Coming Economic/Markets Crash

[SilverFallsAndrew]

On 10/23/2022 at 3:11 PM, Front Ranger said:

We've had to lay off two people on my company team so far. The worst is yet ahead.

https://markets.businessinsider.com/news/stocks/home-prices-housing-crash-fall-jeremy-siegel-paul-krugman-bubble-2022-10

Not buying the "good" news from yesterday?

[Front Ranger]

1 hour ago, SilverFallsAndrew said:

Not buying the "good" news from yesterday?

What was that?

[Iceresistance]

2 minutes ago, Front Ranger said:

What was that?

GDP grew unexpectedly by 2.6%

[Front Ranger]

7 hours ago, Iceresistance said:

GDP grew unexpectedly by 2.6%

Ah, yeah apparently that was mainly due to government spending lot more going into the military.

Lots of other signs the economy is rapidly slowing...I still highly doubt the Fed can manage a soft landing here. Gotta remember it takes 6+ months for Fed actions to start rippling through the wider economy. We're not even close to seeing the effects of tightening so far.

[Deweydog]

At the very least we’re finally seeing some of the more speculative builders waking up and smelling the coffee… Massive price drops, albeit a bit misleading…

https://www.redfin.com/WA/Camas/4367-NW-Water-Lily-Pl-98607/unit-05/home/181148585?utm_source=myredfin&utm_medium=email&utm_campaign=recommendations_update&riftinfo=ZXY9ZW1haWwmbD02NjEzMzg1JnA9bGlzdGluZ191cGRhdGVzX3JlY29tbWVuZGF0aW9ucyZhPWNsaWNrJnM9cmVjb21tZW5kYXRpb25zJnQ9YWRkcmVzcyZlbWFpbF9pZD02NjEzMzg1XzE2NjcwNjAyMjZfNiZ1cGRhdGVfdHlwZT0zJmxpbHJfc2NvcmU9MC42OTQ1Jmxpc3RpbmdfaWQ9MTU2MDkxMTE3JnByb3BlcnR5X2lkPTE4MTE0ODU4NSZwb3NpdGlvbl9udW1iZXI9Mw==

[Iceresistance]

On 10/28/2022 at 9:49 PM, Front Ranger said:

Ah, yeah apparently that was mainly due to government spending lot more going into the military.

Lots of other signs the economy is rapidly slowing...I still highly doubt the Fed can manage a soft landing here. Gotta remember it takes 6+ months for Fed actions to start rippling through the wider economy. We're not even close to seeing the effects of tightening so far.

Another massive Rate Hike is coming, the Inflation is literally mocking the Feds to raise the interest rates to try to cool it down, only to have the inflation surge again. 

[Front Ranger]

Lots of big tech layoffs announced this week. And crypto carnage...a lot of people I know were convinced the bottom was in for BTC, ETH, etc.

[Anti Marine Layer]

4 hours ago, Front Ranger said:

Lots of big tech layoffs announced this week. And crypto carnage...a lot of people I know were convinced the bottom was in for BTC, ETH, etc.

Looks like they waited until Election Day to do it.

[Iceresistance]

Amazon is laying off Thousands of its workers. 

[Andie]

On 11/14/2022 at 9:41 PM, Iceresistance said:

Amazon is laying off Thousands of its workers. 

Do you know what percent that is?

[Iceresistance]

Just now, Andie said:

Do you know what percent that is?

Around 2% apparently, but I'm not too sure about it. 

[Andie]

That’s not real concerning but if it continues it could certainly signal a reaction to a recession. 
Goods are already getting somewhat slow to get if not difficult.  
Certainly not my first recession and we get them about every 12 years anyway but occasionally we get a big one.  

[Iceresistance]

The food prices are just awful! A bag of mini peppers is $6!

[Deweydog]

Costco is now down $1.64 a gallon since the secondary peak in early October. 

[Iceresistance]

1 hour ago, Deweydog said:

Costco is now down $1.64 a gallon since the secondary peak in early October. 

Sounds like even the Gas Stations had too much Turkey this year!

[Iceresistance]

RV sales has collapsed. 

[Andie]

On 11/27/2022 at 11:50 AM, Iceresistance said:

The food prices are just awful! A bag of mini peppers is $6!

How’s this affecting your cravings?   
…Just teasing.

No waste in our house. It’s easy to get gob-smacked if you stroll through the meat dept.  All that money going into raising and fattening beef!  Yikes!  

