9 responses | 0 likes
Started by wglassfo - Aug. 1, 2022, 4:43 p.m.

The question might be asked if we are in a recession

I can find no definitive example of what a recession actually may be

There are some widely accepted examples of what a recession may be such as 2 qtrs of declining GDP, although very few actually accept this as the absolute definition of recession that I can find. 

Several economists will opine on what a recession may be [2 qtr's declining GDP] but that is an opinion

So the question remains, are we in recession and what will the coming economic out look be like. What if any thing will happen to our financial system, assets, pension etc.

For starters it is estimated the world has a combined GDP of 100 trillion

However the world has a combined debt of 350 trillion

You may disagree with these numbers, which is a fair assumption. I would ask where your numbers come from as my numbers come from various sources, all of which may not be true. Thus your thoughts may be equally or more valid

However, debt is some thing that often for tells of recession

Have you looked at the housing market?? As fast as prices increased they are now falling in asking and selling price

Have you looked at delinquent auto loans. Yes they are increasing. Now is not the time to buy an auto, although we did take delivery of a new truck. I did not take my own advice but heck, we wanted a new vehicle, so we bought one.  We were in a situation where both car and truck needed to be traded together as both were 2016 However, no loan so might be okay, to buy a truck.

Now the trouble may happen if our assets decline due to recession

What about your pension. My pension is land rent. That may decrease and so might our stk fund portfolio If your pension is, [maybe] a teachers pension do they have to pay your pension in full. Not if the funds are insufficient.

Example:  A machinery Co. had to merge yrs ago due to using pension funds to pay expenses. So BK, sell the assets and receive 20 cents on the dollar pension or merge and receive 80 cents on the dollar pension money. A merger happened.

350 debt vs 100 GDP could reduce our land asset value by 2/3 or more. Recession may mean reduced prices as demand disappears


Do you have any thoughts about a possible recession

What about our debt based currency. Will all those billions/trillions of debt based currency, printed dollars, printed by a click on a keyboard, come back home to the USA, demanding some collateral

When I write a cheque I need to have money to make it a good cheque. Does our gov't have the money to make it a good cheque or is it funny money??? I can't keep on losing money on the farm for ever. My uncle got in big trouble for writing bad cheques. Had to sell the farm.

Just a few thoughts on debt. Maybe hard times if recession

Re: Recession
By metmike - Aug. 1, 2022, 6:58 p.m.
Like Reply

Moved this up to market stuff of you Wayne!

By joj - Aug. 2, 2022, 6:28 a.m.
Like Reply

I think that 2 Qtrs of GDP decline is a good definition.

What I find interesting about this recession, whether it be a shallow one or a hard landing, is the historically low unemployment rate.  I don't think we've ever seen this before.  Please correct me if I'm wrong on that.

Might it be the demographic imbalance of 80 million baby boomers vs much less young folks?  Shortage of labor has to result in rising wages.  Rising wages are passed on to the consumers which is referred to as "sticky inflation" because wages never go down, and might lead to a spiral of ever higher wages/inflation.  

Also, that demographic imbalance has to weigh on GDP in that retirees, even those who are comfortable, are less productive.  I read somewhere that the average age for peak income (productivity) is 48 years old.

When growth is healthy and robust (as in when baby boomers were productive) we can get away with deficit spending.  But if the economy contracts that debt gets harder to service.  Seems like headwinds for the next 20 years in my opinion.

I've mistakenly had that opinion in the past, like in the 1990s.  But then the internet came along (who saw that one coming?) and that exploded economic growth which helped service the ever growing debt.  

Anyone see any inventions on the horizon which might explode economic growth?  Artificial Intelligence?  We all chill out while machines do all the work?

By TimNew - Aug. 2, 2022, 7:02 a.m.
Like Reply

Typically, 2 qtrs of contraction is a standard.  It's probably an over simplification as there are a lot of metrics beyond GDP.  GDP is arguably the most significant metric, but not the only one.

Employment is a key factor as is consumer spending and retail, all of which are at respectable levels. A few others,  MFG and Housing are definitely in contraction.   What we have is a large array of mixed signals.

