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    Default Recession?

    Looks like the recession police are out in force.


    Personally, I would like to see a slowdown so that I can purchase machinetools at a discount, but what I currently see is an acceleration in manufacturing.


    Like many, waiting for a slowdown, or a collapse is foolish.

    If demand exist to justify investment, do it, Don't try to time this shit.

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    Technically, Manufacturing is in Recession, already, by the financial definition- 2 consecutive quarters of decline in production.
    this is not based on my personal observations, but the federal numbers.

    U.S. manufacturing ‘is in recession,’ Fed’s data show - MarketWatch

    The bond market is in "inversion"- and every single time it has done this before, for the last 50 years, a recession has followed.
    Inverted Yield Curve: Definition, Predicts a Recession
    Explainer: Countdown to recession - What an inverted yield curve means - Reuters

    Farm Bankruptcies (directly tied to tariffs in many cases) are soaring.
    Farm Loan Delinquencies and Bankruptcies Are Rising

    Net Farm income is down 50% over the last five years- thats almost 60 billion less dollars in income in farm country.
    USDA’s Early Look at 2019 Farm Income

    While jobs in the USA are still growing, the rate at which they are growing has been steadily dropping.
    https://www.nytimes.com/2019/08/02/b...bs-report.html

    none of these things necessarily means a recession is coming.
    but all of them, combined, is not a good thing.

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    Quote Originally Posted by Ries View Post
    Technically, Manufacturing is in Recession, already, by the financial definition- 2 consecutive quarters of decline in production.
    this is not based on my personal observations, but the federal numbers.

    U.S. manufacturing ‘is in recession,’ Fed’s data show - MarketWatch

    The bond market is in "inversion"- and every single time it has done this before, for the last 50 years, a recession has followed.
    Inverted Yield Curve: Definition, Predicts a Recession
    Explainer: Countdown to recession - What an inverted yield curve means - Reuters

    Farm Bankruptcies (directly tied to tariffs in many cases) are soaring.
    Farm Loan Delinquencies and Bankruptcies Are Rising

    Net Farm income is down 50% over the last five years- thats almost 60 billion less dollars in income in farm country.
    USDA’s Early Look at 2019 Farm Income

    While jobs in the USA are still growing, the rate at which they are growing has been steadily dropping.
    https://www.nytimes.com/2019/08/02/b...bs-report.html

    none of these things necessarily means a recession is coming.
    but all of them, combined, is not a good thing.
    I strongly disagree with your statement. While the west is floundering, the east coast and Midwest are accelerating.

    One region in particular is continuing it's expansion; the Midwest. There are a few cities to note, Whichta,Kansas, Ohmaha,Nebraska. There are several more cities in this region and they are not showing any weakness in their business.


    These business's purchase a shit load of steel alloy, and they are working 7 days a week.

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    Quote Originally Posted by otrlt View Post
    I strongly disagree with your statement. While the west is floundering, the east coast and Midwest are accelerating.

    One region in particular is continuing it's expansion; the Midwest. There are a few cities to note, Whichta,Kansas, Ohmaha,Nebraska. There are several more cities in this region and they are not showing any weakness in their business.


    These business's purchase a shit load of steel alloy, and they are working 7 days a week.
    not my statement.
    Its real numbers, from a wide variety of sources, both governmental and private.

    you can certainly feel that a recession is not coming.
    thats your right.

    But all the numbers above are true numbers, and none of em are good.
    And the midwest includes more than just manufacturing with metal- farms are a big part of it, and, particularly in Minnesota and Wisconsin, things are not good in rural areas.

    Also- what about cars?
    US auto sales are falling.
    New-Vehicle Sales Fall to 1999 Levels: How to Grow Revenues After 20 Years of Stagnation (Yup, You Guessed It) | Wolf Street
    we dont know for sure yet, but it looks like US sales will be close to 1999 levels.

    Again, not a "statement" from me- simple facts.

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    Quote Originally Posted by Ries View Post
    not my statement.
    Its real numbers, from a wide variety of sources, both governmental and private.

    you can certainly feel that a recession is not coming.
    thats your right.

    But all the numbers above are true numbers, and none of em are good.
    And the midwest includes more than just manufacturing with metal- farms are a big part of it, and, particularly in Minnesota and Wisconsin, things are not good in rural areas.

