About to crash

[Flopper]

Moody's cuts ratings of 10 U.S. banks and puts some big names on downgrade watch

Moody's on Monday cut the credit ratings of a host of small and midsized U.S. banks and placed several Wall Street big names on negative review.

www.cnbc.com

Downgrading banks means the flow of credit will get tight. That’s when recessions hit and markets crash.

This is awful news.

There are a lot of factors that effect the money supply and the availability of credit. The Federal Reserve's long announced increase in interest rates in the fall, won't occur if the economy looks like it's turning down. In fact the Fed has a lot room to cut rates.

I will do as I have done for over 40 years, maintain my asset allocation, buying and selling only when a major asset class is more than 5% off my target which has served me very well for regardless of the ups and downs of the market.

 

[AzogtheDefiler]

There are a lot of factors that effect the money supply and the availability of credit. The Federal Reserve's long announced increase in interest rates in the fall, won't occur if the economy looks like it's turning down. In fact the Fed has a lot room to cut rates.

I will do as I have done for over 40 years, maintain my asset allocation, buying and selling only when a major asset class is more than 5% off my target which has served me very well for regardless of the ups and downs of the market.

That’s fine but the economy is about to crash regardless. Glad you can afford to pay $1k to fill up your oil tank if your use oil to heat your home. Many cannot.

 

[Flopper]

I don't get it; the Federal minimum wage is still what, $7.50 an hour? I thought low wages was the road to prosperity and huge booms. obviously we need to get wages down to around 50 cents an hour, and force these lazy proles to put in 4 hour days, 7 days a week, so stock dividends can go through the roof and stuff.

The federal minimum wage is a joke. Only 1.5% of workers are paid the federal minimum. There are only 7 states where workers have a 7.25 minimum wage.

 

[Flopper]

That’s fine but the economy is about to crash regardless. Glad you can afford to pay $1k to fill up your oil tank if your use oil to heat your home. Many cannot.

We may have a recession in 24, economist give it about a 50/50 chance but I doubt that there is going to be a crash.

 

[AzogtheDefiler]

We may have a recession in 24, economist give it about a 50/50 chance but I doubt that there is going to be a crash.

It’s going to make 08-09 look like child’s play.

 

[Flopper]

It’s going to make 08-09 look like child’s play.

How did you come up with this? Link?

 

[themirrorthief]

The unemployment rate is 3.5%. If Trump was still president you'd be singing his praises from the mountain tops about what a wonderful economy we're in.

United States Unemployment Rate

Unemployment Rate in the United States increased to 4.10 percent in June from 4 percent in May of 2024. This page provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic...

tradingeconomics.com

yeah and mcdonalds is still hiring!!!!!!

 

[DudleySmith]

The federal minimum wage is a joke. Only 1.5% of workers are paid the federal minimum. There are only 7 states where workers have a 7.25 minimum wage.

Which is why I laugh at the parrots who run around trying to make minimum wage some great cause of inflation. Even in states with a $15 minimum that still lags far behind inflation; wage never lead inflation, at least not since the 1950's or so.

 

[DudleySmith]

The federal minimum wage is a joke. Only 1.5% of workers are paid the federal minimum. There are only 7 states where workers have a 7.25 minimum wage.

Which is why I laugh at the parrots who run around trying to make minimum wage some great cause of inflation. Even in states with a $15 minimum that still lags far behind inflation; wage never lead inflation, at least not since the 1950's or so.

 

[Flopper]

Which is why I laugh at the parrots who run around trying to make minimum wage some great cause of inflation. Even in states with a $15 minimum that still lags far behind inflation; wage never lead inflation, at least not since the 1950's or so.

I agree, there should be a minimum wage but minimum wage should be a state issue not a federal issue. The huge difference in cost of living between states makes a one size fits all approach unworkable.

 

[DudleySmith]

I agree, there should be a minimum wage but minimum wage should be a state issue not a federal issue. The huge difference in cost of living between states makes a one size fits all approach unworkable.

It has to be a Federal issue up to a certain point. A Federal base wage floor can prevent a state from using a lower floor to take business away from other states. The point is to limit wage competition below a certain minimum standard at the expense of the most vulnerable workers, and have businesses compete on managerial competence and quality, not who can degrade the least powerful the most. It worked well until the 1990's.

 

[AzogtheDefiler]

How did you come up with this? Link?

It’s my opinion. Why would there be a link?

I have already explained why:

Gas prices will be around $5 per gallon, already there in many parts of Cali.

Credit card debt is at an all time high with interest rates hovering around 20%

The moratorium on college debt payment halts will end. So people will have to start making those payments. College costs are rising and are already at an all time high.

People will have less disposable income to buy investments. What is keeping equities afloat are 401k and IRA investments.

Interest expense for companies is way up. They will have to cut payroll to maintain bottom lines. These same people who racked up credit card debt now don’t have the means to make payments so defaults will spike. Fewer people working means fewer 401k contributions. So equities suffer. Those who have stocks will sell to pay off more expensive debt. Sell off = stock market crash. Also early 401k withdrawals and IRA withdrawals are notably up.

Lastly, homes are unaffordable for many due to high interest rates. Home equity loans are pricey so people won’t borrow to upgrade, add or buy new appliances, furniture, etc. people will only spend on necessities. So companies selling washers and dryers, cars, furniture, will all have their revenues impacted negatively.

