record Rate Last Quarter(wsj.com)
wsj.com
U.S. Economy Contracted at Record Rate Last Quarter
https://www.wsj.com/articles/us-economy-gdp-report-second-quarter-coronavirus-11596061406
150 comments
Was the title of this post changed? I can't really understand why this comment is at the top, since "it didn't" and "contracted by 9.5%" seems to refer to some specific complaint about the thesis of the article.
It's typical for us in the HN crowd to have a superficial knowledge of a domain and get lost in quibbling about the minutae of how the data is represented, but the thesis of this article is the record decline, and focusing on the use of the annualized metric feels like a tangent.
It's typical for us in the HN crowd to have a superficial knowledge of a domain and get lost in quibbling about the minutae of how the data is represented, but the thesis of this article is the record decline, and focusing on the use of the annualized metric feels like a tangent.
[this is terribly wrong: “It did contract by 32.9% in the second quarter (not in the four quarters ending in June 2020)”]
Edit: I assumed it was compared to the second quarter 2019, not sequentially to the first quarter 2020, I didn’t stop to think that 33% was just too much. 9% is bad enough: from $21.34 trillion to $19.41 trillion (Q2 2019 to Q2 2020).
Edit: I assumed it was compared to the second quarter 2019, not sequentially to the first quarter 2020, I didn’t stop to think that 33% was just too much. 9% is bad enough: from $21.34 trillion to $19.41 trillion (Q2 2019 to Q2 2020).
The title of the article says "U.S. Economy Contracts at Record 32.9% Annual Rate". A HN mod should change the title here on this site cause it's misleading.
No. “The U.S. economy contracted at a record 32.9% annual rate last quarter.”
No it didn’t. Here’s NYT’s headline:
U.S. economic output fell 9.5 percent in the second quarter, the biggest drop on record. That translates to a 32.9 percent annual rate of decline.
U.S. economic output fell 9.5 percent in the second quarter, the biggest drop on record. That translates to a 32.9 percent annual rate of decline.
Exactly... it makes no sense to report an annualized number on this case.
Here's a pretty good explanation of how the figures are reported (and why it can be misleading): https://www.nytimes.com/2020/07/29/business/economy/us-gdp-r....
The headline is wrong. The number isn't. The headline should have said "Contracted at an annual rate of.." To make snapshots comparable, they are stated at an annual rate, even if the snapshot is monthly or quarterly.
Actually it looks like just the HN headline is wrong. The article states it correctly.
Actually it looks like just the HN headline is wrong. The article states it correctly.
The headline changed since this was posted. It's been updated to reflect the new title.
To be clear, in finance, we _always_ quote annualized numbers. It would be super unconventional and misleading to everyone in finance to list an absolute number as you suggest.
This is more like the general populace not understanding how finance works rather than the finance press exaggerating the number.
This is more like the general populace not understanding how finance works rather than the finance press exaggerating the number.
Note that national accounting growth rate reporting conventions are local. In the US, official GDP comes from bea.gov, which annualizes the quarter-on-quarter growth by default. In the UK it's done by ons.gov.uk, which reports (seasonal-adjusted) quarter-on-quarter without annualizing. In China, www.stats.gov.cn used to report quarter-on-quarter in the past, but they changed to year-over-year rates (which is different from annualized quarter-on-quarter) a few years ago.
In finance, you would compare 2020-q2 with 2019-q2. You would still get a similar 8% - 9% drop.
That figure (32.9%) is based on future projections. Stating the predicted future as something that took place already would get someone fired in finance.
>> This is more like the general populace not understanding how finance works
It looks to me more closely as someone applying mathematical formulas either without understanding what you are doing de-facto behind them, or being ill intended in the first place to manipulate the market. Either way, it's bad.
Unless you're explicitly writing "in Q2, the GDP dropped at an annualized rate of -33%", you're committing the capital offense when it comes to writing good journalism: not knowing your average audience, not adapting your content to the audience and probably most significantly, not understanding as a journalist what you're writing about.
That figure (32.9%) is based on future projections. Stating the predicted future as something that took place already would get someone fired in finance.
>> This is more like the general populace not understanding how finance works
It looks to me more closely as someone applying mathematical formulas either without understanding what you are doing de-facto behind them, or being ill intended in the first place to manipulate the market. Either way, it's bad.
Unless you're explicitly writing "in Q2, the GDP dropped at an annualized rate of -33%", you're committing the capital offense when it comes to writing good journalism: not knowing your average audience, not adapting your content to the audience and probably most significantly, not understanding as a journalist what you're writing about.
Let's say they reported 9.5% . Would it still not be the biggest drop in history? Isn't that the important bit here?
9.5% x 4 = 38%
How exactly annualization works?
How exactly annualization works?
1-.095 = .905
.905^4 = .671
1-.671 = .329 = 32.9%
.905^4 = .671
1-.671 = .329 = 32.9%
What is the purpose is using the 0.095 figure?
the economy contracted 9.5% -> 0.095
Was this figure from the previous quarter or the same quarter last year?
It presupposes that the quarterly trend will continue at the same rate. In finance, annualizing is a good way to try and extrapolate from the current trend, but in this unprecedented pandemic, the current trend is extraordinarily volatile.
well yes, but as long as there's no vaccine, it remains fairly predictable it seems.
So what I find interesting--even scary--is the disconnect between the economy and the stock market. Back in April near the bottom the advice I gave was that this was pretty serious and it's going to knock the economy off its feet so don't treat this like a short-term buying opportunity.
Here we are a few months later and the market has gone gangbusters. This is probably a consequence of zero-interest rates as there's really nowhere else for money to go. You have amateurs jumping into the market based largely on the market can only go up and you can't lose.
Once the market is disconnected from the economy like this it's just a question of when not if you have a reversion to mean and the market will typically get oversold when that happens. But how long will that take? I honestly have no idea. It could be months. Hell, it could even be years.
But a drop in GDP this large is shocking, probably even more shocking than people suspected. And before this I think a lot of people expected things would just get back to normal at some point. But a certain number of businesses and jobs are simply gone. That'll affect demand and probably take years to recover.
I've got a bad feeling about this.
Here we are a few months later and the market has gone gangbusters. This is probably a consequence of zero-interest rates as there's really nowhere else for money to go. You have amateurs jumping into the market based largely on the market can only go up and you can't lose.
Once the market is disconnected from the economy like this it's just a question of when not if you have a reversion to mean and the market will typically get oversold when that happens. But how long will that take? I honestly have no idea. It could be months. Hell, it could even be years.
