Global Recession?

Unemployement rate: 3.5%
Jobs added: 528k vs 250k expected. jobs lost in pandemic are fully recovered.
wages: up 5.2% vs 9% inflation rate

Employment will be the key indicator going forward to see where inflation goes. As long as people are employed, they will be able to stomach the price increases and demand for things like travel. Pushing prices potentially higher. Which is why I don't see inflation cooling down just yet. Expect Fed to raise more and interest rates to go up.
 
Europe will have a Lehman moment of energy crisis similar to our 2008 financial crisis any day now. Ruskies is taking a page from our playbook and apply it where it hurt most in Europe, western countries. It will undoubtedly spread abroad and U.S will be the last man standing until further demand destruction taking ahold with the tightenning. Prepare your boats.
 
sleepy5136 said:
Unemployement rate: 3.5%
Jobs added: 528k vs 250k expected. jobs lost in pandemic are fully recovered.
wages: up 5.2% vs 9% inflation rate

Employment will be the key indicator going forward to see where inflation goes. As long as people are employed, they will be able to stomach the price increases and demand for things like travel. Pushing prices potentially higher. Which is why I don't see inflation cooling down just yet. Expect Fed to raise more and interest rates to go up.
Click to expand...

The headline employment numbers are coincident (current trend defining) economic data and tends to be a lagging indicator of the health of the economy.  Leading indicators tend to point better to where we'll be in the future.  There are additional economic measurements that can add color to the jobs picture  This explains it better than I can:  https://youtu.be/rMDt45ITv2w  TLDW high probability of economy wide job losses in 2023.

Somewhat related and interesting is this same content creators take on the current housing market: https://youtu.be/vLnX7GsoVDE

TLDW 2005 housing bubble tended to be concentrated in AZ, NV, CA, and FL.  Today's home price growth is more distributed across the states.  Today's national home price growth is higher than in the peak of the last bubble, but no state level home price growth today is exceeding the highest from the prior bubble.  Months' supply of new home inventory (a leading indicator) has risen dramatically (in the 10s), close to prior peak (12).  Pace of new homes sales today is down 50% vs PY.  Prior bubble was down 70% at max.  Today's Mortgage rates are up 2.7% vs PY.  In 2006, mortgage rates jumped 1.6% vs PY.  M2 growth (a measurement of liquidity) was excessive in 2020 and 2021 (likely the cause of the many broad based financial bubbles we're seeing today).  M2 growth is falling sharply today.  M2 growth was more controlled in the prior bubble and only briefly went negative.  Prior bubble's debt levels were concentrated in home loans.  Today's are in auto and student loans.  There's are many similarities and differences between today's bubble(s) and the 2005-2008 bubble.  The opinion is that it's probable we'll see a significant decline in housing prices, but it won't likely cause a global banking crisis like the prior one.
 
someguy said:
sleepy5136 said:
Unemployement rate: 3.5%
Jobs added: 528k vs 250k expected. jobs lost in pandemic are fully recovered.
wages: up 5.2% vs 9% inflation rate

Employment will be the key indicator going forward to see where inflation goes. As long as people are employed, they will be able to stomach the price increases and demand for things like travel. Pushing prices potentially higher. Which is why I don't see inflation cooling down just yet. Expect Fed to raise more and interest rates to go up.
Click to expand...

The headline employment numbers are coincident (current trend defining) economic data and tends to be a lagging indicator of the health of the economy.  Leading indicators tend to point better to where we'll be in the future.  There are additional economic measurements that can add color to the jobs picture  This explains it better than I can:  https://youtu.be/rMDt45ITv2w  TLDW high probability of economy wide job losses in 2023.

Somewhat related and interesting is this same content creators take on the current housing market: https://youtu.be/vLnX7GsoVDE

TLDW 2005 housing bubble tended to be concentrated in AZ, NV, CA, and FL.  Today's home price growth is more distributed across the states.  Today's national home price growth is higher than in the peak of the last bubble, but no state level home price growth today is exceeding the highest from the prior bubble.  Months' supply of new home inventory (a leading indicator) has risen dramatically (in the 10s), close to prior peak (12).  Pace of new homes sales today is down 50% vs PY.  Prior bubble was down 70% at max.  Today's Mortgage rates are up 2.7% vs PY.  In 2006, mortgage rates jumped 1.6% vs PY.  M2 growth (a measurement of liquidity) was excessive in 2020 and 2021 (likely the cause of the many broad based financial bubbles we're seeing today).  M2 growth is falling sharply today.  M2 growth was more controlled in the prior bubble and only briefly went negative.  Prior bubble's debt levels were concentrated in home loans.  Today's are in auto and student loans.  There's are many similarities and differences between today's bubble(s) and the 2005-2008 bubble.  The opinion is that it's probable we'll see a significant decline in housing prices, but it won't likely cause a global banking crisis like the prior one.
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So as Jerome Powell says a "soft" landing? hahah
 
Heard on the news today about LA restaurants wanting the outdoor dining permits to be extended.

