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Thread: The Great Recession 2.0 (2019)

  1. #1

    The Great Recession 2.0 (2019)

    As everyone paying attention to the economic situation already knows, the fundamental economic problems that brought about the last recession haven't been solved. In lieu of allowing the necessary liquidation, the Fed expanded credit, and the feds spent hundreds of billions (financed by the issue of treasuries then monetized by the Fed), to support the inefficient structure of production that existed in 2007, which only extended all of those malinvestments. This time it isn't just sub-prime (though real estate is still an issue), it's everything. Corporate debt, mostly used to finance buybacks and goose the stock market, is totally out of control; nearly half of the investment grade stuff ought to be rated junk based on current metrics, nevermind what happens when GDP turns negative in a quarter or two. Global trade is collapsing. Consumer debt delinquencies are rising. The stock market is just off historically insane over-valuations. As for camel-back-breaking straws, the 10y-3m spread is seriously inverted, among other durations. The US is going to go into recession early next year, if not sooner.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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  3. #2
    Quote Originally Posted by r3volution 3.0 View Post
    As everyone paying attention to the economic situation already knows, the fundamental economic problems that brought about the last recession haven't been solved. In lieu of allowing the necessary liquidation, the Fed expanded credit, and the feds spent hundreds of billions (financed by the issue of treasuries then monetized by the Fed), to support the inefficient structure of production that existed in 2007, which only extended all of those malinvestments. This time it isn't just sub-prime (though real estate is still an issue), it's everything. Corporate debt, mostly used to finance buybacks and goose the stock market, is totally out of control; nearly half of the investment grade stuff ought to be rated junk based on current metrics, nevermind what happens when GDP turns negative in a quarter or two. Global trade is collapsing. Consumer debt delinquencies are rising. The stock market is just off historically insane over-valuations. As for camel-back-breaking straws, the 10y-3m spread is seriously inverted, among other durations. The US is going to go into recession early next year, if not sooner.
    I don't have all the figures in front of me like you do, but if it's as you say, I reckon you're right. But I'd use the term "depression" instead of "recession". As Rothbard notes in "Man, Economy, And State", the word "recession" developed as a way to appease the delicate sensibilities of Boobus Americanus. Likewise, the all-wise economists who tell the masses what to think are known to call the busts(depressions) "slowdowns", "sideways movements", and various other euphamisms.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
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  4. #3
    Quote Originally Posted by heavenlyboy34 View Post
    I don't have all the figures in front of me like you do, but if it's as you say, I reckon you're right. But I'd use the term "depression" instead of "recession". As Rothbard notes in "Man, Economy, And State", the word "recession" developed as a way to appease the delicate sensibilities of Boobus Americanus. Likewise, the all-wise economists who tell the masses what to think are known to call the busts(depressions) "slowdowns", "sideways movements", and various other euphamisms.
    Check out this presentation by David Stockman, skip ahead to 14:40 on the video.

    His charts explain most of what's happening.

    https://www.peakprosperity.com/pain-...g-is-optional/

    And, yes, "recession" is certainly a euphemism.

    I don't want to go all out doom porn, but I think this is "it" (for the socialistic West).
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  5. #4
    DOOOM! DOOM! DOOM! Buy gold! Buy bitcoin! DOOOOOOOOOOOOOOOOOOOOOOOOM!

  6. #5
    Quote Originally Posted by phill4paul View Post
    DOOOM! DOOM! DOOM! Buy gold! Buy bitcoin! DOOOOOOOOOOOOOOOOOOOOOOOOM!
    We're a month or so away from the longest economic expansion in history.

    How much longer do you think it might last?
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  7. #6
    Quote Originally Posted by r3volution 3.0 View Post
    We're a month or so away from the longest economic expansion in history.

    How much longer do you think it might last?
    How long have doom purveyors been around? Did you espouse the "Year 2000" problem? A total breakdown? DOOOOM! DOOOOOM! DOOOOOOM!

    Keep on with your bad self. Your full of bull$#@!. There are ups and downs, but there will not be a bust.

