Once playing, click the icon in the lower right corner for full screen. Focus should occur after a few seconds; if not, click the wheel to the left of the YouTube icon to adjust:
Attention Non-Client subscribers: Nothing in this video should be construed as investment advice. The examples expressed relate to portfolio management we perform on behalf of our clients, and, again, under no circumstances are they to be considered recommendations to the viewer.
Thanks for the updates Marty!
ReplyDeleteIt sounds like we may have a recession. If we do, when? And for how long? Would it be mild? With the way things go, I am thinking it could be some time in Mid-2024 for the following reasons:
1. Market breadth is not good.
2. Student loan repayment has begun. Mine is due on 10/24/23. LOL
3. Corporate debts are not sustainable. It is hard to refinance with higher interest rates.
4. Historically, Fed raises interest rates always caused recession.
5. Corporate earnings may fall apart.
6. Consumers exhausted all savings.
7. Consumers' debts ballooned up to $1trillion.
8. Banks have major issue with their balance sheets.
9. Unemployment rate starts rising.
10. US political system is not stable.
11. Housing market is in deep recession.
12. Commercial loans are not sustainable.
13. Lastly, something is going to break. The Fed may have to cut rates.
Let me know your thoughts. Have a great weekend!
Hi Sam, I don't have a timing prediction, but I'd say 1-12 months out.
DeleteHere I'll comment on each of your points:
1. Market breadth is not good.
Right, but that can happen with or without recessionary pressures.
2. Student loan repayment has begun. Mine is due on 10/24/23. LOL
Yep, that's a problem
3. Corporate debts are not sustainable. It is hard to refinance with higher interest rates.
Yes, but companies generally did a great job of "terming out" (extending their maturities) when interest rates were pushed to zero during covid... So, not the immediate refinance risk people think... Is a problem for new issuance however.
4. Historically, Fed raises interest rates always caused recession.
Mid-90s are one exception when that didn't happen...
5. Corporate earnings may fall apart.
Yep
6. Consumers exhausted all savings.
There's still a chunk there, but it's dwindling.
7. Consumers' debts ballooned up to $1trillion.
Yes, but as a percentage of their income and net worth it's not problematic at this point... Of course a recession can change all that.
8. Banks have major issue with their balance sheets.
Yes and No... Banks hold a lot of long-duration bonds that got creamed as interest rates rose, which makes it very tough to handle a mass exodus by depositors... The Fed has in-effect bandaided that problem with new facilities, etc... Ironically, a recession (falling interest rates), will bolster that aspect of their balance sheet... Otherwise the banking system is balance-sheet-fine.
9. Unemployment rate starts rising.
Definitely during (and leading into) recession.
10. US political system is not stable.
For sure!
11. Housing market is in deep recession.
Hmm... I will say that homebuilders are worried at this point, prices are holding up relatively okay... Don't know that I'd characterize it as deep recession at this point.
12. Commercial loans are not sustainable.
See #3
13. Lastly, something is going to break. The Fed may have to cut rates.
They will cut rates when recession hits, something breaking or otherwise...
Happy Sunday my friend!