US coming into a Recession

Actually, the textbook definition is two consecutive quarters of negative GDP growth. Not just a decline in GDP.

 

Anyone who is suggesting its fun to watch Democrats cheer bad news is looking in the mirror and seeing Republicns cheering on the bad news economically in the early Obama years, even though they caused.

 

You are downplaying reality. The yield curve inverting is a big deal. Analyst start to say things like “The U.S. equity market (^GSPC) is on borrowed time after the yield curve inverts,” Bank of America Merrill Lynch’s Stephen Suttmeier wrote on Tuesday.

You are correct that investor Psychology plays a big role - and that just took a huge hit with this yield curve inversion.

You are also correct that consumer spending plays a big role - the biggest role in fact. Consumer debt levels are higher than they were prior to the 2008 crash (prior to which was also the last time the yield curve inverted).

Overall GDP has been on the decline. It had a brief spike due to the nitrous oxide injection (massive Trump credit card spending/increasing the deficit) - but this is short term gains for long term losses. Since the brief spike GDP has been getting lower and lower - as have the future forecasts. Short term gain for long term pain - as I stated years ago - and now we are entering the pain part. The most recent forecast by the Altlanta fed is 1.9%. https://www.frbatlanta.org/cqer/research/gdpnow.aspx A far cry from the 4-5% we were promised.

Exacerbating these issues is the Trade war - and the longer this goes on the worst things get but - this is only one factor. The sanctions are even worse - the way the Trump admin has gone about things - trying to beat our allies into submission using the so called "nuclear option" , threatening to block national banks out of the international system of payments - has backfired in a major way. This was a huge blunder/miscalculation on the geopolitical chessboard - one which is threatening our long term economic hegemony and security.

If it were just one factor I would not be that concerned.... it is when you have numerous factors lining up - along with geopolitics going south - that I worry.

 

I post a few thoughts in post 55.

 

Since 1949, the average time between recessions is less than 5 years (58 months). With that being the case, there is ALWAYS a recession somewhere on the horizon. Pointing to an indicator 24 months out and pretending like it therefore predicted the recession is nonsensical.

A recession WILL happen at some point, and we can all rest assured that Democrats will collectively declare "I told you so". It is like declaring that there will be a hurricane to hit our east coast. Of course there will be at some point. That's not prescience. It is an eventual certainty, and declaring as much is meaningless.

 

Hey, the Obama haters talked negatively about the economy for 8 straight years. Was that a self-fulfilling prophecy?

 

Ok so super. As long as we don't dip into negative growth, there is no recession. How nice of you to agree with me.

 

We will withstand Democrats and their media talking down the economy 24/7 to try to get people to curtail spending in your effort to make Trump look bad.

Fact is that the yield curve is being influenced by negative interest rates in Europe.

When you fail to tank the economy, will you go back to Russian collusion?

 

No, actually they did not. They didn't constantly call for recessionary pressures.. They clearly indicated that there were issue in the economy that could actually be improved. Obviously not the same thing.

 

"If anyone had doubts that trade was the thing hanging over the market, today seals it," said Bill Stone, chief investment officer with Avalon Investment & Advisory.

Tariffs on popular consumer goods like clothing, shoes, computers, and cell phones cause higher prices. Even Trump admitted that yesterday. Higher prices cause inflation. Inflation causes less demand. Less demand causes unemployment. Tariffs cause recession, Econ 101.

When Americans suffer investment losses it causes permanent loss of principle, fourth grade math. Millions of Americans permanently lost more of their principle in investment accounts today.

As things stand now, the Dow has lost over 575 points, the Nasdaq over 200 points, and the S&P over 65 points. The reason: Stocks plunged on Wednesday, giving back Tuesday’s solid gains, after the U.S. bond market flashed a troubling signal about the U.S. economy, a recession warning.

There have been five such warnings of the 2-year and 10-year yields since 1978 and all were precursors to a recession.

https://www.cnbc.com/2019/08/14/stock-markets-wall-street-in-focus-amid-earnings-economic-data.html

Today, the Dow is at 25,690. On March 15, the Dow was 25,440. Because of Trump's trade war with China, the market has been treading water for five months. https://www.zacks.com/stock/news/355019/stock-market-news-for-feb-15-2019

I have been a student of current political history for over a half century, and I am a retired columnist. Never in my 50 years have I seen a U.S. President repeatedly harm our economy and cause investment losses. The current President is doing that very thing. The past three weeks prove it.

