The kids of the New York Shock Exchange predicted the Great Recession of 2008, yet the New York Times, Financial Times and have all but ignored. Ralph Baker’s Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead chronicled what caused the Great Recession and why the next one could be worse. The U.S. economy is weak. We have been in a recession for while, but it has been masked by money-printing from the Fed, tax cuts, etc. to drive financial markets higher.
The coronavirus and low oil prices have likely ushered the “pain ahead” Shock Exchange predicted. Social distancing has punished retailers and the aviation industry. Boeing and it suppliers – General Electric, Honeywell and United Technologies – are on the brink. Now Goldman Sachs and Morgan Stanley are predicting GDP will free fall in Q22:
Goldman Sachs is now projecting a massive U.S. economic contraction in the second quarter of the year.
The bank is forecasting a 24% decline in economic activity next quarter, compared to their previous forecast for a 5% decline. That’s because U.S. economic data (specifically manufacturing data) have already started to miss economist estimates, even before Americans started to stay home to avoid spreading the coronavirus.
Their estimate, published Friday morning, is one of the most pessimistic on Wall Street. J.P. Morgan released estimates Wednesday that predicted a 14% contraction in second-quarter U.S. growth.
If Goldman’s economists are right, that means the U.S. is approaching the sharpest single-quarter decline in gross domestic product since the U.S. started measuring GDP in its current form. The current record for the largest quarterly slowdown was in the first quarter of 1958, the bank says, when GDP declined 10%.
In the streets Shock Exchange is known as “This that heat.” You would think comedian Dave Chappelle, who dropped knowledge the Neflix “Sticks And Stones” routine, would be at home reading Shock Exchange religiously, trying to learn about the failed policies of the Obama and Trump administrations, and the Federal Reserve that got us into this dilemma. No, Dave was found somewhere partying with DJ D-Nice at Club Quarantine.
DJ D Nice has been breaking records with his IG live, streaming live sessions for the past few days under quarantine with hundreds of celebrities tapping in to watch
— Complex Ambition (@ComplexAmbition) March 22, 2020
Apparently DJ D-Nice curated some hot music and live streamed it during the pandemic. A bunch of celebrities and athletes “were all up in the club like” partying and grooving. Instead of preparing for the next recession and the pain ahead everybody would rather party … on a weeknight too. It was bad enough Dave chose Frederick Douglass over Shock Exchange as his favorite book. And now this …