Coming Economic/Markets Crash

[Deweydog]

1 hour ago, Andie said:

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.  

Bingo. Those willing to immerse themselves in an apprentice-based trade with an even modestly strong work ethic is all but guaranteed a six-figure earning potential within a relatively short time. We never talked our kids out of the college route, but never pushed it either. Ended up with a 50/50 split.

[Deweydog]

On 3/9/2023 at 9:08 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.

Tricky. There is no real definition, you have to look macro rather than micro and add context.

The markets panicked three years ago and the SP500 bottomed out around 2,300. Since then it’s up over 65%. The dissonant euphoria of 2021 with all the meme stocks, crypto, rock bottom rates/QE and stimulus were extremely transparent. It’s hard to look at what was an inevitable correction, still ongoing in a persistent inflationary environment, and call it a crash. 

[Stormy]

I hope Larry isn't right!!

 

 

 

[Front Ranger]

23 minutes ago, Deweydog said:

Tricky. There is no real definition, you have to look macro rather than micro and add context.

The markets panicked three years ago and the SP500 bottomed out around 2,300. Since then it’s up over 65%. The dissonant euphoria of 2021 with all the meme stocks, crypto, rock bottom rates/QE and stimulus were extremely transparent. It’s hard to look at what was an inevitable correction, still ongoing in a persistent inflationary environment, and call it a crash. 

I think that's a factor that can't be overlooked as well - inflation. When that's accounted for, last year saw basically a 30% drop in stock market value, in real terms.

But overall I agree...given the bubblicious run up the previous few years, it's more of a correction than a crash to this point. Though crypto, meme stocks, and many tech stocks have seen a legit crash without a doubt.

That being said, the worst could easily be ahead. Historically, equity/housing markets don't bottom out until we're well into a recession. And almost every indicator out there says a recession is right around the corner.

[Deweydog]

52 minutes ago, Front Ranger said:

I think that's a factor that can't be overlooked as well - inflation. When that's accounted for, last year saw basically a 30% drop in stock market value, in real terms.

But overall I agree...given the bubblicious run up the previous few years, it's more of a correction than a crash to this point. Though crypto, meme stocks, and many tech stocks have seen a legit crash without a doubt.

That being said, the worst could easily be ahead. Historically, equity/housing markets don't bottom out until we're well into a recession. And almost every indicator out there says a recession is right around the corner.

The recession thing is funny considering it became a very partisan issue last year. Both sides were able to manipulate things to fit a pre-determined narrative because there was and still is an interesting duplicity. Some indicators screamed recession while others screamed the exact opposite.

And I totally agree, the worst could be and probably is still to come. Rate hikes have not yet had a widespread effect as it’s been pretty erratic. Housing and car market have been hit the hardest, both which were in need of solid corrections. 

Edited March 11, 2023 by Deweydog

[Andie]

10 hours ago, Deweydog said:

Bingo. Those willing to immerse themselves in an apprentice-based trade with an even modestly strong work ethic is all but guaranteed a six-figure earning potential within a relatively short time. We never talked our kids out of the college route, but never pushed it either. Ended up with a 50/50 split.

Just curious. Who’s doing better in the income so far. College grads or trades?  Do you think one will surpass the other 15 yrs from now?

[roadtonowhere08]

13 hours ago, Andie said:

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.  

I think a few things are at play here:

1. This country has beaten the drum of "college or loser" for a long time now.  Colleges are businesses.  They need butts in seats paying tuition.  It's great PR for everyone to tout high school to college rates.  But this resulted in a LOT of people wasting a lot of money for a worthless degree, and killed society's respect for the irreplaceable: hardworking people working in the trades.  Nobody seemed interested in having the honest conversation of whether people were wasting money on college and that being a plumber, electrician, or linesman was an honest living with good pay.  People thought you were selling them short.  That's toxic and needs to end.

2. There's also social media corrupting the minds of youth on a variety of fronts, giving them false views of reality.  They also develop an entitlement complex, but that is a product of a lifetime of marketing pushing conspicuous consumption and selfishness.  People growing up and entering the workforce are a product of their environment.  This environment raised a generation of followers demanding instant gratification.

3. Finally there is a cultural shift of giving the finger to grueling work expectations and a heavier emphasis on a balance on work and personal life.  Time after time, they see the benefits of their parents being chipped away by corporations who only really care about quarterly profits.  Why give it 110% when usually there is no reciprocity?  It is expected when a society reaches a level of affluence and comfort:  People want to enjoy their life as well as work.  I can't say I blame people for having that desire.

The U.S. has got to get serious about homegrown talent and keeping workers by prioritizing morale instead of squeezing them dry for that last 1% of productivity.

