Next recession?

[Shaun @ Tru6]

Try as you might, after mastering black anodizing over the last two weeks, nothing can phase me. So much to be Thankful for. Tru6

[cabmandone]

Too glossy

Just kidding! Looks nice man.

[Shaun @ Tru6]

Haha, you might think so but after looking at 4 sets of midyear frames, 2 of which were garaged since new it would appear, these match the inside of them perfectly. Black is so much more challenging than clear anodizing. The only difference is the surface is much nicer than Porsche ever did, I hope my customers don't get points off for being over-restored.

[merbesfield]

Shawn I don’t know what those frames are supposed to look like but they look nice to me. Please carry on with the financial conversations. What amazes me and destresses me at the same time is the number of retirement communities coming across my desk. It’s crazy how many are getting built. Getting old sucks. Back under my rock I go.

[cabmandone]

Originally Posted by merbesfield

Shawn I don’t know what those frames are supposed to look like but they look nice to me. Please carry on with the financial conversations. What amazes me and destresses me at the same time is the number of retirement communities coming across my desk. It’s crazy how many are getting built. Getting old sucks. Back under my rock I go.

When the alternative is looking at the grass from the root side... getting old doesn't sound all that bad!

[sugarwood]

Jims5543,
Have you been calling for a housing crash every single year since 2009 ?

[Jims5543]

Originally Posted by sugarwood

Jims5543,
Have you been calling for a housing crash every single year since 2009 ?

You must have me confused with someone else.

I said the crash was coming in 2008 back in 07. Because I listened to Peter Schiff.

I said the RE bottom would not hit until 2012 back in 2010. That was my call.

I am now saying we might be starting a fall again. Mostly due to patterns I see from 2007 that are the same now. I have read quite a few articles that agree.

Goldman Sachs recently advised investors to start pulling out of the RE market.

Take that FWIW.



Sent from my SAMSUNG-SM-G891A using Tapatalk

[LWJ]

Shaun,
I used to work at a large scale aluminum mill. We had many anodizing lines and did work for outfits like Leopold-Stevens.

Your work looks good on my phone. Congrats! Re-doing anodizing is really really hard!

[Shaun @ Tru6]

Thank you Larry! I agree with over 1500 unbilled hours in 2016 and 17 perfecting my clear or "bright dip" anodizing which takes advantage of some special blackhawk helicopter/military chemistry making it harder than standard. But worth the time I put in, I think my clear is the best in the country, and PCA judges tend to agree. Black is a whole other world I have found.

[sugarwood]

Originally Posted by Jims5543

I am now saying we might be starting a fall again. Mostly due to patterns I see from 2007 that are the same now. I have read quite a few articles that agree.

Goldman Sachs recently advised investors to start pulling out of the RE market.

Can you post some of these links?

This link says that as of last month, GS is just getting into RE
https://www.wsj.com/articles/goldman-sachs-unit-buys-its-first-stake-in-real-estate-management-industry-1540218847

In 2017, they raised $1B for a new RE fund.
https://www.forbes.com/sites/bisnow/2017/07/05/goldman-raised-1b-for-a-real-estate-fund-putting-2007-fail-behind-it/#4414aba5171c

[Jims5543]

We are having this discussion on another BB so this was easy to cut and paste.

https://www.thebalance.com/could-the-great-depression-happen-again-3305685

I noticed Oct. 2018 was a bad month for me. I was not alone.
https://seekingalpha.com/article/4217962-bad-october-2018-comes-next

This is a 2017 article.
https://www.lombardiletter.com/stock-market-crash/20656/20656/

Oct 2015 Article.
https://www.telegraph.co.uk/finance/personalfinance/investing/shares/11931489/Thirty-years-of-stock-market-crashes-and-the-signs-they-were-coming.html

https://www.cnbc.com/2018/11/15/cramer-says-ceos-are-telling-him-off-the-record-the-economy-has-cooled.html

Company leaders across industries are telling Jim Cramer — off the record — that they're worried about a slowdown in the U.S. economy, Cramer said Thursday on CNBC.

"So many CEOs have told me about how quickly things have cooled," the "Mad Money" host said. "So many of them are baffled that we could find ourselves in this late-cycle dilemma that wasn't supposed to occur so soon."

Cramer has been warning investors for weeks about a manmade slowdown in the U.S. economy, fueled by the two-pronged pressures of the Federal Reserve's interest rate hikes and the Trump administration's tariffs. Now, high-profile CEOs are worried about growth slowing so drastically that it could actually hurt the economy, he said.

"There are degrees of slowdowns that, nonetheless, can cause an awful lot of havoc and cost a lot of jobs, and that's what we're on the verge of here," he said. "That's what the markets are saying. That's what the CEOs are worried about offline."

The situation reminded Cramer of when, on the cusp of the 2008 financial crisis, his corporate sources confided in him that the Fed "seemed to be out of touch ... with what was happening" on Wall Street, he said. That led to his now-famous "They know nothing!" rant blasting the Fed for its lack of diligence.

"I was right," he said. "I did my best and, at that time, I made a resolution. If I thought we would ever get back into one of these situations again, I promised myself I'd be vocal about what could go wrong, even if I knew it wouldn't be as serious as the Great Recession."