If I had to commit to an answer,  I'd say we are in high risk territory, and a recession is certainly possible,  but we are not there yet.

If fuel prices continue to drop and employment remains strong............

Re: Recession
By wglassfo - Aug. 2, 2022, 12:30 p.m.
Like Reply

This is what we see on our farm. I will be the 1st to say the entire work force may not be  like our local work force

We go to stock car races, once a week and sit amongst the spectators in a mixed crowd of families, younger boy friends and girl friends and retirees

I over hear the younger folks complaining about no job openings

Well on our farm we have a hard time hiring employees. I will be the 1st to admit, working on a farm is not a 9-5 job, but different tasks keep it interesting

We offer 10 months of above average starting hrly wage with above average  wage increases, if the employee sticks and works for us more than one yr. We even offer a raise after 6 weeks. The two months of Jan and Feb we shut down and expect the employee to collect unemployment benefits. Most employees want to work 12 months. The paper work for unemployment seems to be a task they wish to avoid and also less money from benefits. We also have 4 part time workers who are happy for some extra work when we have it and they can work around holidays at their permanent job.

However all but one employee is getting older and will not be with us much longer. A 14 hr shift in a tractor after a couple days is too much for an older body. We do it but we have a vested interest in hard work, and a good crop.

We have one younger employee, who lives on a small farm which will not support him and the rest of his father and brothers. So he came to us looking for work. But he is selective in the jobs he will do. He won't run a sweet corn harvester, planter, sprayer and other tasks. We expect him to leave this winter. We find younger workers don't worry if there is no money. They find enough and don't worry about bills etc.. Many live with their parents 

On the other end of the spectrum we find management types are impossible to find. We have offered 90,000.00 CAD starting salary, most weeks 8-5 working hrs and days off, for extra hrs or money in lieu of over time plus generous holiday pkg. Benefits are negotiable

Even though education with a 4 yr ag degree qualifies these people to do the job, the complexity of management, on our diversified farm, turns them away. We offer 30,000.00 more money than the coop pays them to come and sell us inputs etc. but no takers so far. It seems the management responsibility scares them away., although we offer an extensive training period for as long as they wish.

So in summary, when I hear no jobs are available and many Co.'s have advertisement looking for workers, plus our own experience, this baffles me as to who will do the work in yrs to come. On average workers are in short supply today.

I really believe the benefits collected during covid to stay home and collect money, did a lot of harm and spoiled the work ethic.

Heck if old age did not stop me, I could find many jobs today. I never had a very hard time to find work, in yrs past, even when I had to compete for a job opening. I did manual jobs, sales which involved long distance between possible sales, drove a truck, drilled for oil as a helper, on 12 hr shifts, 6 days a week and farmed my own land.  Most times, two weeks and I had a job, when needed. 

The thing was, I think, I was not selective on what job I would accept so long as I collected a pay check.

When I went BK my wife and myself had a grand total of 683.00 dollars, [as close as I remember] and two children to feed and cloth plus one of them in university with tuition etc.

I took 400.00 and left home with a truck, which I prayed did not break down on my 1st delivery. My wife had the rest to buy food etc. until I had my 1st trucking pay cheque

Gradually I bought land and kept on trucking and farming until the farm supported the family

Every time I bought a farm and also my son and grand son, land purchases, people thought we were crazy 

I remember one purchase of 1.5 million really got the coffee shop talking.

5 yrs earlier the bank refused to lend us 110,000.00 to build a couple bins and a corn drier. That was when I hit the road going into every bank, asking for an appointment to talk money lending. I found the money

A think workers need some kind of different incentive to work, in today's environment. My family had a personal stake in our success but an hrly pay cheque does not seem to be enough, today.


Is there a connection between employment and recession, in today's environment

Will china and Asia supply the work force

Some want an open southern border for cheaper labour. I can see why as we hire Mexican workers. The local labour force simply will not do the work we require. Our Mexican are good workers, some can drive a tractor, most can't and are better than off shore workers

Just some thoughts about our experience and if this relates to recession or not might be the question

By TimNew - Aug. 2, 2022, 12:44 p.m.
Like Reply

There is no shortage of job openings.    One of the questions I am having a hard time answering is why there are so many.   I've never seen openings anywhere near these levels in all the years I've watched, and they number in the decades.  And quits are the same thing.  Well over 4 million.    More than double anything I've seen in the best of years.   We have a very confident work force along with a participation rate below pre-pandemic levels.