[Stormy]

6 hours ago, roadtonowhere08 said:

I think a few things are at play here:

1. This country has beaten the drum of "college or loser" for a long time now.  Colleges are businesses.  They need butts in seats paying tuition.  It's great PR for everyone to tout high school to college rates.  But this resulted in a LOT of people wasting a lot of money for a worthless degree, and killed society's respect for the irreplaceable: hardworking people working in the trades.  Nobody seemed interested in having the honest conversation of whether people were wasting money on college and that being a plumber, electrician, or linesman was an honest living with good pay.  People thought you were selling them short.  That's toxic and needs to end.

2. There's also social media corrupting the minds of youth on a variety of fronts, giving them false views of reality.  They also develop an entitlement complex, but that is a product of a lifetime of marketing pushing conspicuous consumption and selfishness.  People growing up and entering the workforce are a product of their environment.  This environment raised a generation of followers demanding instant gratification.

3. Finally there is a cultural shift of giving the finger to grueling work expectations and a heavier emphasis on a balance on work and personal life.  Time after time, they see the benefits of their parents being chipped away by corporations who only really care about quarterly profits.  Why give it 110% when usually there is no reciprocity?  It is expected when a society reaches a level of affluence and comfort:  People want to enjoy their life as well as work.  I can't say I blame people for having that desire.

The U.S. has got to get serious about homegrown talent and keeping workers by prioritizing morale instead of squeezing them dry for that last 1% of productivity.

[Andie]

15 hours ago, roadtonowhere08 said:

I think a few things are at play here:

1. This country has beaten the drum of "college or loser" for a long time now.  Colleges are businesses.  They need butts in seats paying tuition.  It's great PR for everyone to tout high school to college rates.  But this resulted in a LOT of people wasting a lot of money for a worthless degree, and killed society's respect for the irreplaceable: hardworking people working in the trades.  Nobody seemed interested in having the honest conversation of whether people were wasting money on college and that being a plumber, electrician, or linesman was an honest living with good pay.  People thought you were selling them short.  That's toxic and needs to end.

2. There's also social media corrupting the minds of youth on a variety of fronts, giving them false views of reality.  They also develop an entitlement complex, but that is a product of a lifetime of marketing pushing conspicuous consumption and selfishness.  People growing up and entering the workforce are a product of their environment.  This environment raised a generation of followers demanding instant gratification.

3. Finally there is a cultural shift of giving the finger to grueling work expectations and a heavier emphasis on a balance on work and personal life.  Time after time, they see the benefits of their parents being chipped away by corporations who only really care about quarterly profits.  Why give it 110% when usually there is no reciprocity?  It is expected when a society reaches a level of affluence and comfort:  People want to enjoy their life as well as work.  I can't say I blame people for having that desire.

The U.S. has got to get serious about homegrown talent and keeping workers by prioritizing morale instead of squeezing them dry for that last 1% of productivity.

  Exactly what I think    

We seem to push too many young people toward tech careers when they may only be average  Their aptitude may be talented in entirely different fields…and they’d be happier   
That happened to me.  My mother pushed me the wrong direction and my Dad later encouraged the engineer in me.  We worked together on my plant and had a blast while making good money.  I didn’t need a degree for that chemical plant   

 

[Iceresistance]

Signature Bank has collapsed.

[SnarkyGoblin]

On 3/11/2023 at 2:13 PM, Deweydog said:

And I totally agree, the worst could be and probably is still to come. Rate hikes have not yet had a widespread effect as it’s been pretty erratic. Housing and car market have been hit the hardest, both which were in need of solid corrections. 

We begrudgingly bought a new car within the last month. My wife insisted.

Dealers for the same car (Kia Sportage phev) were charging anywhere from 3k to 8k above MSRP.  Correction hasn't hit all areas of the market yet.

[Iceresistance]

Credit Suisse is facing serious trouble, it could be next to collapse! It has dropped by over 25% just today.

[SnarkyGoblin]

2 hours ago, Iceresistance said:

Credit Suisse is facing serious trouble, it could be next to collapse! It has dropped by over 25% just today.

Apparently Credit Suisse has about as many assets as Lehman did in 2008. =\

Let's hope we learned our lesson to stop contagion.

[Front Ranger]

3 hours ago, SnarkyGoblin said:

Apparently Credit Suisse has about as many assets as Lehman did in 2008. =\

Let's hope we learned our lesson to stop contagion.

The lesson I hope we learn this time (probably not) is that the Federal Reserve needs to stop over-manipulating markets.

https://www.pbs.org/wgbh/frontline/documentary/age-of-easy-money/

[Deweydog]

13 hours ago, SnarkyGoblin said:

We begrudgingly bought a new car within the last month. My wife insisted.

Dealers for the same car (Kia Sportage phev) were charging anywhere from 3k to 8k above MSRP.  Correction hasn't hit all areas of the market yet.

Yeah, the car market is really volatile right now, but the rates have priced a ton of people out of the market. Most vehicles priced above MSRP these days are rotting on the lots while 12-18 months ago they were predominantly sold before rubber ever touched the lot.

