Here's a quick summary of reasons to believe the economy is either heading toward recession or heading toward a soft landing. Snip it and then stick it on your refrigerator door.
Bad news:
- Bond prices up.
- Housing prices high.
- China imploding.
- Fed rate hikes starting to bite.
- Personal savings depleted.
- Inverted yield curve.
Good news:
- Unemployment still low.
- GDP forecasts solid.
- Inflation dropping.
- Consumer spending steady
Housing prices are high is bad news?
Housing prices declining is bad news.
The inverted yield curve might not mean anything. The last inversion in 2019 predicting a recession didn't predict Covid. Maybe there is far less to an inverted yield curve than most people think.
GDP forecasts solid and Consumer spending steady mean basically the same thing.
I have my first check for $15,000. I have a lot of energy so I always have something first. u85 Now I’m going to work a lot harder and barely finish next week’s episode. w I strongly encourage everyone to sign up. .
periods,……… http://payhome99.blogspot.com
Bond prices are up? I think you mean, "Bond yields are up." When interest rates rise (see your immediate preceding post), the *price* of the bond itself goes *down*. That's standard terminology in finance. (Pedantically yours, MikeTheMathGuy)
Good catch.
If we're going to say anything about housing prices with regards to the economy writ large, housing prices going up is actually good (I'm assuming we're talking about home sale prices). Higher housing prices, while detrimental to actual people (and I'm probably the first person in the comments here who would jump up and shout about how fucked we are in the housing price realm), have systemic effects that are good for the economy: more equity for those who do own a home (which turns into more demand at some rate), more incentive for construction which means more jobs and more spending on construction, etc.
I assume what you actually mean by bond prices is that it's bad for the government budget, not for the economy. This isn't really relevant as I don't think we're in the realm where high bond yields would stifle investment and spending from people just parking cash in bonds for the good yield.
But most importantly:
THE FED RATE HIKES ALREADY BIT. They are not just now starting to bite. For fuck's sake, many of us in the comments have already been pointing this out and all the reasons why you're wrong here and you're just ignoring us all.
+1 to your last paragraph. I honestly don't get Kevin on this. And I say this as a huge fan.
I dont think currently high housing prices are good for the economy going forward.
You are saying that housing price increases in the future can benefit the future economy in certain ways....but thats different than saying currently high prices will benefit the economy in the future. This latter argument wouldnt really make much sense.
Most (all?) of the comments as to the timing and impact of Fed rate increases has been more speculation and wild guesses than 'reasons'. Kevin might be wrong and the comment guesstimates might be right, but the 'reasoning' has been pretty light. Not a lot of science to go on with this topic. Gut feels abound.
Hard to argue the rate hikes have impacted the economy significantly with unemployment so low (still stable and near record lows) and the GDP is still growing.
Now the higher rates have made it harder for people to afford new mortgages, but this goes with the nature of rate hikes.
I do think the inverted yield curve may not always be as predictive as people think. It's not a standalone measurement that can predict what will happen, it's basically a measurement of what Wall Street people *think* might happen.
Clearly a ton of mixed signals and confusing post-pandemic economics like we have now, and a healthy amount of Wall Street Journal doomsaying, can throw the yield curve way out of wack.
In this economy who can afford a refrigerator?
😄😄😄
The economy is good. You can get a job moderating content for Facebook.
Oh wait…
The chief executive of a company contracted to moderate Facebook posts in east Africa has said she regretted taking on the work, after its staff said they were left traumatised by graphic content on the social media platform. The US outsourcing firm Sama is facing a number of legal cases brought by Kenya-based employees, who alleged being exposed to graphic and traumatic content such as videos of beheadings, suicide and other material at a moderation hub.
Hilarious. Only the best for Facebook.
I have heard that burnout rates for moderators are extremely high, because people have no reluctance to posting "their worst selves" on social media.
After looking through thousands of incredibly hateful, graphic posts every day, mods just want to go home and drink to excess (or the equivalent), or maybe get a fully automatic rifle and cut loose.
Bad news:
...China imploding
I have no idea what the long term implications are for the global economy if China is indeed sliding into a significant or prolonged downturn. But it has to be good for exerting downward pressure on oil prices. And that (for obvious reasons) is good news for Joe Biden.
I dont think currently high housing prices are good for the economy going forward.
We may one day reach the point where housing affordability issues have become such a problem that a majority of voters punish political leaders for not delivering YIMBY policies. But we're not there yet (nor even particularly close to that point yet save in one or two coastal enclaves).
For the time being, falling home sales are a much bigger danger for incumbents than skyrocketing prices.