    Also- what about cars?
    US auto sales are falling.
    New-Vehicle Sales Fall to 1999 Levels: How to Grow Revenues After 20 Years of Stagnation (Yup, You Guessed It) | Wolf Street
    we dont know for sure yet, but it looks like US sales will be close to 1999 levels.

    Again, not a "statement" from me- simple facts.
    Some of the strongest manufacturing cities that are also showing continued demand are in Minnesota, Wisconsin, Ohio, Pennsylvania, Indiana. Along with the "Oil Patch" directly south, business is definitely described as "Brisk".

    The numbers that are "fed to us" are not showing the true dynamic of our economy.

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    We are due... oh well, nothing you can do about it. Hopefully you didn't buy a boat and a cabin and a new $100k truck to tow it.

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    Quote Originally Posted by kustomizingkid View Post
    We are due... oh well, nothing you can do about it. Hopefully you didn't buy a boat and a cabin and a new $100k truck to tow it.
    That is exactly what everyone is thinking....

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    Quote Originally Posted by otrlt View Post
    That is exactly what everyone is thinking....
    So your theory is that the US economy can continue its mediocre growth trend indefinitely despite the historical data that this has never been possible?

    Judging by the crops in my area, this will be a disastrous year for crop farmers. And all of the farmers here are leveraged to the hilt trying to buy land for $15,000 an acre just to keep the other guys from getting it.

    That said, a recession is not bad for everyone. Folks in the repair side, rather than the manufacturing side, tend to do quite well in a recession.

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    A friend of mine who sells machine tools and is fairly well plugged in said that second quarter 2019 machine tool sales in the southwest were down about 40% from second quarter 2018 and would have been down more than that if not for some long lead time orders that delivered in 2019. This came from the downturn in oil, semi-conductor, and the Boeing 737 Max debacle that is getting some deliveries pushed out. He commented that it is starting to feel a lot like 2007 when machine tool sales took a dump a year before the rest of the economy.

    On the plus side we are still fairly busy and I am glad that I diversified out of 90% oil and gas parts and have a much better balance today. I am also not getting on the hook for any new machine lease payments, last one I bought was a cash purchase.

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    Quote Originally Posted by ewlsey View Post
    So your theory is that the US economy can continue its mediocre growth trend indefinitely despite the historical data that this has never been possible?

    Judging by crops in my area, this will be a disastrous year for crop farmers. And all of the farmers here are leveraged to the hilt trying to buy land for $15,000 and acre just to keep the other guys from getting it.

    That said, a recession is not bad for everyone. Folks in the repair side, rather than the manufacturing side, tend to do quite well in a recession.


    Your correct on our growth rate, but it still is quite positive despite all of the tariff noise. We will end this year with a 2-3% growth rate.

    My focus is only on the manufacturing sector. Business continues to look good for us throughout 2019.

    Farmers have received their handouts for decades, the manufacturing sector has been severely neglected, despite their continued contribution to GDP.

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    It may not be raining where you live- but US manufacturing was DOWN for the first two quarters of 2019, nationwide.
    That is not positive.

    Some people do just fine in recessions.
    My perspective is one of an owner, not an employee- and, in 2009, I saw 2 years worth of work, with signed contracts, dry up and blow away. I also have lived thru several other recessions, as an owner of a business.
    I know they are real, and, that they can hurt.

    But if your company floats above the next one, great.
    Just dont try to tell me not to believe real numbers from multiple sources that prove the US economy is slowing.

    I am no fortune teller- I cannot promise a recession, or the lack of one. Might happen, might not.
    But all the standard economic indicators that predict recessions pretty accurately in the past, including auto sales, are not looking good.

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    Since I'm retired, I no longer have a finger on the pulse of of the manufacturing side of of things. That inverted yield curve data looks to be pretty convincing to me, though.

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    Self fulfilling prophesy.........car markets are hurt by all those planning for their next to be electric.....including me.

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    Well given that retractions are based on actions taken I think all are somewhat self full filling.

    I pay attention to the talking heads to see if any of them manage a well reasoned comment.
    One did a few weeks back.
    “Well we are not seeing any bubbles which usually proceed failure”.
    Smart guy- I like to say that the boom period is the dangerous one.
    In the worse case the ‘new normal’ allows extension of debt to parties normally restricted from it so a downturn cascades into failure as those notes go sour.

