Ask HN: How worried are you about the upcoming recession?
I hate to even talk about this but with all the bad news recently about the stock market downturn esp the NASDAQ, hiring freezes, rising interest rates, along with all the other negativity like Russia's war, continuing lock-downs in China with no end in sight and sky high oil prices all contributing to inflation, it seems like a recession might be inevitable at this point.
I am no economist but it is esp concerning to me that with particular recession due to inflation there don't seem to be any "easy" option like Quantitative Easing available to get out of it fast so I fear that this might a painful one which is adding to my anxiety. How worried are you and what are you doing to handle it? Is there a chance it could be as bad as 2008 or worse 2000? (I was not in the professional job market during those years so I have no idea how bad they were other than knowing they were real bad).
196 comments
[ 5.2 ms ] story [ 231 ms ] threadIt’s sad, he was a true lion in his youth
That being said I don't know who is on the democrats bench that could fill in for him. It's not Harris.
pumping infinite weapons to former soviet republics will be the stupidest and final mistake that US does. I will be back in 5 years to revisit this comment and see if I was the stupid one or did the public not think beyond their noses.
Can you expand on that? Are you suggesting Ukraine will turn on Europe or something?
https://www.jacobinmag.com/2022/04/united-states-military-ai...
you know how when a movie is almost over, they start setting up for the sequel? well..
The Fed has no way to fix the current supply chain shortage issue, which is half the equation in the rising inflation, their only tool in the box is aggressive rate hike to dampen demand. Essentially Fed wants demand to go way down, we don't feel the impact yet because the stock market isn't cracked yet. Fed wants it cracked.
No idea if that will play out well. I'm not that worried though.
1) Things are about to get incredibly nasty over the next 3-6 months.
2) Things only stay bad until the Fed capitulates and decides to start rescuing things. In this case we will be choosing inflation over a recession. And I'm saying inflation as a long term trend, at least 5 years.
But basically the game is up. This all ends up in one of two ways
1) The fed defaults on the debt and tells the Boomers they were just joking about Social Security and Medicaid existing as interest expenses drastically increase while tax receipts drastically decrease from a baseline of 127% debt to GDP (this will NEVER happen. You don't default on your debt as the world's reserve currency. Why would you? This is the one thing the MMT crowd gets right)
2) We give up and take our inflation medicine to cure our sovereign debt issues.
It's going to be option 2 11 out of 10 times. History is pretty clear on this point.
To me, no one lays this case out better than Luke Gromen:
https://youtu.be/VCAe4lVEpgs?t=37
I think very likely the future doesn't have one reserve currency, that the USD still plays something similar to its current role but similar transactions also happen in more currencies. so we lose sole reserve currency status, but not reserve currency status. The truth is we are already past this point. A lot of oil is already being traded outside of the dollar system already which wasn't true even 10 years ago.
There are 100s of hours of people including Gromen discussing this topic in depth on youtube if you look around.
It's more accurate to say: you don't default on your debt when your debt is denominated in your own currency. It doesn't require any specific reserve currency status to play that game.
There is the Euro, but it's not like there aren't several EU countries with severe financial issues. COVID hit the Eurozone pretty hard, and with high inflation, the war in Ukraine and the prospect of very high food and energy prices the next six months I wouldn't be too sure. Interest rates are finally going up aswell. EURIBOR just went above 0% for the first time in many years and there's a lot of people in overvalued homes currently fearing the bubble will burst.
I'm tired of the world insisting that every company must be growing in order to be valuable, and then when growth stagnates, people ditch it to cause massive losses.
Can we not just have moderate success? Can we create a system that doesn't self implode every so often? Can we create a system where making money at all costs (including the decimation of the planet, the wage-slave workforce, and the engorging and toppling of governments through cronyism) isn't the the default?
I have to remember that people are _generally_ good. I have faith in the next generation of leaders, thinkers, and doers. What will happen will happen, but I have hope that the youth who have seen wave after wave of "being at the brink" might be able to create a system where this isn't the norm.
That's a ramble, sorry. But it's just what I'm feeling. I have to ride this wave, take care of my partner and children, do what I can for others, and hope it ends soon.
See why people don't say this even though it's true? Because the only reason to point this out is to imply causality and to point out that it's different than some other system.
There has been unprecedented money printing in tough times that doesn't revert to mean before the next economic crisis comes along. This results in huge misallocation of resources and a lot of long term negative consequences all to avoid short term pain.
At some point the developed governments on Earth will have their hand forced rather than playing god with the economic cycle.
https://www.pbs.org/newshour/nation/indiana-jones-collapsed-...
People came up with the idea of good, being good is essentially acting in consensus with society therefore it is unsurprising that most people are good.
Maybe the idea of “goodness” is a layer on top of that, created by consciousness, but it’s not a completely invented thing by society just to make people conform.
