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[Discussion] Will the Next one be the Worst Recession in History?


Warhippy

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12 hours ago, Warhippy said:

Have been reading a lot of paperwork and reports coming out recently indicating that the next Great Recession is not only inevitable, it is already starting to happen.

 

I don't want to be all doom and gloom but the 3 key factor weighed against this are

 

  • Over valuation of stock, property and asset
  • Geo-Political issues such as Mid East conflict and trade wars
  • Personal/Consumer, Business and Corporate Debt levels.

 

Now there is very little any government can do to avoid such issues, as much of it is based on market forces that are well outside of their control, consumer and personal debt levels are based on a persons inability to live within their means.  Trade wars...well we've read about those for the last 17 months and the US seems happy to engage under the current administration without cause or worry to their own interests.

 

I have posted a few links to read over, and while I know most are all US based it still holds weight.  But am truly interested in a discussion here as I know there are a number of people on this site well invested in the real estate market, business and financial markets or personal banking and would love to hear what they have to say about this

 

https://www.ccn.com/the-next-recession-wont-be-triggered-by-a-housing-market-crash-economist/

 

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

 

https://www.stlouisfed.org/on-the-economy/2019/october/consumer-debt-new-peak-depends

 

https://www.ccn.com/buffett-indicator-warns-stocks-doomed-worse-crash-than-2008/

 

https://www.federalreserve.gov/releases/chargeoff/chgallsa.htm

 

https://www.axios.com/world-total-debt-load-91ab8c0a-db67-40cb-940e-a36ac58b629f.html

 

https://www.ccn.com/66-rate-cuts-fuel-dangerous-bond-market-bubble-in-2019-when-will-it-pop/

 

So in all honesty.  What is everyone's thoughts on this?  Please, try to keep this as partisan free as possible because if this mess hits the fan it won't care for party status or choice of team.

nice work Hip, a lot of good info there.

 

IMO its not underway, but the conditions exist. My biggest concern is household debt in the entire picture, the middle east war part not so much, thats been going on my entire life and unless someones going to drop the big one I think thats down the list as far as things we need to be concerned about from a recession pov. 

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"Buy Gold! Intrinsic value!" 

There are a lot of other resources with more intrinsic value than gold, first of all. Secondly, drinkable water is going to be the most sought after resource before long.. if it isn't already. Good luck drinking your gold coins or bartering with them when people are so dehydrated they're dying. Billions of people still lack access to fresh water. When powerful nations start feeling that water pinch - there's your World War 3. And this country and its water reserves is going to get run over by the big boys down south or the menace across the arctic. 

But of course the next recession is brewing. That happened when Republicans took control again and started unraveling many of the measures put in place after 2008. There's zero consequence for politicians or the banks when nobody ever goes to prison, nobody ever pays penalties, and they all get a big fat Christmas bonus thanks to the tax payer. Until the plebs unite and take it to these cocksuckers next time, the vicious cycle will continue. I know that's a pipe dream.. hyper partisan politics will prevent this from ever happening..

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10 hours ago, Nuxfanabroad said:

Globally I'm quite concerned about this(approx) 250 trillion in Govt debt(with Global GDP at 80 trillion). Can they kick the can down the road forever? Can they always manipulate lending & inflation rates? Here in Japan, many of these issues are not too rosy.

 

Watch interviews where some interesting minds warn of currency values, & whether it all defies gravity. People look for historical parallels, but in many ways the period we're in has no precedent.

At least in Japan the majority of their debt are domestically owned, thus all borrowing and interest maintenance stays within Japan.  Plus they still have like a trillion dollar in US treasuries/bonds in their vaults.  

 

Whereas countries like US, a sizable portion of their debt are foreign owned (China and Japan owns like over 2 trillions worth alone), so all interest payments leave the US.  The US does have one way to alleviate their debt repayments.... make the US dollar worth way less going forward.  It will totally screw over the lower and middle class... but since rich will usually stay rich... it may not be improbable.  

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10 hours ago, Ryan Strome said:

@Warhippy btw you say not to get partisan and that's fair enough but if this is well known why is our government running up massive debt and running massive deficits just before the big recession? Not trying to shift the conversation but that seems very, very irresponsible and is setting Canada up for austerity in the future.

whats the actual alternative? we haven't had a PC/CPC government thats not rung up the debt since the 50s. The joke of it being viewed as partisan is they all do it because we all like the election time goodies, whether its social programs or lower taxes, its going to cost us all.

