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Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%


@Learner wrote:

Recession coming!  (Sorry for posting this.)

https://www.cnbc.com/2020/03/20/goldman-sees-an-unprecedented-stop-of-economic-activity-with-2nd-qua...


It's interesting that the lowest GDP growth rate was in the 2008-09 time period and the economy contracted -3.9%, all due to the housing bubble and the subprime mortgage mess.  A -24% GDP growth that is 6 times the lowest ever, caused by the political response (closing down society) in response to a virus that hasn't, so far, been as deadly as the normal flu season seem a bit overboard.  Everywhere except in the big metropolitan areas.

But that's just me, I guess!  8-)

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

The Doctor Who Helped Defeat Smallpox Explains What's Coming Epidemiologist Larry Brilliant, who warned of pandemic in 2006, says we can beat the novel coronavirus—but first, we need lots more testing.  "The world is not going to begin to look normal until three things have happened."

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

ElLobo

Well - this confusion, about the relevance of this virus, appears to come from looking at the issue from a total population perspective.  However, simple aggregates hides relevant segmentation information. 

Here is a link with the death rate by age, gender and profession. https://heavy.com/news/2020/02/coronavirus-death-rate-vs-flu/.

The issue is not how many people have already died, rather it is a question of potential impact on a specific  population segment.  Currently approx. 17% of the US population is 60+ , the population is 331 million.  331 million * 0.17 = 56 million seniors.  Take a death rate of  3% (this is on the lower end for this population segment) and you have approx. 1.7 million death.  Clearly, this is an oversimplification as other variable like infection rate have a big influence, however, it illustrates that that this "flu" is potentially not something to "sneeze" at.

 

 

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

"Well - this confusion, about the relevance of this virus, appears to come from looking at the issue from a total population perspective."

I'm not confused.  I, and a lot of others it seems, just don't think that more people will die as a result of Coronavirus than the ordinary flu.  If not, there's no particular reason to tank the economy 24% over it.  The reason (Why take chances?) is a common response whenever data doesn't exist to do a risk/reward tradeoff, or it does exist but is ignored.

 

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%


@trichebacher wrote:

ElLobo

Well - this confusion, about the relevance of this virus, appears to come from looking at the issue from a total population perspective.  However, simple aggregates hides relevant segmentation information. 

Here is a link with the death rate by age, gender and profession. https://heavy.com/news/2020/02/coronavirus-death-rate-vs-flu/.

The issue is not how many people have already died, rather it is a question of potential impact on a specific  population segment.  Currently approx. 17% of the US population is 60+ , the population is 331 million.  331 million * 0.17 = 56 million seniors.  Take a death rate of  3% (this is on the lower end for this population segment) and you have approx. 1.7 million death.  Clearly, this is an oversimplification as other variable like infection rate have a big influence, however, it illustrates that that this "flu" is potentially not something to "sneeze" at.

 

 


Trishebacher

so what is your estimate of the number of deaths.1.7m is Well in excess of the number of deaths reported in China which has 5X the population of the USA. You also assuming that 100% of those over 60 will contract the virus when estimates are that only 3% will become infected.

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%


@ElLobo wrote:

I'm not confused.  I, and a lot of others it seems, just don't think that more people will die as a result of Coronavirus than the ordinary flu.  If not, there's no particular reason to tank the economy 24% over it.

 


Do you have some particular expertise in epidemiology? Your opinion is not sufficient to plan for outcomes that could rival Italy's and China's. I'm not talking about number of deaths or distribution of deaths. I'm talking about impact on the healthcare system and on public behavior. Have you read about "flattening the curve"? The health care system capacity is about to be exceeded in New York City. If we wait until "you" feel a sense of alarm, it will be too late.

Here's a non-medical article about people in suburban Louisiana who believed that Fox News commentators (mentioned in the article) were right about a Liberal plot to make the President look bad. But when one wife made her Facebook postings public, and they finally saw someone they knew was sick, they began to believe there might be some danger:

https://nyti.ms/2vFazm8

(The NY Times is offering most Covid-19 news for free.) Excerpt:

After Ms. F----- shared her husband’s experience, she saw social-media musings about the virus as a liberal plot to tank the stock market come to a halt, toilet-paper jokes no longer rack up likes. Several people have called her “to pass on to me that everyone has been awakened,” Ms. F----- said. “Because everyone knows Mark.”

Comments of disbelief, sorrow, promises of prayers rolled in almost immediately. A friend urged her to share her story more widely. Ms. F----- was normally intensely private, but wasn’t that the point? That nothing was normal anymore? She made the post public.
...

Ms. P-------- lives in Metairie, about 10 minutes from Kenner. Like many in the area, which is represented in Congress by House Minority Whip Steve Scalise, she is a supporter of President Trump. She, and many of her friends, she said, believed that the coronavirus was a political stunt and media-induced hysteria.

“We kept kind of joking about it, like, ‘Oh, this is crazy! This is not going to affect us, why is everyone so wigged out about it?’ And then it did,” she said. Reading about Mr. F-----, she added, put it into perspective for her.    ...

 

Tim

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

"Do you have some particular expertise in epidemiology? Your opinion is not sufficient to plan for outcomes that could rival Italy's and China's."

@RyanMPlease lock this thread.

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

From Roubini, you get exactly what you expect: doom and gloom as usual.

https://www.project-syndicate.org/commentary/coronavirus-greater-great-depression-by-nouriel-roubini...

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

How bad will Q2 be?  What will be the unemployment rate in Q2?  Take your pick.

https://www.bloombergquint.com/global-economics/economists-see-u-s-facing-worst-ever-quarterly-contr...

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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

Former Fed Chair Bernanke seems to support GS, BAC/ML forecasts of sharp recession in H1 [i.e. negative Q1, Q2 GDP] followed by a strong rebound in H2 [i.e. positive Q3, Q4].   https://www.cnbc.com/2020/03/25/former-fed-chairman-ben-bernanke-sees-very-sharp-recession-followed-...

YBB
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Re: Goldman Forecast: 2Q GDP Down 24%, 1Q GDP Down 6%

Powell says that the US may be in recession already.  https://mobile.reuters.com/article/amp/idUSKBN21D1P9

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