We are reminded that Trump was Putin's personal choice to become our President.

 

As I said, it is an absolute CERTAINTY that there will be a recession at some point in the relatively near future; there isnt any grand revelation in stating that reality.You said that "such a development has preceded EVERY recession in the last 50 years, sometimes leading by as much as 24 months", which basically means nothing in light of the fact that recessions are literally ALWAYS on the horizon. If it had preceded every recession within 6 months or some other short time frame that would mean something, but with a long time frame it truly means nothing.

 

I am sure that when a recession comes if it is during a Republicans administration they will be blamed and if it is in a Democrats administration they will be blamed. Either way recessions are a normal phenomenon in our economic system.

 

LOL! And Obama caused the 2008 recession. Typical GOP revisionist history.

 

As of this writing, the DJIA is - 770. That's a pretty big decline. During the last few trading days, the DJIA has dropped 400, recovered 350, and is now down 770. That doesn't speak stability. Investors don't like that. The Market is, at best, a coincident indicator. If that is true, then a recession is already upon us. Inversion of the yield curve has been signaling trouble for months.

The economy has been on a ten year roll and a downturn at some point was an inevitability. An unwise tax cut and expanding government expenditures has pushed government debt to the clouds. Public debt is equally astronomical. That should trouble folks. Trump pushing the Fed to cut rates to "stimulate" inflation is just plain nuts. If you're about to go off a cliff, you don't start looking for a higher cliff.

 

Every recent recession was preceded by a yield curve inversion.Hours worked has also declined for the past couple of months,manufacturing has tanked as has farming.

 

One thing is for sure. The King of Debt will be on his twitter machine blaming the Fed, blaming, China, blaming anyone he can think of to deflect from his own culpability for hastening the recession with his moronic trade war.

 

I saw it on the news that he's already attacking "clueless" Powell for it.

 

No, it's been happening for 7 months now. And Trump has nothing to do with it. Millions of idiots didn't learn back in '07. Instead of mortgaging homes that they couldn't afford most Americans are now financing vehicles that they can't afford. You want the total vehicle operation expenses (payment, insurance, fuel and maintenance) to be less than 20% of your gross income.

BRIEFINGAUTO LOANS
A Record 7 Million Americans Are 90 Days Behind on Their Auto Loan Payments
By
Natasha Bach
February 12, 2019

 

While one of the strongest indicators now points to that, to say it's the "Trump economy" is a political argument. When you have so much of the opposition doing everything it can to cause trouble and kill the positives, they deserve credit more than anything else. The dems of course serve up denial like it was free beer at a frat party, and anyone even remotely following news knows it's true.

Another factor in regards to Trump is that we have never had a president like this before. He's already broken the traditional mold and patterns; I don't think it would be wise to assume that what would have happened before under others is likely to be the same under Trump.

In a business as well as a government, in-fighting causes troubles. Especially if that infighting is not over how to win or do better- but for the purpose of destroying your opponent, no matter what the cost. That's where we are. The only thing the democrats offer to the nation right now are things that would hasten and deepen any economic disasters. Just as the DOW skyrocket on Trump's win- because investors saw new potential- it will drop like a rock on any democratic success, be it candidate or legislation, because those investors will see potential going down the drain.

Cooperation on real issues could put the market back in line in no time- but that would require putting down the hate, the slander, the crackpot ideas, the obstruction without reason- all the things that the democratic party is all about today. I don't think they are capable of doing that at this time. I do think that a majority of voters will recognize where the problems really come from, and the hate will backfire on the haters. That will move the economy too- and in the right direction.

 

guess the rich are not spending enough, that is why tax cuts for the working class work better, then they have money to spend and the corps create jobs to get that money

 

They want a recession so they think they can win. How bad is that to wish for America to do badly, so they can WIN? Just ask Maher....these are really SICK people...

 

You mean how the party of no (err GOP) boycotted everything Obama for 6 years, putting politics before the economy? Now, you want cooperation from the Dems, who by the way only have the House? Sure!