Is a Recession coming?

[Bert Kemp]

With the stock market falling on a daily basis is anyone thinking recession :(

[mike stenson]

Of course one is coming. There is always one coming. I do, however, believe we're walking into one due to failing to learn from previous mistakes (as usual).

[Rob Luter]

I think everyone will come to their senses. The fundamentals are too strong for a recession. The boogeyman isn't coming for us.

[Mark Bolton]

The part about this that makes me nervous is that for years now (many) speaking with a lot of the "overseers" in the state, head of commerce, SBA, and so on, has been a resounding conclusion that of everyone they speak to on a daily basis the "warm and fuzzy" is not making it down to those that are working/producing. The boon and growth (which makes sense in the world of outsourcing) is focused on the top but very little of that comfort is making it down into the cracks where the vast majority of truly small business' operate. The Fed concept of "small business" being 500 employees or less is an utter joke. That would leave a massive percentage of the economy needing to be classified as a "micro" business with 10 employees or less.

We are way way way beyond lop sided. And this corona deal will be a clear an concise way for a lot of very smart money folk to make billions more off the backs of the fools who will run out and blow unneeded funds on soup and bleach.

But as always, the sheep are going to keep the system in tact and they will elect another sheep herder with the standard staff and herding dogs to keep the cash flowing in one direction and one direction only.

[Myk Rian]

Do you feel better now?

[Doug Dawson]

Do you feel better now?

The market drop today was triggered by the failure of Putin to toe the line with a proposed stabilization of the awl bidness. So it's somewhat complicated. All it would take is a phone call? Why can't people just learn to love each other. :^)

[Rick Potter]

Tried to hire a contractor, plumber, painter, or laborer lately? Around here they are ALL working.

[Bruce Wrenn]

From one of my commercial trade magazines, residential cabinet sales were down 7% in Nov. 2019 as compared to Nov. 2018. Sounds like more of a correction, than a recession to me. The sugar high from tax cuts are beginning to wear off. Today, saw gas for $1.79 a gallon. which I haven't seen in a long time.

[John Terefenko]

No as soon as this virus calms down I believe you will see 2000 point rise and set yet another record. The market was strong and confident. Is it balanced, no it never was and never will be. But what it will do is swallow some of these small businesses up from bankruptcy. We have not seen bottom yet. This virus will get put in the long list of shots you need to get next year and the pharmaceuticals will make a mint. Next year comes along and version 2 of this virus will show up.

[Doug Dawson]

No as soon as this virus calms down I believe you will see 2000 point rise and set yet another record. The market was strong and confident. Is it balanced, no it never was and never will be. But what it will do is swallow some of these small businesses up from bankruptcy. We have not seen bottom yet. This virus will get put in the long list of shots you need to get next year and the pharmaceuticals will make a mint. Next year comes along and version 2 of this virus will show up.

You gotta roll with the punches. Don't just stand there, do nothing.

[Andrew Hughes]

Tried to hire a contractor, plumber, painter, or laborer lately? Around here they are ALL working.
If you need a Roofer I’m your guy.:)

[Richard Baxter]

I think everyone will come to their senses. The fundamentals are too strong for a recession. The boogeyman isn't coming for us.


What do you mean "The boogeyman isn't coming ) He's already here.

[Jim Koepke]

The market is very predictable… It will fluctuate.

In every boom there is a bust. In every recession there is a boom just waiting for a spark.

jtk

[Rick Potter]

Thanx AJ, but I am on the tail end of a new addition. The roofing is done except for a 5X8 porch, where we ran out of shingles.
I am just starting on the cabinetry for it. Laminate flooring went in today.

New garage, and Granny Flat. Only house on the block with two.

[Bob Glenn]

The market rises and falls on fear and greed. Take your pick. Common stock, really has no value. In a bankrupt situation, common stock holders are the last in line to get paid if there is anything left. Proceed at your own peril.

[Curt Harms]

The economy is not just the stock market. I think/hope the fundamentals in the U.S. are strong, no subprime mortgage mess lurking like 2008 (I hope). From what I've read other parts of the world have been in a slowdown/downturn for some time now.

[Paul F Franklin]

The economy is not just the stock market. I think/hope the fundamentals in the U.S. are strong, no subprime mortgage mess lurking like 2008 (I hope). From what I've read other parts of the world have been in a slowdown/downturn for some time now.
-
Student loan debt, high corporate debt, health care costs, income inequality, and pension fund under-funding are all waiting in the wings to contribute to the next big one. Will it be now? Who knows. But when it comes, I'm betting it will be bad and long.

