Recession


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16 minutes ago, Ironhold said:

The insistence upon using -x as a suffix when speaking to Latino audiences is causing many individuals who identify as Latino to switch party affiliations because that suffice is nothing short of cultural imperialism. 

Cutting edge wokespeakers call it "more white folk linguistic colonization against yet again another group of black and brown peoples."


 

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Posted (edited)

It is now official.  We're in a recession.  We've now had two consecutive quarters of negative real GDP growth.  

Q1 = -1.6%

Q2 = -0.9%

The thing is that the numbers may be a bit soft.  The reason is that during the Reagan era, the BLS changed the way they calculate the CPI to walk a line of incorrect vs plausible deniability.  Most financial people say that it basically reduces the "real" inflation rate by about 2%.

So, even if we see a 1% "real GDP" growth, we're really looking at negative real growth.

We may see a lot of flattening for the next two quarters.  We usually see a dip in September with a rise in December.  We'll see just how bad this recession is when we arrive in January.

Also on an unpleasant note, one of the definitions of a "depression" is when a recession lasts longer than two years.  That's what I'm predicting.  I'm guessing we won't see recovery for at least a little over two years from Jan 1st, 2022.   Given that we almost always see a drop the first quarter, I wouldn't expect it to change until after March of 2024.

On the positive side, we are seeing an increase in employment and in wages (mostly to compensate for inflation).

Edited by Carborendum
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Posted (edited)

I just read an interesting article regarding the current recession.  The WSJ noted that ever since the Great Depression, we've always seen the pairing of declining GDP along with the decline in employment.  This is the fist time we've ever seen declining GDP with rising employment.

They're right.  That is certainly unique to this recession.  But the fact is that it is due to COVID.  The shutdown and stimulus checks caused two things to happen statistically:

  • A lot of people "lived on" stimulus checks.  They were taken out of the labor market.
  • Baby-boomers took an early retirement and decided to take their Soc. Sec. checks and live off of their 401 (k).

Many don't know how unemployment is calculated.  But if people leave the labor market, the "percentage" of unemployed goes up automatically with no change in total employed persons.  The more realistic number is the employment numbers, not the unemployment numbers.  While this number is indeed going up, it is still nowhere near where we used to be.  And it is even worse when we're looking at adults only -- i.e. forget the fast food jobs for teenagers.

EDIT: I just looked up the "official" employment rate.  We're now where we were in 2017.  But we're on a slight downward slope.  Soon we'll be at 2016 levels.  And we've never gotten back to the days before the "Great Recession".

Edited by Carborendum
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Yeah, I'm not an economist, not particularly bright, and can't really explain why, but for some reason, this math makes sense to me:

[Covid global economy shutdown] + [govts of the world printing $ (US was what, 5-7 trillion?)] + [worsening energy crisis b/c Russia] = inflation + recession + [another variable that I hope doesn't have much to do with China].

 

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I don't know if this comment will tie into this thread or not, but it's related to the title at least:

I think it's terrible how all the commentary from conservatives is so fear-mongering right now to gain political points. I actually understand, in part, what the Biden administration is trying to do. Yes, some things in the economy are concrete -- but a lot of it is merely perception. When people get scared and tighten their belts, stop spending, stop hiring, etc., it makes things worse. If people trust things are going to be okay, they're more likely to keep spending, keep hiring, etc. Yes, there are concrete issues that affect such things as well. Though even some of those concrete things are based on up-the-chain perception. By letting people know that things aren't as bad as "A RECESSION", it seems the Biden administration is trying to keep things positive, in part, to maintain perception, so everything doesn't go into hunker-down mode, that will surely make things even worse. By arguing the point and demanding that the Biden admin is "redefining what recession means" the conservative commentary is playing a self-fulfilling prophecy style game. They're adding fear to the recession they claim we're now "by definition" in. And literally repeatedly stating how scary it is.

Yes, I know there's more to it than simply what I've described above. I know the Biden admin is playing political games as well, trying to make it seem like they're doing a better job than they are. But I still think it's irresponsible of conservative voices to be dumping fuel on the fire.

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Posted (edited)
On 7/29/2022 at 9:02 PM, The Folk Prophet said:

... I actually understand, in part, what the Biden administration is trying to do...

IF... the intent is simply to keep the public calm and inspire confidence, that is a perfectly reasonable goal with a completely incompetent execution.

By "changing the definition," he's basically saying,"We're only in a recession because we think we are.  So, if you just forget about the fact that inflation is at a historic high and that it is difficult to find the every day goods that we need, and we are making sacrifices to make ends meet, then we're really not in a  recession at all."

A better and completely valid way to go about it (as several liberal media outlets jabye done) is to point out that:

1. We're already taking measures to curb inflation.  It will take some time for it to take effect.  But the relief is coming.

2. While technically we are in a recession, it is a fairly mild one historically speaking.  And it is the most unusual one.  No recession in the past 100 years has had such good employment numbers.  Every recession has always been accompanied by low employment numbers.  This tells me that this will be brief.  And while I know many Americans are suffering, I promise that relief is coming soon.

It would be completely true and highly effective.  But no.  He just wants to avoid the issue altogether.  By refusing to acknowledge the reality, people only get the impression he is out of touch and is unwilling to do anything about it.

Edited by Carborendum
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  • 2 weeks later...
Posted (edited)

Looks like we'll be having an energy crisis this winter.  GET YOUR WINTER PREPS READY.  Spread the word.

