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User Info Don't Fear The Recession in forum [Market-Ticker]
Winesorbet
Posts: 504
Incept: 2010-08-23

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PMI is claiming prices have peaked and business is stalling. Get ready for QE
Tickerguy
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A True American Patriot!
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Remove crack pipe from mouth @Winesorbet.

 

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No violence required.

Latviski
Posts: 141
Incept: 2008-02-22

Colorado
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Obviously organic, sustainable growth in business would have been the preferred path vs a recession, though at this point I agree / burn the forest and the dead wood goes first . The insanity I see in my field (dentistry) is peaking for sure. Offices desperate for help/ employees are paying 50-60% more in salary than a year ago. Thats a broken business model, as our number one expense is employee salaries. 10% can upset a bottom line and 20% erase profits especially if that practice is PPO intensive.
This whole act will end poorly and quickly when it really starts to break to the downside . Bring it on bc Im ready to buy up those troubled assets and laid off employees!
Winesorbet
Posts: 504
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@TGsmiley
Smacktle
Posts: 7124
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I think with this recession, you better be prepared with some food stocks. This aint going to be no gentle downturn. People are going to have to live without a lot of things they are used to now. There is going to be some epic whining going on. Most of the people in this country are spoiled brats.

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Tappedout
Posts: 103
Incept: 2020-09-21

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I respect your optimism. You seem to believe we will have a severe recession from which we will recover.

But this is not the 70's. As you have pointed out many times, we don't make things anymore. The manufacturing jobs that provided a solid income and security for a prosperous and upwardly mobile Middle Class that we saw as kids in Detroit no longer exist on anywhere near the same scale.

What we will live through is not a recession and recovery. It will be a drastic and painful transition, the end point of which is currently unknowable. If we recover, you are 100% correct about cash being king. There will be literal fire sales on just about everything. The biggest decisions will be when to catch the falling knives, and which unbelievable deal is the best deal. IF we recover....IF assets are not stripped/confiscated/stolen...

I read where the SCOTUS changed their normal pattern of not releasing decisions on Friday, and plan to release one tomorrow. I don't know if that's true or not. But if they rule as the draft indicated, we will begin to see the real begging of the transition Friday night and through the weekend.

The country has not been this divided in our lifetimes, and the divisions are on many fronts.

And the leadership of the country is akin to "Let them eat cake." Only these days, it's designer ice cream. We may very well see a recession, leading to depression, leading to revolution.
Tickerguy
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@Tappedout - If you think we will not recover, or the existing government will collapse, then everything other than guns is worthless and the odds of you being dead are very high.

Quote:
What we will live through is not a recession and recovery. It will be a drastic and painful transition, the end point of which is currently unknowable. If we recover, you are 100% correct about cash being king. There will be literal fire sales on just about everything. The biggest decisions will be when to catch the falling knives, and which unbelievable deal is the best deal. IF we recover....IF assets are not stripped/confiscated/stolen...

Again, if there is an all-on collapse of the currency then the government is finished and everyone in it today is deposed at best and very likely dead. That's what history tells you. Hyperinflations, when they happen, basically NEVER leave the existing ruling class in power. None of them survive it in office, and most of them don't survive it physically, nor do their families. They're killed mercilessly by either the people or the new government that comes in.

The people in power currently know this, by the way.

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Greenacr
Posts: 533
Incept: 2016-03-15

Northern Ohio
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A severe recession/depression is different from an all on collapse of the currency. This country has survived multiple recessions/depressions and we will survive this one as well.

Personally, I feel it needs to be at least a 70's style recession so that the Snowflakes of this world begin to realize that prosperity is not a right and that everything is not Cotton Candy and Unicorns.

From where I stand in North Central Ohio and in my frequent travels to points east of the Mississippi, the recession has already begun and the snowball is just starting down the hill.
Striped-pad
Posts: 136
Incept: 2009-03-15
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striped-pad's business cycle hypothesis:

A (good) business investment generally involves a big spend over a short period (months) followed by a much more moderate increased production which only pays for the investment over a much longer period (years).

If investments were evenly distributed in time, you'd get a gradually increasing GDP as the investments increased productivity. (The evenly-distributed investment spending would just push the curve higher, but not affect its shape). But if investments by different firms are synchronised (either because there is a new technology which lots of firms can now exploit, or simply because other investments have increased the demand for services and new capital goods), you get a big increase in GDP during the investment period, followed by a big drop (although to a level still above the starting point) for the much longer payback period.

This drop-off following the investment period is a recession, but it's a good one - a period in which the investment pays off. That's my business cycle hypothesis. What do you reckon?