Prior to Covid, they were doing $200k/mo, now... with outdoor dining... they are doing $800k-$1m/mo.

Food prices (both dining and grocery) are high.

Cars are still selling for above MSRP.

And while homes are way overpriced... the people who bought them got the lowest mortgage rates ever... so there won't be a panic sell off like the previous bubble.

Yes... things are "slowing" but how much will they slow without a black swan event? Covid was supposed to destroy the economy (or the lockdowns were) but the Dow is still above 30k, even BTC is still over 3x its low in 2020... and there is still a war going on... it's just crazy.

Time to cue the Megaflood (and Sharknado)! :)
 
It is K shaped...

irvinehomeowner said:
Heard on the news today about LA restaurants wanting the outdoor dining permits to be extended.

Prior to Covid, they were doing $200k/mo, now... with outdoor dining... they are doing $800k-$1m/mo.

Food prices (both dining and grocery) are high.

Cars are still selling for above MSRP.

And while homes are way overpriced... the people who bought them got the lowest mortgage rates ever... so there won't be a panic sell off like the previous bubble.

Yes... things are "slowing" but how much will they slow without a black swan event? Covid was supposed to destroy the economy (or the lockdowns were) but the Dow is still above 30k, even BTC is still over 3x its low in 2020... and there is still a war going on... it's just crazy.

Time to cue the Megaflood (and Sharknado)! :)
Click to expand...
 
sleepy5136 said:
Unemployement rate: 3.5%
Jobs added: 528k vs 250k expected. jobs lost in pandemic are fully recovered.
wages: up 5.2% vs 9% inflation rate

Employment will be the key indicator going forward to see where inflation goes. As long as people are employed, they will be able to stomach the price increases and demand for things like travel. Pushing prices potentially higher. Which is why I don't see inflation cooling down just yet. Expect Fed to raise more and interest rates to go up.
Click to expand...
JPowell openly said we need to see job losses and continue to raise rates to slow inflation. Also said that the housing market needs a huge correction. Buckle up folks!
 
With the way inflation is going, i expect Dow to drop at least another 15-20%. Honestly, I want it to drop another 30%. I already parked the proceeds(from selling my Irvine home 2 months ago) in a brokerage account. Ready to buy buy buy some S&P500 ETF. The hardest thing is to time the market.
 
Danimal said:
With the way inflation is going, i expect Dow to drop at least another 15-20%. Honestly, I want it to drop another 30%. I already parked the proceeds(from selling my Irvine home 2 months ago) in a brokerage account. Ready to buy buy buy some S&P500 ETF. The hardest thing is to time the market.
Click to expand...

If the 52 week doesn't hold, I'm looking at 2900-3400 on the sp.

If everyone didn't pile into tesla and appl, the sp500 would have already broke that low imo
 
Danimal said:
With the way inflation is going, i expect Dow to drop at least another 15-20%. Honestly, I want it to drop another 30%. I already parked the proceeds(from selling my Irvine home 2 months ago) in a brokerage account. Ready to buy buy buy some S&P500 ETF. The hardest thing is to time the market.
Click to expand...

I, too, don't mind the stock market dropping. I need to use the proceeds from selling my Eastvale and Lake Elsinore homes to make enough money for the down payment for Cielo.  ;D
 
CalBears96 said:
Danimal said:
With the way inflation is going, i expect Dow to drop at least another 15-20%. Honestly, I want it to drop another 30%. I already parked the proceeds(from selling my Irvine home 2 months ago) in a brokerage account. Ready to buy buy buy some S&P500 ETF. The hardest thing is to time the market.
Click to expand...

I, too, don't mind the stock market dropping. I need to use the proceeds from selling my Eastvale and Lake Elsinore homes to make enough money for the down payment for Cielo.  ;D
Click to expand...

Someone in the neighborhood refinished a china cabinet, kept the buffet, put a base on the upper portion and sold that. It looked awesome so I joined some facebook groups to see how to do that (my daughter has some old furniture their neighbor left them when he moved recently).

The groups are mostly furniture flippers who do that for profit. Some amazing looking furniture comes out of pure (imo) pieces of trash. LOL! Unbelievable the transformations and what they get for them.

But recently lots of these flippers are commenting they can't figure out WHY their stuff gets lots of likes and no offers (use to selling things in a day to a week and now nada). The consensus is people are not spending at all.

I think everyone is worried we'll get 2008 again and afraid they won't have a job.

Ebay is at a 52 week low. Fedex said global shipments down. Post office is raising rates early October which means sellers either eat the increase or raise prices.

Who is dependent on global sales in discretionary market..... nice but mostly unnecessary things? Etsy.

