Recession 2019/2020 Mega-thread (putteth all thy strange eruption in h're)

[rcjordan]

Recession fears have vanished - Axios
https://www.axios.com/recession-fears-have-vanished-0d02ba58-81ac-4c47-a645-001ff8908023.html

[ergophobe]

Interesting.

"The CNN Fear & Greed Index registered 'extreme fear' (<25 on a scale from 0-100) in August but is now in 'extreme greed' (91), indicating we may have gone too far too fast."

One of the signals I always use is a friend who is a piano tuner. His clients seem to put off tunings when they are worried. He kept telling that there was "no work." Yesterday he told me tunings have picked up again and he's doing better.

[ergophobe]

Actually, the Fear and Greed Index commonly makes massive moves
https://money.cnn.com/data/fear-and-greed/

[Drastic]

https://www.msn.com/en-us/money/markets/personal-loans-are-growing-like-a-weed-a-potential-warning-sign-for-the-us-economy/ar-BBX7SW0

Also, I've had a prospective startup client contact us for marketing for "installment loans" which seems to be a very high interest (well into double digits) loan structured in a way to be legal with current regs. Reading up on it, seems very nasty.

[littleman]

The great American labor paradox: Plentiful jobs, most of them bad

[ergophobe]

That is the problem... everyone has a job, often two or three. But they are scared they won't make rent, scared they will get laid off, scared they will need to go to the doctor and fail to show up for work on an on-call day and lose their job.

Scheduling security and overtime threshold are two big frontiers for the American labor movement in the coming years. Just-in-time scheduling is one of the biggest complaints people have, more so even than wages.

[ergophobe]

Moved here
http://th3core.com/talk/economics-investing/america's-auto-loan-debt-is-truly-out-of-control/15/

[littleman]

Trucking is an early indicator.

America's $800 billion trucking industry has been in a recession since the beginning of 2019.

That downturn is now affecting truck manufacturers and the people who work at them.

Cummins, a manufacturer of heavy equipment based in Columbus, Indiana, told its employees last week that it would lay off about 2,000 workers worldwide. Cummins' 2018 revenue totaled $23.8 billion.

https://www.businessinsider.com/cummins-confirms-2000-layoffs-at-truck-engine-manufacturer-trucking-downturn-2019-11

The data backs up Boblett's claim, particularly when it comes to new orders of big rigs. According to the most recent data from FTR Transportation Intelligence, October orders of heavy-duty trucks were down by 51% from last year. October is typically the hottest month for new truck orders, and this October's orders hit a three-year low, the weakest since 2016.

[Mackin USA]

U.S. economy shakes free of recession fears in striking turnaround since August

https://www.msn.com/en-us/news/us/u-s-economy-shakes-free-of-recession-fears-in-striking-turnaround-since-august/ar-AAK9ByW

[nffc]

Debenhams will begin a make-or-break year with 19 store closures this month that will result in 660 job losses on the UK's fragile high streets.

https://www.theguardian.com/business/2020/jan/03/debenhams-kicks-off-make-or-break-year-with-19-store-closures

[ergophobe]

Nine States Face Economic Contraction, Most Since 2009 Crisis
Report from the Philadelphia Fed, who issues this forecast monthly
https://www.bloomberg.com/news/articles/2020-01-02/nine-states-face-economic-contraction-most-since-2009-crisis

The overall outlook for the economy, which is enjoying the longest expansion on record, has been helped by the Trump administration scoring trade deals including a pact with China due to be signed this month, lower interest rates, a tight labor market and a rally in stocks.

A Bloomberg Economics model to determine America's recession odds estimates the chance of one within the next year at about one in three -- though that's down from last year.

And then of course, there's the assassination of Soleimani... which is a bit of a wildcard

https://www.marketwatch.com/story/investors-are-misplacing-threats-to-the-us-stock-market-2020-01-03

When the first Gulf War started in 1990, I started short-selling the market, only to see the market shoot straight up.

Historical precedences aside, there is a small probability that this time may be different. The reason is that the U.S. has hurt Iran's pride. When a nation's pride is hurt, its leaders may not act rationally. The rational view is that it is in the interest of all parties to de-escalate the situation.

The real danger to investors is not a war with Iran but the simple fact that this stock market is controlled by the momo (momentum) crowd. A big part of the buying has occurred just because the market is going up. The momo crowd is fickle and can easily start selling if momentum reverses. For this high valuation, fundamental and macro underpinnings are weak in this stock market.

Here's what typically happens to the financial markets after major Middle East crisis events
https://www.cnbc.com/2020/01/03/heres-what-happens-to-the-markets-after-major-middle-east-events.html

Stocks and oil tend to outperform defensive assets like gold and Treasurys in the months after major crisis events in the Middle East, according to an analysis by CNBC.

et cetera

[rcjordan]

UK's HMV still making bad news.

"HMV has warned of possible job losses as it fights to keep open stores across the country in the face of high rents and business rates."

https://www.theguardian.com/business/2020/jan/04/hmv-confirms-three-stores-are-closing-with-job-losses-expected

[nffc]

I've been saying this for years, commercial properties are not an asset, they are a liability.

[rcjordan]

IIRC, this one was on the watch list upstream;

Pier 1 Imports closing nearly half of stores as sales falter - ABC News
https://abcnews.go.com/Business/wireStory/pier-imports-closing-half-stores-sales-falter-68105591

[Mackin USA]

"commercial properties are not an asset, they are a liability"

Having spent years in the commercial Real Estate BIZ, I would agree that online BIZ has taken over. With the continuation of expanded GOV under both GOP & DEM > office buildings in CAPITAL cities will remain strong IMFO

BUT getting back to "Recession"

I'd encourage you to search the phrase "Household Formation 2020"

"Millennials, once held down by the worst job market since the Great Depression, are now in a position where they are the primary demographic driving housing demand."