Recession coming?

[Atla]

At this rate, we'll all be living under overpasses and sucking dick to provide for our families long before Biden's brain finally skitters itself to a stop.

 

[rodney eppes]

Way too many thinking Recession, now, will be the same as some past ones were. The argument of weather we are in one or not, depends on what facts are being looked at. We have had 2 quarters of GDP decline, which is an indicator of recession. But, we Still have 2 jobs open, for every person that wants or needs one. Unemployment is very low, & many people still have money to spend. As long as there are more jobs, than workers, the recession doesn't mean much! The largest hurt right now, is the inflation. Oil prices have come down, but with winter coming, they may go back up. Ukraine has started shipping wheat, which should ease some pain. We will probably stay at the same level, until next spring, or early summer, then start rebounding!

 

[jeepinmatt]

Way too many thinking Recession, now, will be the same as some past ones were. The argument of weather we are in one or not, depends on what facts are being looked at. We have had 2 quarters of GDP decline, which is an indicator of recession. But, we Still have 2 jobs open, for every person that wants or needs one. Unemployment is very low, & many people still have money to spend. As long as there are more jobs, than workers, the recession doesn't mean much! The largest hurt right now, is the inflation. Oil prices have come down, but with winter coming, they may go back up. Ukraine has started shipping wheat, which should ease some pain. We will probably stay at the same level, until next spring, or early summer, then start rebounding!

I'll say this...I like your optimism. There's a giant fan called inflation, and we are the shit that's gonna hit it. The fed keeps trying to move the fan back by making it bigger, but the world will always keep moving towards it until the shit hits the fan.

 

[drkelly]

I'm not seeing any signs of a recession in the small bubble of my life. We are very busy with multiple huge projects at my work and they are still trying to hire more engineers. They have been offering referral bonuses to the existing employees.

Then you have this come out today:

Payrolls increased 528,000 in July, much better than expected in a sign of strength for jobs market

Nonfarm payrolls were expected to increase 258,000 in July, according to Dow Jones estimates.

www.cnbc.com

 

[Atla]

The only thing I worry about is not having enough land to raise meat and veggies on while the rest of you are eating each other.

 

[awheelterd]

The only thing I worry about is not having enough land to raise meat and veggies on while the rest of you are eating each other.

I'm glad I'm not the only one who thinks like that.

 

[Loganwayne]

The only thing I worry about is not having enough land to raise meat and veggies on while the rest of you are eating each other.

Good plan but in less you've been growing and saving old strains of seeds your still gonna have to rely on someone else. Most seeds you buy go way down in viability after a year and the fruit won't produce viable seeds

 

[StretchASU]

I'll say this...I like your optimism. There's a giant fan called inflation, and we are the shit that's gonna hit it. The fed keeps trying to move the fan back by making it bigger, but the world will always keep moving towards it until the shit hits the fan.

I dig that description.

I sat with a customer today going over some particulars. His sales are down marginally from 2021. Some of that is to be expected as we had an incredibly strong pollen season in 2021 that generated sales we haven’t seen in 6-7 years. But his margins have shrunk considerably. What he buys from me has gone up. Utilities, up. Taxes, up. Etc. His inputs are all up. Regaining that margin without pricing yourself out of the market is a struggle. Decisions fueled by…inflation. That space between us in and the fan is the margin.

 

[paradisePWoffrd]

Good plan but in less you've been growing and saving old strains of seeds your still gonna have to rely on someone else. Most seeds you buy go way down in viability after a year and the fruit won't produce viable seeds

With that thought, you also have to raise heirloom vs hybrid and make sure you are raising some of them specifically for seed.

 

[rodney eppes]

Matt & I, use the same Financial advisor. He says he doesn't have a crystal ball. I'll have to ask if he has a Fan?

A recession is a broad contraction of economic activity that lasts for months or years. Some data suggest we may be in a shallow recession now; other data indicate a recession is a year or more away. There is also the view that future recessions will not look like past recessions. Below is the data that supports each of these three views.



1.) Recession Now – Some define a recession as two or more consecutive quarters of negative gross domestic product (GDP). First-quarter GDP was negative 1.6%, and second-quarter GDP was negative 0.9%, meeting that definition.

(See Chart)



The Atlanta Federal Reserve Bank produces a GDP Nowcast, a real-time estimate for the current quarter's GDP. The NowCast for third quarter GDP has fallen from 2.1% to 1.4%. Supporting the idea that the economy is slowing.

