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So, where's the recession?

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bmw
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So, where's the recession?

Post by bmw » Fri Dec 06, 2019 5:27 pm

-Wages are up 3.1% from a year ago.
-Unemployment dipped again to 3.5%
-266,000 jobs created in November (expected was 187,000)
-Dow Jones average over 28,000, very near an all-time high. Up 55% since Trump was elected.

I laugh at all the dooms-dayers who for years now have been insisting that a recession is just around the corner. I hate to break it to you, but it ain't.



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TC Talks
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Re: So, where's the recession?

Post by TC Talks » Fri Dec 06, 2019 5:59 pm

You like surfing the web, you tell us if the indicators have changed. If they haven't perhaps it's not running on your agenda.

https://www.google.com/amp/s/www.bloomb ... dds?espv=1


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MWmetalhead
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Re: So, where's the recession?

Post by MWmetalhead » Sat Dec 07, 2019 11:14 am

I think a moderate recession remains likely in the not too distant future, but we might remain in the clear for another 18 months. Bear in mind that a "moderate recession" frankly won't be that bad, since the measuring stick (i.e. the current state of the economy) is currently in terrific shape.

Why do I hold this view? Simple. I work for a commercial bank. I have access to reports as to credit risk trends of a large national commercial loan portfolio that spans all sectors of the economy. Some companies we finance are publicly traded; most are privately held - meaning the general public never gets to see their financial statements. The data generally suggest corporate profits are leveling off and that cash flow leverage ratios are rising (translation: recent capital investment financed by debt has not led to attractive returns).

There are also external, global factors in play. Our economy is not isolated - or insulated - from the global economy.

https://www.cnbc.com/2019/10/16/global- ... -says.html

Moody's has access to a gigantic wealth of commercial loan data. I supect their Chief Economist's assessment is largely driven by Expected Default Frequency trends Moody's has observed based on portfolio analytics. These analytics are based on evaluation using various credit risk drivers whose efficacy has been validated by years worth of statistical testing.

When the purse strings for the capital markets loosened greatly two or three years ago, plenty of corporate concerns were able to refinance for five, six, or seven years. A lot of that debt comes due in 2021, 2022, 2023. It will be interesting to see how Wall Street reacts to 2020 election results.

I will say this - electing a socialist to the office of U.S. President would be horrible from a financial markets perspective, would likely cause all major market indices to plunge, and would greatly raise the cost of capital.

I'll also add that the simple unemployment statistic that gets so frequently quoted - the U3 rate - always has been a bullshit statistic. The U6 rate is a better metric, IMO. Our economy happens to be doing very well on a U6 basis right now.

https://www.macrotrends.net/1377/u6-unemployment-rate


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TC Talks
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Re: So, where's the recession?

Post by TC Talks » Sat Dec 07, 2019 10:00 pm

Many of the metrics you prefer absolutely ignore the health or welfare of people.

It offends me that employment data is measured completely from an exploitive basis that only really impacts investors and corporate executives.


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WZRC 1067
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Re: So, where's the recession?

Post by WZRC 1067 » Sun Dec 08, 2019 9:06 pm

I could see a 1990-91 type of recession yes. No matter who is in office, that can happen. Things are not as great as The TV wants you to think.


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Re: So, where's the recession?

Post by Turkeytop » Sun Dec 08, 2019 9:22 pm

TC Talks wrote:
Sat Dec 07, 2019 10:00 pm
Many of the metrics you prefer absolutely ignore the health or welfare of people.

It offends me that employment data is measured completely from an exploitive basis that only really impacts investors and corporate executives.

You ever notice, whenever a Company announces mass layoffs, the stock market reacts by boosting the value of their shares. There is a total disconnect between the investor class and the working class.


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Re: So, where's the recession?

Post by bmw » Sun Dec 08, 2019 10:53 pm

Actually, layoffs usually lead to a slide in stock prices since layoffs are not often a sign of good financial health.



bmw
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Re: So, where's the recession?

