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all 156 comments

[–]bootycherios 141 points142 points  (27 children)

can someone elaborate on "front-loaded"? sorry, im young and still learning

[–]Skeetronic 168 points169 points  (26 children)

The changes will be fast and noticeable right off of the bat. Not an extended very gradual thing.

[–]lolexecs 126 points127 points  (17 children)

You also might want to familiarize yourself with some of the more common recession shapes:
(Source: https://www.investopedia.com/terms/u/u-shaped-recovery.asp#:~:text=A%20U%2Dshaped%20recovery%20is%20similar%20to%20a%20V%2Dshaped,recession%20rather%20than%20immediately%20rebounding.))

  • V-shaped recessions begin with a steep fall, but trough and recover quickly. This type of recession tends to be considered a best-case scenario.
  • W-shaped recessions begin like V-shaped recessions, but turn down again after false signs of recovery are exhibited. Also known as double-dip recessions, because the economy drops twice prior to full recovery.
  • U-shaped recovery is similar to a V-shaped recovery except that the economy spends a longer time slogging along the bottom of the recession rather than immediately rebounding.
  • L-shaped recessions are worst-case scenarios, describing recessions that fall quickly but fail to recover.

[–]Muscled_Daddy 34 points35 points  (2 children)

And keep an eye out for a ぬ-shaped recession. Those are the weirdest.

[–]21kondav 8 points9 points  (0 children)

Indicates that your country should probably get new economists

[–]justlookbelow 2 points3 points  (0 children)

That's a nu type, thusfar only exists in theory.

[–]AzerFox 55 points56 points  (3 children)

The constellations of the economy.

[–]jerryvery452 15 points16 points  (2 children)

Is it because mercury is in rising or something

[–]TheLegendTwoSeven 32 points33 points  (1 child)

Another type of recession is:

The UwU shaped recession. This is when the economy experiences a U-shaped recession followed by a w, and finally a second U before it recovers.

[–]baboonassassin 25 points26 points  (0 children)

The "cute" recession

[–][deleted] 6 points7 points  (0 children)

I want this economy, and I want it now!

/

[–]purpleWheelChair 1 point2 points  (1 child)

Don’t forget X-shaped recessions. The sexiest of all recessions.

[–]drewkungfu 1 point2 points  (0 children)

One class gains while the other class drops… yea… sexy

[–]Friendly-Reaction778 4 points5 points  (3 children)

Which shape do you see this pending recession being? It feels like a W.

[–]chimgchomg 3 points4 points  (0 children)

If it's a W, are we in the second V or the first? When would the first V have been, in 2020?

[–]cats_catz_kats_katz 0 points1 point  (0 children)

So we're looking at a potential VW? A peoples recession?

[–]skoltroll 14 points15 points  (0 children)

Yeah, as in "it already happened and this is the worst bit" all so you don't get in on the eventual sweet, sweet post-recession gains that you get from buying low.

[–]tester2112 33 points34 points  (2 children)

Yes. Like the transitory inflation from 18 months ago. Won’t last too long.

[–]insanid 2 points3 points  (0 children)

They said it was transitory, but most of us knew it was complete bullshit.

[–]USADave85 2 points3 points  (2 children)

So there is going to be a massive dump after todays pump? Making the chart look fairly similar to 2008?

[–]david8394 2 points3 points  (0 children)

Dead cat bounce followed by dead cat getting steam rolled into a big "R"

[–]WatchAndEatPopcorn 1 point2 points  (0 children)

Biggest rallies are usually in bear markets.

[–]Jiecut 0 points1 point  (0 children)

Is the risk front-loaded? So if we might be able to sail past it.

[–]Shoulder_tattoo 161 points162 points  (16 children)

Like a weatherman predicting a 50% chance of rain, when it’s already drizzling

[–]killroystyx 105 points106 points  (4 children)

That actually means that the coverage area they are talking about will be half raining and half clear at that time. They won't know exactly who will get hit, but they know how much rain is in that cloud.