[Iceresistance]

48 minutes ago, Andie said:

How’s this affecting your cravings?   
…Just teasing.

No waste in our house. It’s easy to get gob-smacked if you stroll through the meat dept.  All that money going into raising and fattening beef!  Yikes!  

I really liked them, now I can't get them as it's too expensive!

 

The prices have gone down, but now it's going back up!

[Andie]

What kind of peppers?  
Here in Texas it’s pepper heaven! 

[Deweydog]

Regular unleaded here has officially fallen exactly $2/gallon from the June/October highs.

[Chewbacca Defense]

11 hours ago, Iceresistance said:

RV sales has collapsed. 

Sounds like the used car market is starting to collapse, with the imminent collapse of Carvana being one of the main drivers.

[Iceresistance]

7 hours ago, Andie said:

What kind of peppers?  
Here in Texas it’s pepper heaven! 

Mini Sweet Peppers

[Andie]

This is as good a place as any for this.
crisis in the cattle and poultry industry. They may have to euthanize millions of chickens and cattle may starve.

https://www.wnd.com/2023/01/big-american-farm-raises-alarm-livestock-numbering-millions-soon-starve-death/ 

[Front Ranger]

Canada had an even bigger housing bubble going than the US, and is a bit ahead with their crash. They peaked in March 2022 (US peaked in May), and are now down 17% from that peak, and over 7% year over year: https://wolfstreet.com/2023/01/17/the-most-splendid-housing-bubbles-in-canada-january-update-prices-plunged-housing-bust-gets-real/

[Rubus Leucodermis]

56 minutes ago, Front Ranger said:

Canada had an even bigger housing bubble going than the US, and is a bit ahead with their crash. They peaked in March 2022 (US peaked in May), and are now down 17% from that peak, and over 7% year over year: https://wolfstreet.com/2023/01/17/the-most-splendid-housing-bubbles-in-canada-january-update-prices-plunged-housing-bust-gets-real/

There are no 30-year fixed mortgages here. Typical mortgage term is 5 years and then the balance becomes due, Most people, of course keep getting new mortgages until they pay it all off. The net effect is of an adjustable-rate mortgage. If rates go up, some unlucky homeowners can’t afford the new mortgage and are compelled to sell.

This all causes rate increases to exert downward pressure on housing prices faster in Canada.

[Front Ranger]

34 minutes ago, Rubus Leucodermis said:

There are no 30-year fixed mortgages here. Typical mortgage term is 5 years and then the balance becomes due, Most people, of course keep getting new mortgages until they pay it all off. The net effect is of an adjustable-rate mortgage. If rates go up, some unlucky homeowners can’t afford the new mortgage and are compelled to sell.

This all causes rate increases to exert downward pressure on housing prices faster in Canada.

Yep, that's definitely accelerating the process. Around the world, from the UK, to New Zealand, to Sweden, we're seeing the same phenomenon - with some differences in mortgage terms. But the trends are the same, timing is just different.

[Iceresistance]

Did Y'all see the latest warning sign that we're going into a monstrous recession?

[Front Ranger]

Seattle metro price per square foot is now down 10% year over year, per Redfin.

[Andie]

https://www.foxbusiness.com/markets/stock-market-crash-60-days-best-selling-author-lehman-collapse

I suppose it’s anybody’s guess.  
Place your bets.  

Perhaps it will slow the flood into Texas and Florida.  It’s messing us up.  I mean come on New York and California,  fix your own house.  

[roadtonowhere08]

Nonsense.  It won't.  Quote this.

[Andie]

I’m 50/50 on this.  It’s not like we’re in a strong place.  Employment could be better. All of our numbers could be better. Biden’s been a dud as far as expansion goes.  
It’s like he’s treading water.  That’s not good for the nation.  

[Front Ranger]

1 hour ago, roadtonowhere08 said:

Nonsense.  It won't.  Quote this.

What won't what?

[Andie]

Interesting thoughts from respected thinker/writer, Seymour Hersh   

“-very scary and very dumb.”

https://www.thegatewaypundit.com/2023/03/seymour-hersh-i-dont-know-whats-going-on-in-that-white-house-but-its-very-scary-and-very-dumb/

[roadtonowhere08]

31 minutes ago, Front Ranger said:

What won't what?

I believe that the market will not crash in the near future.