[Prashun Patel]

The fundamentals have never been good. A huge debt and wealth imbalance means when the recession hits, we'll all realize we had it coming.

[mike stenson]

The fundamentals have never been good. A huge debt and wealth imbalance means when the recession hits, we'll all realize we had it coming.

.. and everything that was put in place to prevent it, has been since undone.

[Jim Koepke]

The economy is not just the stock market. I think/hope the fundamentals in the U.S. are strong, no subprime mortgage mess lurking like 2008 (I hope). From what I've read other parts of the world have been in a slowdown/downturn for some time now.

If you are in an area of moderate to large population, next time you drive by a homeless encampment ask yourself, "is this what a great economy and full employment is supposed to look like?"

jtk

[Doug Dawson]

If you are in an area of moderate to large population, next time you drive by a homeless encampment ask yourself, "is this what a great economy and full employment is supposed to look like?"


People make their own decisions. Some of them are wrong (albeit a matter of interpretation). It's a free country. No judgement implied.

[mike stenson]

People make their own decisions. Some of them are wrong (albeit a matter of interpretation). It's a free country. No judgement implied.
Kind of a heartless way to look at it, isn't it?

[Doug Dawson]

Kind of a heartless way to look at it, isn't it?

No. People "of a certain age" have absorbed this.

How _dare_ you tell me whether I should live a conventional life!? ;^) Have you even read Kerouac?

[Jim Koepke]

If you are in an area of moderate to large population, next time you drive by a homeless encampment ask yourself, "is this what a great economy and full employment is supposed to look like?"

jtk


People make their own decisions. Some of them are wrong (albeit a matter of interpretation). It's a free country. No judgement implied.


Kind of a heartless way to look at it, isn't it?


No. People "of a certain age" have absorbed this.

A local business man told me many of the folks living in tents actually have full time jobs. The wages aren't enough to pay the going rate for housing.

jtk

[Mel Fulks]

I was taught a recession is just more production than current demand. But a kid's lemonade stand with a new 200 gallon
tank might not be a recession.

[Bill Dufour]

I predict that even if the Corona Virus takes off in the USA it will kill less then half the people who die in car wrecks every year. Probably far less then the murder rate as well.
A student is more likely to die in a car wreck walking to school then even get the virus today.
Bil lD.

[Doug Dawson]

A local business man told me many of the folks living in tents actually have full time jobs. The wages aren't enough to pay the going rate for housing.


There are engineers working at Google in the Bay Area who are living in RV's. I don't blame them. I wouldn't work there if you paid me to (it would have to be a kings ransom.)

[Stewie Simpson]

People make their own decisions. Some of them are wrong (albeit a matter of interpretation). It's a free country. No judgement implied.

the true measure of any society can be found in how it treats its most vulnerable members;

Mahatma Gandhi

[Jim Koepke]

A student is more likely to die in a car wreck walking to school then even get the virus today.

Dying in a car wreck while walking? :eek:

Sorry, that was just too good to let it slide by.

jtk

[Nicholas Lawrence]

Dying in a car wreck while walking? :eek:

Sorry, that was just too good to let it slide by.

jtk

No idea if the statistic is right, but pedestrians definitely can be run over by cars.

I heard one of the presidential candidates talking about 500,000 homeless (no idea if that statistic is right either, but it is what he said and from what I understand about his campaign if he was going to spin the number he would be spinning it up, not down).

In a country of 350 million that would work out to .01 percent. It would be nice if the number was zero, but it is pretty low.

[Curt Harms]

If you are in an area of moderate to large population, next time you drive by a homeless encampment ask yourself, "is this what a great economy and full employment is supposed to look like?"

jtk

How many of those are there because of mental illness or addiction? To help them, they first have to want to be helped. Otherwise good intentions go for naught. I know of a couple cases like that, they know how to game the system but have no intention of changing.

[Jim Koepke]

How many of those are there because of mental illness or addiction? To help them, they first have to want to be helped. Otherwise good intentions go for naught. I know of a couple cases like that, they know how to game the system but have no intention of changing.

Maybe the best way to start is to start with those who are willing to help themselves, i.e. those who do have jobs but are shut out of the housing market by high rents or other factors.