Because Biden has sold (or has contracted to sell soon) almost all of our Strategic Petroleum Reserves, we won't have the normal buffer for inclement weather this winter.  This winter we're expecting a "La Nina" which means we'll see unusually cold weather.  This is just after several record cold winters in the past years.

You all remember how we had entire states in trouble.  See what happens when we don't have any fuel for our power plants during the coldest weeks this winter.

This will be one of the few winters where we will see gas prices higher than the summer before it.  It may actually be higher than the summer after.  But inflation may be so high that it will overcome this shortage.

Edited by Carborendum
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  • 4 weeks later...

A lot of stores are *still* having massive gaps in their inventory well over a year after lockdowns began ending, and supply chains all over are still pretty badly disrupted. I would recommend that everyone be mindful of what's in stores.

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  • 2 weeks later...

This shows the changing value of retirement savings for Mr. and Mrs. Typical.  Vertical bars indicate presidential election.   For the first time since I started keeping track in 2007, that value has gone DOWN under any president.

image.png.495e0b86c69767de6a710dc4e529ad2d.png

 

Yeesh.

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On 8/19/2022 at 10:18 AM, Carborendum said:

Looks like we'll be having an energy crisis this winter.  GET YOUR WINTER PREPS READY.  Spread the word.

Because Biden has sold (or has contracted to sell soon) almost all of our Strategic Petroleum Reserves, we won't have the normal buffer for inclement weather this winter.  This winter we're expecting a "La Nina" which means we'll see unusually cold weather.  This is just after several record cold winters in the past years.

You all remember how we had entire states in trouble.  See what happens when we don't have any fuel for our power plants during the coldest weeks this winter.

This will be one of the few winters where we will see gas prices higher than the summer before it.  It may actually be higher than the summer after.  But inflation may be so high that it will overcome this shortage.

Carbs, I’m wrestling with getting solar on my house (Utah, Wasatch Front).  The sales guy says they can have it done in 2 months.  Under the circumstances, would you say that’s worth pursuing?

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18 hours ago, Just_A_Guy said:

Carbs, I’m wrestling with getting solar on my house (Utah, Wasatch Front).  The sales guy says they can have it done in 2 months.  Under the circumstances, would you say that’s worth pursuing?

The only time onsite solar or wind is a good option for a single family residence is if you KNOW you're going to be there for around 15 to 20 years.  Otherwise, it is wasted money.

If you're just looking for energy security, get a diesel generator.  Get several 5-gal jugs of diesel, some sta-bil (for diesel), and store it.

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20 hours ago, Just_A_Guy said:

Carbs, I’m wrestling with getting solar on my house (Utah, Wasatch Front).  The sales guy says they can have it done in 2 months.  Under the circumstances, would you say that’s worth pursuing?

We finally got our 27.2 kWp solar array (80 panels) and Propane Kohler 30 kW generator installed.  Took almost 2 years.  Permits, unexpected hazards, roof repairs, excuses, rescheduling, supply chain issues.  Was a bit spendy.

But now I have a surplus of energy production and run the A/C whenever I want - at any temperature.  Next car I get will likely be electric.

PG&E (pacific gas & electric) is crazy expensive.  Summer monthly electric bills over 1K are no joke.  And they will turn off the power with a threat of high winds (forest fire threat / prior lawsuits) for days at a time.

We had to buy a second propane tank 500 gallons dedicated for the generator.   When we bought the house 2 years ago I got a used propane tank for $500.   The one I bought last month cost 4K.  Unbelievable…

The break-even point is likely 15 years or so.  But I love to watch the power production and review PG&E bills with a credit instead of 4 figure payment request.

Previously I would get a warning that I was using too much energy for a single family on the 10th of the month and I would get charged on the 4th tier for energy usage.  Ridiculous. 

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11 minutes ago, mikbone said:

PG&E (pacific gas & electric) is crazy expensive.  Summer monthly electric bills over 1K are no joke.  And they will turn off the power with a threat of high winds (forest fire threat / prior lawsuits) for days at a time.

Holy crap!  Here's my power/gas averages for the last few years, for a single family in a home here in Colorado. (It's an annual average of the monthly bills.)  The electric bump over the last year is due to having another structure to heat.  The gas increases were not due to anything we did.

image.png.902684dae844a5d1e4ee6760f5eab066.png

 

I'd also get periodic notices that my home used more energy than the average, but never any threats.  Just an offer to do a free energy audit to see where the air leaks are, and suggest some fixes.

 

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  • 3 weeks later...

DISCLAIMER: I'm not a financial professional.  I'm just a guy who likes looking at things and commenting on them.  So, take this as you will.

Based on the patterns I've seen (as previously alluded to) we're very near a local low.  Perhaps we're there already.  We should be seeing a bit of a reprieve over the next few months.  But it will fall down even lower by March to May of next year.

I could easily be made a liar if there are certain major powers that take certain measures.  The Fed who VOWED to keep raising rates to curb inflation has recently said that they may not be so gung-ho anymore because they see that the extreme measures they've taken are beginning to affect the economy.  And some of it is indicating that their measures may bankrupt some of the bigger and healthier companies.  So, that is just one example of how the Fed may change the course of the patterns I'm seeing.

I only see patterns.  I see when they "rhyme".  But big events can happen in different eras to disrupt the previously established pattern.

Bottom line: Beware.  Be careful.  And watch.

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