Having said this, people who invest for the long term do not sweat any of this noise.  Zoom out on the graph and follow the trend line.  7-8% yearly gains on average compounded over 30 years.  It's how non rich people retire nicely.  Everything else is just fear mongering to get your money by selling or trading.

[Front Ranger]

43 minutes ago, roadtonowhere08 said:

I believe that the market will not crash in the near future.

Having said this, people who invest for the long term do not sweat any of this noise.  Zoom out on the graph and follow the trend line.  7-8% yearly gains on average compounded over 30 years.  It's how non rich people retire nicely.  Everything else is just fear mongering to get your money by selling or trading.

Define crash. The market saw its worst year since the Great Recession in 2022, losing nearly 20% in value. If it drops another 20% this year, would that qualify?

No one knows what the future holds, of course, but I don't necessarily think looking back at the past 30 years is the best guide going forward. 

And then you have the real estate market, which is the main way that average Joes build wealth historically. Every indicator I looked at a year ago said we were in a bubble, and it was rapidly heading for a significant correction. The evidence says that's happening.

[roadtonowhere08]

1 hour ago, Front Ranger said:

Define crash. The market saw its worst year since the Great Recession in 2022, losing nearly 20% in value. If it drops another 20% this year, would that qualify?

No one knows what the future holds, of course, but I don't necessarily think looking back at the past 30 years is the best guide going forward. 

And then you have the real estate market, which is the main way that average Joes build wealth historically. Every indicator I looked at a year ago said we were in a bubble, and it was rapidly heading for a significant correction. The evidence says that's happening.

I view a crash as something that is sudden based on some black swan event like COVID or the housing crisis based on an industry of debt laden loans and derivatives.

2022 was a correction to COVIDs money printing ending and a plunge back to reality ensued.  That is where I see us now. 

The housing market is definitely in a bubble, but most homes sold recently have been paid either in cash (lots in my area) or loans based on good credit.  It is not the same as 2007.  Prices will correct now that interest rates have climbed.  They were too high due to COVID era bidding wars anyway.  Demand has waned and a correction is (I think) in progress in that market.

I am by no means an expert, and I think we have a long way to go,  but I do not buy the Chicken Little narrative being pushed by some.

In the end, time will tell.  I could be wrong (and I am fine with that), but I am a long term investor who is not retiring anytime soon.  I will stay the course and let over 100 years of market history comfort me if the dookie hits the fan again.

 

[Andie]

6 hours ago, Front Ranger said:

…..And then you have the real estate market, which is the main way that average Joes build wealth historically. Every indicator I looked at a year ago said we were in a bubble, and it was rapidly heading for a significant correction. The evidence says that's happening.

There has certainly been a bubble in the DFW area with people fleeing Calif.   For me it’s immediately west of me. I call the development little Cali.  However, construction has slowed.  Perhaps rates and cost have finally rule the day.  
I hope if it becomes a recession it’s short lived.  Let’s get it over with.  

[Stormy]

On 3/9/2023 at 11:08 PM, Front Ranger said:

Define crash. The market saw its worst year since the Great Recession in 2022, losing nearly 20% in value. If it drops another 20% this year, would that qualify?

No one knows what the future holds, of course, but I don't necessarily think looking back at the past 30 years is the best guide going forward. 

And then you have the real estate market, which is the main way that average Joes build wealth historically. Every indicator I looked at a year ago said we were in a bubble, and it was rapidly heading for a significant correction. The evidence says that's happening.

Exactly what I was thinking. The last 10+ years have been phenomenal, but we need to look way beyond 30 years! 

[Andie]

On 3/9/2023 at 10:18 PM, roadtonowhere08 said:

I believe that the market will not crash in the near future.

Having said this, people who invest for the long term do not sweat any of this noise.  Zoom out on the graph and follow the trend line.  7-8% yearly gains on average compounded over 30 years.  It's how non rich people retire nicely.  Everything else is just fear mongering to get your money by selling or trading.

Not crash but a correction is in the cards.   
Also more Baby Boomers are retiring.  Their businesses shutting down. The work ethic has changed.  Society is changing. Where it goes is anyones guess but right now it’s hell finding a good carpenter or plumber around here.  Trades are the backbone of this country.  If I was a young man I’d become the best at my trade.  No shortage of work or income.  

[Iceresistance]

Silvergate and SVB have completely collapsed, this is the biggest since 2008