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Comment by icedchai | Hacker News Reader

3% sounds optimistic.

You know, that's what I thought too. But then I was seriously surprised when I saw 0.1% contraction during the Great recession of 2007-2009.

China and India grew substantially during the recession, just at a lower rate than they would have. No such luck this time.

> No such luck this time.

How do you know that? If you could predict that for certain, you could turn 10000$ into 1000000$ with ease.

No. This is reasonably predictable in the short term. You would have to have better knowledge than the market to be able to profit.

If the whole market expects depressed gdp grow and you get depressed gdp growth, you have no edge.

This guy invests.

More seriously, you emphasize a most important point. The delta of information is precisely where it's at.

I wonder if this is exactly the same thing as what we call "bias" in trading / investing. (as a function of some objective knowledge + subjective experience)

I mean, we all have the same information but if my bias happens to be correct, I will be able to outperform others (however much depends on how much risk I'm willing to take, how much hedging I conversely do). That's the delta I create with taking a stance, when I press that button, which conditions I choose to enter/increase/reduce/exit a given asset.

Curious how you see it.

I also found this astonishing.

World Bank data has GDP decreasing by 1.9% during the great recession[1], so I don't know where that 0.1% number comes from.

[1] https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...

It wasn't a depression in the sense that economic activity mostly continued, it was a deleveraging. People are overestimating the leverage in play in the current situation, other than giant public companies, there is less toxic debt, so it's more about actual economic activity (E.g. trade).

That's what they said at the start of the financial crisis too. I'm too tired to write an essay, but wait until there's a de facto default on college debt.

What are the odds some of that non-toxic debt turns into toxic debt as unemployment lingers?

It's definitely possible that real estate (both commercial and residential) is going to see a bunch of deleveraging as the debt becomes unserviceable. Right now everything is frozen in place. But once it restarts and everyone is supposed to get up to speed on their rents and mortgages again, a bunch of landlords are going to realize they're never getting those n months of back rent that are officially just temporarily suspended. At that point, the more leveraged ones are going to end up with cash-flow problems and mortgages going into default (also currently officially just temporarily suspended). I won't venture a guess on how widespread that's likely to be though.

That’s because it wasn’t a reduction in our national output (real production output). It was a reduction in perceived future earnings (I.e. loans). Today we are facing real production losses that will lead people to really stop buying. As prices increase and many many more people are out of work.

Consider that it’s a 6% change, which is crazy. That’s two years of “growth” wiped out in 3/4 of a year. That’s astonishing.

2 years of environmental progress made in 3/4 of a year. Incredible.

> "2 years of environmental progress made in 3/4 of a year. Incredible."

Which will rebound in a bad way. People who are unemployed will not give two hoots about how much the environment gets trashed as long as they get fed.

This temporary environmental progress is nothing to celebrate about.

I can see environmental regulations getting trashed to get the economy going. I'm worried. Here in Canada, I suspect Alberta will be given a major stimulus to get their oil workers active again. This will happen all over the world.

I don't think that's true. Environmental progress must mean a shift away from fossil fuels. What we currently have is just lower demand, but not for reasons of improved efficiency. I don't think that a lot of solar panels, wind turbines, or heat pumps were installed during the shutdown.

we've reduced demand by realising most of our travel was utterly pointless. things can go on fine without us traversing our cities and the world constantly.

I wonder how many people will now switch to working from home permanently.

How so? It's cheaper than ever to use oil and natural gas instead of renewables.

Cheap because there is almost no demand for the product. Just wait until the supply drops to adjust.

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