(See Chart)



Though we may technically be in a recession, it could be the economy adjusting and normalizing following the Pandemic



2.) Recession within Two Years - Inversions of the yield curve have preceded many recessions by six to twenty-four months. When bond investors expect economic weakness, higher inflation, or rising interest rates, they shift a more significant portion of their investment allocation from equities to longer-term bonds. This shift causes longer-term bond prices to rise and yields on those bonds to fall. Simultaneously, prices of short-term bonds fall, and short-term bond yields rise. We monitor the spread between the ten-year and the two-year treasury yields to track these changes.

On February 5th, I wrote a blog, "A Recession Indicator" (Link to Blog), discussing the relationship between yield curve inversions and recessions. The yield curve briefly inverted on April 1st, 2022, but it's believed that inversion was too brief to count. On July 5th, this part of the yield curve inverted again, meaning that the yield on the two-year treasury is higher than the yield on the ten-year treasury. If the economy follows historical patterns, we could expect a recession in 2023.

(See Chart)



3.) Future Recessions may be Different – The consumer drives over 70% of GDP, which makes it difficult to have a deep recession during periods of low unemployment. People with jobs have money to spend on goods and services, and people with jobs continue contributing to their company's retirement accounts, making sharp declines in consumer spending and GDP less likely. The July jobs report from the Bureau of Labor Statistics showed the economy grew by 528K jobs while only 250K jobs were expected. The unemployment rate fell from 3.6% to 3.5%, tying the pre-pandemic low and the lowest unemployment rate in 55 years.

(See Chart)

The stronger-than-expected jobs number throws doubt on the notion that we are in a recession.



Societal changes have led to declining birth rates. People are marrying later, having fewer children, and retiring earlier; these forces, combined with inefficient immigration policies, have resulted in dislocations between the supply and demand for labor. Lessons learned during the Pandemic are causing companies to reconsider their supply chain management by onshoring some manufacturing and production jobs. Less globalization will put additional pressure on a tight labor market. In the past, there has been a spike in unemployment as we enter a recession.

(See Chart)



According to the Bureau of Labor Statistics, there are 10.7M job openings for 5.218M unemployed people. Before we have a typical recession, we would need to slow the economy enough to work through the excess job openings to bring the unemployment rate closer to its 5.75% long-term average.

(See Chart)



Implications for the Stock Market – Markets are focused on the Federal Reserve's monetary policy, its impact on economic growth, and corporate profits. The stronger-than-expected jobs report may cause the Fed to remain aggressive for longer than previously thought. Most companies have reported their second-quarter earnings. There was some expectation that higher inflation would eat into corporate profits and second-quarter earnings would suffer; however, earnings have not been as bad as feared, and guidance for the future have held up well. I don't have a crystal ball, but I expect continued market volatility as the Fed raises interest rates into the mid-term elections, then a year-end rally.



I hope you found this helpful.

 

[thebrotherinlaw]

 

[RatLabGuy]

Two part time is the new full time.

This quandry can be fixed with a new definition. duh. "do you work > 35 hours at... something?"

In all seriousness I'm sure the problem is that the DoL gets its info from employers, not works, so they only know the # of jobs reports, not really which jobs are doubled up together.

 

[benXJ]

No one should believe a single word coming from the government.

 

[Caver Dave]

The only thing I worry about is not having enough land to raise meat and veggies on while the rest of you are eating each other.

Or a means to *bury* the hoards coming after YOUR food? Have plenty of ammo, and stacking bodies is just fine... until they begin to fester a bit!

With that thought, you also have to raise heirloom vs hybrid and make sure you are raising some of them specifically for seed.

I was lead to believe that any NON-GMO/hybridized variety could be used for seed?

 

[Loganwayne]

Or a means to *bury* the hoards coming after YOUR food? Have plenty of ammo, and stacking bodies is just fine... until they begin to fester a bit!

I was lead to believe that any NON-GMO/hybridized variety could be used for seed?

most hybrids of any type of plant or animal are sterile. Look at a seedless watermelon as an example.

also not sure what has been done to Heirloom and non hybridized seed. i have some corn and bean seeds that are probably 10 years old just stored in a jar and id bet 98% of them would grow. but two year old seed bought from the store i bet more than 50% would not.

 

[paradisePWoffrd]

most hybrids of any type of plant or animal are sterile. Look at a seedless watermelon as an example.

also not sure what has been done to Heirloom and non hybridized seed. i have some corn and bean seeds that are probably 10 years old just stored in a jar and id bet 98% of them would grow. but two year old seed bought from the store i bet more than 50% would not.