This is my OPINION

Feel free to refute what I wrote and explain why I may be wrong. It’s certainly possible.

 

[22lcidw]

If it collapses with inflation or deflation? Politicians could print the fiat currency in hyper drive.

 

[iamwhatiseem]

What reality do you live in? That's been the case for last FOUR decades.

It took to March 2022 to get back to pre-covid number of full time employees.
There should be about 2 million more people fully employed right now, if you would have taken the trend from 2010 - 2019.
The unemployment figure does not count people who have not worked for several years, they are still unemployed.

 

[otto105]

That’s fine but the economy is about to crash regardless. Glad you can afford to pay $1k to fill up your oil tank if your use oil to heat your home. Many cannot.

What time frame is about?

6 months?

2 years?

 

[Flopper]

It’s my opinion. Why would there be a link?

I have already explained why:

Gas prices will be around $5 per gallon, already there in many parts of Cali.

Credit card debt is at an all time high with interest rates hovering around 20%

The moratorium on college debt payment halts will end. So people will have to start making those payments. College costs are rising and are already at an all time high.

People will have less disposable income to buy investments. What is keeping equities afloat are 401k and IRA investments.

Interest expense for companies is way up. They will have to cut payroll to maintain bottom lines. These same people who racked up credit card debt now don’t have the means to make payments so defaults will spike. Fewer people working means fewer 401k contributions. So equities suffer. Those who have stocks will sell to pay off more expensive debt. Sell off = stock market crash. Also early 401k withdrawals and IRA withdrawals are notably up.

Lastly, homes are unaffordable for many due to high interest rates. Home equity loans are pricey so people won’t borrow to upgrade, add or buy new appliances, furniture, etc. people will only spend on necessities. So companies selling washers and dryers, cars, furniture, will all have their revenues impacted negatively.

This is my OPINION

Feel free to refute what I wrote and explain why I may be wrong. It’s certainly possible.

Countering the negatives factors you sighted strength in the U.S. labor market, housing sector and corporate investment could help spur renewed economic growth. Also the recovery abroad is spurring a 3% growth in US exports this year and it is expected to rise to 3.6% next year. Lack of GDP growth is a strong indicator of a recession. GDP growth in the 2nd quarter was was 2.4% and projected growth in the 3rd quarter is now 4.1%

The Confidence Board list of leading indicators points to deceleration of the economy with real GDP growth slowing to 1.9 percent in 2023, and then fall to 0.5 percent in 2024. . Their forecast is 60% chance the economy will be in a recession in the 3rd quarter of 2023 and the 1st quarter of 2024. Looking into 2024, the Board expects the volatility that dominated the US economy over the pandemic period to diminish. In the second half of 2024, they forecast that overall growth will return to more stable pre-pandemic rates, inflation will drift closer to 2 percent, and the Fed will lower rates to near 4 percent.

Consensus of Wall Street Analyst is 50/50 on a recession. A few of course are predicting crashes and a few are predicting a robust economy next year.

I've heard the arguments for a crash, over and over but the fact is you can't predict a crash with any real accuracy. Predictions of recession or expansion is little more than a guess.

I will ride the market down and up as I have since the early 70's and I will leave predictions to the so called experts.

Economic Forecast for the US Economy

Monthly update of The Conference Board's forecast for the US economy

www.conference-board.org

 

[AzogtheDefiler]

What time frame is about?

6 months?

2 years?

By Q1 2024

 

[AzogtheDefiler]

Countering the negatives factors you sighted strength in the U.S. labor market, housing sector and corporate investment could help spur renewed economic growth. Also the recovery abroad is spurring a 3% growth in US exports this year and it is expected to rise to 3.6% next year. Lack of GDP growth is a strong indicator of a recession. GDP growth in the 2nd quarter was was 2.4% and projected growth in the 3rd quarter is now 4.1%

The Confidence Board list of leading indicators points to deceleration of the economy with real GDP growth slowing to 1.9 percent in 2023, and then fall to 0.5 percent in 2024. . Their forecast is 60% chance the economy will be in a recession in the 3rd quarter of 2023 and the 1st quarter of 2024. Looking into 2024, the Board expects the volatility that dominated the US economy over the pandemic period to diminish. In the second half of 2024, they forecast that overall growth will return to more stable pre-pandemic rates, inflation will drift closer to 2 percent, and the Fed will lower rates to near 4 percent.

Consensus of Wall Street Analyst is 50/50 on a recession. A few of course are predicting crashes and few are predicting a robust economy next year.

I've heard the arguments for a crash, over and over but the fact is you can't predict a crash with any real accuracy and predictions of a recession or expansion is little more than a guess.

I will ride the market down and up as I have since the early 70's and I will leave predictions to the so called experts.

Economic Forecast for the US Economy

Monthly update of The Conference Board's forecast for the US economy

www.conference-board.org

You’re worried about you. OK

GDP is meaningless as it consists of Govt and corporate spend. And Govt spend has grown out of control. You didn’t really counter what I wrote?

 

[otto105]

You’re worried about you. OK

GDP is meaningless as it consists of Govt and corporate spend. And Govt spend has grown out of control. You didn’t really counter what I wrote?

Orc

GDP is a measure of our total economic output of goods and services and is not a measure of corporate or government spending.

 

[AzogtheDefiler]

Orc

GDP is a measure of our total economic output of goods and services and is not a measure of corporate or government spending.

Does it include Govt spending? Yes or no?