Who Is Predicting a “V” Shaped Recovery?

I was wondering about this question as I followed the discussion of how to categorize recoveries. I was reminded by crampell to check the WSJ survey (which requires me to somehow circumnaviate the paywall), and this is what I found.

Figure 1: GDP, in billions Ch.2012$, SAAR (black bold), WSJ April 2020 survey mean (green), James Smith/Parsec (red), Fienup & Hamilton/California Lutheran (tan), and Doug Hamilton/BMO Capital (blue), as implied by growth rates, and 2019Q4 3rd release. Source: BEA, 2020Q1 advance, WSJ April survey, and author’s calculations.

I was, frankly, surprised at how many people thought there’d be a V, even back in early April. At the top of end-2020 q4/q4 growth was a familiar name, James F. Smith at Parsec Financial Management. He has been consistently optimistic, year after year, recession after recession. The most downbeat (on a q4/q4 basis) were Fienup and Hamilton, two analysts at California Lutheran University. The mean forecast as implied by the all respondents was for a 2.2% lower GDP in 2020Q4 than a year earlier. The closest to a “V” in levels was by my assessment Doug Jones at BMO Capital. He forecasted a 40% drop and 54% surge (Q2, Q3), and GDP at end-2020 less than a percentage point lower than at end-2019.

Since April, sentiment has moved more toward the “swoosh” perspective (WSJ today).

The debate over how to characterize the recovery is extensive. I’ll just note a small part I followed, including Jumana Saleheen, Antonio FatasRicardo Reis (albeit on detrended GDP), and Laurent Ferrara. Salaheen forwards this typology (table), while Ferrara has this paper on formally assessing paths.

Source: Salaheen.

Source: Bec, Bouabdallah, Ferrara (2011).

From my view taking into account the politics and policy implementation (that’s what teaching in a policy school will do to you), I’m more with the Deutsche Bank updated “protracted scenario” than the updated “baseline”. In other words, I have no faith in the management capabilities of the current administration.

Source: Deutsche Bank, 5 May 2020.

The May survey from the Wall Street Journal should be coming out soon.

101 thoughts on “Who Is Predicting a “V” Shaped Recovery?

  1. Barkley Rosser


    I am not sure what a “swoosh” view is. Can somebody fill me in?

    I see that according to the three letter categoriztion between V, U. ans L, the latter is defined to allow positive growth after the turnaround, but at a slower pace than what went on previousliy that would fit with John Conchrane’s view that labeled the The Great Recession and its aftermath an “L.”?

    In my view L should only apply to a case where after the decline, there is not growth or ver little. What they call an L is that I have been labeling a Lazy J, not that anybody has picked up my neologism. Again, there are real L cases out there, with Mexico i the 1980s aftwer 1982 looking pretty much like it, but never to my knowledge in the US.

      1. pgl

        “Instead, the recovery could be shaped more like a Nike swoosh.”

        When the stores reopen, I want to buy a new pair of running shoes. Now if I buy a pair of Nikes – remember designed in Oregon, made in China, and all the profits end up in Bermuda. Maybe I’ll buy a pair of Adidas – designed in Germany with the profits staying at home but still made in China.

        Of course Trump does not know running shoes are made in China as that chubby tubby has never owned a pair of running shoes. MAGA!

        1. Alan Goldhammer

          @pgl – buy Brooks and help prop up my Berkshire-Hathaway stock!!! They moved production to Vietnam so you don’t have to worry about propping up the PRC’s economy! I just ordered a new pair of Ravenna 11s and they are nice. I have different sized feet and end up paying double for shoes which is a pain but there are sites on the Internet that facilitate selling mixed shoe sizes.

        2. Ulenspiegel

          “Maybe I’ll buy a pair of Adidas – designed in Germany with the profits staying at home but still made in China. ”

          That is too simplistic. It is correct that 60% of the Addidas production comes from Asia, however, they also have high tech production facilities in the USA and Germany that are much more flexibel than the Asian production facilities and provided in 2018 already 10% of the production. The goal of Addidas was and IIRC still is to increase the share of these high tech facilities, that are much closer to the customers, to around 50%.

      2. Barkley Rosser

        Thanks, Moses, for once. So making it into a letter, it looks closer to my Lazy J than to a V or an L or a U or a W, altough it has this sort of flat zone at first.

        1. Barkley Rosser

          I think this swoosh scenatio is a moderately high probability. It is clear that growth will be very slow to take off due to so much widespread fear. But if there is not a second wave (looking at current countries about 15% have had noticeable second upturns after a substnatial downturn, although only one or two of those have seen the second wave go higher than the first) then after awhile confidence will return, which would allow a distinct increase in the growth rate, although nothing symmetric to the extreme rate of decline seen. So, not a V, more like a lazy J with a kink or a flattened out U.

          If Trump gets this and does not blow it (and crucially can avoid a major second dwave) it might be pretty good for him in tems of the election. By earlyi November the economy might be not too far from where it was when it started declining, although unemployment would still probabliy be substantially higher, albeit well down in the single digits, the Dow might well be over 30,000, and with the eoonomy growing fairly rapidly he coudl claim his “transition to greatness” with more independents not just laughing him out of the room than do now.

          That would make the race very competitive, with GOP probably regaining a slight edge to hold the Senate, which they do not have now.i

          1. macroduck

            There are a number of factors which make political prediction based on economic and market performance tricky this time. To name a few:

            – Trump’s approval numbers have not varied much with changes in the economy. The biggest swings have been driven by things like children in cages and the rally-’round-the-flag effect in the first days of Covid in the U.S.

            – Election forecasting models have used both level and change in the jobless rate as predictive factors, and the change is often from year-ago rather than a shorter period. It is not clear that a modest improvement in labor market conditions from the worst point in the spring would help Trump, even if his voter approval numbers were sensitive to labor market conditions in a conventional way.