Maybe learning how the system is gamed can be turned around to shutting down the game.

jtk

[Wade Lippman]

The economy is not just the stock market.

That is a very important concept that most people don't understand. The stock market is driven by expected corporate profits. If unemployment goes up, companies don't have to pay high wages; so their profits go up as does the stock market. The economy has gotten worse, but the market is up.
The recent tax cut improved profits so the market went up, even though it badly damaged the economy.
It is perverse, but that's the way it is.

To answer the OP's question, it depends on what happens.
If corona goes away when the weather improves, the market will recover.
If 150,000,000 people get it, 30,000,000 are hospitalized, and 4,500,000 die; then we will all be in the crapper.

I suspect the truth will be closer to the first possibility, but who knows.

[Brian Elfert]

The way things are going I think we will have a recession. Airlines are already drastically cutting expenses and asking employees to take voluntary leave. Who is going to want to go to any tourist destinations until this blows over? Just the fact that all NCAA tournaments are going without fans means probably means at least one hundred million in losses for the host cities.

If things get really bad I wonder if my employer could even survive a total shutdown of society for several weeks. We produce a daily product that we may not have the staff to produce and deliver, plus we may not be allowed to make deliveries.

[Jim Koepke]

By some accounts we are already in a recession.

From Wikipedia:


In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales".[3] In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.

Hopefully it will not be a long lasting disruption.

jtk

[Brian Elfert]

If the United State simply shuts down for six weeks or more like China we might have a depression instead of just a recession. Untold number of jobs would be lost and many businesses, especially small businesses, won't be able to survive being shut down for weeks with no revenue.

[Curt Harms]

Maybe the best way to start is to start with those who are willing to help themselves, i.e. those who do have jobs but are shut out of the housing market by high rents or other factors.

No question. That's who the system in place now is intended to help.

Maybe learning how the system is gamed can be turned around to shutting down the game.

But that would be cruel and heartless

jtk

10 characters

[Ole Anderson]

With universities going into uber safety mode and going to on-line classes, banning spectators for March madness and the NBA cancelling the season, when will it start affecting retail and factory workers? I am an optimist, but I don't see us getting out of this without a recession or worse unless the virus dies out quickly. Beginning to wonder if this might be intentional on China's part. They can certainly waste part of their 1.4 billion population to achieve some crazy economic goal. Nope, that doesn't make sense as we are their biggest market for products. Just thinking aloud.

[Doug Dawson]

With universities going into uber safety mode and going to on-line classes, banning spectators for March madness and the NBA cancelling the season, when will it start affecting retail and factory workers? I am an optimist, but I don't see us getting out of this without a recession or worse unless the virus dies out quickly. Beginning to wonder if this might be intentional on China's part. They can certainly waste part of their 1.4 billion population to achieve some crazy economic goal. Nope, that doesn't make sense as we are their biggest market for products. Just thinking aloud.

I went into the BORG to buy a dimmer switch yesterday afternoon, and the clerk said it was the biggest purchase she'd seen all day. Her: "It's a touch screen." Me: "No, YOU touch it." :^)

[Sean Etchason]

Speaking as an active trader and one who has been out of the market since the end of February I know there will be opportunity in the future once the dust settles. Now when that time is I have no idea but right now cash is king!

There will definitely be a negative impact on upcoming earnings reports but that means those padded numbers will be easier to beat down the road. If society completely collapses well then the least of our worries is the stock market.

During the this Bull market people were continuously rewarded when they bought the dip... Buying the dip conditioned many and now that "buying the dip" is not working many are getting taken to the tool shed. Highly leveraged traders are getting margin calls and blowing up entire accounts on these kind of meltdowns.

Hindsight always makes someone looks like a genius just wait it out and the market will come back sooner or later. For chuckles look at the past election years and there has been a consistent trend of a disease/outbreak that happens or should I say gets media attention. Coincidence???

[Doug Dawson]

Speaking as an active trader and one who has been out of the market since the end of February I know there will be opportunity in the future once the dust settles. Now when that time is I have no idea but right now cash is king!

There will definitely be a negative impact on upcoming earnings reports but that means those padded numbers will be easier to beat down the road. If society completely collapses well then the least of our worries is the stock market.

During the this Bull market people were continuously rewarded when they bought the dip... Buying the dip conditioned many and now that "buying the dip" is not working many are getting taken to the tool shed. Highly leveraged traders are getting margin calls and blowing up entire accounts on these kind of meltdowns.

