The recession is coming

[fortune11]

Something has to cause the recession.  In my mind, the biggest risk that would cause a recession is the Fed moving up rates than expected and/or 10-year & 30-year bond rates heading over 4%.  That being said, I just don't see that in the near term. I spoke to all my clients about their businesses and how the companies that they are working at are doing, from what I hear things are going well....increasing business/profits, good raises/bonuses, lot of new job opportunities/higher staff turnover, higher stock prices, etc. The new tax bill won't cause a recession and should be more of a tailwind for businesses.

For exactly those reasons a recession might be caused .  How ?

Notice that whenever these things happen  in synchrony - raises , profits , tight labor market , etc - they don't last for a long time -- go back to the 90s , 2000, or 06-7 . 

And business leaders are the last ones to call a recession - they bow in to peer pressure and jump in to expand capacity , raise hiring , or wages at exactly the same time , with the result that when demand softens , everyone is caught w their pants down at the same time.

for a CEO, or mgmt team,  being wrong w the herd is never a bad thing for future job prospects than being wrong individually - hence everyone peaks at the same time.

From my experience dealing w mgmt teams and business owners for decades , NEVER ever rely on them to call a recession.  But they are generally very good at predicting recoveries (and their timing) after a recession. 

The best prospect for a stock  price stability is that there is a short base (people who are short the stock) that are ready and willing to cover when the stock goes down .  when all the shorts have thrown in the towel , it is then you have to be really concerned as to who will provide the bid the way down

I have no absolutely no idea when the next recession will come.  But what is happening now (and say the next 10-12 months) is generally a good precursor to that event . 

 

[irvineresidential]

The US economy did move sideways at one point and it is becoming more difficult for people to buy or afford houses to live in Irvine. The future awaits who will be smart enough to try their luck in buying a house now the Chinese are unable to move their money out of the US as easily as before. Every year the house prices fell more than 6% and the sales are going downhill. A recession is often triggered by the real estate agents and it?s true the Irvine real estate market is pretty stagnant. There are however, many houses and buildings planned to be constructed in the city.

Something has to cause the recession.  In my mind, the biggest risk that would cause a recession is the Fed moving up rates than expected and/or 10-year & 30-year bond rates heading over 4%.  That being said, I just don't see that in the near term. I spoke to all my clients about their businesses and how the companies that they are working at are doing, from what I hear things are going well....increasing business/profits, good raises/bonuses, lot of new job opportunities/higher staff turnover, higher stock prices, etc. The new tax bill won't cause a recession and should be more of a tailwind for businesses.

For exactly those reasons a recession might be caused .  How ?

Notice that whenever these things happen  in synchrony - raises , profits , tight labor market , etc - they don't last for a long time -- go back to the 90s , 2000, or 06-7 . 

And business leaders are the last ones to call a recession - they bow in to peer pressure and jump in to expand capacity , raise hiring , or wages at exactly the same time , with the result that when demand softens , everyone is caught w their pants down at the same time.

for a CEO, or mgmt team,  being wrong w the herd is never a bad thing for future job prospects than being wrong individually - hence everyone peaks at the same time.

From my experience dealing w mgmt teams and business owners for decades , NEVER ever rely on them to call a recession.  But they are generally very good at predicting recoveries (and their timing) after a recession. 

The best prospect for a stock  price stability is that there is a short base (people who are short the stock) that are ready and willing to cover when the stock goes down .  when all the shorts have thrown in the towel , it is then you have to be really concerned as to who will provide the bid the way down

I have no absolutely no idea when the next recession will come.  But what is happening now (and say the next 10-12 months) is generally a good precursor to that event .