            – July-to-October stock market performance is a good predictor of election outcomes, but that may be because stock market performance is a reasonable reflection of economic conditions, rather than because voters care deeply about stock values. The Fed and Treasury have put trillions into the economy, directly into financial markets in the case of the Fed, which distorts the historic relationship between the economy and equity market performance. That may lessen the predictive power of equity market performance.

            – Any assessment of Trump’s chances at re-election should probably take into account that he won in 2016 against the second least popular major-party presidential candidate in the history of polling candidate popularity. It may be that Joe Biden will be as unpopular as Hillary was by the time the election rolls around, but he currently enjoys a substantial advantage.

            I like playing with predictive models as much as the next guy, but my confidence in such models for this election is not high.

          2. Barkley Rosser

            I just saw a projection of GDP growth by the CBo. It seems to be an anti-swoosh forecasr, with more like a V front end but then the growth rate slowing down after a short period of more rapid bounceback. I assume this comes from a model that simply assumes a V like initial bounceback, but the case for that seems to be very weak in this case.

    1. The Rage

      It depends on population growth adjusted for the mean. A large reason why the US keeps on having debt bubbles compared to pre-2002-7 cycle is due to allowing excessive credit creation to population growth. US growth structural slowed down in the 00’s after peak boomer spending, yet credit growth accelerates. You see the problem.

      1. pgl

        “You see the problem.”

        I see that you are still incapable to provide a shred of data to support your incessant babbling.

  2. pgl

    I’m listening to one lie after another from Donald Trump on testing. And guess what 2020QIV is going to be a great economy while 2021 is going to be the best economy ever in the history of the universe. Donald Trump has spoken!

    Oh wait – he has closed the border with Mexico to protect us from COVID-19. Yes it is Hispanic immigrants that caused this pandemic! MAGA!

    1. Willie

      Hispanic immigrants from China. It’s what people are saying.

      Anybody who expects a quick recovery from this one is a delusional fool. I thought we would have a shallow recession starting right about now. That was pre-COVID. Now, we are mid-COVID, and the bottom is far lower than anybody like me imagined. The fact that there was at least tepid growth in the first quarter until mid-March, when the entire first quarter went negative was pretty spectacular. The question in my mind is whether we will hit bottom this quarter, or whether a bunch of false starts and blunders will cause the virus to come roaring back and put the kibosh on recovery in the third quarter and maybe the fourth quarter. I do think we will hit at least a temporary bottom this quarter. Whatever that means.

  3. baffling

    another study says hydroxychloroquine is not helpful with coronavirus, and increases the risk of heart attacks. something point out on this blog over a month ago. and yet bruce hall still pushes this snake oil promoted by trump, who was convinced of its use by the medical professionals larry ellison and elon musk. the quackery of this administration knows no bounds, and idiots like bruce continue to promote these bogus cures.

    1. pgl

      I think we are up to 100 studies that show this is not effective against COVID-19 but can be risky for our health. And Bruce Hall last week told us it had been FDA approved. Your standard snake oil sales person (Bruce and the Donald) lie and lie and lie.

      1. Willie

        People pushing snake oil should be up on manslaughter charges when their BS kills somebody. In a reasonable world, words and actions would have consequences. We don’t live in a reasonable world.

  4. The Rage

    Thanks to Trump pushing debt based cons, the US economy was struggling in real terms. This the 2002-7 expansion and 2010-19 expansion share in spades. Commercial RE was already imploding and subprime commercial loans collapsed yry going into 2020, which meant slower sales. Once the infection of excess debt destroys cash flow, the party ends.

  5. Not Trampis

    The recovery depends on successfully attacking the virus.

    opening up down under makes sense as we have dome that successfully. opening up in yankland makes no senses at all.

  6. Bruce Hall

    On March 9, before various governors began to crush their economies, I wrote:
    But realistically, once the real scope of the problem is understood and amelioration actions are effected, things will begin to normalize. That may be six weeks or six months, but Moore is probably right although “roaring” may be overstating the case. The economy did not “roar” back to life after the last major downturn. There may be significant re-thinking about supply chains and markets because of the vulnerabilities exposed by Covid 19. You know … eggs in one basket ….

    I post this in anticipation of another inane ad hominem comment by pgl.

    As for baffling’s comment, https://www.drugs.com/hydroxychloroquine.html. It’s not as if this drug’s side effects were suddenly discovered. It has been used for decades to treat millions of people for malaria, lupus, and rheumatoid arthritis. But if someone is dying from Covid-19 and/or underlying health problems, it’s better to let them die than risk they might be one of the small percentage that has damage done by the medicine.

    However, let’s presume despite anecdotal reports of patients who were close to death suddenly reviving after treatment with hydroxychloroquine (few dollars a dose), that the suddenly discovered risks are too much and the benefits too small. Now let’s all jump on the Remdesivir bandwagon which showed some positive shortening of the disease in a small study of a little over 1,000 patients. We can be assured that the pricing will be a magnitude or two higher than for hydroxychloroquine.

    The study showed a trend toward better survival for remdesivir – 8% of patients given the drug died compared with 11.6% in the placebo group – but the difference was not statistically significant so may not be due to Gilead’s drug. https://www.metro.us/data-on-gilead-drug/. Okay then. Follow the money.