But a drop in GDP this large is shocking, probably even more shocking than people suspected. And before this I think a lot of people expected things would just get back to normal at some point. But a certain number of businesses and jobs are simply gone. That'll affect demand and probably take years to recover.
I've got a bad feeling about this.
This is getting into scary territory given that the US also spent 3.5 trillion to prop up the economy.
Some more "fun facts":
- this is the biggest drop on record for GDP: 32.9%.
That far surpasses the previous historical contraction of 10% in 1958.
- 19th reporting period where initial jobless claims came in above 1,000,000 that is stunning
- Personal consumption: -34.6%
- Government spending: +2.7%
- 2Q GDP Price Index Falls at A 1.8% Annual Rate
- Domestic investment: -49%
- 2Q Core PCE Price Index Falls at A 1.1% Annual Rate
- 17 million people collecting money from teh government
- 2Q Personal Consumption Falls at 34.6% Annual Rate
and the kicker
When you compare the last three years of Obama’s Presidency vs. Trump’s first three years, Trump’s deficits will be almost $1 trillion greater at $2.47 trillion to $1.51 trillion for Obama. It doesn’t look like Trump’s tax cuts will pay for themselves.
The US under Trump will add about the same amount to the nation debt in 4 years as Obama did in 8 and Obama inherited the "great recession"
https://www.whitehouse.gov/wp-content/uploads/2020/02/budget...
For those of you who like to dive into the numbers
https://www.bea.gov/sites/default/files/2020-07/tech2q20_adv...
From Bloomberg:
- Some categories actually added to GDP: consumer spending on cars, recreational goods, housing and utilities (as people worked from home and ran air conditioners longer?), and financial services and insurance.
- Other categories in positive territory: information processing equipment at companies (all other categories detracted from GDP), net exports, and government spending.
- China has only bought about 23% of its promised purchases for the year from the phase 1 trade deal so we probably can't look to China to buy the US out of its depression
Some more "fun facts":
- this is the biggest drop on record for GDP: 32.9%.
That far surpasses the previous historical contraction of 10% in 1958.
- 19th reporting period where initial jobless claims came in above 1,000,000 that is stunning
- Personal consumption: -34.6%
- Government spending: +2.7%
- 2Q GDP Price Index Falls at A 1.8% Annual Rate
- Domestic investment: -49%
- 2Q Core PCE Price Index Falls at A 1.1% Annual Rate
- 17 million people collecting money from teh government
- 2Q Personal Consumption Falls at 34.6% Annual Rate
and the kicker
When you compare the last three years of Obama’s Presidency vs. Trump’s first three years, Trump’s deficits will be almost $1 trillion greater at $2.47 trillion to $1.51 trillion for Obama. It doesn’t look like Trump’s tax cuts will pay for themselves.
The US under Trump will add about the same amount to the nation debt in 4 years as Obama did in 8 and Obama inherited the "great recession"
https://www.whitehouse.gov/wp-content/uploads/2020/02/budget...
For those of you who like to dive into the numbers
https://www.bea.gov/sites/default/files/2020-07/tech2q20_adv...
From Bloomberg:
- Some categories actually added to GDP: consumer spending on cars, recreational goods, housing and utilities (as people worked from home and ran air conditioners longer?), and financial services and insurance.
- Other categories in positive territory: information processing equipment at companies (all other categories detracted from GDP), net exports, and government spending.
- China has only bought about 23% of its promised purchases for the year from the phase 1 trade deal so we probably can't look to China to buy the US out of its depression
It doesn’t look like Trump’s tax cuts will pay for themselves.
Did anybody actually believe that?
Did anybody actually believe that?
> When you compare the last three years of Obama’s Presidency vs. Trump’s first three years
If you remove the pointless politicking, this is a very informative comment. Thanks for putting all that data together. It seems strange to lay out the completely unprecedented context, then proceed to ignore it in order to make a political claim though.
If you remove the pointless politicking, this is a very informative comment. Thanks for putting all that data together. It seems strange to lay out the completely unprecedented context, then proceed to ignore it in order to make a political claim though.
Facts aren't political. They're just reality.
If you feel that facts reflect poorly upon your political position, that sounds like something you should address.
And to be clear: the statements you're quoting specifically exclude the pandemic, so I'm not sure what you feel is "the completely unprecedented context" here.
If you feel that facts reflect poorly upon your political position, that sounds like something you should address.
And to be clear: the statements you're quoting specifically exclude the pandemic, so I'm not sure what you feel is "the completely unprecedented context" here.
What was the political claim?
What politicking are you referring to?
You listed personal consumption down as 34.6%, but also 34.6% annualized. Are some of those other numbers also supposed to be annualized?
yes, sorry almost all of those numbers are annualized as that's how I think about them and more importantly that's how our factor models use them.
That doesn't bode well for the global economy, does it? It also makes market caps like AMZNs a little bit sketchy, IMHO a lot of money is pulled out from more "risky" investments and pushed into, maybe, less risky ones.
The thing that kind of worries me is, as soon as people can't afford their mortgages anymore we might well have a new real estate crisis on our hands. The last one tanked the global economy all by itself, now the economy is already leaking left and right.
The thing that kind of worries me is, as soon as people can't afford their mortgages anymore we might well have a new real estate crisis on our hands. The last one tanked the global economy all by itself, now the economy is already leaking left and right.
There's also a significant lag on many indicators because individuals and businesses have some buffers, either provided by government or their own financial elasticity.
A couple of examples: many businesses reliant on tourist seasons will not have begun to feel the pinch until very recently, and will lag behind others in showing up in the reporting for most indicators.
In the UK, the government furlough scheme means that the true picture of joblessness will only become apparent once people are removed from furlough and laid off.
It seems to me (not an economist) that Q4 will be extraordinarily difficult and it's hard to see optimism for a pan-European recovery beginning until Q2 2021.
The US is in a significantly worse position and many seem to expect states to continue with severe restrictions to simply prevent the further spread of the virus until the summer of next year, let alone beginning an economic recovery.
A couple of examples: many businesses reliant on tourist seasons will not have begun to feel the pinch until very recently, and will lag behind others in showing up in the reporting for most indicators.
In the UK, the government furlough scheme means that the true picture of joblessness will only become apparent once people are removed from furlough and laid off.
It seems to me (not an economist) that Q4 will be extraordinarily difficult and it's hard to see optimism for a pan-European recovery beginning until Q2 2021.
The US is in a significantly worse position and many seem to expect states to continue with severe restrictions to simply prevent the further spread of the virus until the summer of next year, let alone beginning an economic recovery.