 

Household debt is the biggest impact on daily lives, thats the one that scares me the most. And its in most peoples control. Of course there are people on the margins that have to, but for the rest of us how many run a tight household budget? how much of that debt was unnecessary? But how much of our economy is based on superfluous consumer spending? that tug of war is going to produce the next recession imo. 

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30 minutes ago, Jimmy McGill said:

whats the actual alternative? we haven't had a PC/CPC government thats not rung up the debt since the 50s. The joke of it being viewed as partisan is they all do it because we all like the election time goodies, whether its social programs or lower taxes, its going to cost us all.

 

Household debt is the biggest impact on daily lives, thats the one that scares me the most. And its in most peoples control. Of course there are people on the margins that have to, but for the rest of us how many run a tight household budget? how much of that debt was unnecessary? But how much of our economy is based on superfluous consumer spending? that tug of war is going to produce the next recession imo. 

That's the key to much of this.  The first wave of personal and business insolvencies is underway and started during the last quarter of 2019.  This is/was based on the initial rate hikes of only .25% 

 

https://www.bnnbloomberg.ca/canadian-insolvencies-increase-8-4-over-past-12-months-to-sept-1.1346799

 

https://www.bnnbloomberg.ca/rising-insolvency-readings-raise-red-flags-in-canada-sort-of-1.1349506

 

https://canada.constructconnect.com/dcn/news/economic/2019/11/rise-in-consumer-insolvencies-raises-a-warning-flag-for-creditors

 

Estimates are showing that an additional 30,000 to 40,000 private citizens at risk with even an additional .25% increase across the country.  The problem is rates NEED to rise.  I've been pretty loud about that too.  That people living outside of their means has caused this issue and that in a truly conservative mindset, rates should rise accordingly and these people should sink or swim based on their own merits.  So many people living under $50k a year taking multiple trips, over extending themselves on home purchases or families living a fantasy world purchasing secondary "investment homes" because they saw a hamster trainer in Toronto with a $1.2 million budget on a home finders show.

 

The scariest thing is much of the insolvencies and defaults are caused by non mortgage debt.  Living on credit, borrowed money that never existed within their means anyways is ruining people in a society in which elected officials said SPEND, SPEND!!!!  it's saving the economy SPEND MORE 

 

The rates of default have outpaces mortgage defaults by a large margin but those mortgage issues are literally around the corner of the next rate hike or two.

 

https://www.macleans.ca/economy/the-most-important-canadian-economic-charts-to-watch-in-2020/

 

https://www.bnnbloomberg.ca/household-debt-squeeze-drives-canadian-delinquencies-higher-1.1360576

 

Honestly, the government not even a decade ago literally said keep spending.  They said to consume, they said it in their budgets and it has not stopped since.  The Harper government, the Trudeau government.  Keep spending people, we are.  That mentality is everything wrong with the country's finances since about 2006.

 

https://www.ctvnews.ca/harper-to-canadian-consumers-keep-spending-1.326214?cache=yes%3FclipId%3D89578

 

https://www.fraserinstitute.org/article/all-due-respect-mr-harper-you-are-wrong-stimulus-spending-doesnt-work

 

https://www.cbc.ca/news/government-to-consumer-spend-and-save-1.874392

Edited by Warhippy
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31 minutes ago, Jimmy McGill said:

whats the actual alternative? we haven't had a PC/CPC government thats not rung up the debt since the 50s. The joke of it being viewed as partisan is they all do it because we all like the election time goodies, whether its social programs or lower taxes, its going to cost us all.

 

Household debt is the biggest impact on daily lives, thats the one that scares me the most. And its in most peoples control. Of course there are people on the margins that have to, but for the rest of us how many run a tight household budget? how much of that debt was unnecessary? But how much of our economy is based on superfluous consumer spending? that tug of war is going to produce the next recession imo. 

I don't disagree with anything you just said but my point is if it's this knowledgeable why is the government of the day don't worry about what party they are why is the government of the day racking up massive debt and running very high deficits? If it's true and there is a major recession as War hippie says then we are in big trouble and will only lead to austerity measures in the future so are the good he's really worth it? I'm not picking on either party I'm saying that if it's this well-known why did the government of the day. Prepare us for it?

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1 minute ago, Ryan Strome said:

I don't disagree with anything you just said but my point is if it's this knowledgeable why is the government of the day don't worry about what party they are why is the government of the day racking up massive debt and running very high deficits? If it's true and there is a major recession as War hippie says then we are in big trouble and will only lead to austerity measures in the future so are the good he's really worth it? I'm not picking on either party I'm saying that if it's this well-known why did the government of the day. Prepare us for it?

My biggest concern with the government (no matter who is in charge) racking up debt is that it sends the wrong message to the nation that debt is ok.

