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Real Estate Newsletter Articles this Week: Watch Months-of-Supply!
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales Months-of-Supply] *Click on graph for larger
image.*
• Part 1: Curren...
19 hours ago
5 comments:
I've been on Team NoRecession since pandemic measures ended, and I'm still looking for what wheel is going to fall off this time to get a bona-fide recession going (not just inflation mildly out-pacing growth for a quarter or two like 2022).
I ignore heuristics like the dread Inverted Yield Curve and Sahm's Rule, they're just being pushed by people searching for anything to paint their thesis.
(btw man do I miss being able to shoot the s in the CR comments section !!)
I just don't think our 21st century economy is going to be cyclical in the way it was in the 19th and 20th centuries, too many dynamics are different now.
My thesis includes the 80M boomers passing on $50 to 90T of assets this decade and next, plus also spending billions in retirement until then, which is 'counter-cyclical' LOL.
S&P 500 P/E is 30 again so it feels like 1998 there, but corporate profits seem to still lbe rolling in for big biz so I don't see an earnings recession like 2001 coming yet.
https://fred.stlouisfed.org/graph/?g=1q7n0 is real (2024 dollars) per-capita (age 16+) wages (blue) and gov't cheese (red).
How can we go into recession with every adult getting $1000'mo in FedBucks and $3750/mo in wages??
The housing sector is no doubt recessionary but that's a good thing, since booms in housing always lay the seeds of a big bust down the road.
While I might agree that the Sahm’s Rule feels a bit like cherry picking old data to predict the future and paint their thesis, I do find the decelerating job growth and accelerating unemployment growth a bit concerning.
https://fred.stlouisfed.org/graph/fredgraph.png?g=1q8Ve
All I can say for sure is that unemployment will not grow at 10%+ forever. We’ll run out of people. Whether it stops growing at that rate before the next recession is anyone’s guess.
I am cautiously pessimistic (as is often the case ;)), especially given that the stock market is feeling a bit like 1998 (as you point out).
I continue to hold TLT. Has not been a great trade. One of my worst since retiring. In for a penny, in for a pound though. One saving grace is that at least I didn’t buy it anywhere near the top. In any event, if I liked it before, I should definitely like it now. The inflation rate has finally been falling and the unemployment rate has been rising. Once again though, there’s no telling how long these trends will continue.
Uncertain times. Was easier to see the future heading into the dotcom bust and the Great Recession. There seems to be a lot more variables in play this time. *shrug*
>decelerating job growth
my thesis also includes us running out of people willing and able to work . . .
PAYEMS vs 74% of age 15-64:
https://fred.stlouisfed.org/graph/?g=1q9hm
Participation rate 25-54:
https://fred.stlouisfed.org/series/LNS11300060
Clearly real GDP isn't going to have a tailwind of 1-2% pa demographic expansion:
https://fred.stlouisfed.org/graph/?g=1q9hv
These dynamics appears to be good for wage earners this decade and next . . .
Here’s one to ponder:
https://fred.stlouisfed.org/graph/fredgraph.png?g=1q9uB
Will be interesting to see what happens next. No opinion here. Well, other than I seriously doubt it ever reaches 1.0.
The unemployment level growth continues to accelerate.
https://fred.stlouisfed.org/graph/fredgraph.png?g=1raAK
Now at 20%+ year over year. It’s certainly part of what spooked the stock market today. TLT was up 3% on the news.
The jump from in the unemployment rate from 4.1% to 4.3% in just one month is more than a bit concerning. Let’s call it solidly concerning, just one small step below very. *shrug*
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