I live in a tiny tourist town (population of ~600) upriver from NYC, our busy season is from July to October spurred on by the millions of city dwellers who take the train up to our tiny town to go to our numerous festivals, our vibrant downtown shops and hike our wondrous mountain trails. Hiking has returned (but feels significantly down from last year), shops are open but not many people are training up, and all festivals for the rest of the year have been canceled. I know a handful of shops have shuttered, a few that I know the owners of are on the verge of shuttering, as I'm sure most of them are.
I'm certain that once this pandemic is over, there will probably be some people who scoop up these shops for a steal, people will move back into the cities with rents depressed, and things will start recovering, but there will be a HUGE scar left that will keep consumer confidence down for a while. I'm worried that the millennials, having faced the second major economic blow in their short careers (mine included), are going to forever hold on to this trauma.
I'm certain that once this pandemic is over, there will probably be some people who scoop up these shops for a steal, people will move back into the cities with rents depressed, and things will start recovering, but there will be a HUGE scar left that will keep consumer confidence down for a while. I'm worried that the millennials, having faced the second major economic blow in their short careers (mine included), are going to forever hold on to this trauma.
I'm near Kissimmee Florida (think Walt Disney World) right now. It's a ghost town compared to normal typical traffic and people present.
>there will probably be some people who scoop up these shops for a steal
Yes, the ultra rich. This pandemic has resulted in the greatest upward transfer of wealth in history.
Yes, the ultra rich. This pandemic has resulted in the greatest upward transfer of wealth in history.
“Pumping up the economy” Was kind of pointless when nothing is open.
> “Pumping up the economy” Was kind of pointless when nothing is open
Based on these figures, over 90% of the economy was open.
Based on these figures, over 90% of the economy was open.
I did my part by holding on to the money. We took a vacation a few weeks ago and spent it that way. I think we're in the vast minority though. The stimulus really should have been held so the money could go to businesses as they reopened.
As for the vacation, we drove to our destination (a resort in San Diego). We disinfected the room ourselves before moving in. We canceled daily cleaning. We avoided crowds and stayed masked up. People are critical of vacationing right now, and rightly so, but it can still be done in a safe way.
"open" yes but severely hampered by government regulations and media fear.
> but severely hampered by government regulations and media fear
Activity is down 9.5%. That means over 90% of the economy is working fine. “Severely hampered” is in the 9.5%.
Most of the economy simply does not require people to be running around and congregating anymore. It’s automated or knowledge based. The 1950s view of our economy is part of the reason we’re seeing more damage than other countries.
Activity is down 9.5%. That means over 90% of the economy is working fine. “Severely hampered” is in the 9.5%.
Most of the economy simply does not require people to be running around and congregating anymore. It’s automated or knowledge based. The 1950s view of our economy is part of the reason we’re seeing more damage than other countries.
There are billion dollar industries dependent of congregating.
Hospitality/Hotels Conventions Restaurant/Bars Movie Theaters, Opera, Musicals Museums
I could go on.
Hospitality/Hotels Conventions Restaurant/Bars Movie Theaters, Opera, Musicals Museums
I could go on.
> There are billion dollar industries dependent of congregating
Again, they’re in that 9.5%. The economy is many trillions of dollars large.
Nobody is saying 9.5% is fine. But the 90% isn’t hampered or cowering in fear. It’s producing.
Again, they’re in that 9.5%. The economy is many trillions of dollars large.
Nobody is saying 9.5% is fine. But the 90% isn’t hampered or cowering in fear. It’s producing.
[deleted]
> When you compare the last three years of Obama’s Presidency vs. Trump’s first three years, Trump’s deficits will be almost $1 trillion greater at $2.47 trillion to $1.51 trillion for Obama. It doesn’t look like Trump’s tax cuts will pay for themselves.
To be clear: this is a fair comparison because it doesn't include the pandemic.
It's worth noting that this isn't unique to Trump. Deficits increased under Reagan and Bush, while deficits decreased under Clinton and Obama[1]. Republican austerity claims are thoroughly debunked bullshit at this point.
[1] https://www.politifact.com/factchecks/2019/jul/29/tweets/rep...
To be clear: this is a fair comparison because it doesn't include the pandemic.
It's worth noting that this isn't unique to Trump. Deficits increased under Reagan and Bush, while deficits decreased under Clinton and Obama[1]. Republican austerity claims are thoroughly debunked bullshit at this point.
[1] https://www.politifact.com/factchecks/2019/jul/29/tweets/rep...
all budgets are passed by congress.. the best is when congress is opposed to the president. It would be interesting to look at that as a metric.
> When you compare the last three years of Obama’s Presidency vs. Trump’s first three years, Trump’s deficits will be almost $1 trillion greater at $2.47 trillion to $1.51 trillion for Obama. It doesn’t look like Trump’s tax cuts will pay for themselves.
Just skimming [0], but I think the last president not preside over growth of the US debt was Calvin Coolidge in 1923. In recent years, Bill Clinton was quite unusual for not doubling the debt in his tenure.
It doesn't take away from your point, but Trump has to see a debt blowout of > ~$20 trillion for anyone who believes in data to bat an eye. The US government literally doesn't believe in fiscal prudence.
[0] https://www.thebalance.com/us-debt-by-president-by-dollar-an...
Just skimming [0], but I think the last president not preside over growth of the US debt was Calvin Coolidge in 1923. In recent years, Bill Clinton was quite unusual for not doubling the debt in his tenure.
It doesn't take away from your point, but Trump has to see a debt blowout of > ~$20 trillion for anyone who believes in data to bat an eye. The US government literally doesn't believe in fiscal prudence.
[0] https://www.thebalance.com/us-debt-by-president-by-dollar-an...
Please add "Annualized Rate" to the title.
@dang Seems like an accurate and fair update
just mentioning his name doesn't do anything. The mod e-mail address is in the page footer if you want to reach him.
Thanks, didn't know that - they often respond so promptly that I actually thought the invocation of the name or "mods" triggered some sort of notification..
Yeah, I wouldn't know either if I didn't remember him saying that there isn't actually a running keyword search for it. It'd be interesting to know what percentage of all HN comments he reads...
It is 6am pt..
Since there's no number in the title (as of 10:30am ET), adding the word "annualized" means nothing.
That works too.
GDP is a flow statistic, though we often discuss it as a stock. (Cash in the bank is a stock statistic. Cash inflows is a flow. Amount of stuff versus delta.)
It's difficult to compare this quarter to those in 1918, given the dramatic differences in the composition of the economies and statistical methods. But a ~10% reduction in flows doesn't strike me as that bad to the country's long-term potential.