    Regardless, Sweden may have been right after all. Let the disease run its course and have individuals use good sense and be responsible (I know that concept may be alien to those who believe only government authority and specific orders can be effective). https://www.nicholaslewis.org/wp-content/uploads/2020/05/Why-herd-immunity-to-COVID-19-is-reached-earlier-than-thought_Lewis.pdf

    Oh, and no, Dr. Lewis is not an epidemiologist. He is a climate scientist who works with and extensively critiques mathematical models. He understands the strengths and weaknesses of mathematical models and their assumptions. https://www.nicholaslewis.org/peer-reviewed-publications/. And, after all, Ferguson’s model was the basis for policy decisions around the world… https://www.imperial.ac.uk/news/196234/covid19-imperial-researchers-model-likely-impact/ … and Ferguson’s model has been found wanting. But I suppose you can be critical of a climate scientist evaluating the model of an epidemiologist. Of course, you’d have to be critical of non-climate scientists who were critical of his models. Still, it seems reasonable to conclude that if a model does not reflect observations, there are problems with the model.


    Incorporating, in a reasonable manner, inhomogeneity in susceptibility and infectivity in a standard SEIR epidemiological model, rather than assuming a homogeneous population, causes a very major reduction in the herd immunity threshold, and also in the ultimate infection level if the epidemic thereafter follows an unconstrained path. Therefore, the number of fatalities involved in achieving herd immunity is much lower than it would otherwise be.

    In my view, the true herd immunity threshold probably lies somewhere between the 7% and 24% implied by the cases illustrated in Figures 4 and 5. If it were around 17%, which evidence from Stockholm County suggests the resulting fatalities from infections prior to the HIT being reached should be a very low proportion of the population. The Stockholm infection fatality rate appears to be approximately 0.4%,[20] considerably lower than per the Verity et al.[21] estimates used in Ferguson20, with a fatality rate of under 0.1% from infections until the HIT was reached. The fatality rate to reach the HIT in less densely populated areas should be lower, because R0 is positively related to population density.[22] Accordingly, total fatalities should be well under 0.1% of the population by the time herd immunity is achieved. Although there would be subsequent further fatalities, as the epidemic shrinks it should be increasingly practicable to hasten its end by using testing and contact tracing to prevent infections spreading, and thus substantially reduce the number of further fatalities below those projected by the SEIR model in a totally unmitigated scenario.

    Nicholas Lewis 10 May 2020

    1. baffling

      ” It’s not as if this drug’s side effects were suddenly discovered.”
      there is strong evidence the virus attacks many other internal organs besides the lungs. the cardiovascular system in particular seems to also be a target. and we know that hydroxychloroquine has cardiovascular risks-those are one of the significant side effects known prior to the pandemic. so when you treat a virus that attacks the cardiovascular system with a drug that can also damage the cardiovascular system, you get deaths. just how stoooopid are you bruce hall? by the way, are you still sitting alone in your apartment self isolating from the world with home deliveries while you encourage others to go out and reopen the country? are you playing trump ball, telling others to take on the risk while you hide in the white house making everybody else take coronavirus tests? what a fraud you both are. embarrassing.

      by the way, there are many epidemiologists who have developed models in contradiction to the results from your medical climatologist. it is probably better to take their medical advice on this topic. my guess is lewis has never done an analysis involving R0 estimates or herd immunity until now.

      1. pgl

        Is Bruce Hall paid by the word? His latest is nothing more than a bunch of lies and gibberish. Sort of like that speech Trump gave yesterday on testing.

    2. 2slugbaits

      Bruce Hall Let the disease run its course and have individuals use good sense and be responsible

      Do you not see the contradiction here? If the goal is to establish “herd immunity”, then people acting responsibly defeats the goal. Herd immunity only happens if people behave in such a way that a large segment of the population gets infected. If people act responsibly, then you don’t get to the herd immunity threshold.

      I propose a different term for the Swedish experiment. Instead of “herd immunity” why not call it the “Great Leap Forward” in which the lives of millions are sacrificed in the name of economic growth?

    3. Barkley Rosser


      You seem not to have gotten the fact that we do not yet even know if “herd immunity” even applies to SARS-Cov-2, much less what level it is if it exists. So this sutff you are quoting from Nicholas Lwwis, whoever he is, is just a bunch of useless garbage.

      1. pgl

        Did you watch Rand Paul try to mansplain science to Dr. Fauci today? Senator Paul is almost as stupid as Bruce Hall after all.

        1. noneconomist

          Very refreshing to hear a U.S. senator eloquently remind Dr. Fauci, “ You’re not the boss of us.”

          1. baffling

            after exposing much of his gop colleagues to the coronavirus, rand paul has very little integrity on which to make such statements. being a medical doctor, makes his behavior all the more galling. rand paul has clearly demonstrated he lacks any respect for human life, other than his own selfish well being.

    4. pgl

      ‘But if someone is dying from Covid-19 and/or underlying health problems, it’s better to let them die than risk they might be one of the small percentage that has damage done by the medicine. However, let’s presume despite anecdotal reports of patients who were close to death suddenly reviving after treatment with hydroxychloroquine (few dollars a dose), that the suddenly discovered risks are too much and the benefits too small.’

      By now your dog is banging his head against the wall over your incessant dishonesty and stupidity. Anecdotal reports? That is not evidence. There are anecdotal reports that drinking bleach cures COVID-19. Last week you told us your snake oil was approved by the FDA. That of course we a lie. You also said rememdesivir was not approved by the FDA even though it was.

      Discussing science with someone as dumb as you is less productive than watching the grass grow.

    5. pgl

      What has been some of Neil M Ferguson’s past work? Let’s see:

      “During the swine flu outbreak in 2009 in the UK, in an article titled “Closure of schools during an influenza pandemic” published in the Lancet Infectious Diseases, Ferguson and colleagues endorsed the closure of schools in order to interrupt the course of the infection, slow further spread and buy time to research and produce a vaccine.”

      Gee I bet Bruce Hall did not know that as Bruce Hall would have recommended just the opposite.