There are people who are genuinely good and almost without fail, they are people who have devoted their lives to helping others. Often they fly under the radar and aren't very well off. They don't make the news but you know one when you meet them and they have a huge impact on those around them.
There are also bad people, if you'll forgive the Marvel level depth of that proclamation. There are people who make the world worse, usually for their own benefit or entertainment.
Generally I think 95+% of people are neutral - just minding their own business. Is that virtuous, or just the minimum?
Recessions aren’t once in a lifetime?
> I'm tired of the world insisting that every company must be growing in order to be valuable
They don’t. It’s just the growth companies don’t pay dividends
> and then when growth stagnates, people ditch it to cause massive losses.
Because it’s price is speculation on future profits which would create future dividends
> Can we not just have moderate success?
Yeah
> Can we create a system that doesn't self implode every so often?
Not really, but we can make the implosions less severe
> Can we create a system where making money at all costs (including the decimation of the planet, the wage-slave workforce, and the engorging and toppling of governments through cronyism) isn't the the default?
No
> I have to remember that people are _generally_ good. I have faith in the next generation of leaders, thinkers, and doers. What will happen will happen, but I have hope that the youth who have seen wave after wave of "being at the brink" might be able to create a system where this isn't the norm.
Seems dubious to me. We will do better on some select issues but mostly otherwise the same
Depends on where you are. Parts of Latin America have been in an economic pit since the late 70s - I guess you could say “once in a lifetime” - for some people, their entire lifetimes have been spent in a state of economic crisis.
I remember the talk about "stagflation" in the 1970s, though I was too young to really understand it. The boom economy that started in the 1980s crashed in 2000. I remember that well as I lost my job. In 2008 I was working in the public sector and my employment was unaffected, I also didn't have any mortgages with stupid terms, and didn't need any of my retirement investments yet so I just rode that one out. So a recession in 2022, especially given the past two years, is maybe a bit early but not really surprising.
Does not seem reasonable, tbh...
Are you now, or have you ever been... poor?
Step outside of the news and step outside of cutting-edge tech companies and moderate success is basically the norm. There are many companies out there that are chugging along, doing okay but not really shooting for the moon. They're not making headlines or coming across your social media feeds as the hottest companies around, though, so you're not going to see them unless you go looking.
The catch, of course, is that the average moderately successful company pays a lot less than the average high-growth startup company. You might find that you're less pressured, of course, so it's not exactly unfair. However, many of us are drawn to high-paying companies, and high-paying companies generally correlate strongly with high-growth expectations.
The vast majority of tech companies are ones you’ve probably never heard of. They don’t pay spectacularly like the SV shops but they don’t underpay either.
I currently work for an digital agency in Ohio. You probably have never heard of them and you likely never will. They don’t make headlines but they’ve chugged along for over a decade, making a healthy business out of building applications for local companies in Ohio as well as some larger companies you have definitely heard of.
Companies like these are the majority, but you never hear about them because the media is focused on a few select companies, mostly consumer tech, that everyone’s heard of and generate headlines.
Meanwhile, what the U.S. should be doing is ruthlessly cracking down on de facto monopolies and oligopolies that are ripping off Americans and making record profits, like meat... baby formula... and most of all TicketMaster.
Oligarchies offer a way to buffer this effect, so that there can be several companies existing in an industry that slow-walk (disruptive) innovation and buy up competitors in their early stages. Hard to say how long an oligarchy can hold, though. Look at Intel & AMD, and how they're facing a serious test from ARM chips. Even further, what will the onset of Quantum Computing do to the market holds they have.
Free enterprise's nature as winner-take-all is what makes the difference here. Why was it that Friendster, Myspace, and Second Life could all co-exist, but when FaceBook came along they went defunct (mostly). In a more extreme example, consider robotics/AI and how it will replace humans. When robotic surgery is perfected, will 'manual' surgery even be considered 'safe' anymore?
All that would mean is a replacement of the world order and an even further degradation of quality of life.
You still have a family unit, that's not too individualistic but also not too tribal. You have technological and military progression, and a fairly comfortable stable economy. You don't have to worry about billions of dollars in corruption or an aggressive president using nuclear weapons in negotiations. Nor are there the wars and tensions of the middle east or eastern Europe.
I've had several European co-workers express disbelief at the gross levels of corruption evident at all levels of large business and government (especially when the latter is buying something from the former and large sums are splashed about wastefully to line pockets of the pencil pushers).
Hopefully the recently elected new Labor-led coalition govt will follow up on their promise to implement anti-corruption trials of various members of the previous government, who were blatantly stealing taxpayer money, via their offshore Cayman Islands family trust accounts and similar.
After the recent election defeat, we now have an ex-cop opposition political leader who "somehow" is now worth $300 Million, not an inheritance, but most probably various corrupted kickbacks from giving out overly expensive contracts (it's been famously called "The Game of Mates"). And he is just one of dozens of obviously over-wealthy liars.
