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Recession - 2022 / 2023 / 2024

More documentation of the failure of the Federal Reserve.
“Everybody’s been calling for a recession that just simply refuses to arrive. And then you’ve got the march higher in oil prices, which of course is complicating the picture in terms of the outlook for policy rates,” said Rabobank head of rates strategy Richard McGuire.
“All of that, I think is conspiring to see investors very wary of locking up their money in longer dated government bonds. They’re demanding compensation for that


 
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The glut of cash after trillions of dollars were pumped into the system since the start of the Covid-19 pandemic has finally started draining as the Federal Reserve unwinds its balance sheet in a process called quantitative tightening. Further pressured by the stream of new government debt, BofA said ripples are starting to appear across the repo market and spilling over into bank credit.

 
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Waiting for that "soft landing" is just digging this hole deeper.
Pay off those credit cards.

Longer term U.S. Treasurys are experiencing a bear market longer than what stocks did during the 2000-2002 dotcom crash and the 2007-2008 financial crisis, according to DataTrek Research.
It has been three years and two months, or 800 trading days, since the iShares 20+ Year Treasury Bond ETFTLT, which invests in long-term Treasurys, reached an all-time high on Aug.4, 2020. The fund has fallen 50% since then, noted Jessica Rabe, co-founder at DataTrek.
A bear market is traditionally defined by an index falling by 20% or more from a recent high.


 
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The door to this recession just opened a bit wider. Interest rates will go much higher.

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The average rate on the 30-year fixed mortgage rose to the highest level since 2000 last week, but rates on adjustable-rate mortgages fell. That caused a run on these so-called ARMs, pushing total mortgage application volume very slightly higher, up 0.6% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.67% from 7.53%, for loans with a 20% down payment. But the average contract interest rate for 5/1 ARMs decreased to 6.33% from 6.49%.
ARMs usually offer much lower rates because they have shorter fixed terms. The difference between ARM rates and the 30-year fixed rate, however, has been unusually narrow recently. Last week, it widened.

 
Well, here you have a picture of what the FED Reserve is going to do.... Nothing
The FED Reserve is going to sit on it's political ass and allow "INFLATION" to do it's dirty work of slowing the economy.
Park your cash in a "Safe harbor", if you can find one.

While there were conflicting opinions on the need for more policy tightening, there was unanimity on one point – that rates would need to stay elevated until policymakers are convinced inflation is heading back to 2%.

 
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I still laugh when I read this... walking into ANY store that sells fk'n anything.

The annual inflation rate for the United States was 3.7% for the 12 months ended August,
 
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Seems a Realtor has found a new description for the housing industry...... “tricky” dynamics

The housing market is dealing with several “tricky” dynamics, according to Tracy Kasper, president of the National Association of Realtors.
“What we’ve experienced over the last probably 12 to 18 months is what I really like to call a leveling,” Kasper said Thursday during CNBC’s Financial Advisor Summit.
That slowdown in home sales comes after “exponential increases year over year” during the Covid-19 pandemic, Kasper said.
With fewer people selling their houses, she said, there is now an “inventory crisis.”
“We’ve seen a crunch — our first-time homebuyers are struggling,” she added.


 
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Seems a Realtor has found a new description for the housing industry...... “tricky” dynamics

The housing market is dealing with several “tricky” dynamics, according to Tracy Kasper, president of the National Association of Realtors.
“What we’ve experienced over the last probably 12 to 18 months is what I really like to call a leveling,” Kasper said Thursday during CNBC’s Financial Advisor Summit.
That slowdown in home sales comes after “exponential increases year over year” during the Covid-19 pandemic, Kasper said.
With fewer people selling their houses, she said, there is now an “inventory crisis.”
“We’ve seen a crunch — our first-time homebuyers are struggling,” she added.


Wow, basic house is around 450,000 to 500,000 dollars, avg wage of a young person less that 50,000, coming out of college with 100,000 grand in student loans. Inflation is still out of control and going to get worse. People aren't selling because they can't afford to buy a new home at current rates. Yup, it's tricky alright.
 
Wow, basic house is around 450,000 to 500,000 dollars, avg wage of a young person less that 50,000, coming out of college with 100,000 grand in student loans. Inflation is still out of control and going to get worse. People aren't selling because they can't afford to buy a new home at current rates. Yup, it's tricky alright.
Just watch the largest "consumer lenders" heading down another tricky path. A great credit score today could be worthless in 6 months.
How do you get 'blood out of a turnip" ?
 
