Recession Coming?

[jbs121s]

I work in banking and we had a guest speaker last week that predicts interest rates of up to 16% in the next 24 months.

 

[*zap*]

The result of june's st petersburgh forum should be interesting.

 

[ianpadron]

I work in banking and we had a guest speaker last week that predicts interest rates of up to 16% in the next 24 months.

meanwhile, the Mortgage Bankers Association which has been spot on through the entire Fed driven rate volatility over the past year is forecasting 5% 30 year fixed money by Q4 2024.

Unless that guest speaker has some qualifications worthy of considering, I'm going to stick with the MBA numbers!

 

[ReaptheHeat]

I work in banking and we had a guest speaker last week that predicts interest rates of up to 16% in the next 24 months.

Was your guest speaker Jim Cramer?

 

[MattB]

I work in banking and we had a guest speaker last week that predicts interest rates of up to 16% in the next 24 months.

What was the underlying thesis? That simply can't happen given the elevated global level of sovereign debt, but I'd be interested in the over-arching rationale.

On recession, some sectors remain strong locally (SF Bay Area), but others are really starting to be impacted. Commercial real estate is tanking and that is having a big impact on all involved (from property owners to the trades, and indirectly to business that rely on office occupancy such as restaurants). We have also seen some pretty dramatic lay-off's in the tech sector. Our local economy was not impacted too substantially through the 2008 recession, so it is interesting to see how significantly it has been impacted thus far through this economic contraction. My sense is that, between the impact of inflation and declining demand for labor on consumers, even businesses that are still struggling to keep up with demand in the post-COVID world will start slowing down soon.

Surveys of banks have shown that lending standards are tightening and the availability of debt capital is declining. That, coupled with higher interest rates, will have the effect of slowing growth.

A strengthening US dollar will also cause US exports to decrease.

Lot's of headwinds, and my sense is the tailwinds we have been benefiting from (e.g. string consumer demand) will begin to wane.

 

[*zap*]

I hear 150 bank collapses in the near future and the fed is happy about that because they think it will decrease inflation....ymmv.

 

[LostArra]

And the estimates of inflation are utter BS. Seems like every time we go to the grocery store, the prices are higher, way higher. We just spent 6 days out at Ocean Shores, WA and needed a few supplies. Went to the local IGA and just about gagged at the prices. We left without buying anything and got by for a couple days on some canned food and clams we dug.

As Sccritterkiller mentioned the definitions can change. Sometimes economists look at "core" inflation to supposedly get a "better picture". It makes no sense unless you have a lot of letters after your name. These core inflation rates will strip out grocery costs, fuel costs and sometimes health care costs. The reasoning is that fuel and grocery costs can be volatile. Well no sh*# but we still have to pay them.

 

[Bluefish]

Yes, the economy is slowing. It’s going to be different this time as the housing market is very distorted by current interest rates and low inventory. The low inventory is keeping prices up. The higher interest is working to keep inventory low. People are in some ways stuck as they can’t afford a new house at the higher payment due to a combination of interest and high prices. This means there is a lot of pent up demand that may break loose at some time.
prices of food and dining out are way up, but don’t seem to be slowing demand yet.
firearm supplies which were all but unavailable for the last 2 years are slowly becoming available. I think a combination of higher prices holding down demand and supply chains catching up. I am even seeing sales on some ammo.

 

[aftriathlete]

I was in the house market very briefly about 2 months ago here in Oahu. Wanted to at least see for myself what the state of prices vs. interest rates/mortgage payments were. It was GLARINGLY obvious that it did not make sense to buy here right now, the online calculators on should you rent vs. should you buy were telling me that the monthly number that was the breakeven was $6300 a month, so if you can find a comparable house to rent for less than $6300 a month then you should rent.

Now I will add that houses are still flying off the shelves here, they are not sitting on the market long. So someone is buying. Both lenders and both realtors we briefly worked with were pushing temporary rate buydowns HARD because "you'll definitely be able to refinance in the next 2 years," "prices here always go up," "the rental market here is strong so you'll definitely be able to rent it when you leave." Yeah well the mortgage on this house we looked at would have been $2000 a month above what the houses on that street are renting for. I expect there are a lot of people moving here right now that are buying what these lenders and realtors are selling on all those tropes and 2 years from now, or maybe sooner, there's going to be another 2008, ARM-like housing crisis because that's basically what these temporary rate buydowns are.