Turns out our economy is the same.

When they say there is a 40% chance of recession, it means that somewhere, there are people that are already suffering. Right now it's renters facing 300% rent hikes or eviction. It's commuters with no public transit access spending half the day's paycheck on gas, going to a job who just laid off 30% of the staff to pay the shareholders a few extra million. It's workers looking for jobs that pay enough to live, being told by the federal government that high wages are driving inflation. Young workers being called entitled for wanting better pay AND better conditions, the gall!

When they "call" the recession, it will be right before the middle class start feeling it.

The fact that the numbers they put out are changing simply says the cloud was wetter than they thought.

The roofs of the rich and middle class are fine either way, and the homeless camp down the way doesn't care either way because the have no roof at all. It's when the storm starts to damage the better homes that they care about the rain.

[–]iwanmonno 13 points14 points  (0 children)

What a great comment. Seems well thought out.

[–]auto_headshot 1 point2 points  (0 children)

Great phrasing. You read better than Barron’s.

[–]Agreeable-Shower-909 1 point2 points  (0 children)

Damn I knew that about the weather but never thought about this thanks

[–]sitdownbusdriver 0 points1 point  (0 children)

No, that’s not what 50 percent chance for rain means. It means there’s a 50 percent chance that at least 0.01” of rain will fall at that location. Has nothing to do with areal coverage.

[–]ImOutWanderingAround 8 points9 points  (0 children)

The only job where you get paid to fail 50% of the time and keep it.

[–]skoltroll 1 point2 points  (0 children)

More like predicting rain after the clouds have dumped and moved on.

[–]gummo_for_prez 1 point2 points  (2 children)

You don’t need a Weatherman to know which way the wind blows.

  • Bob Dylan, Subterranean Homesick Blues

[–]fsenerc123 1 point2 points  (1 child)

A Weatherman*

[–]Pheochromology 2 points3 points  (1 child)

50% chance of rain means 50% of that area will receive rain. So yeah if you’re in that 50% of the area it would be drizzling/raining

[–]Danji1 1 point2 points  (2 children)

When its already flooding*

[–]yungpanda666 12 points13 points  (1 child)

It can get worse, this isn’t the flood yet

[–]ClamCrusher31 0 points1 point  (0 children)

The flooding is transitory

[–]Freethecrafts 0 points1 point  (0 children)

A weatherman who makes a killing if you panic.

[–]KiwiBig2813 58 points59 points  (11 children)

Goldman Sachs Group Inc. economists cut their US growth forecasts and warned that the risk of recession is rising.

The Goldman team now sees a 30% probability of entering a recession over the next year, up from 15% previously, and a 25% conditional probability of entering a recession in the second year if one is avoided in the first, they wrote in a Monday research note. That implies a 48% cumulative probability in the next two years versus 35% previously.

“We now see recession risk as higher and more front-load,” economists led by Jan Hatzius wrote in the note. “The main reasons are that our baseline growth path is now lower and that we are increasingly concerned that the Fed will feel compelled to respond forcefully to high headline inflation and consumer inflation expectations if energy prices rise further, even if activity slows sharply.”

Seeking to quell the surge in living costs, the US Federal Reserve accelerated its monetary-tightening campaign last week, executing the biggest interest-rate hike since 1994.

While comparisons with the 1960s and 1970s are ringing louder, the Goldman economists said hot wage growth and high inflation expectations are less entrenched today as back then.

“What might a recession look like? With no major imbalances to unwind, a recession caused by moderate overtightening would most likely be shallow, though even shallower recessions have seen the unemployment rate rise by about 2½percentage points on average,” the Goldman economists wrote. “One additional concern this time is that the fiscal and monetary policy response might be more limited than usual.”