Just watch the largest "consumer lenders" heading down another tricky path. A great credit score today could be worthless in 6 months.
How do you get 'blood out of a turnip" ?
I asked that same question once; wife's attorney showed me. lol.
I'll quote Ron White..... what's lower than whale shit.. hey, look, it my ex wifes lawyer
 
Life is funny, and will teach you many things by beating you over the head with a brick. When that happens, and after you recover, retain that lesson!!

I look for patterns and anomalies in everything. Watch something long enough, or go far enough back and even anomalies become a pattern. You see this when you talk about the amount of “once in a lifetime” recessions you have personally been through.

That’s what I base a lot of my decisions on along with hard experience. Plus I listen to people who have seen that movie before and know how it ends, lol.
Words of wisdom.

There is a debate going on as to whether this recession is similar or totally different to those that preceded it.
Some differences I am seeing:
As things slow, I am not seeing the "middle men" pass the lower prices down to the consumer. Propane is an example (Mont Belvieu distribution hub in Texas held near the $0.7 per gallon level). Bulk prices are down but filling my small tanks cost $4/ gallon.

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_________________________
I am watching 8 - 10 small businesses breaking ground and building themselves a new building and base of operations within 5 miles of their old location. In some cases, next door on a vacant lot they purchased. After chatting with some of the local businessmen I found out the landlords have raised the rent on commercial buildings to the point where the tenant can simply go out, buy land, put up a metal building and relocate. Many are moving from city property out to county property. There are many, many vacant commercial properties within the city limits. I did not see this during previous recessions.
_________________________
Watching chicken, pork and beef producers shutting down operations. They are openly saying "I can sell less, charge more and have less headaches".

Perhaps this is all regional... IDK
 

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The hole is 3 years deep.

BERLIN, Oct 14 (Reuters) - The head of German shipping firm Hapag Lloyd (HLAG.DE), Rolf Habben Jansen, expects the next three years to be difficult because demand for shipping services is growing more slowly than available shipping capacity, he told the Welt am Sonntag newspaper.
Despite that, he thought the downturn in the sector would be less severe than in the period following the global financial crisis in 2008 when new capacity due to launch amounted to 55% of the existing fleet. Now, the equivalent figure is just 27%.


 
People spending money like crazy on $15 steak sandwiches and $8 cobbler at the fair.

A bunch of fat girls too. Only problem is with this body positivity movement there is more competition for the fatties.
 
People spending money like crazy on $15 steak sandwiches and $8 cobbler at the fair.

A bunch of fat girls too. Only problem is with this body positivity movement there is more competition for the fatties.

Yes, but two steak sandwiches and a cobbler is only 25 cents a month on the credit card. Easily affordable.

Different mind set.

Thank you,
MrSmith
 
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I still remember a conversation I had with my father a few decades ago. The company I then worked for allowed you to borrow money from your 401K then pay it back in a structured payment plan as a payroll deduction. You could choose the terms, within reason. Dad was emphatic not to do it. I countered with but you're borrowing from yourself and paying yourself back. His counter was "but you won't get the interest". Mine was "the 401 is earning 6%, what if I elect to pay my loan back with 15% interest. It's my earnings that I'm giving myself, I just increased my 401 contribution". Blank look. Ended up not doing it.

I must have been thinking about a car loan because the conversation came around to the 5 year time frame. I mentioned I knew people that got a new car every couple of years. His comment "but they will never pay them off". Mine "I guess they have decided that for a new vehicle they will have a payment for the rest of their lives" Blank look and a furrowed brow. Not paying off a debt was inconceivable. Glad I learned that lesson.

He was pretty stupid when I was 14 or so. But, as I grew older he really got a lot smarter.

Thank you,
MrSmith
 
The current confluence of economic conundrums elevates risks massively for the prosperity of Americans, especially those of modest means. These unprecedented, concurring economic contradictions flow directly from the dire mistakes of the 2020 virus panic.
The seismic policy errors of the lockdown era have since been exacerbated by Joe Biden and aligned collaborationist Republicans, to create an economic cauldron into the end of 2023.

 
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The current confluence of economic conundrums elevates risks massively for the prosperity of Americans, especially those of modest means. These unprecedented, concurring economic contradictions flow directly from the dire mistakes of the 2020 virus panic.
The seismic policy errors of the lockdown era have since been exacerbated by Joe Biden and aligned collaborationist Republicans, to create an economic cauldron into the end of 2023.

The part in the article that references Chinese manufacturing, without US consumers, even with slave labor inventory needs to be moved and that is China’s conundrum.
 
