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 The-Shoveler on October 8, 2018 - 3:29pm.

IMO Current high speed rail Tech will be obsolete in 15 years.

But something resembling current metro Rail and Freight Rail will be in high demand.

Submitted by spdrun on October 8, 2018 - 4:02pm.

No, it won't be. It's a good way to power 200-300 mph vehicles electrically without worrying about battery maintenance/charging. Rails do a nice job of locating a current pickup precisely and providing an electrical return path.

Self-driving cars won't be able to do that kind of speed with the same level of safety. Hyperloop is fucking awful if you're claustrophobic or prone to motion sickness -- being Spam in a can would be vomit city for me.

But you're right, the tech can evolve. If trains can be driverless, you can have one or two-car "capsules" running and stopping much more frequently than current trains.

Submitted by outtamojo on October 8, 2018 - 4:19pm.

FlyerInHi wrote:
The Chinese debt is in RMB. Can they not just monetize it away?

Question is that we have excess savings in the west. Why are we not investing to building things that improve people's lives? Companies are swimming in cash but they are not investing because the policies to spur demand, which by definition includes ability to pay, aren't there.

Other questions is humanity is better off today than 30 years ago. Why are we not celebrating and participating in initiatives such as Relt and Road to improve lives.

I read Has the West Lost it? Good book. The author wrote a previous book in 2009 and he was right. Since then, China built its whole high speed rail network. They have amazing technology to build bridges and roads.

https://www.amazon.com/Has-West-Lost-Kishore-Mahbubani/dp/0241312868/ref=sr_1_1?ie=UTF8&qid=1539036068&sr=8-1&keywords=has+the+west+lost+it

---> blatant political threadjack- but I am sure you will agree. Has the West lost it? About half our nation aspires only to make abortion illegal and to openly carry guns wherever they go. They dont dream of exploring space, making energy cheaply, none of that. Our biggest worry is that some out-tribe will steal our cookies so we gotta constantly guard them. No I dont thing we've lost it but we are well on our way.

Submitted by spdrun on October 8, 2018 - 4:31pm.

Because hyper-competitiveness and extreme individualism are parts of American culture.

Now, with the monetization, commodification, and MBA'ification of everything, ordinary Americans are afraid of losing what little they got for themselves. So they're willing to push others down to keep what they have.

Guns are a symbol -- even if you have nothing else but a gun, you still retain a sliver of power over others.

Submitted by The-Shoveler on October 8, 2018 - 4:33pm.

" If trains can be driverless, you can have one or two-car "capsules" running and stopping much more frequently than current trains."

That's a good example, I was thinking more along the lines of fully automated vertical takeoff/landing air craft.

Submitted by spdrun on October 8, 2018 - 4:49pm.

Short-distance flight is already pretty inefficient, and that's with aerodynamically clean aircraft. Add the hardware required for VTOL and efficiency will decline further along with safety.

Think about helicopter and V-22 Osprey safety vs 737 or Dash-8 safety.

Submitted by FlyerInHi on October 8, 2018 - 5:22pm.

spdrun wrote:
Because hyper-competitiveness and extreme individualism are parts of American culture.

Now, with the monetization, commodification, and MBA'ification of everything, ordinary Americans are afraid of losing what little they got for themselves. So they're willing to push others down to keep what they have.

Guns are a symbol -- even if you have nothing else but a gun, you still retain a sliver of power over others.

I don’t even think that Americans are competitive in education, production and commerce. Asians are a lot more competitive. Even the uneducated Asian thinks about opening a small business to buy and sell things. That’s why street life is so vibrant in Asia.

American are competitive in a cowboy kinda way. They want their little homesteads which they defend with their guns while riding their chariots (pickup trucks).

American innovation comes from new immigrants who bring new ideas.

A famous Indian economist wrote about the “New Wealth of Nations” thanks to globalization of education. The newly educated populations do aspire to tech advancement, alternative energy, etc..., They are very competitive.

Submitted by The-Shoveler on October 10, 2018 - 6:40am.

IMO one more FED rate hike and it's all over.

Submitted by FlyerInHi on October 10, 2018 - 8:33am.

The-Shoveler wrote:
IMO one more FED rate hike and it's all over.

Higher rates might be necessary to fund our Federal deficit.

Submitted by The-Shoveler on October 10, 2018 - 8:40am.

"Higher rates might be necessary to fund our Federal deficit."

