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Old 08-07-2019, 10:49 PM
 
Location: On the road
6,151 posts, read 2,987,014 times
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Quote:
Originally Posted by heart84 View Post
Record debt at all levels of government, record corporate debt, and record consumer debt including $1.5 trillion in student loan debt.
Why would these indicate a recession is imminent? Even in the healthiest of economies that maintain a low level of inflation one would expect a constant string of record levels of all forms of debt since the amounts of all things money would constantly rise.

To put in another way, when did USA not have record debt?
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Old 08-07-2019, 11:36 PM
 
26,303 posts, read 28,743,717 times
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Quote:
Originally Posted by bawac34618 View Post
It looks like the party is over and we are about to have a recession. Do you think this will be as bad as 2008? Will it be worse?

I'm currently stuck in a dead end call center job in a town I hate and was planning on moving in a few months to a larger city in hopes of finding a better job and better life, but now I'm having second thoughts.
The short answer is nobody knows.

As we pointed out, you should do what financially successful people do regardless of the economy:

--Work your butt off.
--Both make and save as much as you can within the bounds of your sanity and ethics.

The more money you have, the more options you have. Get that 2nd job while they're still out there to be had.
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Old 08-07-2019, 11:48 PM
 
26,303 posts, read 28,743,717 times
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Quote:
Originally Posted by don1945 View Post
Here is the problem. People didn't learn a darned thing from the last recession. They went right back to their spending every penny they have, going deeper into debt ways. I bet people now do not have any more money in the bank than they did in 2008.
As much as I agree with the general sentiment that people really can and should save more, if government statistics are to be believed, they are doing better than they were in the years leading up to 2008.

The personal savings rate is 8.1%, higher than it's been in many years:

https://www.bea.gov/data/income-savi...al-saving-rate

Household debt as a % of GDP, while not exactly low, has also been on a steady downward trend for a decade:

https://fred.stlouisfed.org/series/HDTGPDUSQ163N

Quote:
Originally Posted by don1945 View Post
I already see signs of companies pulling their horns in and cutting back on staff and inventory. Plus, Trump's programs have not been exactly productive or encouraging.
Agreed on both of those points. The steady rise of government debt as a % of GDP is particularly worrying.

Quote:
Originally Posted by don1945 View Post
Everything is cyclical and we will see another downturn at some point, I just hope it isn't what we saw 11 years ago.
Agreed. Of course a recession will happen again at some point. I still think we're headed for a major depression that will make 2008 look like a joke, but I'll be happy to be wrong about that.
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Old 08-07-2019, 11:50 PM
 
26,303 posts, read 28,743,717 times
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Quote:
Originally Posted by lieqiang View Post
Why would these indicate a recession is imminent? Even in the healthiest of economies that maintain a low level of inflation one would expect a constant string of record levels of all forms of debt since the amounts of all things money would constantly rise.

To put in another way, when did USA not have record debt?
I'm not sure about corporate debt, but government debt keeps rising, not just in absolute terms, but also as a % of GDP. Not good.
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Old 08-08-2019, 06:29 AM
 
30,358 posts, read 47,645,751 times
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Quote:
Originally Posted by MinivanDriver View Post
Also, household debt service as a percentage of disposable income is at the lowest point it's been since the 1970s.



You know the adage that generals are always planning to fight the last war? People are always thinking the next recession is going to be like the last one.
Could you site the source for the comment about household debt service?
And is that influenced by the huge imbalance of disposable income between the wealthy and the not-wealthy?
For example, Jeff Bezos has much more disposable income than I do—or 500 Americans added together have...
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Old 08-08-2019, 06:34 AM
 
5,617 posts, read 2,397,123 times
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Quote:
Originally Posted by loves2read View Post
Could you site the source for the comment about household debt service?
And is that influenced by the huge imbalance of disposable income between the wealthy and the not-wealthy?
For example, Jeff Bezos has much more disposable income than I do—or 500 Americans added together have...

https://fred.stlouisfed.org/series/TDSP

And to your other question, no. There were plenty of superrich people around when that statistic was at an all-time high in 2008.

