The next recession

It's coming, some think sooner than later, like in 2021! At least that is what the majority of business economist think.
Right now unemployment is low, but I can already see cracks starting to happen. The cost of everything is up, and will continue to go up.

www.illinoispolicy.org...

According to Moody’s, Illinois and New Jersey are the two states least prepared for the next economic downturn and “are likely to face more difficult challenges than other states.” Recession preparedness is stronger for 22 states and moderate for the other 26.

Sucks to be Illinois or New Jersey. Sorry guys your state is being run by idiots! Both of these states have known what to do for decades and choose ignorance! Sorry for all the good people that live there and have to suffer, including many of my friends and relatives!

Luckily my state fares OK during recession and bubbles (at least in the past). Our house prices do not go up or down as drastically as other states. We also do not have excess inventory.

My advice for people to mentally prepare for a recession.
#1 be willing to move for a job if you need to. I saw this first hand last time. Everyone that was willing to move actually fared better, anyone that stayed "home" to tough it out is still struggling.
#2 be willing to take a loss on your house if you need to. Don't throw good money after bad.
#3 You will survive and learn a lot from low financial points in your life.
#4 now is probably a good time to look over your finances and evaluate.

Recessions happen on a regular irregular basis. We are probably due for one pretty quick again. We have no debt at all, other than some credit cards we pay off every month. We have some money in the bank, I am not too concerned about one happening, those who have a lot of debt might need to worry about losing what they have accumulated.

a reply to: JAGStorm

Those are excellent points. I can only add that people who might own real estate in the form of single family homes or town homes in the suburbs.......NOW is the time to sell and get whatever you can out. The metro areas will become very dangerous and property values will plummet. Buy rural, acreage with a water well if at all possible and at least 2 counties removed from any major metro area.

Also, now is the time to start rolling out of stocks and reinvesting profits in bonds, treasury bonds NOT Municipal bonds and not corporate bonds.

Its worked for me.

a reply to: JAGStorm
2017

Column: I’m predicting an economic recession in 2017. Are you ready?

www.pbs.org...

2018

7 Smart Market Thinkers Predict When The Next Recession Will Start

www.google.com... 2.1091.9820..12002...0.0..0.166.3718.0j28......0....1..gws-wiz.....0..0j0i131.gVmWKxz-4n8

2019

Tick, Tick, Talk, 2019 Recession Coming

seekingalpha.com...


I mean, if every year you predict a recession, then eventually you'll be right. But are we going to simply ignore all the years that they were wrong?

originally posted by: TonyS
a reply to: JAGStorm

Those are excellent points. I can only add that people who might own real estate in the form of single family homes or town homes in the suburbs.......NOW is the time to sell and get whatever you can out. The metro areas will become very dangerous and property values will plummet. Buy rural, acreage with a water well if at all possible and at least 2 counties removed from any major metro area.

Also, now is the time to start rolling out of stocks and reinvesting profits in bonds, treasury bonds NOT Municipal bonds and not corporate bonds.

Its worked for me.

I would hate to be in cookie cutter suburbia right now, the floor is going to drop.
I'm exactly where you mentioned, rural on a well. Enough land to grow food for survival. Even if I didn't grow anything I live in an area where foraging would be enough to sustain most.

The point about water is on point! Something people don't really think about. I just don't like the city controlling my water and putting chemicals in it, and it is so expensive too.

The people who know economics know it's the danger of unknowns that present a problem for the economy.

The reason for the danger now is we are in a huge credit and debt bubble. If the consumer gets scared in any way and business debt is at an all time high the market retracts and business can't pay the debt and the chain reaction starts.

Debt all around at an all time high even when the economy is expanding is a bad sign. Business debt being an all time high wouldn't be as bad and could indicate investment but national and personal debt also being all time highs and the looming price increases from tariffs set up a powder keg.

Hopefully we don't have any war, major attacks or natural disasters.

a reply to: DBCowboy

It is extremely difficult to predict the timing of the next recession and its always tough to identify the "stressors" which will precipitate the next recession.

This current recovery and what is called a "secular bull market" is one of the, if not THE longest recoveries on record for the US. BUT, it hasn't precipitated a boom in home building and home sales are just rocking along at the bottom. Housing starts are not significant and median priced housing sales are pretty much stagnant. Why? The millenials have never jumped in to buy housing, plus, the last recession caused record number of foreclosures and those homes ended up being sold to investors as rental properties which destroyed the values of the houses in the neighborhoods which went into serious decline.

