Outlook 2016: Why economists are starting to use the ‘R’ word again

Financial Post ^ | January 25, 2016 | John Shmuel

[expat_panama]

Sorry for the doom'n'gloom post but while a lot of good people really had their hopes up that we'd be doing better by now, it's looking more and more like the bad monetary policy that's been added to years of bad fiscal policy is just too much for even America.

[bert]

I visited a company yesterday that has been fattened by the fracking boom. the machines were idle and there was a gloomy feeling about the place

they just didn’t have any orders to keep the lines running.

[Fai Mao]

A major recession will throw a wrench in the demodogs raise taxes platform

[grania]

monetary policy that's added to years of bad fiscal policy

And it's not ending. It seems that now cities are doing massive construction endeavors to attract business, tourists/conventions, and high-income housing. That bubble has to burst.

With the disappearing middle class, the problem is that US citizens are in an even deeper hole. How many people could save for their future needs, even if they wanted to? That requires a stable job and an income that keeps up with expenses.

I'm wondering how much disposable income has disappeared in the US.

I'm not atypical. In my peer group (retires who have a responsible plan for future needs) everybody is cutting back where ever they can. Necessities keep taking more income...and lower gas prices don't mean much if you don't do much driving.

Does anyone have a plan to restore the middle class? Without that, it's hard to imagine that there's a solution.

[expat_panama]

Good morning all!  It's a uniquely good morning for me because my slip-up yesterday turned out OK.  What happened is that yesterday was actually an IBD 'follow-through' day and the contraction was over --we're now officially in a "confirmed uptrend".  My missing the opportunity was the bad news.  The good news is yesterday stocks plunged big time in rising volume --neat huh? 

Futures traders are confused too, these traders happy and these scared.  For stocks.  For metals they're expecting another +0.66% with gold and silver up to new highs: $1,119.80 and $14.50!

Oh yeah, today's 'claims day':

8:30 AM Initial Claims
8:30 AM Continuing Claims
8:30 AM Durable Orders
8:30 AM Durable Goods -ex transportation
10:00 AM Pending Home Sales
10:30 AM Natural Gas Inventories

News:  The Taxing Will Continue Until Morale Improves.  I'm sure there's more but that's as far as I could get.

[Sam Clements]

I turn 65 this year and am watching my business slip into serious trouble. I will need to find cash to keep it alive but can see no way to make a good result No profit and no cash for me. I am definitely becoming dispirited. This is the worst time of my life. All of this since the end of November.

[expat_panama]

didn't have any orders to keep the lines running.

Downturns happen.  The big concern this time is that we're also seeing an extreme disconnect from reality with the people running things, leaders who just point to their imagined 5% unemployment and rampant inflation.

[Original Lurker]

My brother and his wife are having to pull up stakes in south Louisiana’s oil country. He said things are going from bad to worse.

Fortunately, he landed a good job in Seattle. They’re hitting the road in two weeks.

[expat_panama]

throw a wrench in the demodogs raise taxes platform

My hope too.  We may be wrong but we can still dream if we want anyway.

[MarMema]

Whoa. Some serious agenda 21 stuff in Seattle these days. Let me know if they need help with suggestions for a home.

[SkyPilot]

Recession? Try Depression.

[expat_panama]

I turn 65 this year...   ...am definitely becoming dispirited. This is the worst time of my life.

Please.  Do what ever you have to do enjoy life and be grateful for blessings you got.  OK, that's big talk coming from me as someone who's finally on top of things; but 15 years ago when I got permanently kicked into an early retirement, had to move w/ a wife and 2 kids and build a new home and a new life.  It all worked out (tho I didn't know at the time it would),  the kids have all prospered and we're all grateful for the adventure.

The fact that things work out is just one reason to be happy.  The other is that a negative outlook impairs judgment and I'm remembering it was a time when I needed all the good judgment I could get.

[TigerLikesRooster]

P!

[SkyPilot]

Your post regarding retirement is valid. We have a large population who are unable to invest for retirement, but I also believe that a major stock market crash is coming that will wipe out much of what those who have invested expected to receive. I believe it will be so great a crash that it will throw the entire world into global economic chaos. Our government already has formulated plans to seize all IRAs, TSPs, and 401Ks. All they need is for the crisis to happen. They will us whatever money is left to shore up entitlement programs. Mark my words.

[tbw2]

Or all the efforts to pump up the fake numbers are deflating, revealing the true bad situation never ended.

I think the Great Recession of 2007 never ended, as proven by decreasing workforce participation rates and stagnant/declining wages.

The “good” numbers were propped up by borrowed money and welfare transfers.

[Texas resident]

The recession never ended.
First clue was when the Party’s media crowed about how the recession ended just weeks after Obama was inaugurated.
No way can the change of leadership can make the economy turn around that fast. When Reagan took office, it took him years to turn around the Carter recession.

[Original Lurker]

Any Freepmail info would be appreciated as my brother has never lived outside Texas or Louisiana. His wife is from Ontario, Canada. They’re venturing into uncharted waters (though his new employer did fly him in for a week to interview and to tour the area)

Thanks in advance!!

[PoloSec]

I was not aware we emerged from the last recession, I heard rumors we had but personally I have seen no evidence, I also heard there was zero inflation I’ve seen no evidence of that either, but what do I know; as the powers that be suggest I’m just to ignorant to understand that my wallet has not really getting thinner, to stupid to know it is more complicated than that, the thickness or lack thereof of my wallet has nothing to do with anything.

[Texas resident]

Expat, thanks for that advice. My job was oilfield related sales. I was in that business since the mid 90’s. Lost my job at the end of December. Working to move to another industry. I have jumped industries 3 times before and have always landed on my feet, but the process can be a grind. Have to keep my eye on the prize, but also take time to appreciate being off the rat wheel for a while.

[central_va]

I am curious as I have never owned or run a small business. In your case would you ever considered injecting some of your own personal assets into your company to keep it afloat?

I know a guy who runs a small construction co. He says he is hurting and had to lay off 2 of his 5 guys that work for him. Yet he has a lake house, a nice boat and he tells me his house is paid off.