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2020 Global Economic Downturn Thread

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Post your articles about how COVID-19 is affecting economies across the world here. Wonder how fast or slow the economic recover will be.
 
UK puts 330 B£, France 300 B€, US 500 B$, etc. Given how worldwide this entire thing is, I wonder whether it'll be somehow possible to globally agree to reset some debts and the like after the crisis is over, though even then, this shit could mean a pretty hard stop to globalization.
 
The only things that Trumpy had going for himself as El Presidente Fatsioso were 1) the return of casual racism and various other forms of intolerance to the mainstream, ad 2) the economy, especially the stock markets.

Presidents never tie themselves to the markets, because they are fickle. Except for Trumpy, because he's an idiot. So it is worth looking at how they have reacted.

Coming into office, the DJI was at 19,000. A few weeks ago, despite the economic outlook pointing towards a recession (or even to a depression) it was at a record high, nearly at 30.000.

The fucked up US response has knocked it back down to 19,000 over about two and a half weeks. This was despite an emergency relief injection for one and a half trillion dollars. The Dow isn't everything, naturally, but the global markets have all shrunk as well. In some cases by about a third or more.

Banks will be getting some money, and there will certainly be legislation to try and stop them from just calling all existing loans, but the companies that the markets represent will be having a very bad year. This means that loans might not be repayed, leading to bankruptcies, a greatly slowed pace for acquisitions and mergers, and nobody is going to try and open a new business venture. Mass layoffs, temporary for now, are already happening.

There is hope that things will blow over in a few weeks of mass quarantine, but the truth of the matter is that this is going to have an enormous impact for the better part of a year. The other issue is that this is masking the existing US economic problems, so this might just lead into the expected US, and by extension global, downturn. One that was threatening to turn into the largest depression since the 1930's.

I'm preparing for a good half decade or more of very bad times for everyone.
 
The only things that Trumpy had going for himself as El Presidente Fatsioso were 1) the return of casual racism and various other forms of intolerance to the mainstream, ad 2) the economy, especially the stock markets.

Presidents never tie themselves to the markets, because they are fickle. Except for Trumpy, because he's an idiot. So it is worth looking at how they have reacted.

Coming into office, the DJI was at 19,000. A few weeks ago, despite the economic outlook pointing towards a recession (or even to a depression) it was at a record high, nearly at 30.000.

The fucked up US response has knocked it back down to 19,000 over about two and a half weeks. This was despite an emergency relief injection for one and a half trillion dollars. The Dow isn't everything, naturally, but the global markets have all shrunk as well. In some cases by about a third or more.

Banks will be getting some money, and there will certainly be legislation to try and stop them from just calling all existing loans, but the companies that the markets represent will be having a very bad year. This means that loans might not be repayed, leading to bankruptcies, a greatly slowed pace for acquisitions and mergers, and nobody is going to try and open a new business venture. Mass layoffs, temporary for now, are already happening.

There is hope that things will blow over in a few weeks of mass quarantine, but the truth of the matter is that this is going to have an enormous impact for the better part of a year. The other issue is that this is masking the existing US economic problems, so this might just lead into the expected US, and by extension global, downturn. One that was threatening to turn into the largest depression since the 1930's.

I'm preparing for a good half decade or more of very bad times for everyone.
Don't forget Boeing ending up destitute and begging for a bailout.
 
Don't forget Boeing ending up destitute and begging for a bailout.
True, but I was expecting that to happen soon anyway.

The effects of that is interesting since Boeing is still a large military contractor. Despite having a massive and expensive military the US military contractors themselves are having problems keeping afloat.

This leads to two problems:
  1. The possibility that the US will be doing bailouts, or even partially nationalizing parts of their military industrial complex.
  2. When things get really bad financially there has historically been a way to pull yourself out... invade someone and take their shit to pay for your debts. When you have contractors who could use large orders to staying in business this only gets to be a larger problem.
The US has a bit of a war addiction, so I am not ruling out the possibility that an economic downturn could lead to global instability and rolling out the guns in response.
 