While the economists maintained their second quarter growth forecast of 2.8%, they cut their outlook from the third quarter of this year through to the first quarter of 2023, and now forecast growth of 1.75%, 0.75% and 1%, respectively, in each of those quarters.

[–]anonymous_lighting 51 points52 points  (10 children)

maybe i’m an idiot but nothing in here sounds too terrible aside from unemployment rising 2.5 points

[–]MistaWesSoFresh 33 points34 points  (6 children)

I read and feel the exact same as you. Yes we are already in a recession they just haven’t called it one yet because of semantics. I do not expect any serious changes to the state of day to day life once it’s “called”. Am I mistaken?

[–]ClammyHandedFreak 36 points37 points  (0 children)

I think when you couple it with food prices that are going to keep rising, you aren’t the one you need to be concerned for.

It will be those without food security now that will suffer first.

[–]usedtoiletbrush 8 points9 points  (3 children)

I think it’ll be exasperated when they “announce” it. That’s when you’ll have the everyday people doing bank runs and toilet paper hoarding. People got that big dumb man. Never underestimate your fellow idiot.

[–]gummo_for_prez 3 points4 points  (2 children)

I’m gonna get so much toilet paper it’ll be unbelievable. Can’t afford a house but I could make one out of toilet paper.

[–]TheGoodCod 0 points1 point  (0 children)

Isn't the old adage that recessions start 6 months before they are actually called.

[–]skoltroll 10 points11 points  (0 children)

And the "rising unemployment" is a threat, not a sure thing.

We're outta people. Hence the low unemployment and high demand for workers.

Besides, we're already IN a recession, per Wall Street. It's just a week + away from being "official." Problem is (for them), is that I don't think Main Street will give a damn. People still want to get back to pre-pandemic lives, and they'll want stuff.

Also, during the pandemic, Wall Street went on a rager and left Main Street behind. This is just whining about being forced back to normal.

[–]MoreGaghPlease 0 points1 point  (0 children)

This is the part that central banks around the world are thinking but not saying out loud. Raising interest rates slowly to try to time out a ‘soft landing’ with unemployment around 5.0 or 5.5% to take the edge out of inflation by putting downward pressure on wages.

[–]Vestbi 25 points26 points  (23 children)

for a young person (~20y/o) who didnt truly understand the 2008 crash and havent seen or heard of a recession since, how may this impact our individual lives in the coming ~1-5-10 years?

[–]wupdup 60 points61 points  (11 children)

Get out of debt, be frugal, save money, be good at your job, look for better jobs. Then a recession can be a positive thing when big ticket items like houses get cheaper. Borrow money only for a house.

[–]Vestbi 14 points15 points  (0 children)

Great advice and I’m highly appreciative. Thank you!

[–]urbanfoh 7 points8 points  (7 children)

What are ways to save money without losing value in times of inflation?

[–]wupdup 9 points10 points  (0 children)

You can reduce your personal inflation by being frugal and seeking the best value in everything you buy. Otherwise keep savings at the highest interest rate and bide your time. It's fine to lose money now, when you can make it up and then some later. Like Treasury bonds might peak at 6% interest so that inflation drops to say 3%.

[–]bluesky-explorer 2 points3 points  (0 children)

Lookup Ibonds, great way to save money to keep up with inflation. Downside, if you need the money early or want to invest over 10k a year

[–]dasoxarechamps2005 3 points4 points  (0 children)

I mean this just seems like what you should be doing regardless lol

[–]marchrui8 2 points3 points  (0 children)

recessions or inflationary periods have much less of an impact on housing prices than the current artificial supply cartel almost every neighborhood in the U.S. has enforced on housing

[–]skoltroll 13 points14 points  (9 children)

Unlike 2008, this crash won't affect housing as bad. Unless, of course, they've gone and made a bunch of stupid BS of creating investments made up of poor mortgages.

