Is there another recession coming in the very near future?

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Recessions are cyclical about every 10 years with the last one in 2008-2009 due to the subprime mortgage crisis. I don't want to turn this into a political debate but I'm concerned depending on who is elected we may see a recession soon. What are your thoughts on this? Besides hoarding cash, what else can be done to protect yourself?

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How are you determining that the unemployment line is getting longer? People you know?

jfabregas (Sep. 13, 2016 @ 12:03p) |

VZ & T

BostonOne (Sep. 13, 2016 @ 12:12p) |

i suppose that's my point....we're on a finance forum. to say "i know a thing or two about [investing]" and "trust me, i... (more)

solarUS (Sep. 13, 2016 @ 12:31p) |

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The president has complete control of the US economy and stock market, so, YES, who gets elected is of critical importance. I will be listening very carefully to what the two major candidates have to say. I will be voting for the one who is in favor of a growing economy, more jobs, lower health care costs, family farms and "The American Way".

So, all seriousness aside, no one knows when the next recession will hit. There will almost surely be a next recession and when it hits, there will likely be a period of growth afterwards.

For me, I've got funds available if I'm laid off, I've got a network of folks set up to help me get a new job if I so choose, I've got cash ready to invest if there is a stock market crash and I've got my set of sealed envelopes all marked in a discrete code so I can open the correct one in front of friends and family -- the note says: I predict the next recession will hit on XX/YY. I've got 12 for 2016, 12 for 2017, 12 for 2018... I KNOW I'll have predicted this one correctly!

My thoughts are: attempting to time the market is a terrible idea. Keep a reasonable emergency fund available (6-12 months expenses), keep your job skills up to date, and continue dollar cost averaging investments.

I don't know about an overall recession but I definitely believe we are going to see the housing bubble burst very soon. In my area prices have risen ~20% in about 2 years. It is crazy and certainly not sustainable.

Yes, every year that passes, we are closer to a recession.

berlinsmommy said:   I don't know about an overall recession but I definitely believe we are going to see the housing bubble burst very soon. In my area prices have risen ~20% in about 2 years. It is crazy and certainly not sustainable.
  This. The very same people who lost everything because they were speculating on houses are back at it again. Guy I know went BK and let 4 houses go in 2008 just bought his second house (at retail!!) with a very small down payment. Doesn't take a genius to see what's about to happen.. 

More than 1 in 3 in the next 12 months:
http://www.marketwatch.com/story/more-than-one-in-three-chance-o...

34% chance by first quarter of 2017:
www.kansascity.com/news/business/article82285947.html

20% for 2016:
https://www.ft.com/content/da2ed38a-c6bd-11e5-b3b1-7b2481276e45

92% chance in the next 3 years:
http://www.businessinsider.com/92-change-of-a-recession-in-3-yea...
up from 76% in dec 2015:
http://www.businessinsider.com/jp-morgan-76-chance-recession-pro...

Wells Fargo thought there was a 25% chance of recession in the next 6 months back in March (about 6 months ago)
http://www.fxstreet.com/analysis/economic-comentary/2016/03/28/

Theres others that are more doom and gloom but there always are. You can go back a year or so and find the people saying that a horrible recession is imminent.
Like this guy who claimed 100% chance in the next 12 months back in March:
http://www.bloomberg.com/news/articles/2016-03-04/jim-rogers-the...

xoneinax said:   Yes, every year that passes, we are closer to a recession.
  exactly one year closer!

vegas4x4 said:   My thoughts are: attempting to time the market is a terrible idea.
  
​Isn't that what we do here?  We wait until the price of product X drops and then stack coupons and credit card offers on top to get the best price possible for product X.  We do this based on our own knowledge of when product X is expensive and when product X is cheap.  Isn't that timing the market?  Sometimes we are wrong and the price of product X goes down further or sometimes we are right and the price of product X goes higher.
I think looking for a good price on k-cups is just like looking for a good price on a stock.  You wait until a good deal shows up and then you stock up.  You have to assume a sale/recession will come along eventually... the question is can you wait that long?

