Recession 2020

User Forum Topic
Submitted by FlyerInHi on July 25, 2018 - 11:26am

All the signs point to a recession coming.
Since it takes 2 quarters of negative growth before a recession is declared, I'm thinking one will be announced sometimes in 2020. We will see....

Submitted by carlsbadworker on July 25, 2018 - 11:40am.

What signs?

Submitted by FlyerInHi on July 25, 2018 - 11:54am.

$1 trillion annual deficit. Higher rates.
Inflation coming due to trade wars. 25% tariff on imported auto.

Where is Rand Paul and his daddy?

Submitted by The-Shoveler on July 25, 2018 - 2:51pm.

Trade negotiations are not done yet.

IMO The biggest danger is the fed raising rates.

They are expecting a 4% increase in GDP this Friday.
I don't think we have had a 4 handle on the GDP since 1999 (I maybe wrong on that).

People care a lot more about their economy than anything else (most everything else is more on the fringe than some people want to think).

Submitted by spdrun on July 25, 2018 - 3:20pm.

Do you mean 2014?

https://www.forbes.com/sites/samanthasha...

I'm rather happy the Fed is raising rates -- it's already serving as Aspirin for feverish housing markets around here. Hope ARMs start ticking up soon ...

10y bond's back around 3% -- this is entertaining to watch.

Submitted by FlyerInHi on July 25, 2018 - 4:59pm.

My gut feelings is a combination of factors and a black swan event will cause the economy to go to shit real quick.
The confluence of events are definitely not what they teach in business school as good for the economy.

Submitted by FlyerInHi on July 25, 2018 - 5:43pm.

I also have anecdotal evidence that the gig economy, such as Uber, is goosing up the economy by giving people extra income. But once people cut back on going out, Uber drivers will find in harder to make their car payments, cars they splurged on thanks to Uber. We will see....

Submitted by gzz on July 25, 2018 - 8:00pm.

The rate increases give the fed plenty of ammo if the economy starts to cool. What would the local market look like if 30-year rates were 3.25% again?

I don't see a trade war. China and EU will swallow their pride and give Trump a win.

China needs their trade with the USA more than vice versa. We export them a small amount of key goods plus ag stables. China however exports products that are also made elsewhere in Asia, and if it loses market share it may never come back, especially if it loses share to lower cost places like Vietnam.

China's government really does not want mass factory layoffs + large increase in the price of US soy, pork, beef, and grain.

Submitted by FlyerInHi on July 26, 2018 - 12:10pm.

We will see.... but don't think China will blink. Out of adversity, they will accelerate Made in China 2025 and move up the value added chain. China is happy to cede market share to countries such as Vietnam while that sell infrastructure projects in Belt and Road. In fact Chinese companies are moving clothing production to Ethiopia.

Our companies will lose access to the growing Chinese market while Europeans will profit. We forget that the Chinese market is not just as important as our own, more so for luxury brands.

Food commodities are world commodities like oil. The price is set in world makets. It makes no difference that the supply is USA or not.

The Europeans may blink but only because they need NATO. I think they may let the steel tariffs stand and do nothing more. But they may expand business with Iran and China. Not good for the western alliance. Canada is doubling transmountain pipeline capacity to Vancouver for energy export to China.

Submitted by FlyerInHi on July 26, 2018 - 12:16pm.

One thing weird about the US economy that Fox News no longer mentions is our labor participation rate. It's lower than other developed nations, even though we have a younger population. I think we have a huge drug problem and a lot of mentally whack people who can't hold jobs. 1 out of 5 on psychological drugs not counting recreational pot and illegal prescriptions.

It's confounding economists.

Submitted by moneymaker on July 26, 2018 - 12:19pm.

My bet would be recession in 2019! Or it may end up being stagflation.

Submitted by flu on July 26, 2018 - 1:18pm.

What tech recession?

Everything about a piss poor numbers being reported by companies looks to be more internal execution problems....

Why AMD's soaring stock is a more important tell on the tech industry's health than Facebook's plunge

https://www.google.com/amp/s/www.cnbc.co...

Submitted by The-Shoveler on July 26, 2018 - 3:26pm.

Seriously after the news recently about bad tweets and FB posts, I am surprised everyone is not deleting their accounts.

The only reason I would use it is for Biz. and I would keep it strictly biz.

Submitted by flu on July 26, 2018 - 4:10pm.

The-Shoveler wrote:
Seriously after the news recently about bad tweets and FB posts, I am surprised everyone is not deleting their accounts.

The only reason I would use it is for Biz. and I would keep it strictly biz.

that's the only reason why I use Facebook. coupons, raffles, etc

Submitted by Myriad on July 26, 2018 - 6:01pm.