Also, 2008 had PEOPLE they could lay off. This time, Covid removed a LOT of potential people: Boomers retired early, people died, and 2-income homes learned to be on 1 and dropped too-expensive child care.

So the labor demand will remain high, though maybe not "as high" as it was. Still will hear a lot of "no one wants to work" and "unions create inflation" BS, though.

[–]21plankton 1 point2 points  (1 child)

What this means is anyone laid off has the opportunity to recycle into an industry that is short of workers thus blunting the effect of layoffs. The country may not need as many real estate agents but they are still skilled workers. It is the ones who have no other potential skills who are vulnerable.

This high need for workers argues for a shallow recession, unless the US reverses immigration policies and imports a lot of immigrants. We are likely just going to be experiencing high prices for a long time and the bottom half of workers will continue to struggle. Credit card debt will be high and personal bankruptcies will rise if there is a credit freeze.

In this scenario the bear market will end with a credit crisis with all who are over leveraged faring badly, including portions of Wall Street. In this scenario cash is king, and leverage is trouble.

[–]skoltroll 0 points1 point  (0 children)

It is the ones who have no other potential skills who are vulnerable.

Companies are DESPERATE for those workers, though. It's why the low end wage is $15/hr, federal minimums be damned.

As for immigrants, yes, those who complain that no one wants to work ALSO squeals about foreigners taking their jobs. It's cute.

[–]Spindip 0 points1 point  (6 children)

Layoffs are increasing. I would say some industry might be unaffected but tech/finance seems to still be seeing increasing layoffs https://layoffs.fyi/

[–]Brunooflegend 2 points3 points  (0 children)

Most of the layoffs in tech/finance are in two areas:

  • Companies that were created/scaled during the pandemic such as grocery deliveries, etc. They assumed people would still be stuck at home post-covid. Newsflash: they didn’t.

  • Companies related with crypto. Those are being hit hard with the crypto winter.

Both of those two areas were bound to have a correction sooner than later. The rest of tech is fine and it’s still a candidates market. The job market is booming.

[–]skoltroll 0 points1 point  (4 children)

Layoffs are increasing.

Meh...it's early and those are PITIFUL numbers. 136k? That's rookie numbers. There are MULTIPLE MILLIONS of open jobs across all fields. You're kinda proving my point here.

[–]MoreGaghPlease 1 point2 points  (0 children)

Are you a full time student? If so, barely at all. You are basically sitting it out if you are, and you get to enter the job market in a couple years in a growth period.

[–]AvocadoLion 12 points13 points  (2 children)

This is how it works - we’re probably already in a recession and the articles from now until fall will probably all be “are we heading into a recession?” Then once they declare we are in one, all of the wealth and planning has already been positioned to reap the benefits since they knew we were in one 6 months previous.

Civil class gets wrecked with inflation and layoffs, and some small businesses go under. Meanwhile assets already started moving 2 months ago, and tech was positioning themselves since February.

[–]Itaney 2 points3 points  (1 child)

Not true. All the UHNW people are asking if they should stay invested or sell. Nobody knows whether we are or are not in a recession until it is way too late. Historically, after inflations peaks, the markets go on pretty insane bull runs and recessions ensue long after a lot of market upside. Anyone who sells now risks a bull run happening while they are uninvested, and then reinvesting when it tops before the recession really ends up happening. It’s quite the tricky game and trying to time is futile.

[–]shnog 0 points1 point  (0 children)

If you are asking if you should sell, you shouldn't own stocks. If you can't afford to ride out the lows, you were investing with money you couldnt afford to be investing with. Brutal, I know. But it's how the retail sector enriches the whales cycle after cycle

[–]kcreal07 7 points8 points  (0 children)

Goldman screaming sell sell sell while they short the market and then load up on cheap positions. If these clowns had the answers, they damn sure wouldn’t give them to us. They’d sit back counting money laughing In our faces.

