Recession coming?

[+ augustus]

On 1/20/2024 at 7:59 PM, stevenkesslar said:

Meanwhile, 2 in 3 Americans own homes.  Most with no mortgage or a low fixed rate mortgage.  That is bedrock.  Again, this helps explain why the recession has gone missing.

I disagree with this conclusion.  Because as a member of that 2/3, I'm not a whit "wealthier" from the increase in my property valuation. In fact, I'm actually POORER, since this means increased local and state property taxes, maintanence, insurance etc. on my now-more-valuable home.  I wouldn't even be technically wealthier because to SELL my house I would have to get into the group having to buy another one in this higher prices/higher interest rate/low supply environment.  How is it an increase in wealth if you can’t sell it or monetize it?  This is the fundamental problem with that view. 

[+ stevenkesslar]

2 hours ago, augustus said:

How is it an increase in wealth if you can’t sell it or monetize it?  This is the fundamental problem with that view. 

I get your point.  If you go to the store and pay more for eggs, that is real.  If your house is worth $50,000 more, that's not real. 

It's an extremely pessimistic way of looking at things.  

Here's an investment question.  My stock nerdy nephew started buying SOXL at about $7 a share in Fall 2022, when it was beaten down to a low by the imminent recession mongers.  He kept adding positions, and kind of risked the store on it.  But only because it is an index fund with only solid profit makers like NVDA.  And he was racking up huge paper gains.  I think he went from about $200,000 or so invested to now over $1 million in value on paper.  With most of it being an  unrealized long term capital gain.  I, by comparison, got in late at like $17 a share, and have only doubled the tens of thousands I put in.

By your investment standard, both my nephew and I are poor.  And bat shit crazy, to boot.  First, it is only a paper gain.  Second, if it is ever realized, we will have to pay lots of taxes.  Therefore, we are shitty investors.  Just like my roughly 30 % annual return on real estate value over about 25 years is total shit, by your standards.  After all, I have to pay property taxes every year.  And since I haven't sold, the homes may be worth nothing tomorrow.  Is this the investment "logic" you are espousing?

By the way, just to cheer up the gloom a bit ......

Stock prices and home prices may not be crashing.  But egg prices have!

Egg prices are crashing. Here’s why

 

It's terrible!  Obviously a recession is coming!  😉

Edited January 30, 2024 by Kevin Slater

[+ augustus]

UPS reported its earnings yesterday.  They are laying off 12,000 employees.  Their revenue was DOWN 7.8% from the same quarter last year.  This is most definitely bad news and a sign of an impending recession.  

[BSR]

1 hour ago, augustus said:

UPS reported its earnings yesterday.  They are laying off 12,000 employees.  Their revenue was DOWN 7.8% from the same quarter last year.  This is most definitely bad news and a sign of an impending recession.  

FedEx also reported a decline in year-over-year package volume, down 2% in its fiscal Q2, the biggest decline being last June with 9%.  Given that Americans shop online more & more, these declines are a bad sign.

[Bokomaru]

3 hours ago, BSR said:

FedEx also reported a decline in year-over-year package volume, down 2% in its fiscal Q2, the biggest decline being last June with 9%.  Given that Americans shop online more & more, these declines are a bad sign.

People went on an extended online spending orgy, which all transportation companies benefitted from. Plus there were supply chain issues causing a huge shortage of air freight space which meant people who would normally get delivery of orders by freight had to switch to express services.  UPS and FedEx had huge, but temporary, profits as a result. It was a supply-demand imbalance. 

Now that things are returning to normal, they have volumes coming down, year over year, but still have significantly more shipments than they did pre-covid. So the volume and profit windfalls are over. It’s back to normal (good, instead of very exceptional) growth now.

 
Yes they are bellwether companies. But the numbers don’t mean impending recession. They mean the results must be viewed in light of tough comps that are specific to the express transportation industry. 

[EZEtoGRU]

The main dynamic at play for UPS in 2023 was them narrowly avoiding a strike by workers on August 1 over wages and other issues. Negotiations went on for months and many shipping customers started re-directing their shipments through other channels to ensure delivery. UPS lost customers during this period so revenue and profits fell substantially. They have since recovered some of, but not all, the lost business which explains the weak Q4 results  

 

Edited January 31, 2024 by Kevin Slater

[SouthOfTheBorder]

On 1/30/2024 at 12:17 AM, augustus said:

How is it an increase in wealth if you can’t sell it or monetize it?

incorrect logic - you can sell it.  you’re choosing not to sell it because you don’t like the options.  sounds like you want to stay put exactly where you are, same city/same type home - that’s a choice.

there’s always a less expensive option than what you have now & lower property taxes too.  choices have consequences- make them wisely

[+ augustus]

2 hours ago, SouthOfTheBorder said:

there’s always a less expensive option than what you have now & lower property taxes too.  choices have consequences- make them wisely

Disagree.  People have jobs, family, etc that confines them to a particular location.   Not everyone can move to a rural area at will to save on housing costs.  Furthermore, inflated real estate values causes harm and misery to anyone looking for housing.  Housing is a utility, like a car or pair of shoes.  You think it would be good if shoes cost $700 a pair?  Or a car cost 250k?  Soaring housing costs damage an economy.  They damage the standard of living, and it becomes a bubble supported by excessive debt which comes crashing down eventually. 