Trump having rolled back unnecessary regulations on business has been a big factor in the recovery. But my "guess" would be that the catalyst for the next recession will be an imploding of business and consumer debt. Years of unnaturally low interest rates prompted businesses to take on huge debt. Just a bit of an uptick on interest rates could spark a wave of corporate bankruptcys. At the same time, the millenials are way upside down on their student loans; they get laid off and you got serious problems.

If Trump is re-elected, this recovery MIGHT go on for another 4 years, BUT, his reelection might as well precipitate a recession because as long as he is in the WH, government in Washington is hopelessly gridlocked and that could start to undermine business and market confidence. If a Democrat is elected, the next recession will commence within 2 years as business killing regulations are started up again.

Yea, its hard to predict..........but its coming and probably sooner than later. Nothing goes up and to the right forever. And worse, Cities, States and the Federal government are in no shape to counteract the effects of the next recession.

Put another way........this is NOT the time to buy GM stock or bonds.

Recessions come and go. I’m far more worried about the total collapse of the dollar. As it stands now, it’s worth less than 10 cents compared to the gold backed dollar. Probably around 2 or 3 cents.

a reply to: TonyS

It's difficult for you or I to predict.

Economists are supposed to be the experts and they're no better than Miss Cleo and she probably charged less!

If the Fed hadn't been buying stock like mad the last 11 years, we'd be in a depression already. The stock market is propped up on pipe dreams. New construction is stagnant, retail stores are closing in record numbers, and an insane amount of people are unemployed.

The only reason that the unemployment numbers posted by the government look good is that they don't count anyone who has been unemployed for something like six months. Also, the baby boomers are retiring or dying, so their positions are just being closed, which is a roundabout way of dropping unemployment.

a reply to: JAGStorm

Britain coming out of the EU will likely cause a small local and very prolonged recession in the UK as well as perhaps also the rest of the EU, after the storm is over Hamburg will be the new economic capital of the EU and the City of London will remain as merely an island tax haven - the city of London (AKA the Square mile as opposed to London in it's entirety) is technically a Separate country which is why the bankers love it since they can get away with murder there if they so choose - more or less.
The trembles running through the stock markets are likely to affect the US and also China since despite our diminutive size Britain actually punches far above it's weight on the economic stage and it's impoverishment will have a severe knock on affect to other nation's financial establishments' until the new order of thing's is completely established, some nations such as Germany are likely to be far richer - at least there bankers will be as like we Brit's the German's themselves will never see that money only there bankers and it will like here cause a growth in the economic sector entirely unrelated to the other national GDP.

So yeah sometime very soon, maybe I should go and sharpen my pitch fork and light my flaming torches ready for the grand Tory hunt that shall then ensue (we tend to be a bit more sedate than that in Britain but you get my sentiment - the Tory's are solely responsible for this debacle as well as a catastrophic rise in homelessness and death of those homeless as well as a severe increase in violent and drug related crime and worse on our street's through there ideological so called reform's and wholly unnecessary cut's to our public services and when that recession come's more people will die, even many whom think they are fine now so perhaps some Tory head's will roll after all.

Also remember we are still technically in a global recession which has not yet fully recovered, Japan's economy is not back were it was in the 80's and 90's especially when calculating quality of life into the equation, neither is the US and definitely neither is the UK.

originally posted by: DBCowboy
a reply to: TonyS

It's difficult for you or I to predict.

Economists are supposed to be the experts and they're no better than Miss Cleo and she probably charged less!

I guess it just depends how long using the magic credit card and retaining debt can last...since we have never seen debt levels like this before who knows what will happen.

originally posted by: DBCowboy
a reply to: JAGStorm
2017

Column: I’m predicting an economic recession in 2017. Are you ready?

www.pbs.org...

2018

7 Smart Market Thinkers Predict When The Next Recession Will Start

www.google.com... 2.1091.9820..12002...0.0..0.166.3718.0j28......0....1..gws-wiz.....0..0j0i131.gVmWKxz-4n8

2019

Tick, Tick, Talk, 2019 Recession Coming

seekingalpha.com...


I mean, if every year you predict a recession, then eventually you'll be right. But are we going to simply ignore all the years that they were wrong?

Even a broken clock is right twice a day...

You can't have a economic booms without recession. One will happen. All anyone can do is prepare themselves for the inevitable.

Save money. Reduce debt. Live below your means.

It really isn't that hard.

The signs to be weary of

Risks for dangerous corporate loans hit all-time high, Moody's says

Since the last recession, nonfinancial corporate debt has ballooned to more than $9 trillion as of November 2018, which is nearly half of U.S. GDP. As you can see below, each recession going back to the mid-1980s coincided with elevated debt-to-GDP levels—most notably the 2007-2008 financial crisis, the 2000 dot-com bubble and the early ’90s slowdown.