 

[Gutshot007]

What is the current definition of a recession ? Aren't you usually in one before you know it after the fact . Looking back.

 

[Loo.wii]

Bro they changed the definition of a recession to move the goal posts. We've been in one.

 

[MallardSX2]

The only think I know at this point is this:

I bought a sawmill and lumber prices have dropped dramatically to the point that its hardly worth running the mill.

I built a chicken coop and got 24 chickens and now egg prices have dropped to a price cheaper than I can feed these chickens.

Figures. lol

Maybe I should pretend to build a vehicle. The bottom would for sure drop out of vehicle sales!? lol

 

[flatlanderhuffandpuff]

The only think I know at this point is this:

I bought a sawmill and lumber prices have dropped dramatically to the point that its hardly worth running the mill.

I built a chicken coop and got 24 chickens and now egg prices have dropped to a price cheaper than I can feed these chickens.

Figures. lol

Maybe I should pretend to build a vehicle. The bottom would for sure drop out of vehicle sales!? lol

You'll be happy for the sawmill and the chickens once we are back to bartering with lumber and eggs.

It's a joke but also king of serious.

 

[*zap*]

The only think I know at this point is this:

I bought a sawmill and lumber prices have dropped dramatically to the point that its hardly worth running the mill.

I built a chicken coop and got 24 chickens and now egg prices have dropped to a price cheaper than I can feed these chickens.

Figures. lol

Maybe I should pretend to build a vehicle. The bottom would for sure drop out of vehicle sales!? lol

self sufficiency is never a futile effort.

 

[Gutshot007]

The only think I know at this point is this:

I bought a sawmill and lumber prices have dropped dramatically to the point that its hardly worth running the mill.

I built a chicken coop and got 24 chickens and now egg prices have dropped to a price cheaper than I can feed these chickens.

Figures. lol

Maybe I should pretend to build a vehicle. The bottom would for sure drop out of vehicle sales!? lol

They say everything in life is about timing . I usually run the buy high sell low program as well . Lol

 

[william schmaltz]

Yes, the economy is slowing. It’s going to be different this time as the housing market is very distorted by current interest rates and low inventory. The low inventory is keeping prices up. The higher interest is working to keep inventory low. People are in some ways stuck as they can’t afford a new house at the higher payment due to a combination of interest and high prices. This means there is a lot of pent up demand that may break loose at some time.

Add in the "accidental landlord" phenomenon happening that's really driving down inventory. Even people that have to move are deciding to rent instead of sell. I could rent out my house for $1-$1.5K a month more than what my mortgage is. We've already discussed if we had to move for work, we would rent it out and probably buy an RV. Hell, we're seriously thinking about doing it just for something different! Even if we decided to buy another house, that extra ~$1.5K a month means someone else is covering that increased interest rate for us until things straighten out for a refi.

 

[FLATHEAD]

I'm afraid what's coming is much worse than a recession.

 

[Gutshot007]

Then they quit paying and become "squatters" lol

 

[big44a4]

Seeing a slow down in commercial construction finally in TX. A few mega projects pushing forward still moving everything along for now. As many said and have seen most of these high rises with office space below with apartments above are mostly vacant as people work from home. No desire to rent downtown for that rate if you don’t have to go into the office. Also a lot of those places were tech jobs that have seen cuts recently.

 

[ODB]

There are 4 subdivsions with a couple blocks of my shop that have went through entitlements and are ready to build. All 4 have sat for sale for the last 6 months. There are 2 other taller apartment complexes that are sitting at about 50 percent complete with no work in the last 3 months being performed. Yet Boise real estate took another big jump last month. There are quite few developers that are getting quotes on underground work, but not pulling any triggers. Something feels off but you can't tell from the surface.

Man I drove up through Emmet last weekend and as I passed the Freeze out hill memorial my stomach sank because I looked out and saw the next place to explode with houses. Like that Avimoor thing north of eagle. Oof.