Edited January 31, 2024 by augustus

[+ augustus]

6 hours ago, EZEtoGRU said:

The main dynamic at play for UPS in 2023 was them narrowly avoiding a strike by workers on August 1 over wages and other issues. Negotiations went on for months and many shipping customers started re-directing their shipments through other channels to ensure delivery. UPS lost customers during this period so revenue and profits fell substantially. They have since recovered some of, but not all, the lost business which explains the weak Q4 results  

 

WRONG.  An agreement was reached a week before the previous UPS contract expired.  There was no interruption of service. There was very little "re-directing their shipments" by customers and the size of UPS's reported drop in revenue would mean UPS would have moved NOTHING AT ALL for over a straight month, which obviously didn't happen.  

FURTHERMORE, the UPS contract negotiations were in July, 2023 which was the 3rd quarter.  UPS's latest report which showed a 7.8% drop in revenue was for the 4th quarter, 2023.  

Edited January 31, 2024 by augustus

[SouthOfTheBorder]

9 hours ago, augustus said:

People have jobs, family, etc that confines them to a particular location.

resistance to relocate for whatever reason is a barrier to wealth creation & economic opportunity.  thats the entire problem with the largely unsatisfied & angry groups constantly complaining in the US today - they just want to complain about their situation and ignore the real choices that are within their individual control.  I see it every time I go back to the small town where I grew up - same people doing the same thing for the last 50 years.

if you’re convinced of your housing bubble theory - then you should sell now, rent until the crash & then buy low.  problem solved 

[+ augustus]

1 hour ago, SouthOfTheBorder said:

resistance to relocate for whatever reason is a barrier to wealth creation & economic opportunity.  thats the entire problem with the largely unsatisfied & angry groups constantly complaining in the US today - they just want to complain about their situation and ignore the real choices that are within their individual control.  I see it every time I go back to the small town where I grew up - same people doing the same thing for the last 50 years.

 

Most people just can't do that.  They have a job where they already are, so they don't have other real choices.  And moving children and elderly around like vagabonds is just horrible!  

And did you see the news about New York Community Bancorp?  Big real estate losses and much more to come!

[EZEtoGRU]

Wow...our famous multi-poster can't even read and process information correctly.  I guess I shouldn't be surprised though.

[EZEtoGRU]

Just to help with comprehension.  No-one said a strike occurred.  The fact is that UPS lost a significant amount of business over concern there would be a strike in August 2023.  Even though a strike was avoided, UPS still has not recovered all the business that they lost to other shippers in 2023.  Therefore, Qtr4 results were still impacted negatively by events earlier in 2023.

  This was a quote from an analyst during the last seven days:

UPS lost business last year as customers concerned about a possible strike by the Teamsters shifted shipments to rival carriers, such as FedEx. Although UPS said it expects to get most of that business back, it had won back only about 60% of that lost business.

[+ augustus]

1 hour ago, EZEtoGRU said:

Just to help with comprehension.  No-one said a strike occurred.  The fact is that UPS lost a significant amount of business over concern there would be a strike in August 2023.  Even though a strike was avoided, UPS still has not recovered all the business that they lost to other shippers in 2023.  Therefore, Qtr4 results were still impacted negatively by events earlier in 2023.

  This was a quote from an analyst during the last seven days:

UPS lost business last year as customers concerned about a possible strike by the Teamsters shifted shipments to rival carriers, such as FedEx. Although UPS said it expects to get most of that business back, it had won back only about 60% of that lost business.

LOL.....can you cite that "analyst".  Might give you some credibility.   UPS 4th quarter 2023 revenue dropped 7.8% from 4th quarter 2022 revenue.  Has absolutely nothing to do with contract talks and a new labor agreement in mid 2023, as you so erroneously stated.   Talk about comprehension OMG. You really think customers were avoiding UPS in the 4th quarter of 2023 after a contract was negotiated in July 2023??

 

UPS Releases 4Q 2023 Earnings

ABOUT.UPS.COM

---

UPS today announced fourth-quarter 2023 consolidated revenues of $24.9 billion, a 7.8% decrease from the fourth quarter of 2022.

 

Edited February 1, 2024 by augustus

[EZEtoGRU]

Huge profits announced today by Meta and also Amazon. The market surges.   Then there’s this piece by Axios. 
 

Just a moment...