FlyerInHi wrote:
We will see.... but don't think China will blink. Out of adversity, they will accelerate Made in China 2025 and move up the value added chain. China is happy to cede market share to countries such as Vietnam while that sell infrastructure projects in Belt and Road. In fact Chinese companies are moving clothing production to Ethiopia.

Our companies will lose access to the growing Chinese market while Europeans will profit. We forget that the Chinese market is not just as important as our own, more so for luxury brands.

The real issue here is the execution of the trade fight against China and the lack of a strategic plan. Should have united the world against China first.
China is the pivotal challenge for the US at every level for the next 50 years (diplomatically, economically, militarily, geo-politically, etc)
The trade battle and the China 2025 is only a small part of what will be a pseudo Cold War. China is re-aligning Pakistan as an ally while we are re-aligning with India.

We have these stupid rules now like can't say Taipei is in Taiwan when you book a flight. Next thing you know, they'll be trying to cut off Taiwan and Japan economically to force them into China's sphere of influence.

Submitted by FlyerInHi on July 26, 2018 - 10:37pm.

I agree Myriad.
I think India is trying to stay neutral.

I believe China is already the biggest market for Korea and Japan so like it or not they are geographically and economically in China's sphere. Belt and Road is pure genius.

So you think the lack of a plan on the US part means China will the war Trump started?

Submitted by The-Shoveler on July 27, 2018 - 6:55am.

The China Tariffs as well as the EU Tariffs are still very much still in the negotiation phase.

U.S. Senate quietly votes to cut tariffs on hundreds of Chinese goods

https://www.reuters.com/article/us-usa-c...

The EU tariffs are likely to disappear completely on both sides which would be a win for the USA.

Submitted by FlyerInHi on July 27, 2018 - 11:18am.

The-Shoveler wrote:
The China Tariffs as well as the EU Tariffs are still very much still in the negotiation phase.

U.S. Senate quietly votes to cut tariffs on hundreds of Chinese goods

https://www.reuters.com/article/us-usa-c...

The EU tariffs are likely to disappear completely on both sides which would be a win for the USA.

That shows that Trump's rhetoric is all for his base's consumption and that China is winning the trade war.

I actually think that China is happy about the trade war, because they have been shifting production to places such as Vietnam anyway. So, even with tariffs, they will lose some US market share, but they can tell Vietnam "see, we are giving you business. Now let us build your metro systems, high speed rail, airports and seaports. Also, we can upgrade your telecom networks."

Yes, eliminating tariffs with EU would be a win for USA because EU has been resisting for so long. I think the EU may blink on this one because they need USA in NATO.

We may lose with Canada. And I think we lost geopolitically with Mexico since they just elected a leftist president who is more anti US.

Submitted by The-Shoveler on July 27, 2018 - 2:01pm.

It means things are still fluid.

No one would win a real trade war, especially not china in this case.

Submitted by flu on July 27, 2018 - 2:43pm.

The-Shoveler wrote:
It means things are still fluid.

No one would win a real trade war, especially not china in this case.

In the short term, I am hoping export of İntel Xeon server chips to China continues to be prohibited, as it was started during Obama era.

Good news for AMD that owns a Chinese company that manufactures Epyc server chips clones in China, specifically for the Chinese market, and revenue shares on those clones sold.

İf things stay the way they are, $19/share will look like a bargain for AMD share, and $49/share will look like a rip-off for Intel.

Submitted by FlyerInHi on July 27, 2018 - 2:55pm.

The-Shoveler wrote:
It means things are still fluid.

No one would win a real trade war, especially not china in this case.

True. No one would win a trade war.

I meant the trade battle Trump started.

Sorry for us, but if Congress undoes the Trump China tariffs then they won.

Submitted by FlyerInHi on July 27, 2018 - 2:54pm.

flu wrote:

In the short term, I am hoping export of İntel Xeon server chips to China continues to be prohibited, as it was started during Obama era.

Good news for AMD that owns a Chinese company that manufactures Epyc server chips clones in China, specifically for the Chinese market, and revenue shares on those clones sold.

İf things stay the way they are, $19/share will look like a bargain for AMD share, and $49/share will look like a rip-off for Intel.

Haha.

High tech is what China wants to buy but we won’t sell.

So how to close the trade gap? Agricultural products?

Submitted by The-Shoveler on July 27, 2018 - 4:51pm.

We may want those Agricultural products here.

They are already talking wheat shortage.

Submitted by spdrun on July 27, 2018 - 4:53pm.

Good -- less wheat and corn = thinner Americans :-D

Submitted by henrysd on July 28, 2018 - 10:07am.

FlyerInHi wrote:

Haha.

High tech is what China wants to buy but we won’t sell.

So how to close the trade gap? Agricultural products?


