The next recession & the state you live in

www.reuters.com...

Most U.S. states lack reserves to weather next recession: S&P
"Those states, in order of least-prepared, are Louisiana, Oklahoma, North Dakota, New Jersey, Montana, Kentucky, Virginia, Missouri, Arizona, Illinois, Pennsylvania, Wisconsin, Kansas, New Hampshire, Mississippi, Michigan and Arkansas."

I've lived through 6 recessions. The recession of 2007 hit my family pretty hard and we were living in Illinois at the time. I don't think the state ever recovered. I recently visited a small town in Illinois. I had not been there in 11 years. I was shocked, absolutely shocked to see that nothing had changed. No new buildings or businesses. There were quite a few closed, but it was if time stood still for a decade. It was comforting yet sad at the same time.

The last recession I went though taught me a lot. Even though it was very scary, it opened my eyes to a lot of things.
#1 don't be afraid to move if you lose your job. When hard times hit, you will truly find out who your true friend are and that some friends are
more family, than family. Downsize now while things are good.
Make sure your resume, linkedin and everything is up to date now. Take a serious look at your debt and deal with it now.
The most valuable thing you have is your health.

There is always a light at the end of the tunnel. No matter how bleak situations seem, recessions don't last forever.
Remember to sell high, buy low. Real estate is a steal during recessions.

I have a feeling we will start feeling the first of the recession last next year, and then really full force in 2020.
I have a feeling it will be worse than 2007. Good luck to everyone!

originally posted by: JAGStorm
www.reuters.com...

Most U.S. states lack reserves to weather next recession: S&P
"Those states, in order of least-prepared, are Louisiana, Oklahoma, North Dakota, New Jersey, Montana, Kentucky, Virginia, Missouri, Arizona, Illinois, Pennsylvania, Wisconsin, Kansas, New Hampshire, Mississippi, Michigan and Arkansas."

I've lived through 6 recessions. The recession of 2007 hit my family pretty hard and we were living in Illinois at the time. I don't think the state ever recovered. I recently visited a small town in Illinois. I had not been there in 11 years. I was shocked, absolutely shocked to see that nothing had changed. No new buildings or businesses. There were quite a few closed, but it was if time stood still for a decade. It was comforting yet sad at the same time.

The last recession I went though taught me a lot. Even though it was very scary, it opened my eyes to a lot of things.
#1 don't be afraid to move if you lose your job. When hard times hit, you will truly find out who your true friend are and that some friends are
more family, than family. Downsize now while things are good.
Make sure your resume, linkedin and everything is up to date now. Take a serious look at your debt and deal with it now.
The most valuable thing you have is your health.

There is always a light at the end of the tunnel. No matter how bleak situations seem, recessions don't last forever.
Remember to sell high, buy low. Real estate is a steal during recessions.

I have a feeling we will start feeling the first of the recession last next year, and then really full force in 2020.
I have a feeling it will be worse than 2007. Good luck to everyone!

what economic indicators point to a recession?

There is a town in my county that is pretty much dying slowly as home prices plummet.
They were forced to upgrade their sewer system by the Feds about ten years ago and had to get a bond to pay for the upgrade. The cost of water and sewer went through the roof in order to pay the bond.

It's a pretty common story today.

Wait till all those states bankrupt out on their pension plans too.
Should be interesting..

originally posted by: network dude
what economic indicators point to a recession?

Literally all of them point to a bubble bursting in the next couple years. If that ends up being the sub prime auto bubble, it's going to hit us much, much harder than the housing bubble did.

a reply to: network dude

There are several I can think of off hand:
the yield curve on government bonds
the slowing housing markets especially in places that have always been hot.
Trade wars
what really scares me if the pension implosion that will soon happen. (at least in Illinois)
consumer debt at an all time high
health care costs out of reach for those that have insurance.

Risks I see. It is anyone's guess though how much any of these bursting and what kind of systematic risk is associated. I don't think any as bad as housing was in 2007/08 but who knows...

Subprime Autos: I don't think this will be that bad... people just get their car repo'd.

Student Loan Bubble: This could be a big one as too many young people have extreme amounts of student debt they will never be able to payoff. Govt would need to step in to forgive the loans but they should require some form of service or training in exchange.

Pension Bubbles: This is the one that worries the most. It could actually spread to housing more so than the other two above. Property tax bills could go through the roof. Once that occurs, it starts to affecting housing prices/values. Combine this with higher interest rates all around making getting mortgages more expensive, it could be another knock out punch.

I made it through two recessions as a working adult. 2001 when dot com burst and 2008 with housing. The biggest lesson I learned is not living beyond your means. The party always ends and living a lifestyle substantially less than your income sets you up so you don't have to worry when things slow down.

a reply to: JAGStorm

#1 don't be afraid to move if you lose your job.

This.

I read someplace that most Americans live and die within 80 miles of where they were born. Some go away for a time, but always return. This is understandable - family, friends, familiar surroundings, etc.

But when it comes to your quality of life, Americans should not be so provincial. I go back to the town where I graduated high school and still see the same losers hanging around for no reason other than they are afraid to leave their bubble of security.

Try something new. You might like it.

I was gonna do a thread on this, but, I was reading that business debt is massive and an increase in interest rates could be devastating...along 2008 results.

www.forbes.com...


