Ask HN: Are we headed into another recession?

https://news.ycombinator.com/item?id=10604282

by anon2121212121 • 11 years ago

7 6 11 years ago

news.ycombinator.com

A lot of the news coming out recently seems to be pointing in the direction that we are headed into another recession.

1) (http://www.zerohedge.com/news/2015-11-18/dead-unicorn-walking-square-ipos-9-well-below-expected-range)

2) (http://www.marketwatch.com/story/san-francisco-real-estate-looking-like-it-did-before-dotcom-crash-in-2000-2015-11-20?dist=countdown)

3) (http://mobile.nytimes.com/2015/11/22/technology/livingsocial-once-a-unicorn-is-losing-its-magic.html)

4) (https://gcaptain.com/baltic-dry-falls-below-500-for-first-time-ever/)

bmm6o• 11 years ago

Data points 1 and 3 suggest that some tech investors have over-valued some startups, relative to later or public investors. That doesn't directly suggest there's a recession coming, though a lot of people losing a lot of money in a bubble bursting is never good. 2 is related, in that loose money in tech drives up the cost of some supply-limited items, especially in SF/SV. I'm not sure how these conditions are supposed to predict a coming recession.

tmaly• 11 years ago

if you read zerohedge you would think we are always in recession.

T-A• 11 years ago

Of course we are. The tricky question is when. Here is an indicator with a decent historical track record which says not yet: https://research.stlouisfed.org/fred2/series/RECPROUSM156N

11thEarlOfMar• 11 years ago

No.

The US been in recovery since 2010. First to recover was corporate profits thanks to downsizing and low interest rates. Consequently, the S&P went on a tear [2010-2014]. With corporate profits recovering, companies could start re-hiring and unemployment dropped [2010-2015][0]. Now that employment is back in healthy territory and the stock market is back where it should be, Americans are feeling a positive wealth effect, so next to recover is real estate. Still juiced by low interest rates, real estate prices will continue to rise significantly in the [2014-2016] period.[1]

I'd be on the lookout for a recession once this real estate cycle plays out, maybe in the [2017-2019] time frame. By then, interest rates should return to the low end of their historic range [2].

[0] http://data.bls.gov/timeseries/LNS14000000 [1] http://money.cnn.com/2015/08/11/real_estate/median-home-pric... [2] http://mortgage-x.com/trends.htm

gesman• 11 years ago

The problem is not with the state or valuation of technology companies but rather with US government debts reaching record levels.

This bubble is of historic proportions and of a way bigger concern that the shape of overvalued startups.

mcnees287• 11 years ago

And why is that? Technically, we could repay all of our debt, at any time, as we print our own currency. There are long-term implications for what you are talking about, but we are far away from anything approaching a crisis (not including self-imposed crisis by The Congress). There is no connection between a household 'maintaining a budget' and the way the US government finances itself. It is a false equivalency, but serves as a useful political cudgel.

Ask HN: Are we headed into another recession?

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