      “In February 2020, during the COVID-19 pandemic (ongoing as of March 2020), using statistical models that considered data on the number of deaths and recoveries inside China, travellers outside China and in those affected that had returned home, Ferguson, Azra Ghani and their team estimated that detected cases of COVID-19 had significantly underestimated the actual spread of the disease in China”.

      And Bruce Hall argues we are over counting the severity of this virus. Ferguson also argues that the UK is under counting the severity of this virus.
      Now to the paper Bruce Hall does cite – why did he not admit it was criticized by virologist Hendrik Streeck who questioned even the underlying assumptions of this paper:

      “In the – really good – model studies by the Imperial College about the progress of the epidemic, the authors assume, for example, that 50 percent of households in which there is a case do not comply with the voluntary quarantine. Where does such an assumption come from? I think we should establish more facts.”

      One more little detail omitted by Bruce Hall. On 5 May 2020, it emerged that Ferguson had resigned from his position as a government advisor on the Scientific Advisory Group for Emergencies (SAGE) committee after admitting to “undermining” the government’s messages on social distancing by meeting up with a woman.

    6. Ulenspiegel

      “Regardless, Sweden may have been right after all. ”

      Which level of immunisation do you think is achieved in Sweden? Why would this make a difference in autumn, esp- with the low number of ICU beds in Sweden? Or are you still math challenged?

    1. Barkley Rosser

      Square root is just a V. That is what is on its front end. All that adding the rest says is that it stops gong up super rapidlly once it gets back to the previous level, after when it aimply resumes previous trend. That previous trend should be showed on the front end in that case, although that would make it not a square root and indeed nothing at all in particular.

  7. Alan Goldhammer

    @Menzie and the other economists: I regularly listen to Barry Ritholtz’s podcast as I run a small home investment operation with a couple of trust funds (don’t get excited they are not that big!) and am on the investment committee of a decent size non-profit. This past week he had Jim Bianco, a very capable fixed income analyst on.

    Bianco’s view that the Fed has embarked on MMT version 1.0. The written transcript is here: https://ritholtz.com/2020/05/transcript-jim-bianco/ there is an amazing comment, “It’s the equivalent of four years of income tax receipts when all is said and done. If the federal government and the Federal Reserve can either borrow or print four years of tax returns and not have a problem, not produce inflation, I’ve jokingly said can we get rid of the IRS? Can they just print up our taxes every year and just send them to the Treasury at that point? Because if you can do this without having any problems, then why do we even pay taxes in the first place? And isn’t that one of the arguments that the MMTers have been saying is that MMT believes that the — you don’t adjust monetary policy with interest rates, you adjust it with taxes.” There is much more of interest in the interview.

    I confess to not knowing a lot about MMT and whether it is good bad or indifferent. I would just like some comments on whether Bianco is on to something here. I do agree with others that the recession is going to drag on as the airline and hospitality industries will be basket case for some time. I doubt any meeting planners are scheduling large meetings these days and convention sites are going have problems.

      1. Alan Goldhammer

        Thank you, that’s just what I needed. It’s going to be a very interesting experiment.

        1. Moses Herzog

          @ Alan Goldhammer
          I used to be a fan of Ritholtz fan, back in what I sometimes call “the golden age of blogs”, around 2008–2009 (if we don’t include Geocities, which was on Yahoo at one point).


          Yahoo did to Geocities the same thing Microsoft did to Netscape—bought a product superior to their own, so they could turn right around and destroy it. I think I even had a very short-lived blog there where you had to write more of the code back then, anyways……). But Ritholtz said something back then in those general years, I think it was an audio interview where he in essence physically threatened someone, I forgot the exact words , I’m paraphrasing, some bravado crap like “Well in New Jersey we have a way of handling people like him” or something. It was in a way he could deny culpability and yet deliver the threat. He seemed to think he was cool saying it and it gave him a set of big boy pants he apparently felt he needed badly. What it came across to me as, was a blow hard lacking in morals. But….. the podcast may be quite good, I just felt the need to state my feelings on Mr. Ritholtz. I’ll listen to him very rarely now, like if something catches my eye like you mentioned, but in the end I have ZERO respect. He’s not very different than a Michael Cohen. A “gangster wannabe” who talks big but could probably be shoved over by one of his son’s grade school classmates.

    1. 2slugbaits

      Alan Goldhammer In the very early days of this pandemic I commented that it would probably give us a real world experiment with MMT.

  8. 2slugbaits

    A “V” shaped recovery seems very unlikely. That kind of recovery is what you might expect if the shock was to some sector of the economy with a high Domar weight relative to that sector’s share of GDP. The durable goods sector would be a good example. According to the BEA tables, durable goods represent 0.062 of GDP, but have a Domar weight of 0.15. So a positive shock reverberates through a lot of different intermediate supply sectors and results in a robust recovery. But in this case the brunt of the negative shock was in service industries, and those sectors tend to have low Domar weights relative to their share of GDP. For example, the restaurant industry has a 0.022 share of GDP and a Domar weight of only 0.042. Not much bang for the stimulus buck. Another example would be the performing arts and sports sector. That sector has a 0.0065 share of GDP and a Domar weight of 0.0098. Even less bang for the stimulus buck. Furthermore, it will be very hard to stimulate those sectors even if they had higher relative Domar weights. People will be reluctant to go to restaurants, theaters and sporting events. So if there’s going to be a strong recovery, it’s going to have to come from sectors of the economy that don’t face the public as much as restaurants, theaters and sporting events. That means resources will have to be redirected away from some of the service sector jobs lost as a result of the pandemic and towards goods producing sectors. That won’t happen overnight.

  9. sammy


    I don’t know why you constantly accuse anyone who is in favor of ending the lockdown as scared, hiding out in their basement, etc. If we really were scared we would be AGAINST ending the lockdown, like you are. Even this elementary logic escapes you.