The assets are mostly still there. And nobody is forgetting how to do their job in 3 to 6 months, though productivity in some sectors will take a hit from the changes.
It's difficult to compare this quarter to those in 1918, given the dramatic differences in the composition of the economies and statistical methods. But a ~10% reduction in flows doesn't strike me as that bad to the country's long-term potential.
The assets are mostly still there. And nobody is forgetting how to do their job in 3 to 6 months, though productivity in some sectors will take a hit from the changes.
> Congress has approved trillions of dollars in stimulus to help U.S. households and businesses get through the pandemic, and another package is now being negotiated on Capitol Hill. One key component—an extra $600 in weekly jobless benefits—is due to expire at the end of July, but lawmakers are still discussing whether and how to extend the aid.
This is the part that isn't getting enough attention. That "stimulus" came in the form of treasury bonds. Those bonds need to be bought by... someone.
Foreign central banks stopped net buying US treasuries a few years ago. At the same time, gold holdings by central banks have climbed. The world outside the US is thumbing its nose at US federal debt as a reserve asset.
Without deep-pocket buyers, the interest rate on US debt will rise, and continue rising until a suitably-high interest rate can be found to justify the risk of loss.
So the Fed has stepped into the void and bought the treasuries in unprecedented quantities:
https://fred.stlouisfed.org/series/WALCL
It turns out even this isn't enough to soak up all the debt being issued. Regulations have been relaxed so that banks can claim treasury holdings as reserves. The Fed has deputized banks as holders of US debt.
https://www.federalreserve.gov/newsevents/pressreleases/bcre...
This sets up a situation in which US treasury yields simply can't be allowed to spike because if that happened:
1. banks would suffer capital losses
2. the US government would become unable to sustain interest payments on new debt. That means forced cuts to entitlements and even the military.
Clearly, this would spell disaster. So it's not going to happen. The Fed will keep buying and buying and buying. If need be, regulations will be changed to allow the Fed to buy things it has never been able to buy before. Like US stocks.
The party can never, ever end. The balance sheet expansion will continue until some factor emerges that causes more pain as the balance sheet expands. I'm not sure what that factor could be, but it would come as a very big shock.
For clues regarding the limit of Fed money printing, look to the enormous asset bubble that's developing in US stocks. The more the balance sheet expands, the bigger this bubble gets. And for the foreseeable future, the Fed can't stop printing.
What breaks first?
This is the part that isn't getting enough attention. That "stimulus" came in the form of treasury bonds. Those bonds need to be bought by... someone.
Foreign central banks stopped net buying US treasuries a few years ago. At the same time, gold holdings by central banks have climbed. The world outside the US is thumbing its nose at US federal debt as a reserve asset.
Without deep-pocket buyers, the interest rate on US debt will rise, and continue rising until a suitably-high interest rate can be found to justify the risk of loss.
So the Fed has stepped into the void and bought the treasuries in unprecedented quantities:
https://fred.stlouisfed.org/series/WALCL
It turns out even this isn't enough to soak up all the debt being issued. Regulations have been relaxed so that banks can claim treasury holdings as reserves. The Fed has deputized banks as holders of US debt.
https://www.federalreserve.gov/newsevents/pressreleases/bcre...
This sets up a situation in which US treasury yields simply can't be allowed to spike because if that happened:
1. banks would suffer capital losses
2. the US government would become unable to sustain interest payments on new debt. That means forced cuts to entitlements and even the military.
Clearly, this would spell disaster. So it's not going to happen. The Fed will keep buying and buying and buying. If need be, regulations will be changed to allow the Fed to buy things it has never been able to buy before. Like US stocks.
The party can never, ever end. The balance sheet expansion will continue until some factor emerges that causes more pain as the balance sheet expands. I'm not sure what that factor could be, but it would come as a very big shock.
For clues regarding the limit of Fed money printing, look to the enormous asset bubble that's developing in US stocks. The more the balance sheet expands, the bigger this bubble gets. And for the foreseeable future, the Fed can't stop printing.
What breaks first?
Was the US lockdown so hard? I thought Europe locked down much more and the contractions there were in the 6-13% range.
We have millions more cases than them
You also test a lot more and your death rate is below most of Europe and especially the UK. Much of the media likes to suggest the opposite though - go figure?
The death rate in the US is now substantially higher than in Europe. The EU+UK have 355 deaths per million [1], while the US is at 465 [2]. Of course, those are the official figures - it's possible that the excess mortality shows a different picture.
[1] https://www.ecdc.europa.eu/en/cases-2019-ncov-eueea
[2] https://www.worldometers.info/coronavirus/#countries
[1] https://www.ecdc.europa.eu/en/cases-2019-ncov-eueea
[2] https://www.worldometers.info/coronavirus/#countries
'The death rate in the US is now substantially higher than in Europe.'
I used the term most of Europe and especially the UK.
Let's, instead, say 'parts of Europe' and 'the UK' and these figures paint a different story.
I used the term most of Europe and especially the UK.
Let's, instead, say 'parts of Europe' and 'the UK' and these figures paint a different story.
Also most of Europe locked down hard enough that the death rate now is quite low, fairly steady at a few hundred deaths per day.
https://www.statista.com/statistics/1102288/coronavirus-deat...
Meanwhile the deaths per day in the US are still on a strong upward trend with well over 1000 deaths per day and climbing.
https://shorturl.at/eprER
https://www.statista.com/statistics/1102288/coronavirus-deat...
Meanwhile the deaths per day in the US are still on a strong upward trend with well over 1000 deaths per day and climbing.
https://shorturl.at/eprER
It's an election year with a despised president.
the US is very large and very mobile. Everyone staying inside devastates pretty much everything. Only a tiny sliver of jobs are wfh possible.
US drop was also in that range, around 9.5%. (The crucial "annual rate" is missing in the headline.)
You're probably comparing Q2 numbers of 6-13% to the annualized rate from the headline (which is based on a 9.5% contraction in Q2)?
Yeah, as I understand it reporting quartaly economic changes in annualized terms is an Americanism that isn't generally done in Europe, so you have to be very careful when comparing figures.
There was barely any lockdown here in Finland. The Helsinki region was quarantined from the rest of the country, but that's about it. Barely anyone wears masks either. The USA seems to be taking this much more seriously.
Generally rural areas with low population density have found it a lot easier to control the spread of the virus. Helsinki would be the 29th largest city in the US, and Finland would be the 28th most populous state in the US, so it's not really comparable. Interconnectedness matters too, Finland is geographically pretty remote. It might be closer to compare Finland to say Alaska or one of the Canadian states.
