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Goldman Sachs Projections: Q1 GDP Down 6%, Q2 Down 24%
Posted on 3/22/20 at 10:32 pm
Posted on 3/22/20 at 10:32 pm
Fortune: Goldman Sachs just made the grimmest prediction yet about the economy in Q2
For reference, US healthcare spending is roughly 18% of GDP. Meaning the current forecasts (-8% to -24%) indicates economic losses equal to 40-130% of the entire US healthcare industry.
quote:
Most GDP predictions for the second quarter have ranged from horrible (-8%) to catastrophic (-15%). Goldman Sachs just blew those estimates out of the water.
The bank today issued a research note with its projection for GDP loss in the second quarter of 2020: down 24%, the result of a "sudden stop for the U.S. economy."
Overall, they expect a 6% drop in the first quarter. Even with significant positive growth in quarters three and four, that will work out to an annual loss of 3.8%.
The research note pointed to “a sudden surge in layoffs and a collapse in spending, both historic in size and speed, as well as shutdowns of many schools, stores, offices, manufacturing plants, and construction sites” as a reason for the downward revision.
For reference, US healthcare spending is roughly 18% of GDP. Meaning the current forecasts (-8% to -24%) indicates economic losses equal to 40-130% of the entire US healthcare industry.
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Posted on 3/22/20 at 10:33 pm to lostinbr
Absolute state
Posted on 3/22/20 at 10:34 pm to lostinbr
That should make the DJIA plummet even more
Posted on 3/22/20 at 10:35 pm to lostinbr
In a way, this will be our WWII, where, in order to pull through this as a nation, great sacrifices will need to be made.
Posted on 3/22/20 at 10:35 pm to lostinbr
But I can work from home. It's awesome.
Posted on 3/22/20 at 10:35 pm to lostinbr
(no message)
This post was edited on 9/25/20 at 9:42 pm
Posted on 3/22/20 at 10:36 pm to East Coast Band
its going to crash tomorrow big time
Posted on 3/22/20 at 10:37 pm to TulaneLSU
What sacrifices do you think need to be made?
Posted on 3/22/20 at 10:38 pm to TulaneLSU
The thing with the WWII comparison is that the economy absolutely blossomed after the war with manufacturing. A lot has changed since that era. We had a great economy the last 2 or so years. This gig economy hasn’t been through something this severe. So part of me gets the WWII comparison with the total global shock of this event but the recovery method will be greatly different.
Posted on 3/22/20 at 10:41 pm to Walt OReilly
That's a good question. I don't think we can know that right now. It may come in the form of our diets, with rationed foods. It may come in the form of reduced salaries and wages.
Unfortunately, our society has for 30-40 years preached a philosophy of self-satisfaction, self-improvement, self-achievement, self, self, self. Sacrifice, too was only seen in terms of the individual, the self.
What our leaders need to begin to preach is sacrifice for the community. It is only the philosophy and theology of sacrifice for the community that I believe will save America as a nation.
Unfortunately, our society has for 30-40 years preached a philosophy of self-satisfaction, self-improvement, self-achievement, self, self, self. Sacrifice, too was only seen in terms of the individual, the self.
What our leaders need to begin to preach is sacrifice for the community. It is only the philosophy and theology of sacrifice for the community that I believe will save America as a nation.
Posted on 3/22/20 at 10:42 pm to East Coast Band
quote:
That should make the DJIA plummet even more
Someone disagrees. Futures markets are well off their lows in the last couple of hours. Oil is up, too.
This post was edited on 3/22/20 at 10:47 pm
Posted on 3/22/20 at 10:43 pm to TulaneLSU
Look at comrade TulaneLSU
Posted on 3/22/20 at 10:43 pm to Paul Allen
quote:
So part of me gets the WWII comparison with the total global shock of this event but the recovery method will be greatly different
It will take a year or more to recover Paul. It won't be V shaped.
How many will be hesitant to travel or go on an airplane for awhile? How many small businesses will fold and not come back? If you are bankrupt does a SBA loan help you?
Posted on 3/22/20 at 10:45 pm to lostinbr
There's a news guy who repeatedly stresses that, "This is a health crisis, not an economic crisis."
There's a whole lot of truth in that statement. All the economic stimulus we can throw at this won't stop the economic impact if we don't first contain the medical crisis.
This means tests. Hundreds of millions of tests. Test every one and if you test positive, congrats, you have an involuntary 14 day quarantine at a government facility. It's critical to quarantine the sick so that the healthy and/or recovered can get back to work and spurring on economic activity.
The GDP will continue to shrink until we can effectively manage the reach of the virus. If our government doesn't pull its head of its arse and start buying every test they can get their hands on, we're fricked. Not only shmucks like me with a bit of common sense, but epidemiological experts nationwide have been BEGGING for tests because there's no containment without them. This leaves you with national economic catastrophe or just saying "frick it" and lose a couple million people.
There's a whole lot of truth in that statement. All the economic stimulus we can throw at this won't stop the economic impact if we don't first contain the medical crisis.
This means tests. Hundreds of millions of tests. Test every one and if you test positive, congrats, you have an involuntary 14 day quarantine at a government facility. It's critical to quarantine the sick so that the healthy and/or recovered can get back to work and spurring on economic activity.
The GDP will continue to shrink until we can effectively manage the reach of the virus. If our government doesn't pull its head of its arse and start buying every test they can get their hands on, we're fricked. Not only shmucks like me with a bit of common sense, but epidemiological experts nationwide have been BEGGING for tests because there's no containment without them. This leaves you with national economic catastrophe or just saying "frick it" and lose a couple million people.
This post was edited on 3/22/20 at 10:46 pm
Posted on 3/22/20 at 10:45 pm to lostinbr
But hey, our politicians managed to pull all their money out at the exact right time. So, ya know...good for them.
This post was edited on 3/22/20 at 10:55 pm
Posted on 3/22/20 at 10:45 pm to TulaneLSU
quote:
What our leaders need to begin to preach is sacrifice for the community. It is only the philosophy and theology of sacrifice for the community that I believe will save America as a nation.
Hope you can keep it together when Bolshevik Bernie loses to old man Grope Sniffer.
Posted on 3/22/20 at 10:45 pm to lostinbr
Goldman Sachs gonna Goldman Sachs
Posted on 3/22/20 at 10:47 pm to mmmmmbeeer
quote:
There's a news guy who repeatedly stresses that, "This is a health crisis, not an economic crisis."
It's both now. An economic crisis caused by a health crisis.
Posted on 3/22/20 at 10:48 pm to mmmmmbeeer
quote:
There's a whole lot of truth in that statement
There's none. Every crisis has a huge economic componant to consider when crafting strategy. You cannot escape it.
Posted on 3/22/20 at 10:48 pm to castorinho
quote:
Goldman Sachs gonna Goldman Sachs
Be the best?
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