IMO no they are not.

Submitted by spdrun on October 10, 2018 - 8:44am.

Higher rates increase interest on the debt, but they also encourage entities to buy bonds. (i.e. lend). So it's a two-way problem.

Submitted by FlyerInHi on October 10, 2018 - 9:25am.

It’s about selling new bonds at a rate that attracts investors and continue funding the deficit.

The outstanding bonds will trade at a discount to reflect a higher rate environment.

That’s what conservatives have been warning about regarding deficit spending. Eventually inefficient government spending will crowd out private investments.

Submitted by The-Shoveler on October 10, 2018 - 9:52am.

If the FED announced they were going to lower rates next meeting there would be a bull run on bonds LOL.

It is just the opposite, if the market thinks the rates will be lower in the future they buy more, if higher they buy less.

Submitted by FlyerInHi on October 10, 2018 - 10:07am.

The Fed doesn’t make sudden moves.
Expectations are already priced in. Remember the theory of efficient markets.

Submitted by The-Shoveler on October 10, 2018 - 10:17am.

Whatever LOL,

Anyway IMO if the FED raised Rates one more time I think we will have yet another FED induced recession.

Submitted by FlyerInHi on October 10, 2018 - 11:29am.

outtamojo wrote:

Has the West lost it? About half our nation aspires only to make abortion illegal and to openly carry guns wherever they go. They dont dream of exploring space, making energy cheaply, none of that. Our biggest worry is that some out-tribe will steal our cookies so we gotta constantly guard them. No I dont thing we've lost it but we are well on our way.

The author of the book said that the West has not lost it yet. In fact he thanks the 7 pillars of western civilization for making the last 30 years the most successful period in human history. The western led order is what made possible near eradication of extreme poverty. We should be celebrating the success of our Western order.

But there are strong headwinds.

Here’s a good article on China’s BRI. We will lose if we don’t participate or have an alternative.
https://www.forbes.com/sites/greatspecul...

Submitted by FlyerInHi on October 10, 2018 - 3:28pm.

Myriad wrote:
At some point, China will have to deal with all the debt they have created. Currently they are ok, but eventually, the maintenance cost for all the infrastructure they created will have to be supported with something other than sales of land by government and re-issuing debt.
The infrastructure they are paying for in Asia/Africa is unsustainable by those local countries, so China government will have to assume those debts also.
With the combination of debt, interest rates, aging demographics, all of a sudden, China will start to have developed nation budget problems.
The next down cycle will be interesting, especially if investors lose faith in global government debt (like Italy)

Democraphics in China is very interesting.
They are actually allowing more and more immigrants from Africa, including South Africa, Eastern Europe and SE Asia. Except for high skills expats and teachers, not too many immigrants from rich countries want to move to China at this time.

The border towns with Myanmar and Vietnam are booming and China is allowing day labor. In the past, people had to sneak into China to work, but they have opened brand new border stations to make it easy for workers to travel in the morning and leave in the afternoon. Not only that, but border town traders can come in and sell up to 8000 RMB worth of goods, tariffs free, per day. Enterprising Chinese wholesalers buy the products to resell to other parts China using their new internet based models.

Many “left over” Chinese men who can’t find Chinese wives are marrying SE Asian women. I read the dowry for a poor farmer bride is as low as $2500 USD.

Submitted by FlyerInHi on November 27, 2018 - 3:01pm.

So GM lays off 15000. A nice announcement right before the festive season.

Submitted by bibsoconner on November 27, 2018 - 4:04pm.

The Economist is predicting a US Recession for late/end 2019.

Submitted by phaster on November 30, 2018 - 7:19am.

carlsbadworker wrote:
What signs?

www.TinyURL.com/InvestorWarning

Submitted by FlyerInHi on January 21, 2019 - 11:34am.

Mark Zandi says recession 2020

https://youtu.be/HJuizgDmvzU

Submitted by FlyerInHi on March 28, 2019 - 10:30am.

I think we are still on track for recession 2020.

Has growth peaked? Economists see a slowdown. Trump doesn’t.

https://www.washingtonpost.com/business/...

Submitted by The-Shoveler on March 29, 2019 - 9:56am.

Meh, still say most of what is being reported as slow down is more weather related than anything else.

We will see I guess, About as many economists are saying economy is about to take off again and may be running too hot by 2020.

Submitted by FlyerInHi on March 29, 2019 - 7:46pm.