It will be interesting because nobody went to jail,,,,nothing changed.
www.independent.co.uk...

a reply to: JasonBillung


Ive heard the same thing about people never leaving their birthplace.
I have an different theory though.
Those losers would still be losers if they moved.

a reply to: Bluntone22



Could be. I think getting out of your "comfort zone" can, in some cases, help folks to grow as individuals.

No mention of the inflation bubble, eh?

How many years was QE pumping free money into our failed fiat currency to keep money flowing?
The backlash on that should be fun.

originally posted by: lordcomac
No mention of the inflation bubble, eh?

How many years was QE pumping free money into our failed fiat currency to keep money flowing?
The backlash on that should be fun.

That term "fiat currency" seems popular. Want to go back to using sea shells, rocks or metal?

Just trading one "fiat" for another.

Money is just a way to keep track of labor. People have been stealing labor from others since the dawn of time. Get used to it, we will soon never see a paper dollar again. won't be too soon for me. I only carry cash to tip servers at restaurants so it is off the books.

ETA: Oh, and to buy all the crack and drugs I use every day.

Oh, we are already starting to feel the recession in Michigan, however, it's more of a housing bubble that is about to pop than anything else.

Developers are destroying the market, bit by bit, as effectively as possible and all in the name of greed...... So during our upcoming market crash, do everyone a favor: if you know a landlord or property developer, tell them politely to go screw themselves.

No homes are being built for under 200k+. No, the current fad is to buy up affordable property and transform it into over-regulated apartments or Condos (apartments that you buy for more than the cost of a house, yet easier to finance). Nearly every home that is priced under 150k is being bought by developers and flipped (usually not even remodeled) for over 200k, which drives the market up artificially. In fact, they are buying and flipping so many, nobody can afford them...... So they just sit there with a hefty price tag on them. Other properties that don't get flipped, get rented; now, there are people paying 1000+ per month for a rental (that the landlord doesn't normally care about and lets rot until it's no longer livable, at which point they sell for artificially inflated prices based on all the "hard work" they did to turn it into a rental property.)

Don't even get me started on the affordable land that is getting bought up to have Subdivisions built at 850k per home (that again, sit vacant for months, if not years.)

Next, we have mortgage companies that see this about to happen, so they are being aggressively smart - they know that a home can be saved by filing a chapter 13 Bankruptcy......... They also know that you must be able to AFFORD the bankruptcy in order to pay off the arrears. Now, mortgage companies are letting people go 8-12 months (often times more) delinquent on their mortgages before proceeding with foreclosure - this is almost a guarantee that the homeowner can not afford to pay back what's owed; then BOOM - home gets auctioned, bank writes off default amount on the loan, gets reimbursed through tax deductions as an S-Corp, and they don't lose a penny......... Especially if the bank buys the home back, in which case not only do they write it off as a loss, but they also resell the home and make even more money off of it!

So yes, BIG recession is about to hit, I'm guessing by Spring (You can take that to the bank, no pun intended). Housing market dries up, investors lose tons of money, tons of people lose homes, loss of income follows (if they have to move away from work, also hard to work 40 hours a week living in a van down by the river), market crashes, interest rates skyrocket, nobody can afford anything...... It's going to be great.

I chose to close on a home at the perfect time! LOL

a reply to: dothedew

Jeezus, that sounds like the script to the movie Big Short. They said that nothing changed. Gonna be a hoot man! Except this time they cant lower interest rates. What now?

a reply to: JAGStorm

We All have to Become Recession Proof no matter where We All Call Home . If Things get to Overwhelming , then Migration just Might be the Right Choice for some People , others Are Prepared for It .

a reply to: lakenheath24

Now, we're just going to have to invest in good quality RV's. Be better to live in a FourWinds down by the river than a conversion van...

I haven't done the research on this but was in Oregon during the last recession. Because of the jobs that were hardest hit and it's reliance on income tax from those industries it was hit really hard by the recession.

It's not the reserves we need to be worried about but what industries are the biggest employers of each state and which industries were hit hardest by the last recession that will tell you which states are unprepared.

Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, New Hampshire and Tennessee either don't have income tax or in the case of new hampshire and Tenessee don't rely on pure wages to tax. Those states will be the least effected in my opinion. (that's where I didn't do the research) how well did those states weather the last recession?

originally posted by: dothedew
a reply to: lakenheath24

Now, we're just going to have to invest in good quality RV's. Be better to live in a FourWinds down by the river than a conversion van...

In the town I own property in, you can't live in an RV legally! that's an hour out of town, too. Middle of nowhere, on a big ass plot of land.

The bankers have made it near impossible to get out of paying ridiculous rent prices.

a reply to: lordcomac

I totally forgot to include inflation, but yes, that is also an indicator.

Speaking of which. I was at my local grocery store. They had an end cap with toilet paper. It was four rolls, except these were the smallest (thinnest) four rolls i've ever seen in my life. We are talking maybe 3 uses per roll. It was so small it was humorous.
I thought to myself, wow even toilet paper is being inflated now. What a waste of cardboard to hold that little amount of toilet paper.

a reply to: amazing

Florida did terrible in the last recession due to the housing bubble.