Post by bmw » Sun Dec 08, 2019 11:00 pm

MWmetalhead wrote:
Sat Dec 07, 2019 11:14 am
...I will say this - electing a socialist to the office of U.S. President would be horrible from a financial markets perspective, would likely cause all major market indices to plunge, and would greatly raise the cost of capital.
A lot of what you wrote was over my head as this isn't my area of expertise, but do you think that a Democrat (in particular someone like Bernie or Warren) winning in 2020 would quickly trigger a recession? I do think that if Trump wins re-election that this economic boom can't last for another 4 years, or at least not at the pace its been going for the past 3 years, but I do worry that given just how strong the economy is right now that electing one of the far left Democrats could cause a domino effect after a market plunge that could quickly lead to recession.



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Ed Joseph
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Re: So, where's the recession?

Post by Ed Joseph » Mon Dec 09, 2019 2:14 am

For most of the working class, the recession of 2008 has never ended. The economy is bad still for the "common folk". Only the higher classes are doing well. However, since the working stiffs and especially the poor are nothing more than expendable wallets, it really doesn't matter anyways.


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MWmetalhead
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Re: So, where's the recession?

Post by MWmetalhead » Mon Dec 09, 2019 7:12 am

A lot of what you wrote was over my head as this isn't my area of expertise, but do you think that a Democrat (in particular someone like Bernie or Warren) winning in 2020 would quickly trigger a recession?
Biden or Buttigieg likely wouldn't.

Bernie or Warren almost assuredly would.


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WZRC 1067
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Re: So, where's the recession?

Post by WZRC 1067 » Mon Dec 09, 2019 10:03 am

Well.. the economy just might be heading towards a downturn by this time next year, regardless of who we "elect" as our next master.


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Re: So, where's the recession?

Post by bmw » Mon Dec 09, 2019 10:08 am

The one thing I would add here is that Republicans are highly likely to retain control of the Senate. Even if it were 51-49, I don't see even the most wishy-washy of Republicans siding with someone like Bernie or Warren on much of anything. That would be the one firewall (and a pretty strong one too) against a socialist doing too much damage.



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Re: So, where's the recession?

Post by Y M Ionhere » Mon Dec 09, 2019 4:30 pm

MWmetalhead wrote:
Mon Dec 09, 2019 7:12 am
A lot of what you wrote was over my head as this isn't my area of expertise, but do you think that a Democrat (in particular someone like Bernie or Warren) winning in 2020 would quickly trigger a recession?
Biden or Buttigieg likely wouldn't.

Bernie or Warren almost assuredly would.
Buttigiegs proposal of a $15 minimum wage would NOT?
I firmly believe that most small businesses cannot afford that and will have to cut positions to accomodate it, or put everyone on part-time status.



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Re: So, where's the recession?

Post by Y M Ionhere » Mon Dec 09, 2019 4:37 pm

Ed Joseph wrote:
Mon Dec 09, 2019 2:14 am
For most of the working class, the recession of 2008 has never ended. The economy is bad still for the "common folk". Only the higher classes are doing well. However, since the working stiffs and especially the poor are nothing more than expendable wallets, it really doesn't matter anyways.
If thats true,why are we seeing almost record low unemployment? Our unemployment rates wouldnt be like this if a large segment of the work force was excluded.
Im working class. Was offered a job a few months ago ( low skill, entry level). Left after a little over a month because I was offered an even better, higher paying working class job.
Sorry, but I see the opposite. The working class and entry level workers have more opportunities than anytime in the past 18 years.



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Re: So, where's the recession?

Post by MWmetalhead » Mon Dec 09, 2019 7:08 pm

Buttigiegs proposal of a $15 minimum wage would NOT?
He cannot institute that by executive order. Most credible minimal wage proposals I've seen institute the increase over a multi-year period. I personally think the economy could absorb an increase like that without much harm. Granted, I'm not sure it would do a ton of good, either. Essential household items would be the things most likely to see inflationary price movement. And as I've mentioned in the past, employers can always reduce fringe benefits to offset economic impacts from government mandated wage increases.

Giving Sanders or Warren the reins of the regulatory agencies and giving them the keys to Fed Board of Governors appointments (and the Fed Chairman appointment) is what would give Wall Street chills.


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