    1. pgl

      Hey Sammy – when are you and Bruce Hall going to start your new jobs in those meat processing factories? No? You cannot get out of your basement which is why your mommy has to buy groceries for you?!

    2. baffling

      sammy, are you going out and exposing yourself to the virus, or are you staying safely inside while encouraging others to go out and become exposed? ALL of the talking heads on conservative outlets like faux news are self isolating in the comfort of their home studios away from the virus as they encourage others to go out and get sick. better yet, why not go out and volunteer at the local hospital? why are you sitting alone at home?

    3. 2slugbaits

      sammy I believe the hiding out comments refer to people like Trump (who insists that he gets the highest degree of protection but can’t be bothered to wear a mask himself to protect others), or folks like Bruce Hall who demand workers return to unsafe workplaces even though he himself is able to shelter in place while living off SS, pensions and bond coupons. Back in the Bush/Cheney years we would have called that kind of person a chicken hawk. There are of course some individuals (such as yourself perhaps) who are downright eager to reopen the economy and don’t care about risks. Many of those folks are in low risk categories. Those are also the types of individuals who are narcissistic and socially irresponsible because don’t care if they infect others as long as they can do what they want. In other words, there’s a certain segment of the population that never quite grew up. Those folks are perpetual middle schoolers no matter their biological age. And then there are Fox News viewers, and they’re just stupid.

  10. Moses Herzog

    I’ll tell you something I think is a pile of crap, and I am really getting tired of people saying?? (tired of as in incredibly annoyed and irritated by) Is Bill Gates walking around telling everyone he said there would be a pandemic. Really Mr Gates?? You “foresaw” there would be a pandemic?? You remind me of a Virginian Professor right now telling everyone “this won’t be a V shaped recovery”. Gee Sherlock, any other profound wisdom you’d like to drop on us??

    Hey Bill, Monopolistic Bill, the Bill who squashed Netscape Navigator Bill, monopolistic Bill who helped kill off technological innovation he wasn’t profiting from Bill, uh D*ckhead Bill, yeah you. If you were that worried about it, why didn’t you stockpile surgical masks and N-95 masks someplace?? Why didn’t you make certain there would be a back-up supply of ventilators?? What?? What’s that you say Monopolistic Bill?? Stockpiling masks is not as good of a photo op as it is you making a two day visit to poor sections of Africa with a fake frozen grin on your face?? Well, yeah, true enough Monopolistic Bill. Just don’t be telling us what you said about it, when you couldn’t do something as simple as stockpile masks before the pandemic. Ok Monopolistic Bill?? Just don’t do that Innovation Killing Bill, OK??? Try not to be the D*ckhead “You’ll purchase my blue screen of death GARBAGE software because you have no other choices” Bill that we’ve all “come to know and love with” over the years. Can you do that Bill???

    1. pgl

      There are some who say Monopolistic Bill Gates caused this pandemic to sell my Microsoft tools. I doubt these rumors have a shred of credibility but there is nothing Bill Gates would not do to make a buck!

    2. baffling

      bill gates has donated over $35 billion in the name of healthcare and the poor.
      you cannot say he has not tried or he does not care. and you cannot find a private citizen who has contributed more to worldwide health crisis.

      1. pgl

        $35 billion may seem like a lot but take this as a percentage of the wealth he extracted running Microsoft.

        1. baffling

          there was a time i held a grudge against bill gates as well. thought his riches were stolen and ill deserved. in retrospect, he did well and helped change technology for the better. life is easier with a pc (now a mac user, but spent a couple decades on the pc). and he is responsible for us using windows type environments, rather than being forced to use ibm’s os2 and mainframe terminals. or dare we say, unix? for that i am forever grateful.

          1. Ulenspiegel

            “and he is responsible for us using windows type environments, rather than being forced to use ibm’s os2 and mainframe terminals. or dare we say, unix? for that i am forever grateful.”

            Look, if you had to operate an expensive spectrometer you would have been grateful until windows 10 for alternatives, a good unix was far better and much more stable. :-)))

            In some fields window systems were for a long time only second or third choice, sometimes still are.

          2. baffling

            “a good unix was far better and much more stable. :-)))”
            and this is fine for the 345 people around the world who needed a stable system to run an expensive spectrometer. but unix was NOT the tool of choice to push technology (ie the pc) into the arms of a billion novice users around the world. you really think computing technology would be as ubiquitous as it is if unix had been the face of computers?

            i will give you a current example. we have large scale parallel computer clusters all around the country (at both universities and corporations). these systems are not utilized by most of the subject matter experts around the country, who could utilize their processing power. why? because they run on linux-the bastard child of unix. and most people cannot run linux either. so high end computing power tends to be focused on a select few users. the recent advances in cloud technology has helped. but user friendly interfaces invite a lot more users than stability. unix is stable because nobody can access it :-)))

    3. Barkley Rosser


      You just remain so obsessed with dinging me you have to drag me into totally irrelevant sub-threads. So, as I am obviously the “Virginian Professor” is my forecasting that there will not be a V-shaped recovery something to be somehow mocked because it is simply just so obvious that there will not be one or because there is this really high probability that there will be one? If it is the former, do please note that we have several people here, and the people around Trump also, predicting that we shall indeed have a V-shaped recovery, so there seems to be debate over it, even though probably a majority of commenters here agree with me that it is highly unlikely that there will be one. Why am I to be singled out for some sort of brainless ridicule by you over this? Really.

      I remind you that not too long ago you were questioning my manhood because I had refrained from making a definite forecast for whether or not we would have a recession or not before the upcoming election, something I refrained from doing given a feeling that there were too many uncertainties involved, which proved to be more accurate than I foresaw.. So, which is it, Moses? I am some sort of fool or obviousnik because now I am saying that a V-shaped recovery is unlikely (you have also mocked my more specific forecast of a Lazy J, or at least this label I neologized here fot it) or I am simply wrong because, wow, there really is a high probability of a V-shaped recovery?