Repos/defaults are steadily on the increase in conjunction with unprecedented levels of negative equity. It’s a perfect storm of the low rates of yesteryear during low inventory and banks willing to go up to as much as a ridiculous 140% LTV as auto makers gouged the fudge out of consumers. 

[Iceresistance]

20 hours ago, SnarkyGoblin said:

Apparently Credit Suisse has about as many assets as Lehman did in 2008. =\

Let's hope we learned our lesson to stop contagion.

They have recovered as the Swiss Government gave them Billions to help them survive. Stock has increased by over 20%, which has countered yesterday's losses.

[Rubus Leucodermis]

13 hours ago, Iceresistance said:

They have recovered as the Swiss Government gave them Billions to help them survive. Stock has increased by over 20%, which has countered yesterday's losses.

[Iceresistance]

First Republic bank needs to be watched, it could also fail.

 

Dow Jones is taking a nosedive again...

[Front Ranger]

Don't call it a crash.

[Anti Marine Layer]

16 minutes ago, Front Ranger said:

Don't call it a crash.

What should it be called then?

[Anti Marine Layer]

On 3/17/2023 at 11:46 AM, Iceresistance said:

First Republic bank needs to be watched, it could also fail.

 

Dow Jones is taking a nosedive again...

Some say it's a plan by the Dems to make us use digital currency. 

[Iceresistance]

Just now, Mr Marine Layer said:

Some say it's a plan by the Dems to make us use digital currency. 

Well, even digital currency is having problems with this. Silvergate was a Crypto Bank.

[roadtonowhere08]

4 minutes ago, Mr Marine Layer said:

What should it be called then?

A California pothole.

[Iceresistance]

The Fed is insane, another rate hike, highest since 2007.

[Rubus Leucodermis]

On 3/18/2023 at 1:59 PM, Front Ranger said:

Don't call it a crash.

Hasn’t gone down nearly that much in metro Vancouver. Yet.

A bloodbath would personally benefit me. Unless, of course, it triggers a wider contagion.

[Front Ranger]

9 hours ago, Iceresistance said:

The Fed is insane, another rate hike, highest since 2007.

They are stuck between a big rock and a very hard place. Inflation is far from tamed yet, and so they believe they have to raise rates until it is, even if leads to a more significant financial/credit crisis than we've already seen (it will).

[Iceresistance]

9 hours ago, Front Ranger said:

They are stuck between a big rock and a very hard place. Inflation is far from tamed yet, and so they believe they have to raise rates until it is, even if leads to a more significant financial/credit crisis than we've already seen (it will).

The fuse for a Nuclear Economic recession is lit. When it blows, it's not going to be pretty.

[Iceresistance]

Bed Bath & Beyond has filed for Bankruptcy

[Anti Marine Layer]

Wow, this is still here.

[Iceresistance]

Ow!
US economic growth slowed significantly at start of 2023 (msn.com)

[Stormy]

On 4/26/2023 at 7:55 AM, Iceresistance said:

Bed Bath & Beyond has filed for Bankruptcy

Budweiser up next?  Fox News is being Budweisered as well.

[roadtonowhere08]

On 3/9/2023 at 1:57 PM, Andie said:

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.  

So we are coming up on the 60 day mark.  How does everyone feel about their bets?  I feel great about mine.

[Andie]

Can anyone say they’re genuinely excited about things.? 

[Reg]

4 hours ago, Andie said:

Can anyone say they’re genuinely excited about things.? 

I find this very interesting - most Americans, of all political backgrounds and affiliations, find this country's economic future to be very bleak no matter what the situation - the main differences being who to blame for the current situation...

[Andie]

Lots of folks to blame most likely.  
But a lack of real understanding of economics and a lot of folks despondent about the state of society may be a contributing factor.   
I’m just not seeing a great deal of enthusiasm over the future.  
The inflation rate will increase as will interest rates, costs of goods. What is there to say?  
Blame will happen.  Just not noisy enough yet.  

[Iceresistance]

First Republic Bank is likely doomed

First Republic Bank to be taken over by FDIC: Report | Fox Business

[Andie]

Dominoes?…..

“First Republic’s fate was set when the bank revealed that it lost $100 billion in deposits after SVB’s collapse led to panic among wealthy clients. Its stock plummeted 75 percent last week. 

It’s unclear whether First Republic Bank is the final domino to fall in the recent banking crisis. That could hinge on whether depositors will pull their money from other institutions.”

-The Hill  5/1/23

[SilverFallsAndrew]

A lot of reasons to be extremely concerned about the economy right now. 

[Anti Marine Layer]

3 hours ago, SilverFallsAndrew said:

A lot of reasons to be extremely concerned about the economy right now. 

[Deweydog]

1 hour ago, Anti Marine Layer said:

That’s ridiculous. I don’t see gas going over $35/gallon any time soon.