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Comment by Ancalagon | Hacker News Reader

This is why everyone - tech companies, the market, myself - gambled (and apparently lost) and continues to guess that the Fed wouldn’t raise interest rates further.

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> is why everyone - tech companies, the market, myself - gambled

Fed profits and losses are arcane. The markets gambled the Fed would ease off because it would miss its soft landing. Raising rates while preserving employment is extremely difficult. To everyone’s surprise, the Fed is managing it. That economic strength, together with persistent core inflation, means higher rates for longer than some thought.

Are they managing it though? The books are cooked to all hell

> they managing it though

Yes. Employment is growing, unemployment is steady, growth is positive and inflation has at least stabilised.

> The books are cooked to all hell

Which books? The Fed’s?

Government-published economic statistics.

They literally changed the definition of 'recession' for political convenience. You really think the economy is booming right now like whats being claimed? Every admin manipulates BLS collection data to make unemployment look good.

"They literally changed the definition of 'recession' for political convenience"

They did no such thing.

Well then I don't think this dialogue is gonna go anywhere. Agree to disagree.

It would help if you explained what they changed it from and to and when maybe.

Widely agreed upon definition prior to 2022:

https://www.forbes.com/sites/leonlabrecque/2019/03/25/what-i...

https://www.nationalreview.com/corner/it-depends-what-the-de...

https://www.washingtonpost.com/politics/2019/08/21/fact-chec...

Acknowledgement as the 'popular definition' by St Louis fed in 2009 which uses an even less generous definition than two quarters to define it: "“significant decline in economic activity spreading across the economy, lasting more than a few months.”"

https://files.stlouisfed.org/files/htdocs/pageone-economics/...

Spin cycle:

https://www.cnbc.com/2022/07/29/white-house-goes-on-offense-...

https://www.foxbusiness.com/economy/recession-biden-yellen-d...

https://fortune.com/2022/07/29/wikipedia-recession-definitio...

https://dailycaller.com/2022/07/28/wikipedia-change-definiti...

This is not an econometric definition. (To the degree it is, the definition contains a free variable regarding the length of the downturn.) Doubting federal statistics or the Fed balance sheet because the White House spins the definition of a downturn is like doubting relativity because Pluto isn't a planet.

You're saying WH Admins have no influence over economic data collection by the federal government?

> WH Admins have no influence over economic data collection by the federal government

Less than you seem to think. The Fed, SSA, SBA, FDIC and CFPB are independent agencies. Many data are provided by private sources, e.g. ADP. And the statistical agencies, while legally dependent, are fiercely independent and competitive (i.e. when one starts being co-opted, the others publicly disagree).

Moreover, there are hundreds of billions of private dollars which take these data seriously. Is every one of them is in on the conspiracy or duped?

Neither. There's many many sources of economic data, the more money on the line the less reliant on any single source they will be (and the more likely collection will be done in house or contracted and kept private). The more money on the line the more incentive there is to control what will be said. What incentives do they have to make noise if the books are cooked? They would be inviting the ire of the people who regulate them.

Simply because something is claimed independent does not mean it is immune to politics and human nature.

That 2009 link you provided by the St. Louis fed specifically states the fed does not use the popular definition.

You just disproved your own claim. The government/ fed definition of recession has not changed since 2009. You claimed it changed in 2022.

The 2009 link says "The committee considers a wide range of indicators with particular emphasis on payroll employment and several measures of domestic production and income, such as gross domestic product, gross domestic income, and industrial."

I directly acknowledge that in the comment you reply to. Pretty lame to cherrypick the links I provided. The st louis fed recognizes the popular definition. Its definition is even less favorable to the case laid out by Biden admin. There's a clear history of use and a clear change once it became politically convenient. It's completely laid out in the links I provided. Your dispute is with those sources not with me.

Vanguard's chief economist in December 2022 says a recession may occur mid 2023.

https://investor.vanguard.com/investor-resources-education/n...

Do you think they are also part of this vast conspiracy to trick you, or is it possible you are just confused and never understood economics or the definition of recession as well as you thought?

Here's Fidelity in december 2012 "We do not believe that the US is in recession, but instead experiencing a late-cycle expansion, which has historically led to positive returns for stocks and bonds."

https://www.fidelity.com/learning-center/wealth-management-i...

Is Fidelity also part of a vast conspiracy to trick you, or is it more plausible you just don't understand economics so well?

Maybe the issue isn't so much that the definition has changed, as modern events have revealed you never understood the definition in the first place, or that 2009 paper you cited?

It has never been about what I think. The only 'conspiracy' I am alleging is politicians using their power to CYA; which if you believe economic stats are the one thing in the world that is exempt from that then as I already have said, your disagreement is not with me its with the sources I provided you.

Two consecutive quarters of negative real economic growth to... Something else. I'm not sure there ever was a new definition, just a denial of recession.

We're still pouring public resources into armaments manufacturers, some of whose products have reached or theoretically will reach the battle in Ukraine, so the redefinition project was a success!

The bidding right now is driven by the belief that the Fed has lost control over inflation, and the only way to protect your wealth is to chase equities and generate inflation-beating returns.

If you gamble they will and get it wrong you lose a lot more than if you gamble they won't and get it wrong.

What?

What I said?

Betting one way and being wrong is much worse than betting the other way and being wrong.

What you said wasn't English

   If you gamble "they will" and get it wrong, you lose a lot more than if you gamble "they won't" and get it wrong.

This is why punctuation is always important.

Also, Oxford Comma or GTFO :)

Translation: If you gamble that the Fed will raise rates and get it wrong, you lose more than if you wrongly gamble that they will not.

Is this necessarily true? Aren't puts and calls (etc.) symmetrical?

I am not saying it's true or false, but clarifying a wording many misunderstood.

I don't think tech companies and "the market" even looked that far ahead.

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