Roubini on the current economic situation, with predictions

[Eugene]

[quote=gracie]so…if we are going into a recession…how best to we prepare for it? I noted on other sites that people were recommending stocking up on food; do you make a major purchase…say a new dishwasher or car now…or wait.

What are you folks doing to prepare for a bad economic time?[/quote]

Make sure you don’t get laid off during this recession. That you have cash reserves to pay rent/utilities/grocery bills for 6 to 12 months if necessary. Avoid luxury purchases.

This too shall pass.

[peterb]

I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.

[peterb]

I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.

[peterb]

I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.

[peterb]

I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.

[peterb]

I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

I’ve put my bet on the historians for this one, eventhough I agree that Roubini has been pretty good lately as well. It looks like gold’s a good bet in a 5 year time frame regardless, but it’s always nice to time these things closer to the mark than not.

[stockstradr]

so…if we are going into a recession…how best to we prepare for it?

This very weekend my wife and I are going through ALL our expenses. We are not rich people.

We are starting with the prudent assumption that at least one of us probably could lose our job during next eighteen months due to lay offs.

We are cutting out every non-essential housing expense from Sat TV, to expensive foods, to not using the AC. I’m embarrassed to write that it took fear of recession for me to finally this weekend replace every incandescent light in the house with low-power compact florescent bulbs. I should have done that years ago!

I’m starting to ride bike to the snail rail (Silicon Valley’s lame mass transit) then ride that to work each day instead of drive. It was costing me $350/month to drive to work.

Fortunately we are NONtypical Americans in that we: 1) have NO DEBT load, except for a $800/mnth mortgage payment for our China home. 2) Don’t have a big fat USA mortgage payment; we rent. 3) Dual-income earning family.

Our personal challenge is that we have only some cash easily accessible in our bank accounts; the rest is locked in ROTH and 401K.

I believe CA max unemployment payment is about $1800/month, assuming your salary prior to lay off was high enough.

[stockstradr]

so…if we are going into a recession…how best to we prepare for it?

This very weekend my wife and I are going through ALL our expenses. We are not rich people.

We are starting with the prudent assumption that at least one of us probably could lose our job during next eighteen months due to lay offs.

We are cutting out every non-essential housing expense from Sat TV, to expensive foods, to not using the AC. I’m embarrassed to write that it took fear of recession for me to finally this weekend replace every incandescent light in the house with low-power compact florescent bulbs. I should have done that years ago!

I’m starting to ride bike to the snail rail (Silicon Valley’s lame mass transit) then ride that to work each day instead of drive. It was costing me $350/month to drive to work.

Fortunately we are NONtypical Americans in that we: 1) have NO DEBT load, except for a $800/mnth mortgage payment for our China home. 2) Don’t have a big fat USA mortgage payment; we rent. 3) Dual-income earning family.

Our personal challenge is that we have only some cash easily accessible in our bank accounts; the rest is locked in ROTH and 401K.

I believe CA max unemployment payment is about $1800/month, assuming your salary prior to lay off was high enough.

[stockstradr]

so…if we are going into a recession…how best to we prepare for it?

This very weekend my wife and I are going through ALL our expenses. We are not rich people.

We are starting with the prudent assumption that at least one of us probably could lose our job during next eighteen months due to lay offs.

We are cutting out every non-essential housing expense from Sat TV, to expensive foods, to not using the AC. I’m embarrassed to write that it took fear of recession for me to finally this weekend replace every incandescent light in the house with low-power compact florescent bulbs. I should have done that years ago!

I’m starting to ride bike to the snail rail (Silicon Valley’s lame mass transit) then ride that to work each day instead of drive. It was costing me $350/month to drive to work.

Fortunately we are NONtypical Americans in that we: 1) have NO DEBT load, except for a $800/mnth mortgage payment for our China home. 2) Don’t have a big fat USA mortgage payment; we rent. 3) Dual-income earning family.

Our personal challenge is that we have only some cash easily accessible in our bank accounts; the rest is locked in ROTH and 401K.

I believe CA max unemployment payment is about $1800/month, assuming your salary prior to lay off was high enough.

[stockstradr]

so…if we are going into a recession…how best to we prepare for it?

This very weekend my wife and I are going through ALL our expenses. We are not rich people.

We are starting with the prudent assumption that at least one of us probably could lose our job during next eighteen months due to lay offs.

We are cutting out every non-essential housing expense from Sat TV, to expensive foods, to not using the AC. I’m embarrassed to write that it took fear of recession for me to finally this weekend replace every incandescent light in the house with low-power compact florescent bulbs. I should have done that years ago!

I’m starting to ride bike to the snail rail (Silicon Valley’s lame mass transit) then ride that to work each day instead of drive. It was costing me $350/month to drive to work.

Fortunately we are NONtypical Americans in that we: 1) have NO DEBT load, except for a $800/mnth mortgage payment for our China home. 2) Don’t have a big fat USA mortgage payment; we rent. 3) Dual-income earning family.

Our personal challenge is that we have only some cash easily accessible in our bank accounts; the rest is locked in ROTH and 401K.