Last edited by MinivanDriver; 08-08-2019 at 06:57 AM..
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Old 08-08-2019, 06:56 AM
 
14,274 posts, read 7,630,536 times
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Quote:
Originally Posted by mysticaltyger View Post
Agreed. Of course a recession will happen again at some point. I still think we're headed for a major depression that will make 2008 look like a joke, but I'll be happy to be wrong about that.

The usual economic toolbox to dampen the cycle is pretty empty. We already have historically low interest rates. The discount rate is 2.75%. It's not like the Fed can make it negative. We ran huge deficits in the good times. Piling on with even bigger ones risks collapsing the dollar. Good for Boeing and farmers. Bad for people who shop Walmart.


In the Great Depression, more than half the country had food security issues. The 2008 recession was nothing like that. Nobody was starving and lining up at soup kitchens. The unemployment rate when I entered the workforce in 1981 was higher than at the peak of the 2008 recession. A lot of media hype. Kind of like "superstorm Sandy" where peak winds were below 90 mph. That's a modest hurricane unless you're the weather channel.



I'd also point out that cash flow with the Social Security program is about to turn massively negative. Layer a recession on top of it where receipts from payroll taxes drop 10% and you already have a big spike in the budget deficit without doing anything. There's no room to do an Obama "fling money everywhere" policy.
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Old 08-08-2019, 06:59 AM
 
72,790 posts, read 72,628,690 times
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we found 16 billion for the farmers after intentionally hurting them in heart beat
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Old 08-08-2019, 07:07 AM
 
5,617 posts, read 2,397,123 times
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Quote:
Originally Posted by GeoffD View Post
The usual economic toolbox to dampen the cycle is pretty empty. We already have historically low interest rates. The discount rate is 2.75%. It's not like the Fed can make it negative. We ran huge deficits in the good times. Piling on with even bigger ones risks collapsing the dollar. Good for Boeing and farmers. Bad for people who shop Walmart.


In the Great Depression, more than half the country had food security issues. The 2008 recession was nothing like that. Nobody was starving and lining up at soup kitchens. The unemployment rate when I entered the workforce in 1981 was higher than at the peak of the 2008 recession. A lot of media hype. Kind of like "superstorm Sandy" where peak winds were below 90 mph. That's a modest hurricane unless you're the weather channel.



I'd also point out that cash flow with the Social Security program is about to turn massively negative. Layer a recession on top of it where receipts from payroll taxes drop 10% and you already have a big spike in the budget deficit without doing anything. There's no room to do an Obama "fling money everywhere" policy.

In 2008, the economic system had the real potential to collapse. No one has ever accused me of being a tinfoil hat alarmist, but I remember calling my wife and telling her, "I'm getting $10,000 out of our savings in case the banks shut down for a while." When things stabilized in late October, I put that money back in.



I do have to wonder how people can get suckered in by both political parties, given how they both don't give a tinker's dam about the deficit and the overall Federal debt. The answer to that is that neither political party has any ideology whatsoever. It's just a veneer. Instead, they are cartels of power that cater to their various clientele. GOP backers screech about the expansion of government while gleefully voting for W and Trump. DNC backers evidently believe in magical realism.


One of the great tragedies is that this country could have made real strides erasing the national debt in 2000 and let the opportunity slip through our fingers.
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Old 08-08-2019, 07:15 AM
 
72,790 posts, read 72,628,690 times
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Quote:
Originally Posted by MinivanDriver View Post
In 2008, the economic system had the real potential to collapse. No one has ever accused me of being a tinfoil hat alarmist, but I remember calling my wife and telling her, "I'm getting $10,000 out of our savings in case the banks shut down for a while." When things stabilized in late October, I put that money back in.



I do have to wonder how people can get suckered in by both political parties, given how they both don't give a tinker's dam about the deficit and the overall Federal debt. The answer to that is that neither political party has any ideology whatsoever. It's just a veneer. Instead, they are cartels of power that cater to their various clientele. GOP backers screech about the expansion of government while gleefully voting for W and Trump. DNC backers evidently believe in magical realism.


One of the great tragedies is that this country could have made real strides erasing the national debt in 2000 and let the opportunity slip through our fingers.
2008 -2009 were serious .... we had sold two manhattabn co-ops ... they went for just 10% less then the peak but our buyers had banks re-neg at closing when they had no money to loan out ... it happened to two different buyers at different banks ... it took 6 months to finally have banks come across with the funds after committing months earlier .
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