The list of people involved is huge at many levels, and I hope several of these people end up in jail, but the damage is already done (e.g. cancelled Fibre-to-the-Home rollout, and we already spent double the fibre costs to purchase Murdoch+Telstra copper cable instead, for only 1% the bandwidth capability).
Personal quality of life here can be excellent, especially if you earn 50% over the average wage, which is any 5+ years experience software developer role.
Just don't work for old bigbiz or govt if you want to avoid dealing with sleazy theiving weasels.
www.MichaelWest.com.au
and
"Friendly Jordies" (on YouTube)
are two of the best investigative journalists here, and helped sway the vote in the last election.
Change is coming and the exposed corruption will be a force for greater public accountability in the future (hopefully!)
You can go a long way with incompetent leadership if you can dig stuff out of the ground and sell it.
More like once in a decade, and recent ones are substantially smaller than in previous centuries: https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...
I certainly don’t lose sleep over what happens in Australia for example.
What's tiring (and turns people cynic) is, that even though a problem is visible for everyone to see, nothing ever (seemingly) changes. That seems like a universal behavior that can not only be seen in the US, but everywhere humans are involved.
If you’re trapped in that rut like tens of millions of people are in the US, a downturn hurts.
I’m currently not in that rut, but I count my blessings every day that I escaped and a feel for people who are.
Or are you in possession of the true meaning of the word 'suffer' and stand above us all to decide whether someone is suffering or not?
Without being actually affected by all this (not a US citizen), I can say that your comment is flawed either way.
https://en.wikipedia.org/wiki/Gun_violence_in_the_United_Sta...
It being so "obvious", perhaps you could clearly state the problem. And then you might possibly also have a solution (as do so many commentators today)?
If you've studied complex social systems (e.g., the USA's socio-political environment) nothing is "obvious" about them and most "solutions" prove to be illusory.
-"Life is a bitch and then you die."
https://quoteinvestigator.com/2016/10/16/life-hard/
The problem being that every 3 month there is a mass shooting with about 20 casualties. Including schools.
How about you also read the first part of the sentence you cited me on:
> I'm not in for a political discussion about a solution
I explicitly stated that I am not in for that. For the exact reason you want to blame me for. Maybe read more careful next time or put up a little more good will. Especially on a delicate topic like this.
generally means they are average which means half of the people are even worse!
Sure, but Hacker News is a strange place to lament about that.
The country is full of exactly what you're looking for. Go work in an IT department in a medium size business, or a non-profit. Join a consulting group that does software development outside a major metropolitan area. Join a software company that's been around for 20-30 years running the same product. Join the software development team at a company who focuses on the development of their internal proprietary applications.
(I'm not insulting these place. I spent half my career at them. There's nothing wrong with them. They're just different. And they tend not to have the focus on growth.)
There's a lot of companies doing exactly what you want. They just don't make the headlines. And they're definitely not talked about on Hacker News. It's a bit like vegetarian showing up at a steakhouse & acting surprised.
In today's world of corporate growth via acquisition, having a modestly successful job with a modestly successful mid-sized company in no way insulates you from the economic forces of the outside world.
Legitimate modest success tends to result either in a series of endless acquisitions where a mid-size business gets absorbed into incrementally larger businesses time after time - or where the business gets acquired by one of the larger, monolithic players in the industry. With any acquisition, restructurings, layoffs and product changes have substantial impact on those moderately successful staffers.
Alternately, stagnation or modest decline typically results in vulnerability to market forces which results again in a buyout by another player in the market, or a buyout by a private equity group who cuts costs, lays off staff, and tries to leverage whatever assets they can to maximize their return at the expense of the business itself. The effects on the staffers are even worse.
Sure, you can find a boring, moderately successful job for yourself. It may last 5, even 10 years. But the days of being able to have a modestly successful, boring job with the same company for 30 years appear to be completely gone.
But we have it much easier than previous generations. We've got better health, wonderful technology, more information than ever before. There's less poverty and less disease. Less racism. More empathy.
Consider the folks who were around for WWI. It was followed by a flu outbreak, huge stock market crash, Great Depression, then WWWII and Korean conflict.
Life is hard. But we don't have it so bad.
That doesn't mean that there aren't parties that are responsible for much of our current troubles - be it the state of the education/healthcare systems, the state of the housing market, the state of salaries/wages, environmental issues, human rights, as well as the ever growing trend of identity politics and a variety of other issues.
It is also not infeasible that these problems might have actionable solutions and that change for the better would actually be possible with lots of effort. Ergo, accepting things as they are because "it could be worse" isn't a valid stance that would motivate one for whatever actions are necessary to improve the world in whatever capacity possible - be it protests, exercising your rights to vote, or calling out problematic behavior.
