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Recession 2020 Thread

Rougarou

By Rougarou
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Rougarou

Rougarou 594

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Might as well kick it off.

A few writing prompts and discussion topics to get us started:

What are you doing to prepare?

What are some best practices for those of us who weren't very wealthy in 2008?

What do you think are some good deals and opportunities for buying during an economic downturn this time around? Obviously Real Estate was the kingmaker if you were liquid enough to buy a bunch of cheap houses in 2009, but what about for 2020-2021? 

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ryskey

ryskey 447

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Judging by the number of people dumping stocks and tranforming 401Ks into defensive portfolios, if this is the start of a recession, it will be one in which a lot of people (including a lot who are not very financially savvy) picked the top.  How many times has that happened?  I suppose this could be the first.

I'm leaning towards "the great high-beta, narrow band trading range."  It's arguable that we've already been in it for 18 months.  S&P characterized by huge moves daily and weekly moves but stays between 2,500 and 3,000 for a few more years.  Algos driving volatility but no secular, long-term movement.

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Foosters

Foosters 17,731

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10 minutes ago, Rougarou said:

Am I insane in thinking that the people who do not believe a recession is forthcoming (like this guy) are insane?

The President could be giving a speech under an umbrella in pouring rain, tell his supporters there's not a cloud in the sky, and Trump twitter would spend the next week explaining why you're in the wrong because, technically, at the time he was speaking there was not a cloud in the sky in Billings, MT.

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GRHorn

GRHorn 105

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1 hour ago, Rougarou said:

Am I insane in thinking that the people who do not believe a recession is forthcoming (like this guy) are insane?

Are you referring to me or Joumanna, the attractive female CNBC Europe host?

Did I say that anywhere? No.

She shared some good points that were timely considering the creation of this thread yesterday. Take them for what you will. 

 

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Guest Lobo

Guest Lobo

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20 minutes ago, CO Horn said:

In 2007, GDP rose by 2%, wages grew by 4.5%, and CPI was 2.9%.  At this time we also had an inverted yield curve, so what's the point?

Not all inverted lead to a recession but all recessions are preceded by an inverted.  

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CO Horn

CO Horn 154

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5 minutes ago, Lobo said:

Not all inverted lead to a recession but all recessions are preceded by an inverted.  

I was just saying that things looked pretty good in 2007, you could argue even better than today, yet we had a recession the following year.  

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David Dennison

David Dennison 18,655

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27 minutes ago, GRHorn said:

Are you referring to me or Joumanna, the attractive female CNBC Europe host?

Did I say that anywhere? No.

She shared some good points that were timely considering the creation of this thread yesterday. Take them for what you will. 

 

Do you think a strong economy needs stimulation?

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babysdaddy

babysdaddy 2,718

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Someone wrote a version of this in the other thread but to expound, a technical recession is 2 consecutive quarters of negative year over year gdp growth.  So when are those quarters going to happen?  maybe you get q3 this year but not q4.  Christmas shopping by the consumer (accounts for 70% of GDP) will keep that number up.  Q1 could go negative given consumers sit on their wallets post Christmas but spending usually recovers with tax refunds.  I'd also postulate that a trade deal with China gets done sometime in q4 or q1 2020 in order to feed through the economy to assure no recession prior to election day given that is Trump's sole positive aspect for reelection.  So personally, my opinion is that the earliest we have one is in 2021.  

And a recession is coming, but it doesn't have to be immediate or even soon.  Australia has gone almost 30 years without one.  The inverted yield curve is not the signal it used to be given central bank activities since 2008.  

 

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GRHorn

GRHorn 105

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7 minutes ago, David Dennison said:

Do you think a strong economy needs stimulation?

No. I question if it really needed it, but my best guess is that Powell and Fed are concerned about effects of further tariffs biting down and were trying to get ahead of things.

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Rougarou

Rougarou 594

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4 hours ago, GRHorn said:

Are you referring to me or Joumanna, the attractive female CNBC Europe host?

Did I say that anywhere? No.

She shared some good points that were timely considering the creation of this thread yesterday. Take them for what you will. 

 

Come on, Ted!