In addition, it would be the 5th largest state in the Union while being tied for the 12th lowest in population density.
Oddly enough, when you compare them to the 12 other states with lower than or equal population density, they are fairing significantly better.
https://offloop.net/covid19/?default=New%20Mexico;Montana;Wy...
Oddly enough, when you compare them to the 12 other states with lower than or equal population density, they are fairing significantly better.
https://offloop.net/covid19/?default=New%20Mexico;Montana;Wy...
Stockmarket fine though. What a joke.
The stockmarket is denominated in US dollars... Investors see two possible futures:
1. Economy is fine, their stocks end up growing in $$$ terms. Hence high price.
2. Economy tanks, US prints new dollars to pay off loans, US dollar loses lots of its value, but because the company stocks are denominated in dollars, the stocks are still worth a lot of dollars.
1. Economy is fine, their stocks end up growing in $$$ terms. Hence high price.
2. Economy tanks, US prints new dollars to pay off loans, US dollar loses lots of its value, but because the company stocks are denominated in dollars, the stocks are still worth a lot of dollars.
This is an overly simplistic view in my opinion. #1 assumes a strong relationship between the stock market and the overall economy which hasn't been true in recent years (corporate profits are growing way faster than the economy). #2 assumes that the Fed printing money will decrease the value of the dollar, which it might, but in the last 10 years, the Fed has greatly increased the money supply and the dollar has strengthened a lot.
It's best to use terms like the Fed, the US government and US corporations rather than "the US". They're all different.
The possible scenarios investors see are much more varied and nuanced than the two options you've outlined.
It's best to use terms like the Fed, the US government and US corporations rather than "the US". They're all different.
The possible scenarios investors see are much more varied and nuanced than the two options you've outlined.
From option 1, are corporate profits up because of expanded share buyback operations of those corporations? In the current economic downturn buyback-ing seems to be the way to show earnings to shareholders...
I was referring to net corporate profits (revenue minus expenses) which aren't impacted by share buybacks. Share buybacks reduce the number of shares outstanding and increase the earnings per share, but don't impact net income.
The euro is already pulling ahead of the dollar, but I believe the global demand for oil (bought and sold in dollars) will prevent a Venezuelan type inflation situation from occurring. The US participates in the world economy on a level that makes it hard to imagine greenbacks devaluing against other foreign currencies in a highly disproportionate way. That said, I could be totally wrong.
> global demand for oil (bought and sold in dollars)
Oil trading is a negligible component of dollar demand [1]. The petrodollar hypothesis is a debunked myth.
[1] https://en.wikipedia.org/wiki/Petrodollar_recycling
Oil trading is a negligible component of dollar demand [1]. The petrodollar hypothesis is a debunked myth.
[1] https://en.wikipedia.org/wiki/Petrodollar_recycling
Then what is the basis for the dollar being the world's reserve currency? (honest question, not arguing)
> what is the basis for the dollar being the world's reserve currency?
The origin is Bretton Woods [1]. This was the international system set at the end of World War II, when the U.S. was a global nuclear hegemon and the largest developed country with a homeland unmarred by conflict.
It retains the role due to a confluence of the America's relative political stability (as in no revolutions), commitment to open financial markets, deep and complex financial markets and, most critically, massive consumer base.
American consumers spend dollars globally. That leaves U.S. dollar scattered in various merchants' accounts. They can swap those dollars to their local currency, which incurs a fee. Or they can hold it to spend later. If they're holding it, they--or their bank--will invest it to produce yield. That creates demand for dollar-denominated investments, which, in turn, makes it easier to raise capital in dollars. That confluence underwrites a financial system that offers more products, for cheaper, and in more variety, in U.S. dollars than in any other currency.
Plainly put, America's post-war position put the U.S. dollar in the lead just as computing advances increased the global financial system's connectivity and complexity. It's a story of network effects.
[1] https://google.com/search?hl=en&q=breton%20woods
The origin is Bretton Woods [1]. This was the international system set at the end of World War II, when the U.S. was a global nuclear hegemon and the largest developed country with a homeland unmarred by conflict.
It retains the role due to a confluence of the America's relative political stability (as in no revolutions), commitment to open financial markets, deep and complex financial markets and, most critically, massive consumer base.
American consumers spend dollars globally. That leaves U.S. dollar scattered in various merchants' accounts. They can swap those dollars to their local currency, which incurs a fee. Or they can hold it to spend later. If they're holding it, they--or their bank--will invest it to produce yield. That creates demand for dollar-denominated investments, which, in turn, makes it easier to raise capital in dollars. That confluence underwrites a financial system that offers more products, for cheaper, and in more variety, in U.S. dollars than in any other currency.
Plainly put, America's post-war position put the U.S. dollar in the lead just as computing advances increased the global financial system's connectivity and complexity. It's a story of network effects.
[1] https://google.com/search?hl=en&q=breton%20woods
That’s a good thing. A stock market crash wouldn’t improve the economic situation... Many Americans have retirement and pensions tied to stocks.
>A stock market crash wouldn’t improve the economic situation... Many Americans have retirement and pensions tied to stocks.
Sounds like a free market isn't good for the Free Market. A crashed stock market would create opportunity for new investors to invest during this historic downturn...instead during this historic downturn the market is being artificially supported (at record high prices nonetheless) so no new investors will enter.
Free market economics asides, I could imagine the bourgeois and bourgeoise running around during the French Revolution telling the plebs how revolutions and guillotines aren't good for the economy.
Sounds like a free market isn't good for the Free Market. A crashed stock market would create opportunity for new investors to invest during this historic downturn...instead during this historic downturn the market is being artificially supported (at record high prices nonetheless) so no new investors will enter.
Free market economics asides, I could imagine the bourgeois and bourgeoise running around during the French Revolution telling the plebs how revolutions and guillotines aren't good for the economy.
fair point, I remember during the financial crisis in 2009 how i felt the bank bailout was unfair and the market should have been allowed to sort it out.
Since then i've come to believe that lives are tied to market prices so it's more complicated. You can let it crash and create opportunity for new investor, you can also watch someone drown and create a new spot at the pool. ...it gets complicated.
Since then i've come to believe that lives are tied to market prices so it's more complicated. You can let it crash and create opportunity for new investor, you can also watch someone drown and create a new spot at the pool. ...it gets complicated.
The stock market is largely (as a %) owned by the wealthy (top 5%).
Not only that, but they have gotten wealthier due to government intervention in the stock market. If these resources were put into the real economy, they could have helped ordinary people far more, and had a positive greater effect on the economy. You can't have a functioning economy without demand from consumers.
