Ask HN: Are we headed into another recession?

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/)

6 comments

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bmm6o 10y 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 10y ago ↗

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

T-A 10y 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 10y 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 10y 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 10y 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.