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The reductions come as the business-oriented social network has seen year-over-year revenue growth slow for eight consecutive quarters. It grew just 5% in the second quarter, even as membership growth has accelerated each quarter for the past two years, Microsoft said in July.

 
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The reductions come as the business-oriented social network has seen year-over-year revenue growth slow for eight consecutive quarters. It grew just 5% in the second quarter, even as membership growth has accelerated each quarter for the past two years, Microsoft said in July.

Remember all that posturing about working from home, won't go back to office, etc. This is what happens when you remote work overseas and with AI/ML.

"As we continue to execute on our FY24 plan, we need to also evolve how we work and what we prioritize so we can deliver on the key initiatives we’ve identified that will have an outsized impact in achieving our business goals. This means adapting our organizational structures to improve agility and accountability, establishing unambiguous ownership, and driving improved efficiency & transparency through reduced layering."
 
Debt, the money of peasants.
This will become unsustainable.


Bank of America said interest income rose 4% to $14.4 billion, roughly $300 million more than analysts had anticipated, fueled by higher rates and loan growth.

 
Consumers are paying more and getting less.... Many are living off of a credit card.... Unsustainable.
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Retail sales are up due to rising cost of goods; passed on by HIGHER retail pricing, NOT because people are buyng more.
Companies are doing a fk'n lazy job of trying to paint a rosy picture.
 
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Average American household has about an $8,000 credit card balance. I have been there, done that. Really difficult to pay off that balance during a recession which is topped by inflation.

 
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  • Ming-Chi Kuo said Wednesday that shipments for the company’s MacBook computers will decline around 30% year over year, to 17 million units, during 2023.
  • He added that MacBook shipments during Apple’s fourth quarter will be lower than they have been in years past.
  • Kuo said the company will not release any new products during the fourth quarter, which will allow it to “clear inventory and reformulate new product and marketing strategies” for next year.
 
Winnebago blamed “lower unit sales related to current market conditions and dealer efforts to reduce inventories, and higher discounts and allowances.” Unit deliveries of motorhome RVs plunged 52% year-over year.

 
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My dad told me during the depression, the rich always had gas. The depression only effected the poor people. Eat more bugs and save the beef for the rich. Do you have a coupon for that?
 
Same thing is happening at tractor and lawn dealers. My local Kubota dealer has more stock than I have ever seen.
Yep... Somewhat appearing at the car dealerships as well. They knew the good times would not last for ever. But they did sell a lot of those $100k pickups.
Watching some of the "Play Toy" dealers around here. Yards full of side by side's and 4 wheelers.
Result of the diminishing "disposable income".
 
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One of the world’s largest telecommunications equipment makers, Nokia has been facing headwinds from a slowing global economy and from infrastructure spending reductions made by mobile operators.
Sales from Nokia’s biggest unit by revenue, its mobile networks business, declined 24% year-on-year to 2.16 billion euros, with operating profit for the division diving 64% year-on-year.


 
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Can't other economists just 'redefine' what a recession is? Everything will be ok, because they redefined the word.
 
Stack Overflow is laying off 28% of its workforce. Here's the full list of major US companies slashing staff this year.©Stack Overflow
  • Stack Overflow is cutting up to 28% of its workforce in its second round of layoffs this year.
  • This year, layoffs have expanded beyond tech, media, and finance with Gap and Whole Foods also announcing cuts.
  • See the full list of layoffs so far in 2023.
 
How many cars are repossessed every day in USA?
An average 2.2 million personal vehicles were repossessed in the U.S. in 2021. That's 5,418 vehicles a day. When the tow truck drives away with your vehicle, that's just the beginning of a complicated and expensive process, both if you want to get it back or if you want to get another vehicle.


 
High interest rates and chaos in the real estate industry are combining to put an enormous amount of pressure on our largest financial institutions. As a result, banks are getting very tight with their money, they are closing down hundreds of branches, and they are laying off thousands of workers. We are in the early stages of the worst financial crisis since 2008 and 2009, and I fully expect conditions to get even worse in the months ahead.


 
How many cars are repossessed every day in USA?
An average 2.2 million personal vehicles were repossessed in the U.S. in 2021. That's 5,418 vehicles a day. When the tow truck drives away with your vehicle, that's just the beginning of a complicated and expensive process, both if you want to get it back or if you want to get another vehicle.


Making it easier to find, thanks to the black boxes that are installed.
Some places even have automatic shut offs if you're late.
 
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