I can't find a recent figure however I did find "In 2011, U.S. pensions directed an average of 44 percent of overall capital to the stock market".
https://finance.zacks.com/effects-stock-market-pension-funds...
https://finance.zacks.com/effects-stock-market-pension-funds...
What % of overall wealth is that? AFAIK most Americans do not have a lot in their pension pot and many don't have anything at all.
54% of Americans own stocks, either directly or indirectly.
While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
>54% of Americans own stocks, either directly or indirectly.
But its negligible ownership stake, during the pandemic we have seen the multiple single day market swings that more than erase the collective holdings of 80% of investors. Moreover, 1% of investors own more than 33% of the market and the top 10% own >80% of the US stock market, that type of top heavy system is always bound to topple.
But its negligible ownership stake, during the pandemic we have seen the multiple single day market swings that more than erase the collective holdings of 80% of investors. Moreover, 1% of investors own more than 33% of the market and the top 10% own >80% of the US stock market, that type of top heavy system is always bound to topple.
> But its negligible ownership stake
Yes, and that was addressed immediately in the next paragraph:
> While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
> In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
Yes, and that was addressed immediately in the next paragraph:
> While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
> In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
I carefully worded what I said above precisely because I knew this irritatingly misleading statistic would pop up. It always does.
54% of Americans owning at least one share isn't especially meaningful. Giving the stock market a boost doesn't help people with one share. It helps people who have the majority of their net worth tied up in it. Those people are deliberately left out of that statistic.
A stock market crash doesn't affect the median citizen the worst. The median citizen has more % of their wealth in housing than the stock market (what they do have, which isn't an awful lot) .
In percentage terms its the ultra wealthy who get fucked. And it's them who got bailed out. And it's them who love that 54% statistic.
Moreover the stock market is inversely correlated with wages as a % of GDP (money that doesn't go into wages goes into profits, which pushes up stock prices) . If wages go up and the stock market goes down that DEFINITELY helps the median citizen.
54% of Americans owning at least one share isn't especially meaningful. Giving the stock market a boost doesn't help people with one share. It helps people who have the majority of their net worth tied up in it. Those people are deliberately left out of that statistic.
A stock market crash doesn't affect the median citizen the worst. The median citizen has more % of their wealth in housing than the stock market (what they do have, which isn't an awful lot) .
In percentage terms its the ultra wealthy who get fucked. And it's them who got bailed out. And it's them who love that 54% statistic.
Moreover the stock market is inversely correlated with wages as a % of GDP (money that doesn't go into wages goes into profits, which pushes up stock prices) . If wages go up and the stock market goes down that DEFINITELY helps the median citizen.
It's not "irritatingly misleading", it just needs to be contextualized — which ironically was missing in your "precisely worded" statistic.
I provided that context in the elucidation:
> While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
> In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
Just because the top 5% owns a highly concentrated amount of the stock market by nominal value, does not mean that the median American is immune to shocks in the stock market, and arguably the latter is impacted more adversely than the former.
> Moreover the stock market is inversely correlated with wages as a % of GDP. If wages go up and the stock market goes down that DEFINITELY helps the median citizen.
Stock market being inversely correlated with wages as a % of GDP does not imply that when the stock market falls, wages will rise, there is 0 evidence of that having ever happened in history. When the stock market falls, unemployment increases, so average wages fall.
The reason why a healthy stock market inversely correlates with wages as a % of GDP is because stock market increase as a % of GDP can be much higher than wages as a % of GDP. You can't take that observation then conclude that if you tank the stock market, wages will magically rise. As a % of GDP, they may stay the same, but that's just because GDP dramatically falls.
I provided that context in the elucidation:
> While it's true that the top 5% owns a disproportionate amount of stocks, that's just a function of the wealth distribution. If everyone in the US had half of their personal wealth in the stock market, the top 5% would still own a large % of the stock market just by virtue of what it means to be in the "top 5%" today. This fact doesn't change the fact that a stock market crash would still be devastating to the middle American that owns stocks (directly or indirectly).
> In fact, when the stock market crashes, it's median stock holders that are the worst off, because the wealthiest stock owners will still largely remain millionaires even if the stock market plunged.
Just because the top 5% owns a highly concentrated amount of the stock market by nominal value, does not mean that the median American is immune to shocks in the stock market, and arguably the latter is impacted more adversely than the former.
> Moreover the stock market is inversely correlated with wages as a % of GDP. If wages go up and the stock market goes down that DEFINITELY helps the median citizen.
Stock market being inversely correlated with wages as a % of GDP does not imply that when the stock market falls, wages will rise, there is 0 evidence of that having ever happened in history. When the stock market falls, unemployment increases, so average wages fall.
The reason why a healthy stock market inversely correlates with wages as a % of GDP is because stock market increase as a % of GDP can be much higher than wages as a % of GDP. You can't take that observation then conclude that if you tank the stock market, wages will magically rise. As a % of GDP, they may stay the same, but that's just because GDP dramatically falls.
>If everyone in the US had half of their personal wealth in the stock market
Yeah but they don't do they? If you wanted to "contextualize" you could have used a statistic along these lines (not that it's true) instead of arguing that 54% of Americans own at least one $4 share so they might get fucked by a stock market collapse.
Yeah but they don't do they? If you wanted to "contextualize" you could have used a statistic along these lines (not that it's true) instead of arguing that 54% of Americans own at least one $4 share so they might get fucked by a stock market collapse.
56% of all workers participate in a workplace retirement plan.
In the public sector, 83% of workers participate in a workplace retirement plan.
The median earner doesn't own "1 stock", they indirectly hold stock through 401(k)s, IRAs, company-provided pensions, or government-provided pensions. The vast majority of your pension plans are managed and administered by institutional investors.
If you are a median earner, and your defined contribution plan tanks, you will absolutely be worse off than the multi-hundred millionaire whose net worth still remains in the millions even if their ownership in the stock market falls by 90%.
http://www.pensionrights.org/publications/statistic/how-many...
In the public sector, 83% of workers participate in a workplace retirement plan.
The median earner doesn't own "1 stock", they indirectly hold stock through 401(k)s, IRAs, company-provided pensions, or government-provided pensions. The vast majority of your pension plans are managed and administered by institutional investors.
If you are a median earner, and your defined contribution plan tanks, you will absolutely be worse off than the multi-hundred millionaire whose net worth still remains in the millions even if their ownership in the stock market falls by 90%.
http://www.pensionrights.org/publications/statistic/how-many...