      Nothing I do pleases you. Heck, one minute I am a bad guy because I supposedly accused Paul Krugman of stealing ideas from me, and the next I am yet again a no-goodnik because I am upset that he did not steal ideas from me. I get it that you did not like me crticicizing him at all, although you never provided the remotest scintilla of refutation of the specific things I said, and I kept noting the whole issue was old and irrelevant to now. I am always bad, no matter what I do or say. Shame on me.

      1. Moses Herzog

        @ Junior
        Quite the contrary. You’re like a narcissistic version of the cartoon character Grampa Simpson. You have very high entertainment value. Whatever you do, please never stop.

  11. Fair Economist

    TBF, everybody’s flying blind. Nothing like this has happened before. FWIW, hasn’t China had kind of a Porter/BMO outcome – V-shaped but to a lower level than pre-epidemic? That does seem like a plausible outcome – a V is plausible given that all the demand and resources have been sitting around, but to a lower level since the economy has to carry the burden of the added safety measures. Extension to the US would predict a V to an even lower level; since we have not properly contained our epidemic, we’ll have to shoulder more burdensome safety measures.

    We have the additional complication of the death cultists pushing excessive and premature re-opening, which most likely will give us a “W” after we have to reimpose lockdown measure to fix the acceleration they created.

    1. Wally

      China can better enforce the distancing and mask rules than the US. They don’t have beer-drinking, gun-toting idiots driving in pickup trucks to Texas parks or Florida beaches or driving back and forth in front of governor’s homes waving “I’m Stupid” flags. If they did they’d shoot them, thereby saving other lives.

    2. Moses Herzog

      There’s no way to know, because in China, the worse the numbers get, the bigger the economic lies get. There’s really no reason to keep stats in a culture which places a very low value on truth. I’m sorry, but there it is. Ethnic Chinese raised in other cultures maybe treasure honesty, but I am sorry, I spent exorbitant amounts of time with every educational and socio-economic level in mainland China (unless you want to make it a regional thing since I spent 98% of my time in one city). I even spent a lot of time communicating with a girl in Fuzhou (which is more south China) and she gave me no reason to believe otherwise with her own views on the mainland culture (I will say she was quite honest herself though). With maybe the small proviso that poor people in ANY culture are more honest/innocent—pragmatism in social dealings is engrained everywhere there. Even Chinese will say there is a “saying” there— “Those who tell (tattle) on the criminal are less popular than the criminal themselves”. That’s the essence of the quote, if any Hong Kongers or mainland Chinese wanna correct me on the quoting of that “proverb” I’m happy to be corrected, please do. So are they giving accurate numbers in say Hubei now?? The only thing that could make this close to accurate is the fact they are probably better at “MMT style” policy than donald trump is—that’s about it.

  12. spencer

    Question, in the future are we going to have to always use a dummy variable for 2020 in econometric work?

    1. pgl

      We have a dummy for a President. We have lots of dummies who support our Dummy in Chief. So yea a dummy variable for 2020 is just good statistics!

  13. pgl


    Trump lied yesterday about our testing. Credit to Senator Romney for telling the truth. Trump talks about the absolute number of tests here v. South Korea, which ignores two things. One is that we have six times their population. But tests per capita is also misleading as we have more cases of this virus per capita than does South Korea. The right metric is the number of tests relative to the incidence of this virus. On this metric, our testing SUCKS!

  14. Wally

    Re-watching ‘The Big Short’ the other night one thing that really stood out was the length and extent that the big financial houses went to to stay in denial of the collapse and to hold bond and derivative prices high until they could squeeze out from under as best they could.
    When I look at the current markets and the predictions for quick returns to ‘normal’ I see the same thing at work. Denial by persons with a self-interest rewarded by that denial. Eventually the chickens did come home to roost. I suspect the same thing will happen again. No ‘Vee” on my radar.

  15. sammy


    “our testing SUCKS”

    Here in Portland OR there are sandwich boards outside of Zoom Cares that blare “COVID testing here!” There is a convention center nearby with a huge parking lot with a long maze marked off for cars for people to get tested. There are zero cars there. I haven’t been tested, nor has anyone I know been. I would be interested to know how many of the people here have been tested. Maybe there are plenty of tests, but a shortage of testees.

      1. MP

        “Maybe there are plenty of tests, but a shortage of testees.”

        What does that tell you? Is that good or bad?

    1. Moses Herzog

      @ Sammy
      There’s no way to verify your claim, I’m going to take you on the honor code and assume you’re telling the truth. But it’s interesting to note, if you look at testing per 100,000 residents/citizens, Oregon ranks on the low end of the 50 states.

      The number you’re looking for is the gray colored horizontal bar—it also has the exact numbers per 100,000 listed on the left hand side.

    2. pgl

      Sammy in his incessant dishonesty tries to tell us that testing in Oregon is great. If so, why did the governor decide to announce a new plan?


      “Oregon Gov. Kate Brown unveiled a bevy of new initiatives and details Friday to beef up testing and contact tracing as businesses look to reopen amid the coronavirus pandemic. Brown announced a new “game changer” partnership with Oregon Health & Science University to monitor 100,000 Oregonians for coronavirus symptoms over a year, providing serial testing for up to 10,000 of those voluntary participants with the goal of spotting infections early among people without symptoms.”

      Governors like Brown and Cuomo are at least trying unlike Trump. But monitoring only 100 thousand people with symptoms is far cry for the claims Sammy made. After all, the population of Oregon is 4.3 million.