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DixonHur

DixonHur 11,200

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Posted
4 hours ago, babysdaddy said:

Someone wrote a version of this in the other thread but to expound, a technical recession is 2 consecutive quarters of negative year over year gdp growth.  So when are those quarters going to happen?  maybe you get q3 this year but not q4.  Christmas shopping by the consumer (accounts for 70% of GDP) will keep that number up.  Q1 could go negative given consumers sit on their wallets post Christmas but spending usually recovers with tax refunds.  I'd also postulate that a trade deal with China gets done sometime in q4 or q1 2020 in order to feed through the economy to assure no recession prior to election day given that is Trump's sole positive aspect for reelection.  So personally, my opinion is that the earliest we have one is in 2021.  

And a recession is coming, but it doesn't have to be immediate or even soon.  Australia has gone almost 30 years without one.  The inverted yield curve is not the signal it used to be given central bank activities since 2008.  

 

Average time between yield curve inversion and recession is 15 months.  Buckle up.

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Spankytoes

Spankytoes 1,736

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21 hours ago, CO Horn said:

I was just saying that things looked pretty good in 2007, you could argue even better than today, yet we had a recession the following year.  

Do we have a bubble that I'm not aware of? We don't have a housing crisis/bailout to contend with this time. 

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atomheartbevo

atomheartbevo 89,416

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On 8/22/2019 at 9:28 AM, Spankytoes said:

Do we have a bubble that I'm not aware of? We don't have a housing crisis/bailout to contend with this time. 

It may not be the same as the 2000s, but throw out a few major rounds of layoffs, and a whole lot of people are going to be selling their houses in Austin.

It still blows my mind how many people are basically living paycheck-to-paycheck.    I get it for poor people who are treading water, but not people who have homes that are hanging around their necks if they get laid off for even just a few months.  I've got a friend at SpiceWorks who has been sweating bullets and doing every single interview he can find..  As far as he knows, he's safe, but when those layoffs were announced, he flipped the fuck out.

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Rougarou

Rougarou 594

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14 hours ago, atomheartbevo said:

It may not be the same as the 2000s, but throw out a few major rounds of layoffs, and a whole lot of people are going to be selling their houses in Austin.

It still blows my mind how many people are basically living paycheck-to-paycheck.    I get it for poor people who are treading water, but not people who have homes that are hanging around their necks if they get laid off for even just a few months.  I've got a friend at SpiceWorks who has been sweating bullets and doing every single interview he can find..  As far as he knows, he's safe, but when those layoffs were announced, he flipped the fuck out.

Yea that’s a crappy company too.

one of the reasons I live in a house below my means is because I’m scared to death (no mack brown) of being in a position where I’m paycheck to paycheck and a sudden lay off gives me a heart attack. I pay less in mortgage than most college kids pay in campus rent with roommates and it’s a comforting feeling. To each their own though.

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Fudge Nuggets

Fudge Nuggets 19,150

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20 hours ago, Rougarou said:

How does this looming recession affect new IPO's or planned IPO's for 2020 and beyond?

Until the bubble bursts you will see a big increase in IPO’s as insiders of private companies want to get out before it’s too late.  A spike in IPOs is usually a sign of an impending recession. 

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Rougarou

Rougarou 594

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2 minutes ago, Fudge Nuggets said:

Until the bubble bursts you will see a big increase in IPO’s as insiders of private companies want to get out before it’s too late.  A spike in IPOs is usually a sign of an impending recession. 

Interesting. I guess this recession is going to impact my retirement plan

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David Dennison

David Dennison 18,655

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1 hour ago, Rougarou said:

Bump.

I don’t think the recession is going to happen, as scare mongered when this thread began. Heck doesn’t even look like there will be a pull back. Roaring ‘20’s 2.0? Sign me up!

There's going to be a recession. Everyone knows that. Will it be in 2020? 

Maybe. Maybe not. 

The economy is as meh as it's been since 2009.

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Rougarou

Rougarou 594

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3 hours ago, David Dennison said:

There's going to be a recession. Everyone knows that. Will it be in 2020? 

Maybe. Maybe not. 

The economy is as meh as it's been since 2009.

That’s just politics. Maybe, maybe not. Yes but no. You are the master of the vague, talking out of both sides of your mouth. Are you a football coach IRL? 

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