Trying to prevent a recession like this with monetary or fiscal policy only encourages investments which aren't capable of paying for themselves, and which burden the rest of the economy. It increases GDP in the short term, but it's destructive in the longer run.
Shadowmask
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If you want to lower stress, stop masturbating to fear porn.
Wayiwalk
Posts: 459
Incept: 2016-11-09

New Yersey
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I'm planning for the worst and hoping for the best.

Severe regional economic hardships putting the US in a recession that would be called a depression in a more honest degree of reporting.

Karl's projection of the medical spending breaking the economy was before pandemic inspired gov't spending. We are just know reading about corporate layoffs, more systemic layoffs will continue to erode tax receipts while increasing gov't welfare type of spending....a lot more pain to come.

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The Lockdowns Will Continue Until the Morale Improves!

I keep thinking, "it can't get any worse" and then it does!
Tappedout
Posts: 103
Incept: 2020-09-21

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"If you think we will not recover, or the existing government will collapse, then everything other than guns is worthless and the odds of you being dead are very high."

Agree 100%. Fungible commodities ultimately would require armed protection.

I don't think we won't recover eventually, but I do think that this will not be a recession anything like the 70s or even the depression our Grandparents lived through.

Revolution and coup are on the table. Not inevitable, but possible.

My probability of being dead some day is 1. I'm as ready as I can be.
Zappafan
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Atlanta
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I am going to confess this recession has me very worried.

Personally, I am somewhat prepared, mostly due to this forum and being by nature risk-averse. I started de-risking all my IRAs/401ks earlier in the year (moving funds to treasury/money market) and have a lot of cash stockpiled. Probably one year of emergency funds in case of no income from wife or me. One house paid off, just bought a 2nd property that can be used as either rental income or sold if need be.

I may be tapping some IRAs early for educational funds, or worst case, to live off. Better to pay the penalty and get the cash vs. starve. It is somewhat of a race against time as I have 4 years to go before I can take normal withdrawals on IRAs/401ks.

The skyrocketing fuel and food prices are not survivable for many, IMO. I fear crime and getting robbed, plus the civil unrest that will likely hit us. The middle class are going to get squeezed to the point where they may have nothing to lose by shooting the current governmental clowns.

(Hey, I just found a silver lining!)

It is the clowns that worry me the most. I have never seen such rank incompetence or outright evil in our government in my 55 years on this planet. The first thing that needs to change is the morons in DC. They all need to go, ASAP. Immediate relief is possible if new politicians come in and admit that the proxy war in Ukraine was a huge mistake. Losses need to be cut - no more weapons sent to that idiot Zelensky, just sue for peace and be done with it. Throw Zelensky under a large bus with extra spikes in the tires - no more money unless he reaches a settlement with Russia, likely ceding large parts of the country. He also needs to be removed and replaced with a realist who will negotiate on good faith terms with Putin. I would hazard to say that the chances of this with the current administration and Congress are zero. It will take some sort of apocalyptic event, like mass starvation and death in Europe due to the energy crisis.

@Winesorbet - the Fed is out of road to kick the can. They have to force a recession to get the demand down to match the supply. 20 years of bad policy have come home to roost, it isn't all their fault so much as that gawdawful, corrupt clown-fest in DC.

I suppose the good news is, as bad as things are in the US, they are worse in Europe, Latin America and Japan. Although Japan may hold together better due to their culture and eastern emphasis on group harmony.




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We're Sargeant Ponzi's lonely hearts club band
We hope you have enjoyed the pump
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Frat
Posts: 10901
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NKY
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Karl wrote..
The people in power currently know this, by the way.


Great. So when can we get started? smiley

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We're fucked. There will be no happy ending here; there is no going back to 'normal.'. There are only bad outcomes and worse outcomes. And we don't get to choose those, either.
Tickerguy
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@Tappedout -
Quote:
Revolution and coup are on the table. Not inevitable, but possible.

Possible, but you can neither plan or equip for that, if it comes. Expanding effort or funds on that is stupid; whatever you think you can do it will be wrong and worthless. Post-hoc stories of someone else are worthless too because survivor bias -- they're the 1 in 100 -- is entirely too personal and since it cannot be generalized you're even MORE stupid to follow THEIR path for YOUR circumstance, which isn't and won't be theirs.

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Civil Society requires 99%+ consent.
Stop consenting and it is forced to stop. Always.
No violence required.
Disgusted
Posts: 337
Incept: 2021-07-20

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"The people in power currently know this by the way". You bet the fucktards know this. That's why they have plan B in case forcing a recession by jacking interest rates doesn't save the dollar from total hyper-inflationary destruction. It's called nuclear war with Russia. If they are going to die, the fucking maniacs will try to take everyone else with them.
Tickerguy
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Well @Disgusted I have a couple of bottles of very fine booze for that occasion, and will be certain to guzzle at least one of them before the flash.

