ALL BLOG POSTS AND COMMENTS COPYRIGHT (C) 2003-2019 VOX DAY. ALL RIGHTS RESERVED. REPRODUCTION WITHOUT WRITTEN PERMISSION IS EXPRESSLY PROHIBITED.

Saturday, May 09, 2020

That aged well

Just months after almost everyone on Wall Street worried that a recession was just around the corner, Goldman Sachs said a downturn is unlikely over the next several years. In fact, the firm’s economists stopped just short of saying that the U.S. economy is recession-proof.
- December 31, 2019

The hilarious thing is that the downturn had already begun. This sort of thing is why I meant it very literally when I wrote the chapter entitled "No one knows anything" in RGD.

It is also why destroying your nation simply because the economists tell you that doing so will make everyone rich is a horrifically bad, horrifically stupid idea.

Labels: ,

18 Comments:

Blogger Zaklog the Great May 09, 2020 9:03 PM  

It is also why destroying your nation simply because the economists tell you that doing so will make everyone rich is a horrifically bad, horrifically stupid idea.

I believe this is a case of what C.S. Lewis referred to as First Things and Second Things. If you have your priorities straight, if you put First Things first, you will often find Second Things thrown in as a bonus. If, however, you pursue Second Things first, you will usually end up with neither.

Blogger Dave May 09, 2020 9:15 PM  

That's what they were openly saying to the public, meanwhile they were busy hedging their bets and shoring up too big to fail sponsors.

Blogger KPKinSunnyPhiladelphia May 09, 2020 10:21 PM  

I went to an "elite" university, a designation with which everyone on here would agree (sorry Vox, it wasn't Bucknell, though I did see some pretty good concerts there), and I cannot tell you how many of my fellow students thought that becoming a partner at Goldman Sachs would be the greatest career pinnacle ever -- either that or rising to the top at McKinssey, Bain, or BCG.

Investment banking or consulting. All other choices were unacceptable.

Mnuchin I think is a bit of Goldman apostate, but the rest? Absolutely evil.

Blogger random Earth dweller May 09, 2020 10:35 PM  

I'm up 30% after buying the dip. Are you saying I should quit while I'm ahead?

Blogger Ingemar May 09, 2020 11:12 PM  

Jokes on you!

We destroyed our nation because epidemiologists said it's the best way to avoid the coof.

Blogger mrpinks May 10, 2020 12:46 AM  

The REPO market (that is the overnight and term repurchase) crashed in November 2019 and the FED has been propping it up since then.
The collapse was already here.

Blogger buzzardist May 10, 2020 2:53 AM  

When Goldman Sachs says the economy is anything, recession-proof or otherwise, expect that they are lying. They could merely be blind and ignorant, but they are more likely fleecing every last cent that they can out of gullible boomers who are still holding retirement money in mutual funds.

Blogger The Lab Manager May 10, 2020 7:37 AM  

Those stupid Austrian economists with their low taxes, stable purchasing value of money, rule of law, limited government. I'd be so much poorer under that than now.

Blogger VFM #7634 May 10, 2020 9:29 AM  

We destroyed our nation because epidemiologists said it's the best way to avoid the coof.

I do find it amusing that this attitude is so ironclad among Hillary Clinton voters. The Left Coast states are keeping themselves on lockdown for far longer than even most people consider reasonable; if they were run by GOP governors, they'd already be open. Hawaii is the extreme case: next to no new cases, with even CovidActNow coloring it green, but under a stay-at-home order until the end of the month.

I really, really, really hope this ridiculous attitude hurts the Democrats in the election.

It is also why destroying your nation simply because the economists tell you that doing so will make everyone rich is a horrifically bad, horrifically stupid idea.

I looked at Trump's immigration moratorium. He basically gave us close to the immigration policy of a normal country, where only spouses and children of your country's citizens can get residence. Family-based preferences (chain migration), employment-based preferences, parents of U.S. citizens, and the diversity lottery were all put on ice.

