OT: 2015 Recession?

[Coronita]

[quote=livinincali][quote=flu]People keep predicting a doomsday in the near term and that the Fed and government can kick the can down the road only so many more times.

I think it’s pretty evident, however, just how long and how far the Fed and our government can and will kick the can down the road… They are a can kicking guru, and will do the same thing over and over again if needed.
[/quote]

They managed to blow a bubble for 6 years after the NASDAQ bubble burst. We’re really only into this current bubble about 5-6 years. It’s kind of funny that we get really confident in their ability to control and manage everything right about when the bubble pops again. I remember how confident everybody was about subprime being contained back in 2007. We’re probably pretty close to being there again and we just completely ignore what happened last time thinking it’s different this time. Most of us have been through 2 big bubbles and here we are again saying it’s not a bubble. I guess we like to forget.[/quote]

but after the bubble did burst….where are we now?

How many people the held on really got hurt in both cases?

[an]

[quote=livinincali]They managed to blow a bubble for 6 years after the NASDAQ bubble burst. We’re really only into this current bubble about 5-6 years. It’s kind of funny that we get really confident in their ability to control and manage everything right about when the bubble pops again. I remember how confident everybody was about subprime being contained back in 2007. We’re probably pretty close to being there again and we just completely ignore what happened last time thinking it’s different this time. Most of us have been through 2 big bubbles and here we are again saying it’s not a bubble. I guess we like to forget.[/quote]I wasn’t confident about subprime. It was subprime that got me to think it was a bubble. That and the fact that PITI was much higher than comparable rent. Today, there’s no subprime, lending standards are tight. Most buyers are cash or well financed buyers. Not anywhere close to how it was in 2004-2008. Houses in most areas still have not reach peak price yet. I haven’t even talked about inflation adjusted, just pure nominal price.

As for the stock market, all I can say is, don’t bet against the house, don’t fight the fed, etc. It never end pretty. If you start buying into the DOW 20 years ago and dollar cost average over the last 2 busts, you’re sitting very pretty right now. The DOW is up 340% over the last 20 years. How good are you at predicting tops and bottoms? My crystal ball is broken, so unless it is very clear like 2000 and 2008, I’m not betting against the house. I’m won’t be taking the lead, just have a stop loss in place just in case we get another bust.

[FlyerInHi]

[quote=CA renter]I think things will continue to gradually slow, with some bounces along the way, until 2016/2017. At that point, I think that the current bubble has the potential to collapse…and take everything else with it.
[/quote]

can you please elaborate what “everything else with it” means?

GDP has grown since 2008. Where would a collapse as you predict it set us back to?

In general, a mild recession (2 quarters of negative growth) is nothing much to worry about.

[FlyerInHi]

[quote=livinincali] Most of us have been through 2 big bubbles and here we are again saying it’s not a bubble. I guess we like to forget.[/quote]

The busting of the dot.com bubble wasn’t that bad for main street. It affected Silicon Valley and Wall Street.

The housing bubble bust was a real great-recession type event, and had the government not intervened, we could have had a depression.

I predict the next bust will be like the 1989 defense bust that affected Southern California and other costal markets. The rest of the country will move right along. Or it might be on the order of the S&L failures, not more.

[spdrun]

The bursting of the housing bubble didn’t really affect markets that weren’t prone to bubbles in the first place. Shitholes that were circling the drain like DeeeeTROIT excepted, of course.

You didn’t hear about a glut of foreclosures in Ottumwa, Iowa, or Casper, Wyoming.

As far as homeowners in foreclosure, Chris Christie in NJ has the right idea. Minimal state intervention, no requirement to offer a loan mod, let them make it through the system. Keep prices low, and if you were retarded enough to buy a home at bubble prices, screw you.

[FlyerInHi]

Is that why NJ has one of the longest foreclosure process in the country?

I remember reading that somewhere. And the foreclosure rare is very high.

[spdrun]

It’s a judicial state, so it’s a generally long process. Christie has no intent of extending the process to keep skells squatting any longer than needed. Right now, the homes are moving through the system nicely.

Late, but they’re moving, rather than being modded out of the system.

[FlyerInHi]

The article says China ana Europe will cause global recession. Not was said about the “sins” of the Fed

[CA renter]

[quote=FlyerInHi][quote=CA renter]I think things will continue to gradually slow, with some bounces along the way, until 2016/2017. At that point, I think that the current bubble has the potential to collapse…and take everything else with it.
[/quote]

can you please elaborate what “everything else with it” means?

GDP has grown since 2008. Where would a collapse as you predict it set us back to?

In general, a mild recession (2 quarters of negative growth) is nothing much to worry about.[/quote]

Everything else: housing prices, stock prices, bond prices,* commodities, wild currency fluctuations, etc. And jobs will be lost, too, IMO.

You don’t need to have NINJA mortgage loans to make a bubble. It’s the level of leverage and speculation that causes a bubble. How that speculation and leverage manifest themselves does not really matter.

—————-

Margin debt:

http://www.businessinsider.com/nyse-margin-debt-scary-zone-2014-7

…

Derivative contract volumes are at or above 2008 levels:

2008 (page 5)

http://www.bis.org/publ/otc_hy0811.pdf

2013

http://www.bis.org/statistics/dt1920a.pdf

…

Federal Reserve’s balance sheet:
(click on all data)

http://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

…

Federal Debt:

http://research.stlouisfed.org/fred2/graph/?g=Jut

…

Household debt:

http://www.businessinsider.com/ny-fed-q1-2014-household-debt-2014-5

—————

I’ve probably forgotten to list some of the things that have stood out to me over the past few years, but that should at least give an idea of why I (and a few others) are concerned. And this is all the result of the Federal Reserve’s manipulations…and the government’s support of those manipulations.

*Bond prices could go either way, depending largely on the global position of the dollar and faith in fiat currencies.

[spdrun]

Everything else: housing prices, stock prices, bond prices,* commodities, wild currency fluctuations, etc. And jobs will be lost, too, IMO.

Here’s to it!

[CA renter]

[quote=FlyerInHi]The article says China ana Europe will cause global recession. Not was said about the “sins” of the Fed[/quote]

It is all connected.

[Coronita]

….So it looks like the Bank of Japan is going to be kicking the can down the road… Futures up bigtime…

http://finance.yahoo.com/news/asia-shares-edge-brightening-us-003958389.html

I guess when the Fed ends stimulus some other sovereignty needs to …heh heh…

Meanwhile, gold/silver getting crushed.

[The-Shoveler]

I still got a good vibe feeling going for USA,

IE economy starting to ramp up these days (fastest growing economic area in California now).

L.A. ports at record volume.

Manufacturing being on shored now.

Feels good to me.

I think I will buy a little silver just because (nearing 5 year low).

[spdrun]

When the Fed were printing, Europe was still circling the drain. Just because the Japanese print doesn’t mean we won’t go down the toilet. Or that they won’t — they’ve been printing for years to no major effect.

Also, Japan is targeting a $10-20 trillion yen excess increase in their monetary base per annum. That’s $90-180 billion per year, or $7-15 billion per month. A drop in the bucket compared to US QEx.

Japan QE was also highly dollar-positive, which isn’t so good for US manufacturing and sales of our shit abroad.

Euro at 1.25 – wow.
Yen at 112 – wow.
Canuck almost at 1.13 – haha.

[spdrun]

With any luck, a strong $$$ and cheaper oil will kibosh this trend.

[Author]

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