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Civil Society requires 99%+ consent.
Stop consenting and it is forced to stop. Always.
No violence required.
Zappafan
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I agree that the 1% tail risk scenarios aren't plannable for.

If it all goes to Hell like Sri Lanka, or Ecuador right now, your survival will be determined by random chance. Or fate, if you like. Unless you have already bugged out and have 3-4 years of provisions and a defensible perimeter.

The next two years may be the worst. For a historical analog, look at Great Britain in the post-war 1940's. Remember, the pound was once the global reserve currency, and GB survived losing that. Rationing may become a thing. Good news is there are lots of things that can be banned to save energy for more productive use - cruises, non-essential air travel. I would guess that 2024 will be a political earthquake the likes of which none of us have probably witnessed, even those in their golden years.

For those that struggle with fear, I recommend meditation and prayer. These have been helping me:

Do not fear, for I am with you
Do not be afraid, for I am your God
I will strengthen you, I will also help you,
I will also uphold you with My righteous right hand.


Isaiah 41:10

If you are not particularly religious, this is the Bene Gesserit Litany against Fear, from the novel Dune:

I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past, I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain.

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We're Sargeant Ponzi's lonely hearts club band
We hope you have enjoyed the pump
Sargeant Ponzi's lonely hearts club band
Don't think you will enjoy the dump!

Erroldo
Posts: 596
Incept: 2013-09-12

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2 mortgages left of 2 houses less then 1/4 mil total. Worse case I just mail the check. But no, that 250k recession buying asset money I am giving up.
Technically just need to find food, energy and property taxes.
Can just about fund those with my BMW hobby as a worse case I loose my high dollar job. My only debt is the 2 morts. My newest vehicle is a 2013 BMW X3. In fact a car is over $3k, i paid too much:).
So, while some of my 201k retirement fund will drop, let the recession bleed of the excess.
Frat
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NKY
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If anything less than glowing fireballs come on the horizon, and you don't have your lists together... I don't know what to tell you. You're behind on your preps. The people who facilitated this mess need to feel the love. You very likely know who they are in your neighborhood; their virtue signaling of the current thing almost always carries over to their yard, if not social media.

If the lights go out for more than a few days - which is a lot more likely than violent revolution - have a plan and have some fun. Or, some payback, if nothing else.

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We're fucked. There will be no happy ending here; there is no going back to 'normal.'. There are only bad outcomes and worse outcomes. And we don't get to choose those, either.
Smacktle
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Did @Shadowmask say fear porn? Some of the best right here and it's all true:


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Invisiblesun
Posts: 548
Incept: 2020-04-08

Maryland
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Recessions, even deep ones, used to be normal. Then they got hyper-politicized. Consider the 2008-2012 recession - aka mortgage finance collapse and Obama malaise. The so called worse since the Great Depression. I never missed a day of work. Neither did my wife. It seemed everyone who wanted a job had one.

Now I understand the leisure / luxury industries got slammed. Suddenly a lot of people who thought they were rich became poor and they had to unload their boats and RVs and extra homes.

But that economy all recovered and more. Now it is going down again. The economic cycle is what it is.

So I don't fear recessions. I do worry that the response to the recession will be further destruction of savings and of economic freedom. It is the risk that the Commies will create a depression out of recession that sits in the back of my mind.
Mannfm11
Posts: 8243
Incept: 2009-02-28

DFW, Tx
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The closest I can recall was 73-75. Even then, there were a couple of cycles to work up to that. We are coming off zero, which means there wasn't a cap rate on risk free and a negative interest rate. In the meantime insane government is way in front of the 70's.

There are some differences from the 70's, but the form is the same. Nixon went along with a lot of new spending programs, then the embargo and Watergate threw Congress heavily into the hands of radicals. They had no restraint. But, there was a big recession. This recovery was from an induced disaster, made 100X worse by the government.

Like Carter, this administration is full of relative lefties. The magnitude is off the charts. We see the same type nonsense out of regulations and insane social policy that focuses more on what color you are and a made up emergency. What is coming is price controls and effort to strip energy of needed capital. If we don't have a recession, the effort to artificially control energy prices is going to result in long term shortages and make growth difficult.

