Post #2049715

2026-04-29 09:42 UTC

It's very obvious that we are very likely headed towards a global recession, driven by the problems Trump has created in the gulf. Of course financial institutions are preparing for the eventuality, and that alone can cause a financial crash if it accelerates. It's extremely difficult to estimate the risk or chance, but the fact that (almost) everybody is aware, makes the risk bigger, because for some weird reason, everybody preparing for a financial crisis doesn't make it less likely because people are prepared, but instead makes it more likely because nobody does anything when the uncertainty passes a certain threshold. And at that point the economy collapses.

Replies (2)

@gedaliyah@lemmy.world 2026-04-29 09:59

Yeah, Trump didn't help, but I think it's more to do with a decade of private equity dropping trillions of dollars into industries that never return any value.

Open ##2049756
@dylanmorgan@slrpnk.net 2026-04-29 16:03

>It's extremely difficult to estimate the risk or chance, but the fact that (almost) everybody is aware, makes the risk bigger, because for some weird reason, everybody preparing for a financial crisis doesn't make it less likely because people are prepared, but instead makes it more likely because nobody does anything when the uncertainty passes a certain threshold. And at that point the economy collapses. It’s because everyone is primarily concerned with making sure they’ll turn out okay, or is too committed to the failing investments that they keep doubling down. Consider the story of the big short: guys who saw the crash coming said it was coming, and when no one listened they made bets on how bad it would be. Our best case scenario is that we survive and get something like a worldwide Glass-Steagall act that prevents investment banks from also being retail banks.

Open ##2049757