  16. pgl

    An important consideration from when Sen. Sanders questioned Dr. Fauci. The Senator cited the official death count of 80,000 – a figure that Bruce Hall says is an overestimate. But the Senator suggested the death count could be as high as 120,000. Fauci replied it is likely higher than the official count understates the reality but was not committing to the actual percentages. Of course Bruce Hall has no problem that 120 thousand people have died so far and more will die in the future as the incompetence of Donald Trump pales in comparison with Bruce Hall’s need to have this corrupt lying and incompetent person reelected as President. MAGA!

  17. Moses Herzog

    Menzie, I have a really super good (yet sick and morbid) “Why did the chicken cross the road?” joke, wanna hear it?? (Menzie never humors me on these…….. sigh…….. )

  18. Moses Herzog

    Menzie, you were supposed to say “OK, go ahead and tell your stupid joke.”

    Why did the chicken cross the road???

    Bruce Hall, “Princeton”Kopits, and Didier Raoult answer in unison: “Because zero chickens died in the 6 day drug trial.”

    Moses the comedy Jedi: “Thank you!!!” [ Bows and waits for the uproarious and unrestrained laughter to end…… still waiting for the laughter to stop…… ] I’ll be performing at Comedy Underground in Seattle in 2021 sometime, thank you!!!!”

  19. Johnny thanks James

    Menzie : For reasons of objectivity, you should mention that the californian guys Fienup & Hamilton are left-wing, and not shy to tell so.
    In our common interest, let us hope it will be a “V”. Though, I am sure that Fienup & Hamilton hope it will be not, to satisfy their political interest.

    1. Menzie Chinn Post author

      Johnny thanks James: Why? I didn’t mention James F. Smith’s political leanings. I have no idea what they are in fact. Must say Fienup & Hamilton are new to me – I’ve never encountered them before this event. For me, I just took highest and lowest q4/q4 growth rates.

      1. MP

        It’s a good thing you are so unbiased, as if you were not at all like any other human being.

        1. Moses Herzog

          @ MP
          Menzie separates his objective statements from his subjective statements. I doubt if Menzie would deny he has personal biases, as you say, we all have them. If you are saying he allows those personal biases to seep into the work, I think you’d be hard-pressed to find examples. Menzie much prefers “New Keynesianism” I think to “MMT”. I suspect Professor Chinn literally grimaces when he thinks of some of MMT’s prescribed policies. But he is still willing to have a small portion of his class curriculum on “MMT” for his students.

          He’s basically quoting from one of the most Republican biased hard-print publications in America, WSJ, owned by Rupert Murdoch (who also owns FOX) reporting the mean average forecast, and the high and the low forecast, and the forecast which is the most “prototypical” V-shaped forecast in the group. What exactly would you have Menzie do??

          If many bad policies are enacted by a certain party and there are objective numbers to prove the policy was ineffective, would you have Menzie ignore it and act like it had no real world impact?? When I mentioned Justin Wolfers criticism of Nancy Pelosi’s (a self-professed Democrat) rollback of the SALT Cap, Menzie in that moment did not “take arms” with that specific criticism of Pelosi. I suspect (though do not “know”) because he agreed that that was a poor policy decision by Democrat Pelosi. That is not the action of a man who lets political bias infect his work.

    2. Barkley Rosser

      Wow, Johnny, youi are still pushing that US will have a V? Clearly you wuold like it to be a V, but there is plenty of evidence that this is extremely unlikely. Did yoiu not see Moses Herzog ridiculing me for saying something so screaminly obvious as that we are very unlikely to have a V? Have you not seen the near zero respoinse of customers to restaurant openings in states that have “reoponed”? With all these frightened customers, where is your V going to com from? And keep in mind that for a true V this will have to be by far the most rapid rate of growth ever seen in US history as it will follow the most rapid decline ever seen. And people do not want to go shopping. You really look hopelessly out of it.

      Oh, and for purposed of “objectivity,” hoew about you tell us your political leanins. My bet is that you are a Berniebro.

        1. Barkley Rosser


          ‘We” includes a lot people now unemployed who do not have much of that money to spend.

  20. pgl

    Is Bruce Hall really Tucker Carlson?


    “Dr. Fauci’s recommendation was headline news at almost every media outlet,” Carlson said. “Fauci says, ‘The children must stay home or countless people could die,’ that’s the message. “So I’m asking a very simple question, how does he know this exactly? Is Tony Fauci right about the science?” Carlson asked. “Do we have any particular reason to think he is right? Right now, there is an awful lot of evidence indicating that America should cautiously reopen.”

    So Dr. Tucker Carlson think he knows more about this virus than Dr. Fauci? Of course, Dr. Carlson was pushing that snake oil that Bruce Hall claimed was approved by the FDA.

    You may recall how I suggested Bruce Hall had to be the dumbest wingnut ever. Well Tucker Carlson certainly deserves this award.

    1. baffling

      “Right now, there is an awful lot of evidence indicating that America should cautiously reopen”
      notice tucker will not back this up with actual evidence, only opinion. there is NOT an awful lot of evidence to support reopening right now. the evidence says otherwise but again, tucker is self isolating in his home studio, asking others to go out and risk their lives so that his 401k maintains its value.

        1. baffling

          does tucker sit in the safety of an isolated work environment telling others to go out and risk their lives opening up the economy?

  21. baffling

    still waiting for folks like bruce hall and sammy to explain whether they are self isolating at home, or actually out risking contracting the virus in public? are you two practicing what you preach, or are you two hypocrites encouraging others to risk their lives for your financial gain and personal safety? inquiring minds want to know.

    1. MP

      Wisconsin hasn’t really been affected. Think more people are dying now falling off the toilet, as it were.

      Perhaps the medicine practiced here is not of the same variety as elsewhere. Don’t know.