I can say that I have had way better luck starting seeds from Baker Creek vs anything Ive bought local. They are more expensive, but I have yielded better results. I store my seeds in the freezer in hopes to get them to last longer. Not sure if that is right or wrong.

 

[jeepinmatt]

I dig that description.

I sat with a customer today going over some particulars. His sales are down marginally from 2021. Some of that is to be expected as we had an incredibly strong pollen season in 2021 that generated sales we haven’t seen in 6-7 years. But his margins have shrunk considerably. What he buys from me has gone up. Utilities, up. Taxes, up. Etc. His inputs are all up. Regaining that margin without pricing yourself out of the market is a struggle. Decisions fueled by…inflation. That space between us in and the fan is the margin.

I know you're in the carwash industry, and just got this email this morning from Sams Xpress. They've never had a $20/month option before, so they are obviously seeing some serious shortfalls and trying to keep the cars flowing:

 

[StretchASU]

I know you're in the carwash industry, and just got this email this morning from Sams Xpress. They've never had a $20/month option before, so they are obviously seeing some serious shortfalls and trying to keep the cars flowing:
View attachment 378253

The big corporate express tunnels business model is built off the memberships. They’ll adjust everything else based off of memberships. Staffing, chemical, service etc. Also, with more In-Bay-Automatic owners looking into membership programs, the tunnels are having to adjust to retain customers who may be chasing a cheaper option.

 

[Bebop]

The only thing I worry about is not having enough land to raise meat and veggies on while the rest of you are eating each other.

Hope you got fences and traps, you know, for when the zombies come knocking

 

[jeepinmatt]

The big corporate express tunnels business model is built off the memberships. They’ll adjust everything else based off of memberships. Staffing, chemical, service etc. Also, with more In-Bay-Automatic owners looking into membership programs, the tunnels are having to adjust to retain customers who may be chasing a cheaper option.

I had the $30 Sams one for a while, but it just seemed a little too expensive. I always swore if they did a $20 one, I'd sign back up. I might have to eat my words. They do a much better job than most of the other tunnels, mainly because they actually clean the bulk of the crap off before you go in.

 

[StretchASU]

I had the $30 Sams one for a while, but it just seemed a little too expensive. I always swore if they did a $20 one, I'd sign back up. I might have to eat my words. They do a much better job than most of the other tunnels, mainly because they actually clean the bulk of the crap off before you go in.

The prep at the beginning helps a lot. However they have to charge tax if they touch the car so a lot of washes are trying to get away from prep. Sam’s isn’t terrible. I’ll leave them at that since it’s a public forum . If you’re a 2-3x a month customer it’s worth it. Most expect members will wash 1.5x a month. Some more, some less but that’s the expected average.

 

[RatLabGuy]

The prep at the beginning helps a lot. However they have to charge tax I’d they touch the car so a lot of washes are trying to get away from prep. Sam’s isn’t terrible. I’ll leave them at that since it’s a public forum . If you’re a 2-3x a month customer it’s worth it. Most expect members will wash 1.5x a month. Some more, some less but that’s the expected average.

The tax thing is interesting, is that bc it becomes a service?
I assume this pricing logic is why the monthly rate is usually 2x the 1 time. I go almost every Sunday, on the way home from breakfast out w/ my daughter. when she was little she loved the experience. Now its just a "thing" for us, and I go whether I need it or not solely to stay above the average

 

[StretchASU]

The tax thing is interesting, is that bc it becomes a service?
I assume this pricing logic is why the monthly rate is usually 2x the 1 time. I go almost every Sunday, on the way home from breakfast out w/ my daughter. when she was little she loved the experience. Now its just a "thing" for us, and I go whether I need it or not solely to stay above the average

You nailed it. If they don’t touch the car it’s just a wash similar to a self serve in the eyes of the tax man. Some roll the tax into the cost of the wash others operate on cost +.

Your soap guy appreciates you staying ahead of the curve. Your wash owner appreciates the membership someone else out there isn’t washing and is offsetting your frequency.

 

[jeepinmatt]

The prep at the beginning helps a lot. However they have to charge tax if they touch the car so a lot of washes are trying to get away from prep. Sam’s isn’t terrible. I’ll leave them at that since it’s a public forum . If you’re a 2-3x a month customer it’s worth it. Most expect members will wash 1.5x a month. Some more, some less but that’s the expected average.

Definitely got my money's worth. I was on the 4-6x per WEEK wash rotation, so you're welcome

 

[Loganwayne]

I came to say as a whole my company has everyone get their washed 2-3 times per week. Over 50 trucks now from a monthly service drive through wash