Hindsight always makes someone looks like a genius just wait it out and the market will come back sooner or later. For chuckles look at the past election years and there has been a consistent trend of a disease/outbreak that happens or should I say gets media attention. Coincidence???

If you've got a lot of money in taxable (because you can only put so much into a 401k every year) the tax on the private investor cashing out even now would be prohibitive. Holding on through even a 50% drop is IMO the best option. It worked in 2008+ when the markets were in much worse shape, and it should work now. As I mentioned before, the people who sold when the market tanked back then were the ones who really got hurt. All you need is enough liquidity to last it out.

FWIW, stocks are on sale by 25% or so right now (what time is it?) so there's that.

But only a maniac buys on margin. Those people should try Vegas, it's a bit more controllable. :^)

[mike stenson]

All you need is enough liquidity to last it out.

Which is fine by me, I have at least 20 years before I can retire anyway (assuming that's actually ever a possibilty) so while I (in theory) took over a $30,000 loss (not counting 401k) since the start of the turn down, I don't really care that much as I was planning on holding for another 20 years anyway.

[Edwin Santos]

If you've got a lot of money in taxable (because you can only put so much into a 401k every year) the tax on the private investor cashing out even now would be prohibitive. Holding on through even a 50% drop is IMO is the best option. It worked in 2008+ when the markets were in much worse shape, and it should work now. As I mentioned before, the people who sold when the market tanked back then were the ones who really got hurt. All you need is enough liquidity to last it out.

FWIW, stocks are on sale by 25% or so right now (what time is it?) so there's that.

But only a maniac buys on margin. Those people should try Vegas, it's a bit more controllable. :^)

Take this for the simpleton's logic that it is, but the financial crisis of 2008 was years, maybe decades in the making, and it took years and massive government intervention to resolve the root problems.
This virus crisis came out of nowhere, suddenly. I'm hoping it will resolve as suddenly as it appeared, and that all the temporary disruption and damage will be just that, temporary. Hopefully the same will go for the oil standoff.

I'm taking some comfort in the fact that the virus spread looks to have slowed in both China and South Korea. I heard one scientist interviewee say something to the effect that viruses like this have a tendency to mutate as they spread, in a way that progressively weakens the virus. Optimistic thinking here, but maybe that means as it spreads the virus also loses it's legs, and perhaps that's what we're seeing in China and South Korea. And hopefully soon in Italy, then everywhere else.
Anyway, I hope it burns itself out and we can resume normal life and learn some lessons in preparation for the future.

If the scenario I'm describing is what happens, then I would expect some inflection point where the stock market skyrockets. In investing, I think it's natural to want cash out to avoid the downside momentum and the pain that goes with it. However, it's equally important to participate in the upward momentum and not be stuck on the sidelines.

$.02 from a simpleton.

[Doug Dawson]

Take this for the simpleton's logic that it is, but the financial crisis of 2008 was years, maybe decades in the making, and it took years and massive government intervention to resolve the root problems.
This virus crisis came out of nowhere, suddenly. I'm hoping it will resolve as suddenly as it appeared, and that all the temporary disruption and damage will be just that, temporary. Hopefully the same will go for the oil standoff.


The 2008 crisis was instigated largely by widespread fraud in a newly deregulated market that was not fully understood by the controlling entities, resulting in an implosion of the credit system. The current crisis (if you can call it that) seems to be the result of an understandable self-defensive panic mechanism on the part of the general public, derailing outward-facing purchases (travel, tourism, going out, etc.) Yes people are getting sick, and yes it's an issue, and yes we don't want it to spread. Maybe somebody can tell me which is the _fundamentally_ more serious problem, because I don't know.



If the scenario I'm describing is what happens, then I would expect some inflection point where the stock market skyrockets. In investing, I think it's natural to want cash out to avoid the downside momentum and the pain that goes with it. However, it's equally important to participate in the upward momentum and not be stuck on the sidelines.
.

Over long history, as you well know, but speaking generally, nobody really knows when to get out and get in, and studies have shown that slight errors in timing either way can be hugely detrimental, so it's best just to get in and stay in. One thing that has proven true over long time frames, is that that's where the real payoff is.