FatMoneyClip said:   vegas4x4 said:   My thoughts are: attempting to time the market is a terrible idea.
  
​Isn't that what we do here?  We wait until the price of product X drops and then stack coupons and credit card offers on top to get the best price possible for product X.  We do this based on our own knowledge of when product X is expensive and when product X is cheap.  Isn't that timing the market?  Sometimes we are wrong and the price of product X goes down further or sometimes we are right and the price of product X goes higher.
I think looking for a good price on k-cups is just like looking for a good price on a stock.  You wait until a good deal shows up and then you stock up.  You have to assume a sale/recession will come along eventually... the question is can you wait that long?

Most consumer goods don't go up in price like stocks

www
zerohedge
com/news/2016-09-11/widely-ignored-indicator-signaling-investor-complacency

rufflesinc said:   
  
​  I agree if we are discussing consumer electronics.  Have you seen what they try to charge for k-cups or Starbucks coffee?   A market economy is simply buyers trying to get the lowest price and sellers trying to the highest price.  Both sides give and take on price based on ever changing priorities and obligations.  The distinction I will draw is that with the stock market, we are both the buyers and sellers.  Since we don't consume our stock shares (unlike k-cups), we do want the price to go up eventually.

xoneinax said:   ...zerohedge...
 

  
​Those guys are buying ammunition, weapons, stacking gold coins, and moving into bomb shelters with generators, spam, dried rice and beans, bottled water, and recreational sex dolls. Not sure I would cite them.

megatard said:   
xoneinax said:   ...zerohedge...
  
​Those guys are buying ammunition, weapons, stacking gold coins, and moving into bomb shelters with generators, spam, dried rice and beans, bottled water, and recreational sex dolls. Not sure I would cite them.

  
They've also been promising an absolute economic collapse since 2009, and every year that the stock market goes up they claim they were right its just that the stock market is manipulated. In 10 years after we've been through a cyclical recession or two, Zero Hedge will still be there promising absolute doom any day now. The fact that people read websites like that and actually believe them is a testament to the sheer power of belief. There is a certain sector of the American population that believes a total economic collapse is imminent despite all evidence to the contrary.

megatard said:   
xoneinax said:   ...zerohedge...
  
​Those guys are buying ammunition, weapons, stacking gold coins, and moving into bomb shelters with generators, spam, dried rice and beans, bottled water, and recreational sex dolls. Not sure I would cite them.

strange, how were they going to reproduce the species

Define "near future"

Zero Hedge is a fun read, kinda like watching Waterworld after a few beers with the guys.

NewGuy said:   Besides hoarding cash, what else can be done to protect yourself?
  How does hording cash protect yourself? And interest rates back then were a lot higher than now. I can't envision a recession anytime soon with current low rates, or at least not one of any significance.

I'm pretty sure a recession can start and continue regardless of the interest rates.

If the stock or commodity prices start dropping (because they're way too high), consumer spending could drop because consumers are poorer on paper. Bam, recession.

The US economy is ultimately in a lot of trouble because the Federal Reserve has attempted to construct a phony recovery based on inflating asset prices with cheap money.

I've been out to Silicon Valley 3 times in the last year... there are tons of companies with no real business model and losing money that are able to operating because of all the liquidity. As soon as the cheap money dries up these places all have to close their doors. Biotech in particular is loaded up with companies that are a complete fraud (Theranos was a good example).

Since the last recession governments, corporations, and consumers have been piling on debt... so nothing was ultimately resolved. There is too much debt and not enough savings.

I would expect the Federal Reserve to double down on bad policy and start QE4 as soon as things go bad to try and prop up the market.

magika said:   
megatard said:   
xoneinax said:   ...zerohedge...
  
​Those guys are buying ammunition, weapons, stacking gold coins, and moving into bomb shelters with generators, spam, dried rice and beans, bottled water, and recreational sex dolls. Not sure I would cite them.