  8. #7
    Oh, and, for the once reasonable member turned Trumptard above, no, don't buy bitcoin or gold right now.

    Sell everything and sit in cash or near cash and wait till blood floods the streets to the height of a horses' bridle, as it were.

    DISCLAIMER: This is not investment advice. I am in fact a cat walking on a keyboard. Meow.

    P.S.

    Quote Originally Posted by phill4paul View Post
    Keep on with your bad self. Your full of bull$#@!. There are ups and downs, but there will not be a bust.
    Ah, MAGA-forever, got it.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  9. #8
    Quote Originally Posted by r3volution 3.0 View Post
    Oh, and, for the once reasonable member turned Trumptard above, no, don't buy bitcoin or gold right now.

    Sell everything and sit in cash or near cash and wait till blood floods the streets to the height of a horses' bridle, as it were.

    DISCLAIMER: This is not investment advice. I am in fact a cat walking on a keyboard. Meow.

    P.S.



    Ah, MAGA-forever, got it.
    See ya right here. Right now in 5, 10 yrs.? Oh great prognosticator do you hold a specific DOOOM date like so many others in the past? Is it tied to the Bible? Or the stars? If the economy in America goes through total collapse what do you suppose bit coin will be worth? When it can't be accessed.
    AF is right. You are a Collapseatarian.
    Keep on hoping and wishing. For destruction.
    I'll just keep on earning. And investing.



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  11. #9
    Quote Originally Posted by phill4paul View Post
    See ya right here. Right now in 5, 10 yrs.? Oh great prognosticator do you hold a specific DOOOM date like so many others in the past? Is it tied to the Bible? Or the stars?
    As I said in the OP, I expect the US to be in recession by the beginning (i.e. Q1) of next year.

    I base this on the current downward trend in economic data.

    The inversion of the yield curve, e.g., typically precedes the first negative GDP print by about half a year.

    If the economy in America goes through total collapse what do you suppose bit coin will be worth?
    Nothing

    When it can't be accessed.
    I'm sure people will be able to access nothing at any time.

    AF is right. You are a Collapseatarian.
    I wasn't aware that AF ever called me such.

    Are you sure you aren't confusing me with someone else?

    Keep on hoping and wishing. For destruction.
    I'd prefer growth, but with idiots running the present administration, and surely also the next, I've curbed my enthusiasm.

    I'll just keep on earning. And investing.
    If you're long equities, best of luck...
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  12. #10

    a few telling charts in no particular order

    The Triple Top




    The inversion



    Housing



    More Housing



    Shipping



    Corporate Debt

    Last edited by r3volution 3.0; 05-30-2019 at 01:00 AM.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  13. #11
    Gundlach has the idea.

    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  14. #12
    Auto Loan Delinquencies




    World Trade

    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  15. #13
    Regarding that chart of corporate debt above, it's not just about quantity:

    The quality of investment-grade corporate bonds has crumbled over the past decade. A bond is considered investment grade if it’s rated between AAA and BBB-. The closer to AAA, the safer the bond.

    But according to Morgan Stanley, the U.S. has been flooded with BBB-rated bonds. In the past 10 years, the triple-B bond market has exploded from $686 billion to $2.5 trillion, an all-time high. In other words, 50% of the investment-grade bond market now sits on the lowest rung of the investment-grade ladder.

    And there’s a reason BBB-rated debt is so plentiful. Companies have binged on cheap credit for years. Ultra-low interest rates have seduced companies to pile into the bond market. Corporate debt has surged to heights not seen since the global financial crisis:

    ...

    In a recession, BBB-rated bonds are the most vulnerable of all investment-grade bonds. According to Moody’s, 10% of BBB-rated corporate bonds are downgraded to “junk” status in a recession. Since the number of BBB-rated bonds has exploded, we will see more such cases than ever before in the next recession.
    https://www.marketwatch.com/story/ha...tus-2019-01-07

    Companies that gorged on debt in an era of easy money are storing up trouble for the next downturn, according to prominent figures such as Bruce Richards, chairman and chief executive officer of Marathon Asset Management.