Blogger Tars Tarkas May 10, 2020 10:08 AM  

All of these geniuses failed to call a recession in the spring of 2008 that started in the 4th quarter of 2007. Yes, we were already months into a recession and none of these fools could see it 'coming.'
I have no idea why anyone takes these people seriously. They are reliably wrong about everything. Their measuring tools are extremely flawed at best. Their primary measurement counts the building of a car and the operation of a prison equally. One of these things makes us richer and one makes us poorer. Large parts of the GDP are just meaningless. Homeowners rent and 'free' checking run up the GDP with no money at all exchanging hands. If 'free' checking counts, how much 'value' is free access to The New York Times online etc worth? Is it counted? Ridiculous.

Blogger Jpc May 10, 2020 10:21 AM  

Because they are installed globally near the top of everything that is to do with financial/regulatory decision making.
Ability wise
Meh!

Blogger Seeingsights May 10, 2020 12:45 PM  

It doesn't surprise me that a forecast by Goldman Sachs turned out utterly wrong.

In my over 25 years experience investing, I've concluded that one should not base investing decisions on what a financial firm says, or what a market pundit says. Read what they say, yes.

For success, an investor has to create his own strategy.

I re-entered the market the Monday after Easter.

That might seem like a no-brainer. But at that time roughly half of market pundits were still bearish.

Blogger TiredPoorHungry May 10, 2020 1:00 PM  

I didn't go to Bucknell or Princeton. I went to Murray state (go Racers!). The president went to Wharton, where he heard a who.
This chrismas when the Grinch (Bill Gates) tries to stab us with vaccines (Is there balm in Gilead?), I'll be gathered with my friends in Whoville singing "Fah who foraze".

Blogger Macs May 10, 2020 1:31 PM  

Was driving around the other day abd ended-up outside Best Buy where they have "Contactless Pickup" advertised like it's the new White-Glove delivery. Watched the line of cars coming through to get giant TVs strapped to their pick-ups by hazmat-suited employees, it was quite busy fir Mother's Day I guess. For some reason it gave me chills, made me realize that this lockdown is going to keep going here in NY for quite some time. I'm sure it will be around for elections one way or another. Cuomo is the face of lockdown and he will be used to pressure swing-states into doing mail-in ballots. If Trump needs to deny Cuomo funds or he will use this crisis to the absolute max, probably including putting people in camps. They already cleared the jails out...

Blogger Snidely Whiplash May 10, 2020 3:51 PM  


It is also why destroying your nation simply because the economists tell you that doing so will make (((everyone))) rich is a horrifically bad, horrifically stupid idea.
Fixed it for you.

Blogger Harambe May 11, 2020 5:08 AM  

Don't predictive models usually work on the premise that EVERYTHING WILL CONTINUE IN THE SAME SORT OF DIRECTION IT HAS BEEN?

Or "if we keep buying stuff from China, and offshoring labour, we'll be making $x billion". Do their prediction models ever contain things like "what if Drumpf institutes tariffs and poops all over the H1B programme?"

Blogger Ominous Cowherd May 11, 2020 6:01 PM  

Harambe wrote:Don't predictive models usually work on the premise that EVERYTHING WILL CONTINUE IN THE SAME SORT OF DIRECTION IT HAS BEEN?

Yes.

You can only calibrate a model with data from things have already happened. That means that you cannot calibrate a model of things that have never happened.

Data-based econometric models can give an indication of what might happen if we made a marginal change in one or more of the variables in the model. They're pretty useless if we want to know what happens when something really big happens, unless it's something big that has happened often in the past.

If we shut down the economy for months at a time every year or two for the next decade, by 2035 we should be able to model the effects of a shut down pretty well. Of course, by that time we will have either all starved, or we will have killed everyone in government and academia who might pay for or make such a model.

Blogger Canada78Bear May 14, 2020 7:31 PM  

The vampire squid is probably right.
We had massive layoffs, demand destruction and a market crash.

Amazing how well controlled and ordered it was. I don't think you could have planned a recession any better.

Post a Comment

Rules of the blog
Please do not comment as "Anonymous". Comments by "Anonymous" will be spammed.

<< Home

Newer Posts Older Posts