  
They've also been promising an absolute economic collapse since 2009, and every year that the stock market goes up they claim they were right its just that the stock market is manipulated. In 10 years after we've been through a cyclical recession or two, Zero Hedge will still be there promising absolute doom any day now. The fact that people read websites like that and actually believe them is a testament to the sheer power of belief. There is a certain sector of the American population that believes a total economic collapse is imminent despite all evidence to the contrary.

  hey, one of these days they will be kinda right for a little while, until the bulls come back. 

We went 15 years after the Great Depression without a recession - even a technical one. The next one to come, in 1945, was due to WW-II and not due to "natural causes".

The next cyclical recession was not there till 1949. Next one - 1953, was again due to war and not caused by natural economic cycles.

Point is - it is very much possible to go more than 10 years without a recession occurring, especially after a particularly severe one like the Great Depression (or it's little brother - the Great Recession). Many of the known triggers for a recession in the financial sector have been plugged by capital measures.

The only crisis-in-confidence similar to 2008 that can cause another systemic shock is if people lost confidence in sovereign debt. If that does happen - it will eclipse the Great Recession, and potentially even the Great Depression. The possibility of that - though rising every day we go with ZIRP and NIRP - is still very small.

All bets are off with black swans though! Why is demand for commodities so persistently low for so long? Is this just cyclical or some new normal (Who knows - maybe China is hiding massive issues inside)? Another spectacular attack on US by ISIS? They can hit us tomorrow and cause a recession.

I only hope I am financially set up before the next recession hits. Another 5 years and I'll be there.

You tell me the POTUS winner early in November and I will have a much better idea where the American economy is headed in the medium to long term.

But I do not think near-term recession prospects will be equally winner dependent.  Much is already "baked into the cake".  My take:  I do not see a recession on the horizon any time soon . . . but sadly, neither do I see much chance America's chronically unemployed will be back to work.  

rufflesinc said:   
megatard said:   
xoneinax said:   ...zerohedge...
  
​Those guys are buying ammunition, weapons, stacking gold coins, and moving into bomb shelters with generators, spam, dried rice and beans, bottled water, and recreational sex dolls. Not sure I would cite them.

strange, how were they going to reproduce the species

  
Do we want them too?

puddonhead said:   We went 15 years after the Great Depression without a recession - even a technical one. The next one to come, in 1945, was due to WW-II and not due to "natural causes".

The next cyclical recession was not there till 1949. Next one - 1953, was again due to war and not caused by natural economic cycles.

Point is - it is very much possible to go more than 10 years without a recession occurring, especially after a particularly severe one like the Great Depression (or it's little brother - the Great Recession). Many of the known triggers for a recession in the financial sector have been plugged by capital measures.

The only crisis-in-confidence similar to 2008 that can cause another systemic shock is if people lost confidence in sovereign debt. If that does happen - it will eclipse the Great Recession, and potentially even the Great Depression. The possibility of that - though rising every day we go with ZIRP and NIRP - is still very small.

All bets are off with black swans though! Why is demand for commodities so persistently low for so long? Is this just cyclical or some new normal (Who knows - maybe China is hiding massive issues inside)? Another spectacular attack on US by ISIS? They can hit us tomorrow and cause a recession.

I only hope I am financially set up before the next recession hits. Another 5 years and I'll be there.

  I'd like to just point out that this is not accurate.

There were a recession in 1937-1938.
https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_S...
Wikipedia said: "The Recession of 1937 is only considered minor when compared to the Great Depression, but is otherwise among the worst recessions of the 20th century."

While the economy was technically only in recession until March 1933, per capita GDP did not recover until 1939 and the unemployment rate didn't recover until 1942 -- so some consider the 1937-1938 recession to be part of the Great Depression.

https://en.wikipedia.org/wiki/File:GDP_depression.svg
https://en.wikipedia.org/wiki/File:US_Unemployment_1910-1960.gif

debentureboy said:   
So, all seriousness aside, no one knows when the next recession will hit. 