I'm curious about what the lessons of this are going to be for Joe and Jane Bloggs. It can be as horrifying as "We Should Get Rid Of Chinese People" or, a different kind of terror, "Absolutely Nothing", but let's assume it's going to be a lesson with some kind of constructive intent or purpose. What is the thing that people think was flawed about how our societies are organised that made this pandemic as bad as it is and is going to be, and what could be done for when the next pandemic happens?

I can't imagine so many people being given contradicting demands from their government (stay at home, you'll be risking your family otherwise) and their boss (keep coming in, we can't afford to stop business) and not seeing some kind of shift in the attitude about work: everybody has to be free to not work, if they choose not to. The attitude of work as being something that gives your life a purpose might also be whittled away among the people who are made to stay home; even something as simple as rediscovering a hobby could get people thinking that a lot more free time would be good even when the world isn't cowering in fear of a deadly pandemic.
 
My expectation is that as bad a blow as the coronavirus is to the world economy, it's going to completely crowd out all the other factors for economic decline, which were already present during most of 2019. In other words, by serving as an all-encompassing explanation for a world recession, it will minimise any discussion of systemic problems in the economy, and hence be a de facto reason not to address any of them significantly.

As in, pass around some one-off tax cuts or subsidies at $1000/citizen or whatever (already under discussion in Congress) and forget about changing anything substantial. I would be pleasantly surprised to be proven wrong on this prediction.
 
Do you think that's going to satisfy the people who are going to have a relative die, or who will suffer permanent damage to their lungs? Just how many people at the end of this are going to be stupid enough to think that another pandemic like this happening in the future is impossible?
 
At the societal rather than individual level, and in the US, well... yeah, probably. It's likely enough to win an election and completely reframe the issue by the time the next one rolls around. There's a huge amount of acceptance to health being an entirely personal problem and tons of people dying like dogs on the street (or becoming bankrupt from medical bills), and it ultimately comes down the historical way unions in the US behaved compared to most other places. Because the unions negotiated healthcare for themselves and not for everybody, the fuck-you-I-got-mine is extremely entrenched in the US through a myriad of employer-based arrangements, and I have very little hope changing it.

Even if things get bad enough to demand more, the most likely outcome is basically the same kind of scheme: a one-off patch (e.g. coronovirus treatment for everyone) and then no systemic changes. The evidence for this is that this is already a debate point for the Biden campaign, i.e. that the state should pay for coronavirus treatments but not health care in general. For example, framing the pandemic situation as a war inherently pulls toward temporary patches, because one can later declare victory in this war and forget about it afterwards. And here's a prediction for the spin doctors: Italy had single-payer healthcare and look at them. You want to be like Italy?

Though again, I'd love to be proven wrong.
 
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Even if things get bad enough to demand more, the most likely outcome is basically the same kind of scheme: a one-off patch (e.g. coronovirus treatment for everyone) and then no systemic changes. The evidence for this is that this is already a debate point for the Biden campaign, i.e. that the state should pay for coronavirus treatments but not health care in general. For example, framing the pandemic situation as a war inherently pulls toward temporary patches, because one can later declare victory in this war and forget about it afterwards. And here's a prediction for the spin doctors: Italy had single-payer healthcare and look at them. You want to be like Italy?

Though again, I'd love to be proven wrong.
Global Orwellian Dystopia, Ahoy! (Likewise btw...)
 
I'm curious about what the lessons of this are going to be for Joe and Jane Bloggs. It can be as horrifying as "We Should Get Rid Of Chinese People" or, a different kind of terror, "Absolutely Nothing", but let's assume it's going to be a lesson with some kind of constructive intent or purpose. What is the thing that people think was flawed about how our societies are organised that made this pandemic as bad as it is and is going to be, and what could be done for when the next pandemic happens?
Coming back to this a bit, let me add another reason why I don't expect any truly deep systemic changes in the US: while the dollar has global hegemony, the problems will ultimately be papered over until the next crisis, as it happened before. Is this crisis strong enough to break that? I really doubt it, but it will weaken it. However, politically, there will undoubtedly be effects, and the primary one would be a significant diminishing of libertarianism. People are going to get some bailouts en masse, the government will interfere in the economy for the public good, and all the Ben Shapiros and Stefan Molyneuxes are going to have a much harder time peddling their crap after that happens, and that's going to affect the GOP. But I suppose I'm too pessimistic to believe it's enough.