The-Shoveler wrote:
Meh, still say most of what is being reported as slow down is more weather related than anything else.

We will see I guess, About as many economists are saying economy is about to take off again and may be running too hot by 2020.

Ok. I guess you are predicting continued expansion. What are you doing real estate wise?

I recently bought 4 cheap FSBO condos (not in San Diego) because I got inside deals. And I figure that even if we have a recession, I might lose 10%-20% but I'm making the money back from cash flow and the location is good, close to the urban core.

However, predicring right will make you money. No risk, no reward. I'm predicting that we are due for a recession and I'm preparing to buy multi-unit apartments after the next recession is announced. In a recession many investors will need to liquidate.

Let's revisit this thread in a couple years and gauge who was most prescient.

I will link the sell and rent thread here and we shall see.
https://www.piggington.com/sell_and_rent...

Submitted by bubba99 on April 1, 2019 - 2:54pm.

In the early 2000's we saw recession on its way. Piggingtons was a great source for the fundamental economic forces pushing the country toward a recession. The excesses in housing and lending put us on a very unstable footing. The out of sight leveraging of banks and RE investors cemented the natural deline. When the cost of SFR exceeded what the median income could support it was clear that a recession was on the way. Although it took a few years to really take hold, it came and devastated the American economy, along with the rest of the world. This time around it looks different.
The talking heads are saying we are headed for a recession, but the only real indicator of recession is the inverted yield curve, and that is so manipulated by 10 years of artificially low interest rates it may be meaningless. Other economic indicators like employment and GDP at least on the surface point to a solid economic future. I am thinking that we are not ready for a real recession, and that if any we get a mild fear induced stock market sell off. But . . .

Submitted by FlyerInHi on April 3, 2019 - 8:41pm.

This is what Bob Shiller says about the next recession. He equivocates but he’s pretty much saying that we are due for a recession.
https://youtu.be/rUYk2DA8PH8

Submitted by FormerSanDiegan on April 4, 2019 - 5:12pm.

FlyerInHi wrote:
This is what Bob Shiller says about the next recession. He equivocates but he’s pretty much saying that we are due for a recession.
https://youtu.be/rUYk2DA8PH8

Shiller’s views from the preface of a book published in 2012:

"Efforts by governments to solve the underlying problems responsible for the [2008] crisis have still not gotten very far and the 'stress tests' that governments have used to encourage optimism about our financial institutions were of questionable thoroughness," Shiller writes in the preface to his latest book: Finance and the Good Society. "As I write in 2012, we certainly do not believe that [the crisis] is over yet, and the worst may be yet to come."

.

Submitted by FlyerInHi on April 6, 2019 - 8:56pm.

Actions by federal regulators and Republicans in Congress over the past two years have paved the way for banks and other financial companies to issue more than $1 trillion in risky corporate loans, sparking fears that Washington and Wall Street are repeating the mistakes made before the financial crisis.

The moves undercut policies put in place by banking regulators six years ago that aimed to prevent high-risk lending from once again damaging the economy.

Now, regulators and even White House officials are struggling to comprehend the scope and potential dangers of the massive pool of credits, known as leveraged loans, they helped create.

Goldman Sachs, Wells Fargo, JP Morgan Chase, Bank of America and other financial companies have originated these loans to hundreds of cash-strapped companies, many of which could be unable to repay if the economy slows or interest rates rise.

“This means that the next downturn that we have could be more serious and longer-lasting and more difficult to deal with than it would have been if we had constrained these practices,” former Federal Reserve chair Janet L. Yellen said in an interview.

The lending boom was precipitated, in part, by the rush to water down regulations at the start of the Trump administration. That’s when newly minted regulators — many with close ties to the financial industry — sought to strip away post-crisis financial rules and find ways to juice the economy by encouraging more lending.

https://www.washingtonpost.com/business/...

Submitted by FlyerInHi on April 8, 2019 - 5:59pm.

Man, recession news are piling on.
We will see if the predictions are accurate. But at least some people are willing to go out on limb and issue forecasts

Monday, April 8, 2019
High-risk lending caused the Great Recession. Could it happen again?
https://www.washingtonpost.com/podcasts/...

Submitted by The-Shoveler on April 9, 2019 - 6:43am.

IMO you are going out on a limb if you predict there will not be a recession.

Conventional wisdom say it is time (cycles etc..).
You have to be unconventional to say there will not be one IMO.

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