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Thread: The Recession Will Be Unevenly Distributed

  1. #1

    The Recession Will Be Unevenly Distributed

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    Those households, enterprises and organizations that have no debt, a very low cost basis and a highly flexible, adaptable structure will survive and even prosper.

    The coming recession will be unevenly distributed, meaning that it will devastate many while leaving others relatively untouched. A few will actually do better in the recession than they did in the so-called "recovery."

    I realize many of the concepts floated here are cryptic and need a fuller explanation: the impact of owning differing kinds of capital, fragmentation, asymmetry, opacity, etc. ( 2019: Fragmented, Unevenly Distributed, Asymmetric, Opaque).

    These dynamics guarantee a highly uneven distribution of recessionary consequences and whatever rewards are generated will be reaped by a few.

    One aspect of the uneven distribution is that sectors that were relatively protected in recent recessions will finally feel the impact of this one. Large swaths of the tech sector (which is composed of dozens of different industries and services) that were devastated in the dot-com recession of 2000-02 came through the 2008-09 recession relatively unscathed.

    This time it will be different. The build-out of mobile telephony merging with the web has been completed, social media has reached the stagnation phase of the S-Curve and many technologies that are widely promoted as around the corner are far from profitability.

    Then there's slumping global demand for mobile phones and other consumer items that require silicon (processors) and other tech components: autos, to name just one major end-user of electronics.

    The net result will be mass layoffs globally across much of the tech sector.Research is nice but it doesn't pay the bills today or quiet the restive shareholders as profits tank.

    The public sector is also ripe for uneven distribution of recessionary impacts.Local government and its agencies in boomtowns such as the SF Bay Area, Seattle, Los Angeles, NYC, etc. have feasted on soaring tax revenues and multi-billion dollar municipal bonds.

    The Powers That Be in these boomtowns are confident that the good times will never end, and so the modest rainy-day funds they've set aside are widely viewed as immense bulwarks against recession when in reality they are mere sand castles that will melt away in the first wave.

    A $1 billion reserve looks impressive in good times but not when annual deficits soar to $10 billion. Local governments depend on various revenue streams, and most rely on a mix of property, sales and income taxes, both wages (earned) and capital gains (unearned). All of these will be negatively impacted in the next recession.

    Full article at link.

    Basically, oooh, the stock market goes up so everything must be awesome, despite the Middle Class being utterly obliterated. Is this a sustainable system that benefits everyone? Or, for a few to be Rich, many MUST be Poor?
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  3. #2
    Quote Originally Posted by DamianTV View Post

    Full article at link.

    Basically, oooh, the stock market goes up so everything must be awesome, despite the Middle Class being utterly obliterated. Is this a sustainable system that benefits everyone? Or, for a few to be Rich, many MUST be Poor?
    Economics are unfair. Recession. Growth. Nobody gets impacted the same way. There are no "evenly distributed recessions". (Zerohedge is always saying things are about to collapse). If you want fair, get rid of the free market and adopt communism.

    Maybe the next recession can skip the middle class and only hit the rich?
    Last edited by Zippyjuan; 01-10-2019 at 07:32 PM.

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  4. #3
    I am thinking any downturn will be unevenly distributed . This next one . unlike most gave people 11 years or more to prepare .
    Do something Danke

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