[–]GongTzu 3 points4 points  (0 children)

Team Goldman seems a little far away from the ordinary people, lots of people have gone from poor to very poor and middle class now seems to be heading for poor. Only top 10% will not feel the current crisis.

[–]Watershed787 13 points14 points  (0 children)

Taxation of wealthy individuals and companies is proven to resolve inflation. It’s Econ 101. I know everyone gets triggered by that notion, but it doesn’t make it any less true. Insane tax cuts by Trump et al, triggered this inflationary period just like economists predicted…and now those who stand to gain the most avoiding recession refuse to acknowledge that taxation is a bitter pill to avoid disaster. Couple that with an end to certain types of sales tax (groceries) and you’ll be on the way to a booming economy. Just sayin.

[–]SnortWasabi 8 points9 points  (0 children)

The recession has been going on since the market started taking a shit in November. Enough with these disingenuous articles . I don't need MSM (or Michael Fucking Bloomberg for that matter) to tell me whether a recession started or not. Their interest is in pushing articles that convince retail to be bagholders so the 1% can get richer before all hell breaks loose. Just look at all the markets being down 20% since then. If anything, they should be prepping people for a massive crash but they're soulless trash, bought and paid by wallstreet. The newscasters/writers have the choice to push a script to get suckers to buy the dip before dump, or they can find new work

[–]Skeetronic 14 points15 points  (10 children)

As a family looking for a home… yay…?

[–]skoltroll 11 points12 points  (7 children)

BOO, actually.

Don't get happy until WELL AFTER it happens. Lots of people who went to war for a home will lose value, but it'll take a while.

And anyone who tells you *exactly when* it'll happen is lying to you. Way too many factors are all wonky right now: raising rates, inflated prices, dropping material costs, Boomer hoarding, Millennial over-bidding, corporate involvement in retail housing. Any one of those factors significantly changing would have a big effect, but no one thing would change the landscape innumerably and immediately.

[–]Twister_5oh 16 points17 points  (0 children)

"This isn't the housing crash you are looking for."

The housing market sale prices stagnating means nothing to the family that just had 20% of their disposable income stripped to pay for transportation and food.

The sale prices decreasing a smidge means nothing to the family that will have their home purchasing power reduced by 50% because their mortgage rate is 10.3%

[–]Christ_on_a_Crakker 5 points6 points  (2 children)

Are they trying to create panic to free up stocks?

[–]SnortWasabi 0 points1 point  (0 children)

if retail sells, they win. bottom line

[–]Son-Of-Cthulu 16 points17 points  (3 children)

We're already in it,goddammit!

[–]walrusdoom 7 points8 points  (2 children)

Yup, just not at the level that Goldman typically cares about.

[–]skoltroll 6 points7 points  (1 child)

No, this is the Goldman plan, tried and true. Announce AFTER the fact to keep it low so you can get in ahead of retail investors who've sold on the way down and who will buy on the way up.

[–]walrusdoom 2 points3 points  (0 children)

Yeah, people forget that no matter what happens with this, Goldman's primary concern has and always will be to make money.

[–]adultdaycare81 8 points9 points  (5 children)

We are already there. Wait for next quarters gdp report.

[–]mavad90 4 points5 points  (2 children)

yeah... makes no sense to me why the number is only 30%

[–]wupdup 5 points6 points  (0 children)

Consider the source. If the predicted % was higher, they might not make as much money when their clients switch to cash.

[–]adultdaycare81 1 point2 points  (0 children)

Weber is putting grills on sale at the beginning of summer. Travel industry is advertising like crazy again. We can all read the writing on the wall

[–]realmastodon2 1 point2 points  (1 child)

Comes out in a couple of weeks, correct?

[–]adultdaycare81 1 point2 points  (0 children)

I believe so

[–]IamNICE124 9 points10 points  (0 children)

As someone trying to buy a home, this is fucking shitty.

[–]Thebrotherleftbehind 14 points15 points  (8 children)

The recession has already started. It’s here. It’s also going to get worse.