The system works. (Maybe not as fast as we like sometimes, but it absolutely works.)
Life is relative. It's not an argument to say "yea but we're better than the Ancient Egyptians!" So what? That isn't meaningful.
Using World War 1 really tells. That was a century ago. No one is even alive from then anymore.
The world is getting "smaller". An ever smaller group of people can create bigger chaos than they could in the past, be it hacking, 3D printed WMD's, or Tweeting hate. We have entered the Century of Trolls.
You’ve been misled. While the exact details may be once in a lifetime, expect world shaking events every 10ish or less years.
Policy makers (and voters) have kept the zombies alive, pumped assets and introduced exciting new complexity.
This is the big one.
Or maybe it isn’t. No one knows.
Or maybe it is. Maybe someone knows.
Start at part 1 if you have time.
It says, after literally 1 article. What a garbage website.
In my case I followed the link, realized it was a 3 part article so I went to the first part and got the message, said "Well, lets check the third one then" and got the message again.
So objectively it is a garbage website, they were trying to convince me to subscribe by showing me something I was not able to see due to the site design
It was bound to end some time and no doubt in 2-3 years people will look back and say "man, I wish it could be like that again".
I lived through recessions since the ‘60s. The 2008 bust almost wiped me out but at least I stayed employed.
I worry about my kids, though.
https://www.hsph.harvard.edu/news/press-releases/economic-do...
We absolutely will not. Economic catastrophe leads to misery and death for many.
The issue of economic boom and bust and the effect on people's lives, at its heart, I believe is a philosophical one. If you view it from the perspective economic libertarianism where government regulation is evil -- boom and bust cycles occur frequently. If you view it from the perspective of social justice and equality where government oversight of business is a necessary evil -- boom and bust cycles occur less frequently.
It's like those signs we saw so much of in the first covid year "we'll all get through this together." Well, a million of us didn't, did they not count as "us?"
I don't know your politics here and I'm not trying to pick an ideological fight. I just wish it was more routine for people to acknowledge the actual human costs of large scale events. Keeping hope alive is necessary, but a recession will kill people, so "at least no one will die" can't be the hope you provide here.
Maybe in a decade or so, property ownership will be within the reach of middle-class families again.
I guess I could worry, but having been through enough of these "sky is falling" events I've mostly decided to just tune out. I think it was covid, or more specifically the wildfires during covid, that finally just broke me down into a "i no longer give a fuck" mindset.
Bad shit happens. I'll continue to be kind to others, and try to treat people the way I would want to be treated. Life will do what life is going to do.
Edit to add: regarding the recession, talk to your supervisors and others in your company. Are layoffs actually likely? What is the outlook? You should only worry if your company specifically is in trouble. Even then, we are in a highly in-demand field, there is a good chance you'll find a new job if you focus on doing excellent work here and now (be so-good-they-can't-ignore-you, as it were).
But at some point it is worth acknowledging that prolonged anguish or anxiety about something bad isn't useful unless it leads to action (see sphere of influence). We can't stop all bad things from happening and they are happening continuously to people around the world -- we can't let that get in the way of improving the lives of ourselves and the people around us.
It doesn’t mean they’re not important, it’s just that it’s ok to take a break.
Sometimes people need that break from the eternal flow of news and social media so that their mental health isn’t impacted and so there is time to process what’s going on.
Worst of all, you can't do anything about either of those
It may not be the right approach, but if you are suffering because of everyone else you should reconsider your priorities
Unemployment is 3.6%.
Nasdaq was overvalued - QQQ went from 100 in 2016 to 400 in 2021. No reason not to return to 150-200.
The only concerning events is that the capital that left the market would never return since it was the baby boomer last big capital injection before they retire en mass and remove thier 401K from stocks.
On the other hand, there is a lot of job openings due to this retirement.
High inflation is actually a good thing, as it is result from wage increases, which means that there are shortages in the job market.
Overall, this looks to me like the wage arbitrage is being removed from the market.
This is quite the take. I very much doubt that high inflation is good, and that it's primarily derived from shortages in the job market.
is it though? At least here in Europe high inflation is mainly caused by rapid increase in energy, logistic and food prices. Wages haven't even started to catch up, which will just cause more inflation in the short & mid-term.
Except wages rarely keep up with inflation. Inflation is for rich people to erode and erase debt - or, more accurately, externalize it on others - nothing more.
(Although one could make a queuing theory argument that a hiring freeze could reduce efficiency of existing engineers if it results in poor division of labor and too much context switching)
The only relatively safe haven in tech during a recession is cloud services as long as the cloud enables companies to reduce head count and cut costs. Otherwise capital expenditure budget cuts would hit clouds as well.
Your argument is that I’m overestimating the value engineers produce because that value depends on them getting paid to do the work?