  
True, but didn't FWF pretty much predict the real estate bubble burst of 2008 in, I think, 2007?

Xnarg1 said:   
debentureboy said:   
So, all seriousness aside, no one knows when the next recession will hit. 

  
True, but didn't FWF pretty much predict the real estate bubble burst of 2008 in, I think, 2007?

  cite?

Here is the first thread:

https://www.fatwallet.com/forums/finance/244405

There were also Part 2, 3, 4, and 5...

If I recalled correctly, one person did put the $ down so to speak, by selling the house and rent before it burst, in 2005. I predict we will all die and the Sun will eventually become a red giant and swallow Earth.

shinobi1 said:    . . . but sadly, neither do I see much chance America's chronically unemployed will be back to work.  
 

  
Unemployment is 4.9%
Only 1.9% have been unemployed for over 15 weeks.
Unemployed PLUS discouraged is just 5.3% now.
Even the measure of unemployed + marginally attached + part timers who'd prefer full , is at 9.7%

Theres no chronic unemployment problem now.
 

ZenNUTS said:   Here is the first thread:

https://www.fatwallet.com/forums/finance/244405

There were also Part 2, 3, 4, and 5...

If I recalled correctly, one person did put the $ down so to speak, by selling the house and rent before it burst, in 2005. I predict we will all die and the Sun will eventually become a red giant and swallow Earth.

  Unfortunately, you won't be able to say "I told you so"

solution: keep a balanced portfolio. That will hedge your risk from a recession. Even with the 2008/2009 recession, my investments averaged 10% ROI year on year with a balanced portfolio, and I didn't need to try to predict the future.

If you're like my dad, load up on physical gold and real estate.

imbatman said:   
If you're like my dad, load up on physical gold and real estate.

  
I have a client-side browser script that replaces string sequence G-O-L-D with D-I-C-K. Immediately these type of FWF threads become much more entertaining than they would be otherwise.

"Don't invest in the market. Invest in G-O-L-D"
"G-O-L-D is the only safe way to preserve wealth"
"Where is the best place store physical G-O-L-D?"

jerosen said:   
shinobi1 said:    . . . but sadly, neither do I see much chance America's chronically unemployed will be back to work.  
  
Unemployment is 4.9%
Only 1.9% have been unemployed for over 15 weeks.
Unemployed PLUS discouraged is just 5.3% now.
Even the measure of unemployed + marginally attached + part timers who'd prefer full , is at 9.7%

Theres no chronic unemployment problem now.

  
Any thoughts on the supposed millions who have stopped looking for work?  Is that captured in any of the numbers you cited above?  I'm genuinely curious.
 

gremln007 said:   Any thoughts on the supposed millions who have stopped looking for work?  Is that captured in any of the numbers you cited above?  I'm genuinely curious.
  
The Fed's use a measure called the U-3. You would want to look at the U-6, which is what economists are more interested in.

stanolshefski said:   
puddonhead said:   We went 15 years after the Great Depression without a recession - even a technical one. The next one to come, in 1945, was due to WW-II and not due to "natural causes".

The next cyclical recession was not there till 1949. Next one - 1953, was again due to war and not caused by natural economic cycles.

Point is - it is very much possible to go more than 10 years without a recession occurring, especially after a particularly severe one like the Great Depression (or it's little brother - the Great Recession). Many of the known triggers for a recession in the financial sector have been plugged by capital measures.

The only crisis-in-confidence similar to 2008 that can cause another systemic shock is if people lost confidence in sovereign debt. If that does happen - it will eclipse the Great Recession, and potentially even the Great Depression. The possibility of that - though rising every day we go with ZIRP and NIRP - is still very small.

All bets are off with black swans though! Why is demand for commodities so persistently low for so long? Is this just cyclical or some new normal (Who knows - maybe China is hiding massive issues inside)? Another spectacular attack on US by ISIS? They can hit us tomorrow and cause a recession.