 

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1 minute ago, Shift-4 said:

My biggest concern with the government (no matter who is in charge) racking up debt is that it sends the wrong message to the nation that debt is ok.

 

 the whole system is flawed you are absolutely correct but banks are more than happy to lend money to people that will basically make them house poor because they should not be getting loans in the first place

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39 minutes ago, Tortorella's Rant said:

"Buy Gold! Intrinsic value!" 

There are a lot of other resources with more intrinsic value than gold, first of all. Secondly, drinkable water is going to be the most sought after resource before long.. if it isn't already. Good luck drinking your gold coins or bartering with them when people are so dehydrated they're dying. Billions of people still lack access to fresh water. When powerful nations start feeling that water pinch - there's your World War 3. And this country and its water reserves is going to get run over by the big boys down south or the menace across the arctic. 

But of course the next recession is brewing. That happened when Republicans took control again and started unraveling many of the measures put in place after 2008. There's zero consequence for politicians or the banks when nobody ever goes to prison, nobody ever pays penalties, and they all get a big fat Christmas bonus thanks to the tax payer. Until the plebs unite and take it to these cocksuckers next time, the vicious cycle will continue. I know that's a pipe dream.. hyper partisan politics will prevent this from ever happening..

I agree with you about water........it makes me so angry we allow Nestle to take our water for next to nothing.

Growing up before water was sold in bottles we (friends and myself) could not comprehend the concept of having to pay for water.

I recall this well.  

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1 hour ago, Ryan Strome said:

I don't disagree with anything you just said but my point is if it's this knowledgeable why is the government of the day don't worry about what party they are why is the government of the day racking up massive debt and running very high deficits? If it's true and there is a major recession as War hippie says then we are in big trouble and will only lead to austerity measures in the future so are the good he's really worth it? I'm not picking on either party I'm saying that if it's this well-known why did the government of the day. Prepare us for it?

good question. Its really the one major area where Trudeau and Morneau worry me. 

 

But if we're in a spot where people are racking up personal debt at record levels, who's going to vote for austerity? seems to be human nature to outgrow the tank and then suffer the consequences. I'd like to believe that Canadians are smarter than that.... we'll see. 

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1 hour ago, Ryan Strome said:

I'm talking into my phone because weather conditions are pretty brutal I hope you can navigate through my message there Jim

its all good. Watch the road though man! we're not going anywhere. 

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Just now, Jimmy McGill said:

good question. Its really the one major area where Trudeau and Morneau worry me. 

 

But if we're in a spot where people are racking up personal debt at record levels, who's going to vote for austerity? seems to be human nature to outgrow the tank and then suffer the consequences. I'd like to believe that Canadians are smarter than that.... we'll see. 

But see it hasn't been that long since Chreti and Martin how to fix a total mess before. Look at all the wild spending through the Trudeau senior years and then in comes incomes Mulroney and Bam a recession hits and Canada is ill-prepared for it and he gets attacked for all this debt he had to pile up what choice did he really have?

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1 hour ago, Warhippy said:

Estimates are showing that an additional 30,000 to 40,000 private citizens at risk with even an additional .25% increase across the country.  The problem is rates NEED to rise.  

^ this. 

 

The threshold for obtaining personal debt has to be much higher. Its so easy to get a homeowner line of credit and high credit card limits. 

 

One thing people may not realize is you can call your credit card company and just flat out ask for a lower rate. I've done it a couple of times, about 1/2 the time they've said yes and lowered it. I pay it off every month tho so that could be part of it but its worth a try if people haven't done it. 

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3 minutes ago, Ryan Strome said:

But see it hasn't been that long since Chreti and Martin how to fix a total mess before. Look at all the wild spending through the Trudeau senior years and then in comes incomes Mulroney and Bam a recession hits and Canada is ill-prepared for it and he gets attacked for all this debt he had to pile up what choice did he really have?

Martin could have kept the party going. He did take some damage from the cuts he had to make, kind of primed everyone to be mad at him and set the table for Harper... who came in and spent 160 billion more :picard:

 

I do hope the next CPC leader has the stones to just state we need to live within our means and runs on that platform. If Rona can stay away from social issues she might just win by doing that, I do think people realize we need to stop the gravy train. Thats really the only thing thats going to protect us from a recession. 

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1 hour ago, redhdlois said:

I agree with you about water........it makes me so angry we allow Nestle to take our water for next to nothing.

Growing up before water was sold in bottles we (friends and myself) could not comprehend the concept of having to pay for water.

I recall this well.  

Is that where you got your water? :P 

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