Just google now: Goldman downgrades U.S. GDP forecast to 0% for Q1, and -5% for Q2
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Besides the hit in GDP, a lot will depend upon the pace of recovery, when it starts. Will it be a sharp upward rebound , or slow sluggish climb.
Definitely not sharp jump, but slow recovery. However, normally market over correct beyond actual impacted correction level, then a sharp jump will be possible once, then very slow years of recovery.
Just see how it went down from 2007 Oct to 2009 Mar, then recovered, went down again in 2011, and the started recovering positive till 2018.
It is exactly same cycle happens, recessions are slow recovery as impact is wide spread.
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Another unknown. Has market found the bottom. Market went down as much as 26% then recovered yesterday to down 23% from peak. Is blood bath over? If worst GDP drop is only 10% for first two quarters (that is a lot of GDP to loose), market seem to have over corrected already.
Fed seems to have met this afternoon and cut rates to zero.
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I posted on TARP. Market still declined for another 6 weeks and 32% after TARP was passed. I doubt we are at the bottom.
This is a totally different paradigm. We don’t have an administration hell bent on shutting down all extractive industry and throwing up roadblocks to business. The recovery will be V-shaped. Large sections of the country where no one is panicking will be minimally affected.
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No two situations are exactly alike. 2008 had securities that could not be priced correctly because the risk on them could not be correctly estimated. The reason for the 2008 collapse was financial recklessness. This time nothing of that kind. It does not mean the second dip will not happen. I think 700 Billion QE of money is also bad as it was then. It will do nothing but reduce the value of money even more. We are living in a time when people expect Presidents and Institutions to make bad decisions, only to their detriment. Politicians and top officials take the path of least resistance, even if that is not the best path to take. They do not fight public sentiment.
Fed cutting rates zero and opening QE is an acknowledgement that there is real impact to economy.
I have not seen any recession V-shaped. If we end up recession, real impact to economy, domino effect will carry through across economy, that takes longer time to recover.
At higher level, Recession is bad for economy, Rate cut and QE are counter measures to improve economy.
Wow. I was worried after the Friday rebound. That’s why I did the research on stock market performance after TARP passed. I wanted to know if the legislation would be the bottom. Once I saw the market kept declining after TARP, then I realized we probably aren’t at the bottom.
I think the fed making 2 big moves so close together is telling people the economic impact is FAR worse than we are thinking.
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Recession are natural part of economic cycles. Recession are the phase to clear out bad investments and unproductive use of resource. Protecting those only makes economy less efficient and it punishes savers and encourages reckless behavior.
Seriously this is an ill timed move, could’ve waited till Q2. Trump could’ve done more on the testing front and shown leadership instead of firing bullets in the air.
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Two children, One is sick and another is good (savers), if you take extra care on sick child to recover fast does not mean you are ignoring the good ones.
Whatever government needs to do for the people to recover from recession, they do. It is natural for every government, every economy ! They are not protecting reckless behavior, but helping economy to recover from a disaster.
If government is not acting now, entire economy will go bad to worst, which is not desirable.
All we can do is just understand the way it works, take appropriate position to secure our position or life for the betterment !
That is not what @pandeyathotmail meant.
The lower leg of a person has gangrene, he proposes to cut off that lower leg.
Economy will do better if government steps out and let economic matters resolve itself. However, last 150 years of education and persuasion has created an environment where people expect GOVT to step in, even thought it is is not in the best interest of everyone (except for politicians and bankers ).
He is also mixing charity and helping a sick with mal-investment.
Can you show one country where this ideology followed? You are taking some ideology which no government on this earth is following !