Impending Recession Just Doesn't Seem Inevitable Perhaps

It’s certainly not time to declare victory, but the U.S. economic engine just keeps beating the odds so far. The somewhat fabled soft landing could be a real possibility.

Oh I dunno about that… the experts have predicted 23 of the last two recessions. :astonished::upside_down_face::wink:

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Consumers are still spending…and putting a lot of it on credit. High inflation and higher interest rates will eventually win out…it always does…


Is that your darkest definition of a “win”?

Interest rates were kept down for years by the Fed’s quantitative easing and easy money policies. Did you think that could go on forever?

I think you mean quantitative easing…

Its common sense that no economic cycle (up or down) goes on forever…but it sure was a great time to be an investor in equities and real estate. There was a lot of net worth created during the previous low interest rate cycle.

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More bad news for the Recession Hawks?

We are getting there…The Fed is following its mandate. Given that the YOY is 3% (4.8% for Core CPI) hopefully one more rate hike at the end of this month will be the last.

You are qualitatively correct, mine was a quotative blunder of Brobdingnagian proportions.

I’ll make the required rectifications. :nerd_face:

I think that most of those in the know – which probably excludes most of us here – feel the next rate hike, if it is to come, will come sometime in September.

Clark agrees:

Like I said…The Fed will hike this month. You don’t need to be an insider…you just have to follow the right economic information (in this case, the bond market). I’m hoping this is it for awhile and they let the economy respond and adjust for the rest of the year. Obviously, its going to depend on inflation data…

How are you preparing for this next wave? You made the right bets on RE and they paid handsome dividends. Is this time to take chips off the table and hold cash? Collect the nice secure APR from the banks or are you looking at value stocks?
Also curious to know your stance on BTC considering the printing of money and the high carrying cost of storing gold. I fear that I have been somewhat of a luddite on BTC because it is easy to give in to the fear mongering that digital money is ‘rat poison’ but their use cases are starting to sound pretty good.

My personal portfolio is about 90% real estate, so I don’t spend much time on equities. Just been investing in growth ETFs in Roth accounts. When I get to 60 I will switch over to high-yield portfolio and withdraw the dividends tax free…

I am hoping there will be a real estate correction here soon, especially in the vacation property market, because I have capital ready. Right now, the numbers just don’t fit our model. The macro economics don’t really favor a correction because we still have a supply problem of new and existing homes. I’m never going to sell my properties because they provide steady income and I can always pull out a lump sum of cash tax-free if necessary.

I don’t do anything with BTC or any digital currency. I’m just not a believer in that asset class. I think there will be better digital assets to own in the near future. The blockchain networks are the real game changer from that sector.

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Makes sense. Wish you all the best and thanks for always answering so eloquently.

UAW strike, Federal shutdown, yield curve went negative a year ago, short-term rates at highs not seen in 22 years… I know this has been “the most forecasted recession”, but how do we honestly AVOID a recession?

… and I don’t really care about recession so much as I care about the stock market, which tends to do badly in recessions. Well, including dividends, VOO (Vanguard S&P 500 ETF) has yielded 0% since August 2021… it has gone nowhere in more than two years. “Yes, but stocks are up 20%+ from a year ago!” sure, that’s true, but that figure falls in line with many bear market rallies.

I’m still invested, I can’t predict the future, I’m just playing it cautious in my allocation because maybe the “singer-person of size” hasn’t sung yet. I like getting the 5% steady with no risk. It’s a nice change. Maybe stocks will go on sale.

A data point… the S&P 500 ETF VOO from Vanguard is down -7% since 12/31/2021. No big secret there… the “equal weighted S&P 500” ETF called RSP is down -11%. RSP won’t be overrepresenting the big few firms that make up 30% of the S&P500 market capitalization which are now going through the “AI WILL SAVE US!” mania. Takeways - the US economy as a whole is getting softer. And, as always, market-cap weighted ETFs like VOO, SPY, VTI, are not clear indicators of the US economy as a whole, as they are dominated by a few firms. The US economy is more than Google, Apple, Microsoft, Amazon, Netflix, etc. Probably none of us here work for any of them. But it’s a good bet that we’ve worked for one of the other 495 companies, or do significant business with them.

My mutual funds (mostly VWENX) have gained 5.9% from 10-2022 to 10-2023.

Read this morning the average 30 year mortgage is now at 8%. That will slow housing down and housing is arguably the biggest dog in the economy.

True…but if you stretch it back 1 more year…its down 20% or so. In your case (if I am remembering correctly) you probably care more about the income anyway.