The fair value of a stock is the discounted net present value of future profits of an enterprise, plus assets, minus liabilities. There are a lot of companies that continue to make a lot of money and the market is confident in the long term prospects for corporate profits. Corporate profits are increasingly detached from the overall economy.
It's priced in.
The fed has made it clear that they’re going to do whatever it takes to keep stock prices from falling. At least until November.
If they try to do this indefinitely, and just keep printing money to inflate asset prices no matter the consequences, then eventually they will cause the value of the dollar to fall, which will cause international organizations to reduce their dependence on the dollar, which will cause the value of the dollar to fall more, and so on until we lose our position as the reserve currency. There is no free lunch. All this short term thinking eventually has a cost.
If they try to do this indefinitely, and just keep printing money to inflate asset prices no matter the consequences, then eventually they will cause the value of the dollar to fall, which will cause international organizations to reduce their dependence on the dollar, which will cause the value of the dollar to fall more, and so on until we lose our position as the reserve currency. There is no free lunch. All this short term thinking eventually has a cost.
Where else would people put their money ?
Remember that FANGMAN (Facebook Apple NVIDIA Google Microsoft Amazon Netflix) constitute over 20% of the market, and they're barely or even positively affected. Without them, the market would be down.
They'll be negatively effected later if the effects of the lockdown have time to trickle up.
i think the market is counting on a flood of pent up demand unleashing in the near term (< 12 months). If that doesn't happen you'll see people jumping from windows. A prolonged market crash and the ripple effects through the financial system (many instruments are tied to stock price) would usher in a true depression IMO. Propping up the stock market props up many many things as well.
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These numbers are not useful. We need to know if the economy will spring back when we reopen, not if it closed when we closed it. Picking this number because it's the closest thing we have to a useful number doesn't make it useful.
Not sure why the parent was modded down, they're exactly right. This is not normal times, all bets are off. Current economic numbers have no relevance to the past nor the future.
edit: It will be interesting if Biden is elected and then a vaccine comes out, the economy rebounds, will he take credit? I would expect him to as would any other politician would but, man, Trump's twitter rage will be epic.
edit: It will be interesting if Biden is elected and then a vaccine comes out, the economy rebounds, will he take credit? I would expect him to as would any other politician would but, man, Trump's twitter rage will be epic.
I don't want to push the metaphor too far, but...
Every night most of us go to sleep between 11pm and 6am. National economic output drops around 90%. Massive disaster, recession, depression level issues. And no one bats an eye lid. Because there is a good reason for this and everyone will wake up in the next 7 hours and go back to work.
This is that but for 7 months instead of 7 hours.
The question everyone should care about is "Will we wake up, when and how many companies will have died in their sleep?" Not "How much work are companies doing while they sleep?".
Those two numbers are barely related IMHO. In fact, the safer we make it to sleep, the less activity we will see now BUT the more we will see in a few months, years etc.
Every night most of us go to sleep between 11pm and 6am. National economic output drops around 90%. Massive disaster, recession, depression level issues. And no one bats an eye lid. Because there is a good reason for this and everyone will wake up in the next 7 hours and go back to work.
This is that but for 7 months instead of 7 hours.
The question everyone should care about is "Will we wake up, when and how many companies will have died in their sleep?" Not "How much work are companies doing while they sleep?".
Those two numbers are barely related IMHO. In fact, the safer we make it to sleep, the less activity we will see now BUT the more we will see in a few months, years etc.
The length of the interval matters. Everyone's heart pauses for a second or so tens of thousands of times a day, but if your heart pauses for an hour you're dead. The economy is a lot like your blood circulation - it relies on a continuous flow of money in order for businesses to keep on running and providing people with stuff, and the longer it's shut down for the worse we can probably expect the damage to be.
[deleted]
This is the hope, but I think it's more realistic to say we all went to sleep around the same time, but since we slept so long, many of us will never wake up, and those who do will wake up very slowly, not all at the same time, and most of us will lie in bed longer than usual before trying to stand up on shaky legs.
We want this to be a "V-shaped" recovery, but I don't think the recovery is going to be nearly as abrupt as the shutdown.
We want this to be a "V-shaped" recovery, but I don't think the recovery is going to be nearly as abrupt as the shutdown.
> 7 months
I think 17 would be more reasonable estimate. Do you think that when a first dose of the vaccine is made the global pandemic will be over?
I think 17 would be more reasonable estimate. Do you think that when a first dose of the vaccine is made the global pandemic will be over?
I have no idea to be honest. I think here in the UK, the government have done such a bad job of handling things that I suspect they're pursing herd immunity but I won't pretend I know if that is a thing or how long it would take...
Of course they're relevant. Many businesses are permanently closing because of this. The long term impact is unknown but it will be significant.
We already know it has sprung back. Retail sales are at pre-coronavirus levels as is housing sales. The only question is how sustainable it is, given the large unemployment numbers and massive government stimulus.
But to say they aren’t useful is wrong. We need to know the numbers to understand the damage done to the economy.
But to say they aren’t useful is wrong. We need to know the numbers to understand the damage done to the economy.
I think there's going to be a run on houses in the suburbs over the next year or two, as urban decay sets in. A lot of those downtown office workers are going to keep working from home, so all of those restaurants and cafes that cater to them are going to be in trouble. Not to mention, our cities are growing less safe by the day.
I'm in the suburbs of a large city now (I used to commute into the city every day), and looking to move further out now that remote work is a real thing. Land in semi-rural and rural areas is being snapped up like crazy at the moment. I'm shopping. The biggest stumbling bock to us tech workers really being able to spread ourselves out is reliable internet access. Satellite internet is... meh. Hopefully solutions like Musk's starlink will change that soon.
I'm in the suburbs of a large city now (I used to commute into the city every day), and looking to move further out now that remote work is a real thing. Land in semi-rural and rural areas is being snapped up like crazy at the moment. I'm shopping. The biggest stumbling bock to us tech workers really being able to spread ourselves out is reliable internet access. Satellite internet is... meh. Hopefully solutions like Musk's starlink will change that soon.
Not bad, the market was pricing in expectations of a 34.7% contraction.
Monthly and quaterly figures are bound to show the largest drop.
For annual figures, a first approximation is that a month is worth 1/12th of the annual output so I would expect a 8.3% drop for every month that the economy is completely stopped.
34% contraction for a quarter means that the economy essentially stopped for a whole month, and would lead to a 8% contraction for 2020, everything else being equal. But we're not through yet...
For annual figures, a first approximation is that a month is worth 1/12th of the annual output so I would expect a 8.3% drop for every month that the economy is completely stopped.
34% contraction for a quarter means that the economy essentially stopped for a whole month, and would lead to a 8% contraction for 2020, everything else being equal. But we're not through yet...
