Recession 2020

[FlyerInHi]

I like Robert Samuelson’s column.

https://www.washingtonpost.com/opinions/trumps-no-win-trade-war/2018/08/12/333915ce-9cbf-11e8-b60b-1c897f17e185_story.html?utm_term=.9f3f0783f8ab

Looks likes the economic consensus is that Trump’s
Trade war bound for failure.

So I stick to my 2020 recession prediction.
1) we are due due for a recession
2) the policies, from deficit to trade wars, to confusion and lack of clarity, will help usher in a recession.

[FlyerInHi]

Prescience or bull?

“Turkey is the canary in the coal mine,” Mr. Lee said on Friday. “We are going have another crash that will be worse than 2008 in certain ways.”

Any Turkish-American on piggington? Maybe time to buy real estate in Istanbul.

The indian rupee also dropped to a record low. Maybe Indian-Americans should think about buying condos in Mumbai.

The meltdown in Turkey will also affect the military situation in Syria. Assad will be able to reclaim territory held by Turkey. A stronger Assad will force the US to escalate or withdraw from Syria.

[SK in CV]

[quote=FlyerInHi]
So I stick to my 2020 recession prediction.
1) we are due due for a recession
2) the policies, from deficit to trade wars, to confusion and lack of clarity, will help usher in a recession.[/quote]

You may be right, mostly because 2020 is a long way off. Another black swan event is as likely now as it’s ever been. I’m not aware of any leading indicators that point in the direction of a looming recession.

[FlyerInHi]

[quote=SK in CV] I’m not aware of any leading indicators that point in the direction of a looming recession.[/quote]

Gut instincts. I’m thinking 2 quarters puts us in 2019 already. Maybe 2020 is an early call.

Higher prices will squeeze consumers, from housing to healthcare, education and consumer goods. Tariffs won’t help.

The U.S. is now a terrible place to be a middle-class consumer
By Germán Gutiérrez and Thomas Philippon
https://www.washingtonpost.com/news/theworldpost/wp/2018/08/13/middle-class/?utm_term=.4666e9155d84

[The-Shoveler]

You would never know it from being at the Temecula Costco yesterday, that place was just crazy mobbed with customers with over stuffed carts.

[SK in CV]

[quote=The-Shoveler]You would never know it from being at the Temecula Costco yesterday, that place was just crazy mobbed with customers with over stuffed carts.[/quote]

That’s not exactly a leading economic indicator, but it’s closer to what I’m looking for. Retail sales are holding steady. Job growth continues. No changes to employment. Layoffs at all time lows. There’s nothing in real estate that screams recession, though there are plenty of areas that require close monitoring. Those are some of the things that are predictive of a recession and almost invariably show up well before GDP turns negative.

[The-Shoveler]

IMO it is a tale of many countries, South Korea they are dealing with mass layoffs, in Japan they have a severe labor shortage.

I saw this morning that China was letting US soy shipments in (well at least some).

When you need it, you need it.

[SK in CV]

[quote=The-Shoveler]
I saw this morning that China was letting US soy shipments in (well at least some).

[/quote]

Sure, at prices 25% lower to US farmers than 2 years ago.

[FlyerInHi]

SK, looking down memory lane at past recessions, excluding the 2008 Great Recession and the 2001 9/11 induced recession, what leading indicators of recession were obviously missed by observers?

[The-Shoveler]

IMO “NOTHING” was missed in 2008.

If we could predict it do you really think they missed it.

[SK in CV]

[quote=FlyerInHi]SK, looking down memory lane at past recessions, excluding the 2008 Great Recession and the 2001 9/11 induced recession, what leading indicators of recession were obviously missed by observers?[/quote]

Quite a few didn’t miss it. Housing starts and initial unemployment claims. That recession was triggered by a black swan event. (liquidity disappeared) It would have happened irrespective of that event.

[Myriad]

Hmm, so wasn’t this site back in 2004/5 documenting the bubble. Along with bubbleinfo.com, calculatedriskblog, etc, etc.

[FlyerInHi]

I meant what are the predictors of the leading indicators…. for example, remember that George Bush Senior denied there was recession trying to talk up the economy.

The thing about recession is that there’s always deniability until 2 quarters of negative growth are confirmed. And the joke “economists predicted 10 of the last 3 recessions.”

[SK in CV]

Here’s two predictors. Rising initial unemployment claims. Falling new home starts. They have not been 100% reliable, but have dropped significantly before most of the last 8 recessions. There are others.

[FlyerInHi]

[quote=SK in CV]Here’s two predictors. Rising initial unemployment claims. Falling new home starts. They have not been 100% reliable, but have dropped significantly before most of the last 8 recessions. There are others.[/quote]

Thanks. I will be paying attention.

[Author]

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