As for Europe, well... I don't know, but there's going to be a tougher time selling European unity and there's probably going to be a lot of talk of national sovereignty, but ultimately I expect the EU will still be rolling along.
 
Global Orwellian Dystopia, Ahoy! (Likewise btw...)
The thing is that technology has... shifted the context where our rights and freedoms exist in. In effect, some are no longer viable under this new technological context. We're going to be more authoritarian no matter what because Hobbes is closer to the truth of the human condition than we ever dreamt of in our darkest nightmares.
 
Coming back to this a bit, let me add another reason why I don't expect any truly deep systemic changes in the US: while the dollar has global hegemony, the problems will ultimately be papered over until the next crisis, as it happened before. Is this crisis strong enough to break that? I really doubt it, but it will weaken it. However, politically, there will undoubtedly be effects, and the primary one would be a significant diminishing of libertarianism. People are going to get some bailouts en masse, the government will interfere in the economy for the public good, and all the Ben Shapiros and Stefan Molyneuxes are going to have a much harder time peddling their crap after that happens, and that's going to affect the GOP. But I suppose I'm too pessimistic to believe it's enough.

As for Europe, well... I don't know, but there's going to be a tougher time selling European unity and there's probably going to be a lot of talk of national sovereignty, but ultimately I expect the EU will still be rolling along.
It partially depends on who wins the upcoming election.

Since Trumpy took over, world governments have made some tiny steps into diversifying trade and not relying so much on the US. In some blocs there has even been an effort to move away from the US dollar.

These remain tentative steps though. A lot of people are blindly hopeful that this current administration is an anomaly, and that a shift in power at election time could let them pretend it was just a hiccup that corrected itself.

In some ways having Trumpy win again would be better in the long run. Yes, it would almost certainly lead to an economic depression, but it would also force countries to put more effort into separating from the US while it crashes and burns. Certainly bad news, but a bit of optimism at the end of troubles.

At this point at least a mild recession is all but assured, but Democrats winning would just lure everyone into the thinking that the crisis is gone with the bad man, and everything is normal. Which means that no one makes necessary changes and all the troubles come back in a few years as bad, or worse, than ever.

Either way, once the virus become contained and governments suddenly realize just how much money they spent and how badly it has hurt the economy, things will get bad. It is more a matter of degrees as to how bad thing get. But you are correct that this is likely not going to make people lose faith in the supposed stability that has occurred in recent history, and thus they will not make more than token changes.
 
In some ways having Trumpy win again would be better in the long run. Yes, it would almost certainly lead to an economic depression, but it would also force countries to put more effort into separating from the US while it crashes and burns. Certainly bad news, but a bit of optimism at the end of troubles.
You know, I never thought you'd say that, even though that has been my silent opinion for a while. The world would be a better place if the American brand of capitalism be thoroughly discredited, but it won't happen while all the charlatans going around preaching the good word of American "good will" even though that never really existed.
 
You know, I never thought you'd say that, even though that has been my silent opinion for a while. The world would be a better place if the American brand of capitalism be thoroughly discredited, but it won't happen while all the charlatans going around preaching the good word of American "good will" even though that never really existed.
Oh, I have always supported America, my eternal enemy, shooting itself in the face.

The longer the the Trumpy party remains in power, the less influence the US will have on global affairs. Divide and conquer.
 