It's been suggested that retiring baby boomers explains some of it, and I agree.   But there is a bigger answer and I have yet to find it.

Quite simply,  if you are not working right now, it's because you don't want to.    And that's the question I need to answer.   Why are so many willing and able to remain outside of the work force? 

By metmike - Aug. 2, 2022, 1:49 p.m.
Like Reply

It's been suggested that retiring baby boomers explains some of it, and I agree.

Thanks Tim!

I'm not claiming this is the main reason now, just commenting on the future.

The number of retired people will continue to increase, year after year. This will  be mostly people NOT contributing productivity but instead are economic drags.

To support them, the rest of the people working must be MORE productive.....just to break even.

Medicare and medical bills will be the biggest drag. People living an extra few years will be gobbling up tremendous amounts of resources to stay alive and it's mostly a one way street. .

Ensuring Medicare’s Future Will Require New Revenue

By becker - Aug. 3, 2022, 8:18 p.m.
Like Reply

There is a paradox. I  choose not to work because I do not want the govt taking the taxes would I pay going to lazy people and those who have neglected their health and stupid govt policy as relates to wars and corporate welfare and a plethora of other bad spending. DC is munchkin land with a prerequisite degree in shrunken brains. 

You all know only 14c of $1 taxed actually has an effect? 

To make this a trade worthy reply I would add a what if scenario. What if the CCP sells the $1.2T  of US bonds it owns?  What interest rates do former reserve currencys deserve?

Re: Recession
By wglassfo - Aug. 8, 2022, 2:59 p.m.
Like Reply

Hi Becker

You choose to not work because you don't agree with how your tax money is spent

Should the gov"t not pay you a single dime because you choose to not work

That's what I would do. Make some changes on how gov't money is spent and you are the 1st money/tax saving

Our farm has to pay more taxes because you choose to not work

What do you think would happen if everybody decided to not work

I will give you an example on our farm

If you were working for us you might not agree with how we spend our money

As you know we have an open position paying 90,000/yr

Is that too much tax to pay

You would have a good amount left over, after taxes

I just bought a new truck, top of the line with every option available

Perhaps you would you not agree with how I spend my money. That truck cost a lot, I mean a lot of money. You would think your work paid for that truck, so you quit, because we won't pay you what I earn in a yr.

If you took our 90,000/yr job opening, you could afford the very same truck

I pay a lot of tax and yet I had money to buy things I want. Some are out of reach, but not because of taxes

You are using taxes as an excuse, not because you can"t work

We have a handicapped employee.

He works hard, we give him jobs he can do. 

He does not complain about taxes

He is very happy with the extra money. Before he came our way, his money situation was very tight

He is a much happier person paying taxes and the money left over after taxes.

People like you are a drag on society

Our handicapped person pays for your life style

Is that fair for a handicapped person to help support you

I am interested?? where does your money come from???

Face it my man

Most don't agree with how others spend there money including our gov't

You might not even agree with how your friends spend their money

A fact of life, how folks spend their money including gov't

Maybe china would be a better place for you

I  don't really want you in this country and paying more taxes so you don't work

You are worse than an illegal

At least most if not all illegals want to work, and most accept low wages

Get off the couch and join our society. Pay your taxes and contribute some thing

People like you really get me steamed up a bit, maybe a lot

I never give pan handlers a nickel, never

Once I offered to buy a hamburg and fries or what ever kind of food the person wanted

He refused, wanted cash

Is that you, ???  my man???

By metmike - Aug. 9, 2022, 12:44 a.m.
Like Reply

I don't know much about becker's personal life but his posts tell us that he clearly understands numerous markets, having generously contributed some insightful thoughts with solid analysis.

MarketForum is very grateful to him for sharing in a positive way. 

To see previous posts and to see any old information, use the search engine box at the top/right part of this screen.

Type in  a key word(s) or name(s) and hit return. Sometimes, you have to try several times to get the spelling or words exactly right.