      1. baffling

        “Wisconsin hasn’t really been affected. ”
        and this statement would also be true if wisconsin had not shut down as the virus spread, right? you are typical of those who refuse to acknowledge reality. if not for the nationwide shutdown, most of the country would have become new york city. but those in the alternative facts universe refuse to acknowledge this to be true, because it interferes with your desired solution. folks like mp and trump still want to believe the virus does not exist. and most galling, you use the success of the shutdown to slow down the virus as evidence to argue it is not bad to begin with. dishonesty or ignorance? either way it makes you an idiot.

  22. pgl

    Bruce Hall last week told us that the FDA had not approved Rememdesivir. So he might be surprised at this:


    Gilead signed nonexclusive licensing agreements with five generic drug makers operating in India and Pakistan to produce COVID-19 therapy remdesivir for 127 countries, the drugmaker said. Gilead will work with Cipla, Mylan, Ferozsons Laboratories, Hetero Labs and Jubilant Lifesciences to manufacture the drug primarily for low- and lower-middle income countries. The list also includes higher-income countries “that face significant obstacles to healthcare access,” Gilead said.
    FDA approved, in high demand internationally, and now 5 third party manufacturers supplying 127 nations. And Bruce Hall is still pushing his worthless snake oil!

  23. Rob

    Just wondering….when was the last V shaped recovery in the US? GPD or employment? Have we actually had one in the post WWII period?

    1. Barkley Rosser

      The Reagan recovery in 1983 looked pretty much like a V, but for all the models that simply assume a V, we really have not had all that many and not any recently. ?The recent ones have looked more like lazy Js, asymmetric with recovery slower than the decline was.

      1. Moses Herzog

        $13 a pint ice cream in your freezer/fridge has to be paid for somehow MP. I’m not gonna use “the c word” when discussing Pelosi or Menzie’s gonna take me out back behind the shed with his nail infused paddle, but you can do this too “MP”, just don’t represent your core constituents when legislation is being passed and practice shrugging your shoulders in the mirror and saying “we have to show the country we can expedite legislation quickly” and you can turn Mitch McConnell into his party’s greatest hero and pick up enough corporate lobbyist dollars to be House Speaker past your 100th birthday. Maybe she’ll put this secret sauce strategy in her posthumous memoirs so you can learn how to be a feminist hero to the Barkley Junior’s of the world someday as well “MP”. You should follow Pelosi’s textbook on how to live on easy street doing literally nothing but enriching yourself. “MP”, you don’t want to be like that bitter guy in the Dire Straights song “I should have learned to play the guitaawwwww, money for nothin’ and your house fixtures for free”

        1. 2slugbaits

          Moses Herzong I’m not sure what your economic point is. Yes, buying $13/pint ice cream has to be paid for somehow, but isn’t paying for it the same thing as putting some of her money into someone else’s pocket? Your macroeconomic point seems confused. Are you saying that Pelosi should not be buying high end ice cream? Isn’t that just another version of Angel Merkel’s “Swabian housewife” fallacy? And how is overspending on high end ice cream a textbook proven way of “enriching yourself”? Isn’t that a textbook way of making yourself poorer? In any event, that high end ice cream didn’t come from a big corporation; she bought it from a small business in a niche market.

          1. Moses Herzog

            @ 2slugbaits
            Why don’t you roust up a large group together to rally and petition for Pelosi to get “Humanitarian of the Year” award for her for showing off $13 a pint ice cream that she purchased from a company with over $30,000,000 in annual revenues. During an economic crisis. There’s something called “leadership”. There’s also something the military refers to as “situational awareness”. That means FDR doesn’t go on the radio during the Depression and tell them “Hey good citizens, I just got a solid gold railroad pocket-watch for $5,000!!!! What a find, aye?!?!?!?! So…… how were things for you folks standing in line at the soup kitchens today??” Beeeeecaaaaawwwwwzz the man had the minimal amount of brains it takes to know it’s not the brightest idea to do that when large numbers of the general public are suffering.

          2. 2slugbaits

            Moses Herzog Still not sure what your economic point is. Buying “X” amount of $13/pint ice cream creates more aggregate demand than buying “X” amount of $1/pint ice cream. The only thing I detect is a case of ice cream envy.

          3. Moses Herzog

            I do like ice cream, I’ll give you that. But in all honestly I prefer cheaper versions of suicide by cholesterol:

            $3.97 for a 12 pack, I usually buy 3 boxes per refill.

            Top that price/value for ice cream, and you move up into my top 20 with Menzie and Benjamin Graham as my economic/finance heroes in life.

            These toffee ice cream bars also have sentimental value, because my Dad lived in Le Mars Iowa when there was a Teachers College there. This is not to “get a dig in” on Japanese people, because the school was already “up against the ropes”. But once the college got bought out by the Japanese, the school “went to hell in a hand basket”. My father was very sad when he saw where that college was going—“down the crapper”. So eating the Le Mars ice cream will always make me think of my Dad. It is good ice cream—and—at one time—-Westmar was a decent college.

            That concludes tonight’s episode of “This Dumb Sap Thinks We Care About Mundane Facts From His Family” [ cue theme ]

          4. Barkley Rosser

            Wow, that is great, Moses. We get to hear yet again about your beloved father, now being reported on virtuoualy eating inexpensive ice cream. But what about your mother? Why do we never hear about her? Did she eat the expsnsive kink like the evil and demented Nancy Pelosi, whose ice cream eating habits have become the main thing Sean Hannity has to say about her when he mentions her. You are in good company caring so much about this Very Important Issue.

      2. Barkley Rosser

        Wow, MP, here you are criticizing Pelosi, but Moses Herzog still puts you in a dumpster with the likes of me. What you need to do to curry his favor is to become the first person here to say she is demented, not just that she is some nasty corporate shill. That will not save your behind from the ever vigilant Moses.

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