    They could rapidly lose their high-grade ratings in a recession and swamp the market with so-called fallen angels, he said in a Bloomberg TV interview this month. He reckons $1 trillion of such bonds could even justify junk ratings based on their leverage ratios -- a figure that tallies with downgrade estimates of Morgan Stanley’s credit team for the next bust.
    https://www.newsmax.com/finance/stre.../16/id/890989/

    Keep in mind that lots of big bond buyers such as pension funds are legally prohibited from investing in (or holding) junk, i.e.:

    Last edited by r3volution 3.0; 05-30-2019 at 12:43 AM.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  16. #14

    At the end of the Rainbow

    Quote Originally Posted by Swordsmyth View Post
    You only show up to attack Trump when he is wrong
    DACA S**thole Dreamers - Make America Great Again?

  17. #15
    Quote Originally Posted by RonZeplin View Post


    I'm taking out a second mortgage to go long the Dow.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  18. #16
    Just in case , I spent a lifetime going all in on everything except FRN's . So I will live like a king one way or the other.
    Do something Danke



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  20. #17
    Quote Originally Posted by phill4paul View Post
    How long have doom purveyors been around? Did you espouse the "Year 2000" problem? A total breakdown? DOOOOM! DOOOOOM! DOOOOOOM!

    Keep on with your bad self. Your full of bull$#@!. There are ups and downs, but there will not be a bust.
    It sounds like you're saying that this can go on literally forever.

    Do you believe that the federal government will fulfill all of its $100 Trillion or so financial obligations over the course of the next few decades?

  21. #18
    Quote Originally Posted by r3volution 3.0 View Post
    The Triple Top

    All good stuff. One random indicator that is also very good is how well the market does when unemployment is super low like now. And historically the market has negative 3 year returns when valuations are like they are and unemployment is where it is at.

    That said I wouldn't be so sure the market has made all time highs. I am buying the market today and would add if tomorrow closes lower. Should get a bounce soon. End of month very bullish an combined with oversold. A little more fear would be nice but still think bounce without.

    Last edited by Krugminator2; 05-30-2019 at 01:44 PM.

  22. #19
    Quote Originally Posted by Krugminator2 View Post
    All good stuff. One random indicator that is also very good is how well the market does when unemployment is super low like now. And historically the market has negative 3 year returns when valuations are like they are and unemployment is where it is at.

    That said I wouldn't be so sure the market has made all time highs. I am buying the market today and would add if tomorrow closes lower. Should get a bounce soon. End of month very bullish an combined with oversold. A little more fear would be nice but still think bounce without.

    There are good arguments to be made for a major downward crash in equity prices as the bubble is popped and fake valuations return to the real world, fake Fed money is drained and the dollar loses its exorbitant privilege as main reserve currency. At the same time good arguments can be made that equity markets crash upward as the dollar is devalued and cash on the sidelines not drained from the system by the first scenario runs for something, especially since gold would quickly become scarce in large quantities (which it already is if you follow COMEX and GLD). Helicopter money is always on the table as an option. Who knows. If thinking outside of the box in order to avoid a possible false choice between one or the other, there's also a very good possibility that parallel markets emerge, one with a low (real, based on gold backed "money") valuation and the existing one based on FRNs that hyperinflates into garbage and takes the FRN with it.
    Last edited by devil21; 05-30-2019 at 02:19 PM.
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  23. #20
    Quote Originally Posted by Superfluous Man View Post
    It sounds like you're saying that this can go on literally forever.

    Do you believe that the federal government will fulfill all of its $100 Trillion or so financial obligations over the course of the next few decades?
    With the right Master, Phil believes anything is possible.

    Kind of pathetic, really.
    “The nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them.” --George Orwell

    Quote Originally Posted by AuH20 View Post
    In terms of a full spectrum candidate, Rand is leaps and bounds above Trump. I'm not disputing that.
    Who else in public life has called for a pre-emptive strike on North Korea?--Donald Trump

  24. #21
    If there has to be a recession, it may as well be a Great recession
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Rand Paul (Vice Pres) 2016!!!!