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If we go by S&P500 market cap, a third of the US economy vanished like it was never even there. On the flip-side, two days ago, the Fed printed over $100B in a single day, which seems to be a record. A sum that most countries would have to work long and hard for to get can be achieved with a few keypresses, without measurable inflation. It is only a tiny part of what's currently planned, and what might eventually grow to multiple trillions before the year is over. And when you're at the top of the world's financial pyramid, you can do that, and you'd even be stupid not to. Why not? Colonies exist to solve the problems of the metropole.

But what's going to happen when it's no longer the case? It's not going to happen this crisis, because too many economies have too much to lose from the current financial system crumbling, but things will be accelerating toward creating alternatives. Will US companies still be able to buy up real production elsewhere repackage it into an order of magnitude higher prices through marketing? ... Right now, it turned out that Theranos, the ten-billion-dollar company (again, as measured by market cap) built entirely on a scam and went bust when this was found out, patented a bunch of things that were bought by a subdivision of Softbank, which is suing BioFire Diagnostics to stop them from producing coronavirus tests. Ok. Theranos aside, how is this fairly typical model of vacuuming up patents for everything one can dream up of in hopes it might resemble something useful someday, be able to function without ultracheap credit? How effective will the US corporation be at being rentiers then?

So on the one hand we have Trump, who wants to move real production back to the US but is too Trumpish to transform the economy, or much of anything, in any positive way, and on the other we was the establishment left, whose entire platform is that we can all go back to life as it ever was if we just get rid of Trump, and perhaps we might need to help people in this specific crisis, but not actually change anything. Great. It's moron vs ostrich.

But perhaps I'm just insufficiently edumacated in economics, or something, so YMMV. Feel free to yell at how silly I am, because at this point I'll welcome a reason not to be as pessimistic.
 
Eh. I owned some stocks and exited the market last Dec/Nov because I thought prices were crazy. Like where was the motivating factor for all the P/E ratios in the market? Some "experts" were saying that if a dive comes, it will be hard.

Well, I think these experts didn't reckon what kind of dive, and how fast. I mean, we are looking at absolute cratering.
 
But perhaps I'm just insufficiently edumacated in economics, or something, so YMMV. Feel free to yell at how silly I am, because at this point I'll welcome a reason not to be as pessimistic.
* Westwood's Blade Runner is released in a remastered edition, which proves not everything is being awful right now.
* Also, gamesguy, who's really super duper smart, says no crash ever happens due to an epidemic, so it just might be a strange optical illusion and changing your glasses might solve the issue for you. Try to book an appointment at a surviving doctor after the end of the quarantine to see that it was all just a dream.
* Hmm... we'll always have Paris?

See? I'm helping! As Lerticus said, though, I'm hoping for a Trump reelection so that the EU gets forced to move away from the US once and for all while trying to distance itself a bit from China on the industrial level. That would be worth a lot of things.
 
In, perhaps, some lighter news, what do you do when you've got access to a phone and the father who has micromanaged your life and fortune for about as long as you can remember is no longer able to reach you without going outside and inhaling some deadly boomerkiller?


It certainly beats singing "Imagine".
 
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In all seriousness, it's a valid idea and I'm glad that people outside of the Left are popping their cherries regarding it. I just absolutely do not trust a person like Spencer or anybody he affiliates with to be proposing it in good faith.
 
I have to admit I may have underestimated the sheer dysfunction of the US response. I mean, by no means did I have an optimistic picture, but damn...

March has ended with the last two weeks having 3.31M and 6.65M unemployment claims, and those might be underestimates for actual job losses because the system in place is crashing under the weight of report rate (however, seasonal adjustment is not factored in either). There's a huge bailout for Wall St and a pittance for small businesses and individuals. The banks almost get bailed out twice because the tiny stimulus for individuals will be eaten by mortgages anyway, which through financial instruments runs Walls St, the ghost of 2008 coming around again, except in unemployment we have in two weeks which took over half a year back then. Pelosi's oversight committee idea is apparently not going anywhere.

So Congress has shut down the economy, thrown money out of helicopters for the top, and then goes on vacation for the next two weeks, perhaps more. This seems like some memetic Marie Antoinette level of running the country.

...

What is the rest of the world doing for economic measures?
 
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