I believe CA max unemployment payment is about $1800/month, assuming your salary prior to lay off was high enough.

[stockstradr]

so…if we are going into a recession…how best to we prepare for it?

This very weekend my wife and I are going through ALL our expenses. We are not rich people.

We are starting with the prudent assumption that at least one of us probably could lose our job during next eighteen months due to lay offs.

We are cutting out every non-essential housing expense from Sat TV, to expensive foods, to not using the AC. I’m embarrassed to write that it took fear of recession for me to finally this weekend replace every incandescent light in the house with low-power compact florescent bulbs. I should have done that years ago!

I’m starting to ride bike to the snail rail (Silicon Valley’s lame mass transit) then ride that to work each day instead of drive. It was costing me $350/month to drive to work.

Fortunately we are NONtypical Americans in that we: 1) have NO DEBT load, except for a $800/mnth mortgage payment for our China home. 2) Don’t have a big fat USA mortgage payment; we rent. 3) Dual-income earning family.

Our personal challenge is that we have only some cash easily accessible in our bank accounts; the rest is locked in ROTH and 401K.

I believe CA max unemployment payment is about $1800/month, assuming your salary prior to lay off was high enough.

[peterb]

I’ve never seen anything like this in my 50 years on this planet. I hear a lot people talking about buying a house right now because it’s PITI costs are equal to rental costs, or it’s down 40% from it’s peak, etc…. All these ASSUMPTIONs about this market are that it will be static are dangerous at this time, IMO. This aint your 1990 recession. The odds of job loss in the next 2 years should be carefully considered by everyone. And that rents could decrease as well. The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

Stay liquid and lower expenses to the bare minimum. I dont even know that debt is such a big deal since one could not pay it off and all that happens is that you lost your credit rating. Oh well, how’s that going to matter when there’s no money available anyway or your unemployed. If I had a HELOC, I’d think about draining out the cash and then wait to see how things go. At least you’d have the money if things really went sour. Credits going away. Might as well get what you can if things look really bad in the near future.

I know this sounds pretty tin-foil-hat in nature. But if you look at the magnitude of the problem, I dont see how payback will not be a beotch for the immense credit abuse of the last 10 years or more.

[peterb]

I’ve never seen anything like this in my 50 years on this planet. I hear a lot people talking about buying a house right now because it’s PITI costs are equal to rental costs, or it’s down 40% from it’s peak, etc…. All these ASSUMPTIONs about this market are that it will be static are dangerous at this time, IMO. This aint your 1990 recession. The odds of job loss in the next 2 years should be carefully considered by everyone. And that rents could decrease as well. The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

Stay liquid and lower expenses to the bare minimum. I dont even know that debt is such a big deal since one could not pay it off and all that happens is that you lost your credit rating. Oh well, how’s that going to matter when there’s no money available anyway or your unemployed. If I had a HELOC, I’d think about draining out the cash and then wait to see how things go. At least you’d have the money if things really went sour. Credits going away. Might as well get what you can if things look really bad in the near future.

I know this sounds pretty tin-foil-hat in nature. But if you look at the magnitude of the problem, I dont see how payback will not be a beotch for the immense credit abuse of the last 10 years or more.

[peterb]

I’ve never seen anything like this in my 50 years on this planet. I hear a lot people talking about buying a house right now because it’s PITI costs are equal to rental costs, or it’s down 40% from it’s peak, etc…. All these ASSUMPTIONs about this market are that it will be static are dangerous at this time, IMO. This aint your 1990 recession. The odds of job loss in the next 2 years should be carefully considered by everyone. And that rents could decrease as well. The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

Stay liquid and lower expenses to the bare minimum. I dont even know that debt is such a big deal since one could not pay it off and all that happens is that you lost your credit rating. Oh well, how’s that going to matter when there’s no money available anyway or your unemployed. If I had a HELOC, I’d think about draining out the cash and then wait to see how things go. At least you’d have the money if things really went sour. Credits going away. Might as well get what you can if things look really bad in the near future.

I know this sounds pretty tin-foil-hat in nature. But if you look at the magnitude of the problem, I dont see how payback will not be a beotch for the immense credit abuse of the last 10 years or more.

[peterb]

I’ve never seen anything like this in my 50 years on this planet. I hear a lot people talking about buying a house right now because it’s PITI costs are equal to rental costs, or it’s down 40% from it’s peak, etc…. All these ASSUMPTIONs about this market are that it will be static are dangerous at this time, IMO. This aint your 1990 recession. The odds of job loss in the next 2 years should be carefully considered by everyone. And that rents could decrease as well. The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

Stay liquid and lower expenses to the bare minimum. I dont even know that debt is such a big deal since one could not pay it off and all that happens is that you lost your credit rating. Oh well, how’s that going to matter when there’s no money available anyway or your unemployed. If I had a HELOC, I’d think about draining out the cash and then wait to see how things go. At least you’d have the money if things really went sour. Credits going away. Might as well get what you can if things look really bad in the near future.

I know this sounds pretty tin-foil-hat in nature. But if you look at the magnitude of the problem, I dont see how payback will not be a beotch for the immense credit abuse of the last 10 years or more.

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