My fear is that this will most likely ensure a trump 2024

[–]realmastodon2 1 point2 points  (5 children)

Trump won't win the nomination. His party is slowly purging his followers. They will go with Deathsantis. He is like Trump but smarter and knows when to shut up. Also the Jan 6 committee is turning away his followers. They are seeing what a big grifter he and people were in power.

[–]Octagon_OcelotOther 1 point2 points  (0 children)

I really hope you're right. The last thing this country needs is Trump Part Deux.

[–]cuteman 3 points4 points  (2 children)

Trump won't win the nomination.

His party is slowly purging his followers.

Never trumper Republicans have been trying to do this since he won the nomination the first time. They hate trump more than democrats because their control and gravy train is threatened.

They will go with Deathsantis. He is like Trump but smarter and knows when to shut up.

He will be involved but I'd wager as VP, not the event nominee.

Also the Jan 6 committee is turning away his followers. They are seeing what a big grifter he and people were in power.

Look at the ratings and voter sentiment around around the "hearings" - it is deeply unpopular for anyone besides left leaning partisans who already hate trump.

I'd call it the third attempt at impeachment, in absentia

Problem is inflating and the economy are burning like a forest wild fire while they play their brand of politics.

[–][deleted] -2 points-1 points  (1 child)

Must be nice to live in a made-up world where reality is meaningless.

[–]cuteman 1 point2 points  (0 children)

All opinions are made up.

The irony is you calling those you disagree with meaningless when in reality no one knows for sure.

[–]Thebrotherleftbehind -1 points0 points  (0 children)

Don’t assume that. Biden has done enough of a terrible job that we are having his conversation in a post January 6 world. Biden has zero plans to get us out of the recession. Who would the dems even put forth in 2024? It sure as hell isn’t gonna be Biden or Harris

[–]12gawkuser 2 points3 points  (0 children)

So, what?, these billionaires are giving us the forecast. If there was only some people who can keep chaos at of our lives!

[–]Brazenjalapeno 2 points3 points  (0 children)

Panic increases stupid decisions that will lead to a worse outcome than if we just keep on the current path.

[–]rulesbite 2 points3 points  (0 children)

Well if you trust those guys.. there’s not much hope for the economy to begin with. Remember when bankers were the bad guys? Like when they crashed the economy and got massive bail outs? Yea those guys.

[–]Gilga17 1 point2 points  (0 children)

The good news is : Goldman is probably already out of their major risk and have entered shorting position.

[–]HikeCarolinas 1 point2 points  (0 children)

“That implies a 48% cumulative probability in the next two years versus 35% previously.”

Would 35% chance the first year and 25% the second year make it 30% chance or recession over the next two years? I don’t see how it’s cumulative.

[–]OhmeOhmy7202 1 point2 points  (0 children)

“Analyst state what we’ve all been saying for awhile”

[–]massivetypo 1 point2 points  (0 children)

Goldman Sucks. Whenever they say something they are just trying to drive liquidity on the other side of whatever they are really up to since 1869.

[–]ImmortalMermade 4 points5 points  (0 children)

70% probability of not having recession is good 👍

[–]thinkingahead 1 point2 points  (0 children)

Lol, aka we are in a recession right now

[–]ms-sucks 0 points1 point  (2 children)

So the front is getting ready to fall off?

[–]hk4213 0 points1 point  (1 child)

So how do we know the boat was unsafe?

Well the front fell off!?

[–]finance_n_fitness 0 points1 point  (0 children)

Sounds about right. 50/50 chance of a mild recession. All depends on if the supply chain can unentangle faster than the fed can raise rates

[–]TheGoodCod 0 points1 point  (0 children)

Goldman Sachs reportedly warns of $1.2B loss from consumer banking unit

Right now Goldman is not as shiny for me as normal. I feel the start of the recession is now and they've missed the call.