Total credit card debt is also at itshighest point ever, surpassing $1 trillion, the Federal Reserve found. Now, more than 1 in 3 people — or 86 million Americans — said they're afraid they'll max out their credit card when making a large purchase, according to a WalletHub credit cards survey.

The U.S. national debt has topped $22 trillion for the first time in history, according to daily figures released by the Treasury Department on Tuesday.
The debt has ballooned by more than $2 trillion in the two years since President Trump

Consumer default rates are rising and even though they're least apparent in first mortgage default compared to credit cards and auto loans, the latest S&P/Experian Consumer Credit Default Indices said that this trend was a signal for caution across credit markets.

President Trump on Thursday signed into law a bill that rolls back banking regulations passed in response to the 2008 financial crisis, declaring it a “big deal for our country.”

The Consumer Financial Protection Bureau is targeting one of the hallmarks of the Obama administration: a rule that would protect the most vulnerable borrowers from the ballooning debt that can accrue with payday loans.

Faced with tepid loan growth and heated competition for clients, banks are sweetening their deals on loans to businesses, a development that is concerning regulators

originally posted by: Edumakated

originally posted by: DBCowboy
a reply to: JAGStorm
2017

Column: I’m predicting an economic recession in 2017. Are you ready?

www.pbs.org...

2018

7 Smart Market Thinkers Predict When The Next Recession Will Start

www.google.com... 2.1091.9820..12002...0.0..0.166.3718.0j28......0....1..gws-wiz.....0..0j0i131.gVmWKxz-4n8

2019

Tick, Tick, Talk, 2019 Recession Coming

seekingalpha.com...


I mean, if every year you predict a recession, then eventually you'll be right. But are we going to simply ignore all the years that they were wrong?

Even a broken clock is right twice a day...

You can't have a economic booms without recession. One will happen. All anyone can do is prepare themselves for the inevitable.

Save money. Reduce debt. Live below your means.

It really isn't that hard.

Except promoting bad spending behaviour effects your dollar and property value.

So it is pretty hard to not be upset we have a credit culture that hurts savers.

This is why I have been so aggressively investing.

My goal for the next year is to make enough money to pay off my place and pay off my car.

Anything after that is icing. When this starts coming down around our ears, I want to have a secured place to live with no debts owed to anyone.

But it won't be 2021.

You'll get a market pull back and corrections throughout the next year. But we haven't seen anything yet as far as the true scale of economic expansion still ahead of us.

There are a lot of reasons to be optimistic if you don't fall down the rabbit hole of conspiratorial thinking.

I don't expect to see a real recession until 2023 or 2024

a reply to: projectvxn

Expansion on debt? That doesnt happen. It's a debt bubble. We are at maximum before the defaults begin to cascade in the corporate loan world.

originally posted by: Edumakated

originally posted by: DBCowboy
a reply to: JAGStorm
2017

Column: I’m predicting an economic recession in 2017. Are you ready?

www.pbs.org...

2018

7 Smart Market Thinkers Predict When The Next Recession Will Start

www.google.com... 2.1091.9820..12002...0.0..0.166.3718.0j28......0....1..gws-wiz.....0..0j0i131.gVmWKxz-4n8

2019

Tick, Tick, Talk, 2019 Recession Coming

seekingalpha.com...


I mean, if every year you predict a recession, then eventually you'll be right. But are we going to simply ignore all the years that they were wrong?

Even a broken clock is right twice a day...

You can't have a economic booms without recession. One will happen. All anyone can do is prepare themselves for the inevitable.

Save money. Reduce debt. Live below your means.

It really isn't that hard.

I do that now.

Boom or bust.

a reply to: Edumakated

It really isn't that hard.

Tell that to the millions of Americans that were impacted last go around. Some of them did exactly what you said and still were hurt/devastated by the recession.

originally posted by: luthier

originally posted by: DBCowboy
a reply to: TonyS

It's difficult for you or I to predict.

Economists are supposed to be the experts and they're no better than Miss Cleo and she probably charged less!

I guess it just depends how long using the magic credit card and retaining debt can last...since we have never seen debt levels like this before who knows what will happen.

This part...

we have never seen debt levels like this before who knows what will happen.

It is human nature to delay/disbelieve, and that is why when the shtf it is so bad. The people that are smart see it coming a mile away. Yes, it might not be next year, but to say it is not coming or very soon, is just silly.