Billionaires selling off RE at a loss. Are they seeing something we do not?

https://www.wsj.com/articles/at-miamis-billionaire-bunker-another-wealthy-buyer-heads-for-the-exit-1542298197

I LOL at this article because my tract home builder is going balls to the wall with no regard at all. This should be interesting to watch develop.

The click bait headline spells doom, the article shows the market is still strong, just weakening a little.

As I said it will be interesting to see how this pans out over the next year. More interesting is if the Fed will leave the rates flat for a bit and let us adjust.

https://www.cnbc.com/2018/11/19/homebuilder-confidence-plummets-to-the-lowest-level-in-more-than-two-years-as-demand-stalls.html

Rising mortgage rates and continued home price growth are hurting affordability and fast becoming a toxic cocktail for the nation's homebuilders.

Sentiment among homebuilders dropped 8 points in November to 60 in the National Association of Home Builders/Wells Fargo Housing Market Index. That is the lowest reading since August 2016, but anything above 50 is still considered positive. The index stood at 69 in November of last year and hit a cyclical high of 74 last December.

"Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices," said NAHB Chairman Randy Noel, a builder from LaPlace, Louisiana.

Of the index's three components, current sales conditions fell 7 points to 67, sales expectations in the next six months dropped 10 points to 65, and buyer traffic registered an 8-point drop to 45. Buyer traffic had broken out of negative territory earlier this year but now appears to be back in it solidly.

Some of the nation's largest publicly traded homebuilders, like Lennar and KB Home, lowered their expectations for sales in 2019 in recent earnings releases. There is still a shortage of homes for sale, but newly built homes come at a price premium, and as interest rates rise, new home buyers are consequently hit hardest.

The average rate on the popular 30-year fixed mortgage is now more than a full percentage point higher than it was a year ago. The huge home price gains seen over the last two years are now shrinking, but prices were still up a strong 5.6 percent year over year in September, according to CoreLogic.

Goldman Sachs says to expect a slow down next year.

https://www.cnbc.com/2018/11/19/goldman-sachs-believes-the-us-economy-will-slow-to-a-crawl-next-year.html


The article states we will not hit the R word though, no recession just some contracting.

It is another click bait headline with pretty decent news when you read the article.

Again, pointing fingers at the Fed and raising interest rates to the point the economy slows down.

The bank sees the economy expanding at 2.5 percent in the fourth quarter of this year, down from 3.5 percent last quarter. Real GDP growth will come in at 2.5 percent again in the first quarter of 2019, but then will slow to 2.2 percent, 1.8 percent and 1.6 percent in the next three quarters, respectively.

Goldman sees the Fed raising rates this December and then four more times in 2019. It will do so because inflation will reach 2.25 percent by the end of next year because of tariffs and increasing wages, the bank predicted, noting there was also a chance of an "inflation overshoot."

"With a large overshoot of its labor market target under way, the FOMC will likely be reluctant to stop until it is confident that the unemployment rate is no longer on a downward trajectory, a point we expect to reach only in early 2020," the note said.

But the bank doesn't believe growth will actually turn negative anytime soon.

"For now, neither overheating risks nor financial imbalances — the classic causes of US recessions — look worrisome," Hatzius wrote. "As a result, the expansion is on course to become the longest in US history next year, and even in subsequent years recession is not our base case."

[Shaun @ Tru6]

Will be interesting to see who is next.

GM to slash jobs and production, cancel some car models

GM said it will take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expects the actions to improve annual free cash flow by $6 billion by the end of 2020.

[Tervuren]

Originally Posted by Shaun @ Tru6

Will be interesting to see who is next.

GM to slash jobs and production, cancel some car models

GM said it will take pre-tax charges of $3 billion to $3.8 billion to pay for the cutbacks, but expects the actions to improve annual free cash flow by $6 billion by the end of 2020.

Who is next will likely be those whose primary business model relies on selling to people who take out loans to buy the product.

[Sooner or later]

The sedan market is drying up industey wide. Truck and suv production is stressed.

[Jims5543]

Lowering production of Sedans and emphasizing on SUV's, I guess they did not learn from their Hummer failure.

Please, lets not prop them up again this time when they fail.

The bigger story is, what will happen when everyone starts defaulting on their 70-110K car loans and the repo'd cars are not worth but 1/4 of the loan balance?


Another interesting article. Not sure what to make make of this, it might be nothing but worth taking into consideration.

https://www.reuters.com/article/us-usa-bonds-foreign-graphic/foreign-buyers-find-u-s-treasuries-less-appealing-idUSKCN1NV27V

A sustained slackening in foreign demand for Treasuries could hurt the U.S. economy. Lower demand means the government must increase the interest it pays out to attract buyers. Those higher federal borrowing costs not only add to the U.S. budget deficit, they also tend to push lending rates higher for consumers and corporations, which could knock the second-longest U.S. economic expansion off track.

Saw this one today too. I have made clear I feel the housing market peaked, builders are asleep at the wheel and contributing to the problem.

https://www.wsj.com/articles/the-u-s-housing-boom-is-coming-to-an-end-starting-in-dallas-1543248073