I only hope I am financially set up before the next recession hits. Another 5 years and I'll be there.

  I'd like to just point out that this is not accurate.

There were a recession in 1937-1938.
https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
Wikipedia said: "The Recession of 1937 is only considered minor when compared to the Great Depression, but is otherwise among the worst recessions of the 20th century."

While the economy was technically only in recession until March 1933, per capita GDP did not recover until 1939 and the unemployment rate didn't recover until 1942 -- so some consider the 1937-1938 recession to be part of the Great Depression.

https://en.wikipedia.org/wiki/File:GDP_depression.svg
https://en.wikipedia.org/wiki/File:US_Unemployment_1910-1960.gif

  
I stand corrected! The existence of the '37/'38 recession (that I overlooked) would mean 10+ years without a recession would be unprecedented!!

The current expansion is going on for 7 years now. This makes me think! Perhaps I should make my portfolio more balanced (25% in cash/CD) now so that I have some dry powder when the recession hits!

So far, I was going all gung-ho with 100% equity thinking retirement is long way out and hence I can weather any downturn.

We are in a Pseudo Recession now and have been for the last eight years.

if Trump is elected president the recession will hit the day news comes out .

ZenNUTS said:   Here is the first thread:

https://www.fatwallet.com/forums/finance/244405 

There were also Part 2, 3, 4, and 5...

If I recalled correctly, one person did put the $ down so to speak, by selling the house and rent before it burst, in 2005. I predict we will all die and the Sun will eventually become a red giant and swallow Earth.

  And I hope I might get to do that again sometime in my life.  However, identifying a clear bubble and guessing when a recession hits are very different animals.

shinobi1 said:   You tell me the POTUS winner early in November and I will have a much better idea where the American economy is headed in the medium to long term.
...
 

  OK.  Hillary.  What now?

manuvns said:   if Trump is elected president the recession will hit the day news comes out .
  I doubt either of 'em will really change things, economy-wise.  Hillary would be business-as-usual, and Trump is all talk and would never actually try to implement most of his promises.  Even if he did, it would never get by Congress.

Skipping 38 Messages...
jcohen73 said:   
solarUS said:   i flipped 2 houses in 2007 just before the crash, then stopped buying real estate until 2010-2011 when things bottomed, then bought a ton, much of which has tripled in price. I MUST BE A GENIUS.

no. sometimes people just get lucky....or a combination of lucky and good. but to claim "I know a thing or two about how this stuff works..." well, we all know a thing or two. some more than others. but i promise you don't know half of what there is to know about the markets.

(that said - i also sold all my bond funds 2 weeks ago for the same reasons)

  
I would assume you had some rational reason for buying and selling like you did.  You didn't just throw darts and did some sort of analysis in your decision process.  Doesn't make anyone a genius, you or I, just less stupid then others.  Most people truly just don't have a clue and are driven by nothing but fear and greed.  True, luck is involved, I just so happen to have lived in one of the epicenters of the real estate bubble.  The clueless person just sat there, the retards kept buying.  Knew people buying properties renting them out for significantly less than the mortgage was.  Why, because real estate just goes up. Sort of like, on average the stock market goes up over time.  Neither is based on sound logic.

Some people's opinion is worth something, others aren't so much....  Over the past decade or so, I'v been fortunate to get to know some of the more astute members of FWF.  I attribute part of my success (outside of investments) to them.

i suppose that's my point....we're on a finance forum. to say "i know a thing or two about [investing]" and "trust me, i've done well for myself" etc etc are kinda silly things to say here.

you managed to buy low and sell high a few times. that's great, many of us have, just based on local ups and downs (in RE and stock market) and a modicum of common sense and risk analysis...but really, you have no more of an idea about the depth and timing of a correction than anyone else. YOUR past performance doesn't equal future returns

anyway, i don't object to your message...just the tone and [what sounds like] hubris.



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