WWW.AXIOS.COM

The US clearly has performed better than the rest of the developed world since the onset of Covid. I’m actually concerned the economy is just too hot right now to consider interest rate cuts…even in March. Let’s see how things look once we get to March. 

Edited February 2, 2024 by Kevin Slater

[+ augustus]

25 minutes ago, EZEtoGRU said:

Well some folks can’t see the forest through the trees. Let’s get back to the real world.
 

Huge profits announced today by Meta and also Amazon. The market surges.   Then there’s this piece by Axios. 
 

Just a moment...

WWW.AXIOS.COM

The US clearly has performed better than the rest of the developed world since the onset of Covid. I’m actually concerned the economy is just too hot right now to consider interest rate cuts…even in March. Let’s see how things look once we get to March. 

Meta and Amazon do not represent the entire US economy.   What about all the tech layoffs going on?  What about the stress the banking system is now under?  What about the high cost of living?   These issues way override some revenue increases at Meta and Amazon.  BTW, who gives a hoot about Meta?

[Kevin Slater]

Moderator's note:

This forum is about personal investing.  I just hid a lot of posts with interpersonal crosstalk and bickering.  Any further such posts will subject the member to forum moderation (posts will have to be approved before published).  Now let's get back to the subject at hand.  

[+ FrankR]

13 hours ago, augustus said:

BTW, who gives a hoot about Meta?

I do. So does the market - it is up 17% today after announcing a dividend for the first time.  Hard to make the case that a recession is imminent when tech companies are prospering. Nasdaq 100 index is up something like 80% for the year. Is a recession coming. Yes. Is it imminent? Does not appear so. Should you be ready, just in case? Always. 

[+ augustus]

Things are NOT good.  The economy is only humming along because of huge debt spending by the Federal Government (which is not sustainable and will itself cause a crises) and consumers going into debt.   

 

Layoffs Hit 10-Month High As Financial And Tech Companies Slash 39,000 Jobs (msn.com)

 

[+ augustus]

7 minutes ago, FrankR said:

Nasdaq 100 index is up something like 80% for the year.

That is a classic bubble.  And the return is about 50% for the past year.

Edited February 2, 2024 by augustus

[pubic_assistance]

48 minutes ago, augustus said:

Things are NOT good.  The economy is only humming along because of huge debt spending by the Federal Government (which is not sustainable and will itself cause a crises) and consumers going into debt. 

 

[EZEtoGRU]

Another massively positive jobs report was issued today busting through expectations. With such a strong economy, robust jobs picture, and upbeat consumer sentiment…there is clearly no recession on the horizon. 
 

Labor market grew 353,000 in January, soaring past expectations

STOCKS.APPLE.COM

---

The gains were roughly double economists’ predictions of 177,000, reinforcing that the economy...

 

[EZEtoGRU]

Further to the above, the November/December2023 jobs numbers previously reported were increased by a whopping 126,000 jobs combined.  So a truly spectacular three months of jobs reports.  An analyst in the attached article repeats my prediction yesterday that a March interest rate cut is almost certainly off the table now.  Things are just going too well for the US economy for interest rate reductions in the near future.  

Also, they comment that recent layoff announcements by companies such as UPS are a minor factor in the grand scheme of the larger job market.  Basically, just a blip.

Things are just going too well with the US economy right now.

 

MSN

WWW.MSN.COM

 

Edited February 2, 2024 by Kevin Slater

[pubic_assistance]

1 hour ago, EZEtoGRU said:

Things are just going too well with the US economy right now.  WINNING!!

12% of the US population is now collecting Food Stamps.

That's 4 million more people since 2019.

THAT statistic speaks more to the reality of what's going on for the average American than all these cherry-picked reports of "low unemployment".  Most unemployment statistics are drawn from charts of people "actively looking for work" and ignore the millions of people who have given up trying, and instead live permanently on public assistance.

Keeping in mind that most US news outlets are now owned by the same few large Corporations that have an agenda to keep us believing what they want us to know and preventing a mass protest to the direction that Global business interests are taking us. Data is constantly skewed and interpreted by expressing numbers that don't give the complete picture of the overall problem. Much of the "employment" that is being touted, isn't providing enough income to put food on the table.

 

[+ augustus]

On 2/2/2024 at 2:44 PM, pubic_assistance said:

THAT statistic speaks more to the reality of what's going on for the average American than all these cherry-picked reports of "low unemployment".  Most unemployment statistics are drawn from charts of people "actively looking for work" and ignore the millions of people who have given up trying, and instead live permanently on public assistance.

Well said!!  About 1,500,000 cars are getting repossessed each year due to non-payment and people falling behind on car payments is at a 27 year high. The average family pays $11,000 a year more for the same goods and services than in 2019. Property taxes are soaring (they just DOUBLED in Columbus).  I think most of us see through this "All's Well" smokescreen.