U.S. wants China to open their market to high quality and low priced foreign products/services.
Remember less than 200 years ago China was still world No 1 in term of GDP before the opium war, but they refused demand from west to open market. That was why Britain started the opium war and used opium to transfer wealth out of Qing Dynasty.

Submitted by FlyerInHi on July 28, 2018 - 12:39pm.

What are high quality low priced western goods? Name some that together will add up to $300 billion just for US alone

Submitted by henrysd on July 28, 2018 - 4:09pm.

FlyerInHi wrote:
What are high quality low priced western goods? Name some that together will add up to $300 billion just for US alone

As as simple as baby formula, Chinese elites opt to avoid domestic brands and buy overseas products. Just watch those Chinese tourists in U.S., see how much they spend on cosmetics, fashion products etc in U.S. All those products are either much much higher priced or simply not available in China. The cause is Chinese government put too many restriction on foreign products to enter.
Not only U.S. is not happy with Chinese trade protection, EU is not happy either. But unlike Trump, the Europeans are trying to avoid direct confrontation with Beijing. They join China in condemning U.S. trade protection, but quietly refuse Chinese call to form alliance again U.S. on trade.

Submitted by FlyerInHi on July 28, 2018 - 6:58pm.

Ha? I don’t think China has any protection against baby formula. These products are simply more expensive in China because distribution and marketing make them beyond the reach of ordinary Chinese. It’s like European food in USA will never be priced competitive to American food, not because of protectionism but because of cost of importation.

If you read all the complaints again China, it’s not baby formula. To me the complaints about IP theft don’t stand because US companies willingly accept the transfers for market access. So they make the cost benefit calculations before entering the Chinese markets.
Sure, China can change laws to allow wholly owned foreign companies to operate in China without local partners.

Super computers, military hardware, and other high tech, if sold to China would close the trade gap very quickly and create more American jobs. How many tons of baby formula for 1 airplane?

National security is sometimes not compatible with trade and capitalism. Trade makes sense when there are different comparative advantages. China is mass production. USA is high value tech and big industrial food. It just makes economic sense to exchange those products.

Submitted by The-Shoveler on July 29, 2018 - 11:34am.

LOL Tell that to Cisco.

It's actually more about government sponsored and owned industry getting subsidies and Currency Manipulation.

Even Obama recognized the corporate and defense espionage and Currency Manipulation.

Submitted by FlyerInHi on July 30, 2018 - 11:03am.

The-Shoveler wrote:
LOL Tell that to Cisco.

It's actually more about government sponsored and owned industry getting subsidies and Currency Manipulation.

Even Obama recognized the corporate and defense espionage and Currency Manipulation.

I agree... but...

First Cisco -- The chinese were able to reverse engineer and copy our tech. No different than the US copying the British textile industry. it just happens faster now. So, when you have a competitive advantage, you actually want to sell your products, monetize them, and keep innovating. But if you refuse to sell your products for fear of security, then your revenue base is much narrower.

What China does is all within WTO. We need background and objectivity to understand. Back when WTO was formed in 1995, after the fall of the Soviet Union, and Francis Fukuyama's End of History, we (the West) were supremely confident of our business model. China joined in 2001. And remember, we designed WTO.

We thought that an American style business environment was the most efficient and competitive. And we were convinced that government planning only leads to failure.

When China built the Great Firewall, our luminaries (bill Gates, Larry Ellison, Sergey Brin etc.. ) predicted it would crumble and we would dominate. And of course, why not? We were so far ahead.

China, against all economic orthodoxy, took a chance on central planning and developed an alternative economic model that generated amazing growth and wealth.

Other countries that tried currency management (Russia, Iran, Venezuela, Zimbabwe) failed and only created a black market for US Dollars again proving our superiority. China turned out different.

So now that China's economy is basically equal to ours, and they are innovating technologically, we are in panic mode. Because if we weren't panicking, we would just sit back, relax, and watch China fail as we predicted.

So now we want to force China to abandon their Made in China 2025. They will not.

Personally, I believe that we need to spend less time blaming China and more time rethinking our business model and have an industrial policy. In USA, we subsidize big businesses just as much as China but in a haphazard way. Our businesses get $ billions from state and local governments. There is just no national policy to advance sectors such as renewal energy, transportation, etc..

It's less on China and more on us to improve. But of course, the lazy ass deplorables don't see that.

Submitted by FlyerInHi on July 30, 2018 - 12:26pm.

This is this a recent NBC report on a Chinese "theft".
I think there's nothing wrong. The student came to learn and improve on the basic research he learned.
Now, if the Chinese government really planned it all along, years in advance, then their planning is sure brilliant. We should do some planning too.

https://youtu.be/jyxgIIQO7eA

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