Debt is what worries me, along with the totalitarian leaning of government. You might wish you had spent your money, as I put nothing past these bastards. I'm listening to Dan Hanniger of the WSJ say the magic phrase, the left is clueless how a private economy works. They have no clue of anything in a free society, thinking they can rule by decree. We are in a phase, where the entire capital base could be consumed by fictional actions of green energy and electric cars, complete with no electricity. I'm not sure the world can live through such a fiasco. Putting everything into something that quite possibly won't work is a threat to survival of modern man and surely long term damage to prospects.

It isn't by chance we have at the head, someone who participated in the mess created in the early 1970's. He brought in people who are working on fantasy problems, but the mechanism is the same. Government ruled by idiots is going to force the worst solution on everything. We are now dealing with fantasy in sex and finance. We pour a fortune into schools that graduate people who can't do simple math with a pencil, but they are concerned about white evil and if kids were labelled the wrong sex. They are living in delusion. I think they will be in denial about everything.

KD, I think Tappedout has a point. We were waiting for liquidation of housing in 2008. The government slid a lot over to Wall Street and instead we got competitors. I did find out there were deals, but they weren't on the courthouse steps. The point being, when the deals appear, will there be a real recovery?

My guess is you will have to look for the deals in the stock market. Hard assets take management. If we have a real recession, the carnage is going to be massive. 1973-1975 took the Dow from over 1000 to down below 600. I think this one will be worse, if we have a real liquidation, because relative values are twice 1972 and we had already had 6 or 7 years of adjustment, in yields. Government has already fired a lot of bullets this time.

The 1970's had a generational wind behind it, while we have been living on printed money this time for over a decade. Expansion of the monetary base, since 2008 is something like a multiple of 10. Most of it has gone into asset prices.

Real estate has a 2 headed monster, housing and commercial. Housing is in short supply, but a large generation is dying off. I think commercial is so up in the air that it is hard to predict, from retail to office to warehousing. If 5% of people move in with someone else, housing changes.

There has been no effective bond market for years. Rule of thumb is treasuries should yield inflation plus 3%. A real interest rate implodes government finance, even if we assume 2% inflation. We have actually a compound 10% plus rate of inflation for years, most of which has flowed into inflating assets and building capacity overseas.

How long can you support worldwide bubbles? How overbuilt and overexpanded is China, which has had an investment bubble for years. As long as there is a surplus of cash equivalent assets, this will go on. Money can be destroyed though, expecially if it rests on a thin slice of capital.

When the US sneezes, the world catches pneumonia. Economic fortunes have never rested on consumer spending, but on solid capital investment. Capital investment is what feeds profit back to consumers. If it is real capital economy wide, the order maintains itself. But, if it is monetarily financed, that end of finances runs its cycle and we find out who is swimming naked.

This raises the question, if Green energy isn't anything but a substitute investment boom? Even in folly, there may be method behind the madness. They do have a delusion that building arms and blowing them up is good for the economy, when in the end we realize nothing but destruction. Both might have a zero or negative real return.

A US recession will put a cash squeeze on the rest of the world. How long can China continue its madness of building empty space? They treat housing investments like we treat underwear, if it is worn, you don't want it. There are piles of unlived in housing, deteriorating all the same. The influence of the China bubble on worldwide material demand is massive.

How much of this mess is government regulation? Much of the Trump economy revolved around removal of Obama era mistakes, quickly reversed by Biden. We didn't have a recovery under Obama, despite trillion of fictional credit. The influence of oil and gas hid a zero and now Biden has fired many shots at these industries, creating a 2 sided target. The culprit is the desire to force people to embrace less of everything. This doesn't make for much of a recovery.

We have to worry what the fools in DC are going to do next. Also what state and local are doing. I think California is in danger of collapse. They live off inflated tech company gains, in the form of taxes on ESOP gains. You see it and the left is marching the state off the end of the pier. Also, when do we reach the point the USA is no longer viewed a place to store capital? When property rights become more like China, why come?

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The only function of economic forecasting is to make astrology look respectable.---John Kenneth Galbraith
Thomasblair
Posts: 181
Incept: 2009-04-03
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NC
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Karl,

Would a building like that not have CHW accessible via chase? We put taps and spares at each floor's takeoff from the the risers.

CHW can be metered and billed; just need a flowmeter and 2 temp sensors. Then you don't shoulder the risk of a single small chiller being down for service. The building has (or should have) N+1 for design day load and considerably more redundancy the rest of the year.

What kind of chiller did you put in?
Tickerguy
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Yep @Thomasblair, that's exactly what we did at 2Pru. But -- we still had to buy and have said chiller installed. It was a Liebert water-cooled unit for exactly that reason (building fed water, metered and billed to us on use that went up to the roof for final heat rejection.)

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Civil Society requires 99%+ consent.
Stop consenting and it is forced to stop. Always.
No violence required.
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