  25. #22
    Quote Originally Posted by TheTexan View Post
    If there has to be a recession, it may as well be a Great recession
    Well you guys have me scared so I spent the day drinking light beer instead of regular beer , eating burgers with fried onions , counting uncirculated 1880 O silver dollars , counting rounds of zombie ammo and sharpening my switchblade . I am a Great American .
    Do something Danke

  26. #23
    Quote Originally Posted by Superfluous Man View Post
    It sounds like you're saying that this can go on literally forever.

    Do you believe that the federal government will fulfill all of its $100 Trillion or so financial obligations over the course of the next few decades?
    It has already floated longer than I thought it could so hard to tell how long it can meander along .
    Do something Danke

  27. #24
    Quote Originally Posted by TheTexan View Post
    If there has to be a recession, it may as well be a Great recession
    Make America Great Recess Again (MAGRA)



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  29. #25
    Quote Originally Posted by kcchiefs6465 View Post
    With the right Master, Phil believes anything is possible.

    Kind of pathetic, really.
    Go $#@! yourself.

  30. #26
    Quote Originally Posted by r3volution 3.0 View Post
    The US is going to go into recession early next year, if not sooner.
    If we are not in the grips of a Great Recession by March 31st 2020 will you go away?

  31. #27
    In his latest masterstroke, Stable Genius announced he's slapping a 5% tariff on Mexican imports effective June 10, to rise to 25% by October 1.

    https://moneymaven.io/mishtalk/econo...E6CSqkEqk-ULA/

    ...because, what the hell, ship's going down anyway, might as well throw some red meat to the base (or he's just an idiot [or short])

    Also, here's another trade chart to ponder.




    Quote Originally Posted by Krugminator2 View Post
    All good stuff. One random indicator that is also very good is how well the market does when unemployment is super low like now. And historically the market has negative 3 year returns when valuations are like they are and unemployment is where it is at.
    Yep, that first hook up off these super low levels usually occurs right before (what is only later recognized as) a recession.

    That said I wouldn't be so sure the market has made all time highs. I am buying the market today and would add if tomorrow closes lower. Should get a bounce soon. End of month very bullish an combined with oversold. A little more fear would be nice but still think bounce without.
    Given the news above, that's a solid bet.
    Last edited by r3volution 3.0; 05-30-2019 at 11:57 PM.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  32. #28
    Trump is such a worthless sack of cum.

  33. #29
    I think that the market crash will be orchestrated in this year (2019) and that this is discussed as we speak at Bilderberg: http://www.ronpaulforums.com/showthr...ing-Bilderberg

    They need a genuine panic to get a full-blown crash going.

    Possibilities I could think of for orchestrating the crash include...

    The Brexit hysteria.
    Sanctions on Venezuela and/or Iran lead to lower oil production, with oil prices exploding.
    Tarrifs, counter-tariffs and sanctions.
    Do NOT ever read my posts.
    Google and Yahoo wouldn’t block them without a very good reason: http://www.ronpaulforums.com/showthr...he-world/page2

  34. #30
    Quote Originally Posted by Firestarter View Post
    I think that the market crash will be orchestrated in this year (2019) and that this is discussed as we speak at Bilderberg: http://www.ronpaulforums.com/showthr...ing-Bilderberg

    They need a genuine panic to get a full-blown crash going.

    Possibilities I could think of for orchestrating the crash include...

    The Brexit hysteria.
    Sanctions on Venezuela and/or Iran lead to lower oil production, with oil prices exploding.
    Tarrifs, counter-tariffs and sanctions.
    Yes, a panic catalyst and they don't turn on the various central bank PPT computers to mitigate it. ZH, iirc, had a barely noticed post earlier this week that many of the companies that have been doing buybacks, which have held up markets to a great extent, are turning into sellers again. For every sell order there's gotta be a buy order, otherwise flash crash ensues.

    May you live in interesting times...
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

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