[Brian Elfert]

I went into the BORG to buy a dimmer switch yesterday afternoon, and the clerk said it was the biggest purchase she'd seen all day. Her: "It's a touch screen." Me: "No, YOU touch it." :^)

I'm hoping I can get all of the remaining materials for my basement remodel before retailers like Home Depot potentially start to shut down. I was at a Menards today and the store had a reasonable number of customers still. It was a Menards I had not shopped at in months so I don't know if the customer count was normal or not.

[Sean Etchason]

Contrary to popular belief people can and do Time / Beat the Market... Hell I was out of the market with my personal account before the poo hit the fan because I didn't argue with the market or my trading discipline. Just because most don't time /beat the market doesn't mean it can't be done... It's very interesting that someone said to ride the selloff down 50%, do you realize that in order to break even you would need a 100% gain from the current value?

Example:

Bought XYZ company at $100.00 per share

Stock went down 50% and XYZ company is now worth $50.00 per share

In order to break even the stock would have to make a 100% move from its current price; how likely is that?

Not being in cash/on the sidelines because of (FOMO) Fear of Missing Out/buying stocks because they are on sale is a foolish logic and will only cause financial pain.

A quote form one of the greatest traders...

“There is time to go long, time to go short and time to go fishing.”

-Jessie Livermore

Now is the time to go fishing.

[Doug Dawson]

Contrary to popular belief people can and do Time / Beat the Market...

Not in the long term, and not across the board. I used to be into stocks, now it's just index funds, Warren Buffet not so long ago made a substantial bet that nobody among the best stock pickers could over some non-trivial period of time beat the S&P 500, and some took it, and none of them won.

BTW, if anyone would suggest that Buffet himself might better have invested in the S&P 500, he was not an "investor" per se, he was the _owner_, having maneuvered himself into spectacular sources of cash flow, etc. (Buy some insurance companies, then nobody knows what's going on except you. :^)



Now is the time to go fishing.

Maybe. Who knows.

[Sean Etchason]

Not in the long term, and not across the board. I used to be into stocks, now it's just index funds, Warren Buffet not so long ago made a substantial bet that nobody among the best stock pickers could over some non-trivial period of time beat the S&P 500, and some took it, and none of them won.

BTW, if anyone would suggest that Buffet himself might better have invested in the S&P 500, he was not an "investor" per se, he was the _owner_, having maneuvered himself into spectacular sources of cash flow, etc. (Buy some insurance companies, then nobody knows what's going on except you. :^)



Maybe. Who knows.


Warren did have a bet but it was with HEDGE FUND MANAGERS... Hedge funds operate with an enormous amount of money and take weeks, months or years to get into and out of the market. If I operated as a hedge fund then sure I would perform like them but I don't operate like them because I can maneuver much more quickly because I don't have hundreds of millions or billions of dollars. If you're competing as a sprinter you won't train as a marathon runner... https://www.cnbc.com/2017/09/18/warren-buffett-won-2-million-from-a-bet-that-he-made-ten-years-ago.html

Buffet is also on a different level than 99.99% of investors he is involved in all sorts of arbitrage and investment vehicles to limit risk and raise alpha.

Ultimately, ones belief system will dictate whether or not they can or can't do something. Human behavior tends to make us seek out information that aligns with our thinking rather than challenges it.

[Doug Dawson]

Warren did have a bet but it was with HEDGE FUND MANAGERS... Hedge funds operate with an enormous amount of money and take weeks, months or years to get into and out of the market. If I operated as a hedge fund then sure I would perform like them but I don't operate like them because I can maneuver much more quickly because I don't have hundreds of millions or billions of dollars. If you're competing as a sprinter you won't train as a marathon runner... https://www.cnbc.com/2017/09/18/warren-buffett-won-2-million-from-a-bet-that-he-made-ten-years-ago.html

Buffet is also on a different level than 99.99% of investors he is involved in all sorts of arbitrage and investment vehicles to limit risk and raise alpha.

Ultimately, ones belief system will dictate whether or not they can or can't do something. Human behavior tends to make us seek out information that aligns with our thinking rather than challenges it.

Hedge fund managers are uber stock pickers, but with more money and resources than you or I. Speaking of agility, some of them have invested in high-speed data lines that can show them what's going on before it even hits the Big Board, and they can take advantage of that (and pay people handsomely to do so.)

Many pension funds rely on them.

So much of retail (even institutional) market activity is at the mercy of skilled salesmanship. Follow the money. And look at the results.