== For annual figures, a first approximation is that a month is worth 1/12th of the annual output so I would expect 8.3% drop for every month that the economy is completely stopped.==
It’s not that easy as the US economy was never “completely stopped”. Public services did not stop, grocery stores did not stop, etc. Even today the states have various levels of openness and movement.
It’s not that easy as the US economy was never “completely stopped”. Public services did not stop, grocery stores did not stop, etc. Even today the states have various levels of openness and movement.
> It’s not that easy as the US economy was never “completely stopped”
Yes, 8.3% is obviously the upper bound and in practice it will always be less per month since the economy will never completely stop. The figure is to provide a ballpark estimate of what to expect and also to estimate how much the economy was impacted.
Yes, 8.3% is obviously the upper bound and in practice it will always be less per month since the economy will never completely stop. The figure is to provide a ballpark estimate of what to expect and also to estimate how much the economy was impacted.
> I would expect 8.3% drop for every month that the economy is completely stopped
Yeah. Everyone knew this was going to be bad, which is why the experts were saying we need to get it under control quickly and figure out how to safely operate while the pandemic is in effect. But 2016 happened, so instead we get months and months of lockdown and the accompanying economic devastation.
Yeah. Everyone knew this was going to be bad, which is why the experts were saying we need to get it under control quickly and figure out how to safely operate while the pandemic is in effect. But 2016 happened, so instead we get months and months of lockdown and the accompanying economic devastation.
The trouble is, there's no good reason to believe that it's even possible to get Covid-19 under control. The handful of success stories that everyone pointed to kept on turning out not to be: Singapore, arguably South Korea, Australia, Hong Kong, Vietnam... and the press just kept on moving on to the next one without ever changing the narrative. We've never contained a respiratory disease this contagious and sneaky before; historically, they've just run through the population and efforts have been focused on minimizing the damage. Unfortunately 2016 happened and now it's an election year again, so we need the idea that all this economic damage and death and lockdowns could've been avoided if only Trump wasn't in charge in order to ensure the right candidate wins later this year.
The "experts" are saying many different things. Currently, the new situation is being analyzed, but it seems that even pervasive non-pharmaceutical interventions (masks obligatory in all closed spaces, ban on public events, etc) are still not enough to keep Rt below 1.0 and "get it under control" (see the second wave effects in Europe). Lockdowns seemed to work, but economically unsustainable. As of now, there is no clear answer about how to proceed.
And that's before the epic blame game even started. Boy, that would be interesting to watch.
And that's before the epic blame game even started. Boy, that would be interesting to watch.
I don't think the lockdowns in europe for second wave flareups will be anywhere near as wide ranging as the initial lockdowns.
It is mostly under control in europe, people understand and accept that if and when there are flareups local lockdowns will happen.
A "new normal" if you will.
It is mostly under control in europe, people understand and accept that if and when there are flareups local lockdowns will happen.
A "new normal" if you will.
If only there were a region of the world with experience suppressing pandemics while maintaining economic continuity.
Perhaps somewhere we could take lessons from with regards to public health policy.
Unfortunately, no country had ever dealt with anything like this. /s
Perhaps somewhere we could take lessons from with regards to public health policy.
Unfortunately, no country had ever dealt with anything like this. /s
That’s the point. I do a (small) contribution to my country’s (Switzerland), public health policy, as a researcher, but we have the same set of challenges as most other countries, at least in Europe. I just wanted to say there are no easy solutions out there.
My point was that Asia already managed their way through SARS in 2002+. While keeping a functioning economy.
And yet there seems to be a surprisingly little amount of "What choices did Asian countries make in 2002, 2003, and 2004? Which were effective / ineffective? What were their economic impacts?"
Instead, at the highest Western government levels, there seems to be an assertion that no one has ever faced anything like this before, and the choices that need to be made are without precedent.
And yet there seems to be a surprisingly little amount of "What choices did Asian countries make in 2002, 2003, and 2004? Which were effective / ineffective? What were their economic impacts?"
Instead, at the highest Western government levels, there seems to be an assertion that no one has ever faced anything like this before, and the choices that need to be made are without precedent.
No one suggested that there are any easy solutions, rather that ignoring health and economic experts and basing public policy on fantasy and Internet conspiracy theories has lead to a worse outcome.
The major issue is the thinking that we need to open the economy in spite of the virus. The virus and the economy are inextricably linked. The smart thing to do would have been to subsidize household incomes in a much more meaningful way than just the table scraps that were provided to truly incentivize people to stay home. That coupled with federal mandates and bi-partisan support for public safety measures would have us in a totally different place than we are today. Ironically, it would have helped Trump's reelection campaign--as he would have been the hero of the day for getting the pandemic under control. Instead--we find ourselves in this debacle with politicians pointing fingers and a bunch of woulda, coulda, shoulda conversations happening. Seems bleak.
Masks would work if everybody wore them
This feels like such an American solution. If everyone just does this one magic thing then life will continue on as usual. First it was hydroxychloroquine, then a lock-down and now masks.
Masks worn correctly limits spread, but it's just a piece in the puzzle of tools available, and almost certainly not the most significant one, that is not meeting people.
Look at Finland, Norway and Denmark, they all successfully controlled it so far without mask usage. Catching up with research they now encourage it in indoor situations where you can't distance, even though the recommendation still is to not even be there if possible. Leaving it as a tool available if current measures aren't enough.
Masks worn correctly limits spread, but it's just a piece in the puzzle of tools available, and almost certainly not the most significant one, that is not meeting people.
Look at Finland, Norway and Denmark, they all successfully controlled it so far without mask usage. Catching up with research they now encourage it in indoor situations where you can't distance, even though the recommendation still is to not even be there if possible. Leaving it as a tool available if current measures aren't enough.
I was in southern France recently. Nearly 100% of people there are wearing masks inside shops, public transport, and other confined spaces. And still, even there we now see the clear increase in daily cases (it is much slower than before, but still happening)
There's no (edit to add: good} evidence for that.
And, wore them properly.
Has anyone in currency exchange noticed signals of inflation? I track GBP=>USD and even in a post-Brexit COVID economy the rate changed from 1.23 in April to a peak of 1.30 on Tuesday. This really looks like inflation to me, but I'm not an expert.
Give me just a little more time, and our love will surely grow. Election delay!
https://www.bbc.co.uk/news/amp/world-us-canada-53597975
https://www.bbc.co.uk/news/amp/world-us-canada-53597975
Annualized figures might make sense in ordinary times, but these are not ordinary times.