Krugman: Recession, What Does It Mean?

I meant to place this here yesterday, but we had a power outage due to a major thunderstorm. No internet and the battery backup on this computer died the power was out so long. So, quite a few open stories I had ready to link to on this board got wiped away. Loads more Housing Downturn stories to add.

But this is one I remembered well after reading as Krugman introduces a new indicator, something called the “Sahm Rule,” which sounds like the one to use to tell when we are really in Recession.

Very interesting read that I’ll want to re-read and take notes when I get around to it.

NYT Times headline: Recession: What Does It Mean?
July 26, 2022, 2:01 p.m. ET

By Paul Krugman
Opinion Columnist

https://archive.ph/kTimr

There’s a pretty good chance the Bureau of Economic Analysis, which produces the numbers on gross domestic product and other macroeconomic data, will declare on Thursday, preliminarily, that real G.D.P. shrank in the second quarter of 2022. Since it has already announced that real G.D.P. shrank in the first quarter, there will be a lot of breathless commentary to the effect that we’re officially in a recession.

But we won’t be. That’s not how recessions are defined; more important, it’s not how they should be defined. It’s possible that the people who actually decide whether we’re in a recession — more about them in a minute — will eventually declare that a recession began in the United States in the first half of this year, although that’s unlikely given other economic data. But they won’t base their decision solely on whether we’ve had two successive quarters of falling real G.D.P.

To understand why, it helps to know a bit about the history of what is known as business cycle dating.

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p.s. I am waiting on a new spark plug wiring harness for my 20-year old generator which I would have loved to have fired up yesterday. I was thinking how many times I’ve used that thing after bad power outages. (We once lost power here for 3-4 weeks after Irma.) If you’ve never suffered humidity after a Cat 5 storm has saturated the ground and left behind dead flora and fauna to fester in the heat, you’ll know why a 5,000 watt generator powering a tiny window A/C and small fridge is a godsend and that generator is a must. Cold showers during power outages are the norm. And cold ain’t cold when the water coming out of the tap is 72 to 80 degrees warm already. Give me a tiny window unit, a tiny fridge to keep ice tea and ice water, and the ability to recharge two Ryobi battery operated fans and one battery operated lantern. Good to go. Hell, we could live a good life like that forever if it ever came down to it. The problem in that equation is this: gasoline for the generator.

Hence, why I’m so interested in alternative energy. Climate change stares me in the face every day I walk outdoors. Thing have got to change, and at a much more rapid pace.

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The problem in that equation is this: gasoline for the generator.

That’s why we plan to have a whole house generator fueled by NG. If NG shuts off, it’ll shut down most commercial backup as well.

We don’t have the humidity you do in the Keys, but it gets pretty darn uncomfortable here in Charlotte this time of year.

Hope you get through hurricane season without incident! Should be ramping up before long…

Rob
Former RB and BL Home Fool, Supernova Portfolio Contributor & Maintenance Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.

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As backup for your backup have you given any thought to a good camping battery or two and portable solar panels?

I live in CA in an area that is often impacted by smoke, fire and power outages. I reside in a HOA controlled townhome so a loud generator is verboten. I can live without hot water for awhile but when the air is bad keeping the air purifiers on is a huge help.

Jackery makes a 1000 W battery as well as separate portable solar panels. They get great reviews on Amazon. Smokey skies probably makes charging take longer.

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Hi, Rock!

Re, recession: couple of takes on that, … bit more down to Earth than Krugman’s column:

April 1 article: Yield Curve Inversions & Media’s Denial Of History

https://realinvestmentadvice.com/yield-curve-inversions-medi…

July 26 article: No Recession? All Of A Sudden Yield Spreads Are Collapsing

https://realinvestmentadvice.com/no-recession-all-of-a-sudde…

… some good historical data and graphs in above two rants!

Anyway, … trust all is well with you! [ It’s been a very long time I last logged in to these boards and browsed a bit, …

Best,
C.

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How are you, C?

I hope your wife and you are in the best health possible and that you’re still out West in Canada.

I will look over your links as soon as I catch up yesterday’s upgrades/downgrades.

p.s. If you have any of your ValueLine stocks you want me to chart, hit me up here, on this board. And lay as many names on me as you want.

p.p.s. I might see if I can write a mult-part report on Florida’s Real Estate, Climate Change, Sea Level Rise, Reinsurance, Insurance, Scam Roofers and Scam Contractors making it tough on honest roofers and contractors, etc.

p.p.p.w. Whatcha got for documentaries or TV series through your library, Netflix, Prime, whatever? I’m loving Kanopy channel on the Roku Box which I refill with documentaries and award winning movies every month. Check that out. Free. No charges. Through your library, even those Communist libraries out in Way West Canada :wink:

  • Rock, over and out, and ready to do the upgrade/downgrade list

Hi Rock - we are actually quite well, considering wife’s MS places a proverbial damper on our life.

We are still in Calgary, … and missing Vancouver Island very much. Just look at a live cam across the road we used to reside near just three years ago:
http://www.pointholmesrecreation.ca/rampcam/ Neat, eh? Just watching those tides, ……

My sister resides just across the road from the cam, just to the left of the cam as you look at the pond (city of Vancouver is just right in the middle of the pic, … just beyond the horizon)

We missed the proverbial boat by not buying some shack out there when we first moved there in August 2016. Real estate just went nuts out there ever since! Latest stats for Comox Valley:

Average price for a detached shack by Vancouver Island Real Estate cartel:
June ‘22 - $911,700; one mo. ago - $910,900; 3 mo. - $840,900; 6 mo. - $798,500;
12 mo. - $747,100; 3 yrs. ago - $540,800, 5 yrs. ago - $444,900 ( … all Canadian $s)

… and those are averages, open realtor.ca and input Comox, British Columbia, and the current asking prices will shock you! Still bidding wars, …

https://www.realtor.ca/map#ZoomLevel=12&Center=49.697101…

No trouble, in fact, if I spent my C$600,000 back in 2018 on an average decrepit shack - when we left the island - my $600k would not grow in real estate as much as it did in the market, … and it grew a real big, big bunch!

As to the financial markets in general, … yah, horseshoes up my arse! Unprecedented wins all around, … but that just about ended! Recession is here! No longer all you have to do is just throw darts into the dark. Fundamentals again, … old fashion way, like we used to do things in the olden days, … aching out ~7% in 52 months - consistently year over year - was a big win!

Anyway, … that’s it for now, … wife is calling for assistance, … probably just wants a refill of her coffee cup! Will talk again, …

Best,

C.

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