Checked the etsy discussion forums and yup....... slow sales blah blah. I used to sell on etsy but their fees just got to be absolutely ridiculous, so I left. Lots of sellers left and opened up their own biz online. Thru the years slow sales complaints always come up but THIS time I see people saying they have been selling for over 10 years and this week/month have been the absolute worst in that entire time.

Etsy broke it's recent range. If costco reports great earnings and says things are hunkie dorie it could rally bigly, but I say odds are lower from here.

Paypal also broke it's range but I don't know who they work with. Etsy no longer takes paypal. Not sure if ebay does thru managed payments but I'll bet independent online shops like ex etsy sellers do and sales has to be slow for them too, imo.

 
Contrary to all the re-definers? We are in a recession and have been for a little while but it?s going to get worse. Traditionally recessions are never officially declared untill months after they end.  Always in retrospect.
 
Ready2Downsize said:
CalBears96 said:
Danimal said:
With the way inflation is going, i expect Dow to drop at least another 15-20%. Honestly, I want it to drop another 30%. I already parked the proceeds(from selling my Irvine home 2 months ago) in a brokerage account. Ready to buy buy buy some S&P500 ETF. The hardest thing is to time the market.
Click to expand...

I, too, don't mind the stock market dropping. I need to use the proceeds from selling my Eastvale and Lake Elsinore homes to make enough money for the down payment for Cielo.  ;D
Click to expand...

Someone in the neighborhood refinished a china cabinet, kept the buffet, put a base on the upper portion and sold that. It looked awesome so I joined some facebook groups to see how to do that (my daughter has some old furniture their neighbor left them when he moved recently).

The groups are mostly furniture flippers who do that for profit. Some amazing looking furniture comes out of pure (imo) pieces of trash. LOL! Unbelievable the transformations and what they get for them.

But recently lots of these flippers are commenting they can't figure out WHY their stuff gets lots of likes and no offers (use to selling things in a day to a week and now nada). The consensus is people are not spending at all.

I think everyone is worried we'll get 2008 again and afraid they won't have a job.

Ebay is at a 52 week low. Fedex said global shipments down. Post office is raising rates early October which means sellers either eat the increase or raise prices.

Who is dependent on global sales in discretionary market..... nice but mostly unnecessary things? Etsy.

Checked the etsy discussion forums and yup....... slow sales blah blah. I used to sell on etsy but their fees just got to be absolutely ridiculous, so I left. Lots of sellers left and opened up their own biz online. Thru the years slow sales complaints always come up but THIS time I see people saying they have been selling for over 10 years and this week/month have been the absolute worst in that entire time.

Etsy broke it's recent range. If costco reports great earnings and says things are hunkie dorie it could rally bigly, but I say odds are lower from here.

Paypal also broke it's range but I don't know who they work with. Etsy no longer takes paypal. Not sure if ebay does thru managed payments but I'll bet independent online shops like ex etsy sellers do and sales has to be slow for them too, imo.
Click to expand...
Costco is a stock you always buy at the lows. Costco membership retention rates are crazy high. It will do great during a recession or when the market is doing well. Very underrated stock with great returns.
 
A global recession is 98% certain according to a model with a history of accurate calls.

Everything-Selloff on Wall Street Deepens on 98% Recession Odds

A global recession probability model by Ned Davis Research recently rose above 98%, triggering a ?severe? recession signal. The only other times the model?s been that high was during previous acute downturns, such as in 2020 and 2008-2009, according to the firm?s Alejandra Grindal and Patrick Ayres.

?This indicates that the risk of severe global recession is rising for some time in 2023, which would create more downside risk for global equities,? they wrote in a note.
https://www.bloomberg.com/news/arti...f-on-wall-street-deepens-on-98-recession-odds
 
Tech layoffs by month this year.

tech-layoffs-2022-MAIN-1.jpg
 
Yet the job market is still strong and there's over 1.5 more job openings versus people who are unemployed. The job market is the last leg of the inflation stool that the Fed knows to knock down to kill inflation.
 
usctrojancpa said:
Yet the job market is still strong and there's over 1.5 more job openings versus people who are unemployed. The job market is the last leg of the inflation stool that the Fed knows to knock down to kill inflation.
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Big layoffs up here across engineering jobs that can be off-shored. Elon has vivdly illustrated the massive overstaffing that exists in most tech companies.
 
This is probably the 3rd forum I've seen this infographic bandied around.

What is the normal churn for these companies? I know that Amazon regularly lays people off... especially in Engineering so I wonder how this compares YOY.

The interesting thing is if you are part of any hiring process... it is still very difficult to find good people. The Great Resignation was definitely a real thing as many of our long tenured staff have left and trying to backfill is not easy (esp for those of us who have to make up the work). I know someone who was part of the Musk-off at Twitter and they were actually happy to be let go considering what Elon is doing there and is not worried about finding new work.

Offshoring is not as easy as people think. I've worked with over half a dozen different offshore teams and it's very hit and miss. For lead and time-sensitive work, you really need some of your staff inhouse, onshore, or nearshore.
 
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