    2007 was interesting- it was proceeded by a decade of building waves of heightened real estate inflation which ultimately brought prices up by a aggregate of 70 trillion dollars.
    The first pop was Ireland’s Celtic Tiger boom followed in turn by 18 or so additional countries.
    Fear is a wonderful motivation- “Main Street” was immersed in as the bubble swept over the states.
    My crappy neighborhood had bidding wars with forty folk driving housing prices through the roof.
    The papers were carrying articles stating that ten years hence would see a national housing shortage which would cripple hopes for the American Dream of home ownership.
    Crude spiked as well- remember that first one and the fear behind it as supply suddenly seemed so uncertain...
    The stumble was abrupt when real estate failed.
    I remember a bit in the paper- “when this happens the market is next”...
    That chap called it well enough.

    I used to think hard booms and busts are a generational thing.
    A social/institutional memory of aberrations serves to curve reckless behaviors which cause the run ups.
    A safety valve if you will- the economy self regulates.
    Enough years pass and folk with cash in the game didn’t experience the last one.

    Hmmmm- right?:

    70925475-55a3-4d7c-ac08-ffebd0bdaf64.jpg

    We had another bubble in real estate here- it peaked months ago..

    Worth a read and some nice graphs :

    What The 1990s Tell Us About The Next Housing Bust - Real Estate Decoded

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    Quote Originally Posted by otrlt View Post
    Your correct on our growth rate, but it still is quite positive despite all of the tariff noise. We will end this year with a 2-3% growth rate.

    My focus is only on the manufacturing sector. Business continues to look good for us throughout 2019.

    Farmers have received their handouts for decades, the manufacturing sector has been severely neglected, despite their continued contribution to GDP.
    I'm not sure why you started this thread. I'm sure things are going well in some industries and places and not so well in others.

    Even within manufacturing it very much depends on what is being manufactured and where.

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    Quote Originally Posted by ewlsey View Post
    So your theory is that the US economy can continue its mediocre growth trend indefinitely despite the historical data that this has never been possible?

    Judging by the crops in my area, this will be a disastrous year for crop farmers. And all of the farmers here are leveraged to the hilt trying to buy land for $15,000 an acre just to keep the other guys from getting it.

    That said, a recession is not bad for everyone. Folks in the repair side, rather than the manufacturing side, tend to do quite well in a recession.
    On the plus side I am sure the folks in china are just itching to buy our farm products. And there is no climate change at all so the crops will be doing just fine.
    MAGA. My daughter recently moved away from Galesburg, and wow. Sounds like they are practically pulling out the streets in that area.

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    Quote Originally Posted by Ries View Post

    Net Farm income is down 50% over the last five years- thats almost 60 billion less dollars in income in farm country.
    USDA’s Early Look at 2019 Farm Income
    I know a lot of farms have been hit by drought or floods. But have you seen the price of food? Does the middle man eat all the profit?

    And for those saying we do not have any bubbles.... The price of food, rent, houses, healthcare, cars, education have skyrocketed but wages have been stagnant. Even if not a bubble that is certainly not healthy for the economy unless you are the 1%

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    This is humorous if ya look at it right.
    Folks are falling over themselves to ‘call it’....

    '''Great Recession''' to hit US, jeopardize Trump'''s reelection hopes: Peter Schiff | Fox Business

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    I’ll
    Quote Originally Posted by Trboatworks View Post
    Well given that retractions are based on actions taken I think all are somewhat self full filling.

    I pay attention to the talking heads to see if any of them manage a well reasoned comment.
    One did a few weeks back.
    “Well we are not seeing any bubbles which usually proceed failure”.
    Smart guy- I like to say that the boom period is the dangerous one.
    In the worse case the ‘new normal’ allows extension of debt to parties normally restricted from it so a downturn cascades into failure as those notes go sour.

    2007 was interesting- it was proceeded by a decade of building waves of heightened abnormal real estate inflation which ultimately brought prices up by a aggregate of 70 trillion dollars.
    The first pop was Ireland’s Celtic Tiger boom followed in turn by 18 or so additional countries.
    Fear is a wonderful motivation- “Main Street” was immersed in as the bubble swept over the states.
    My crappy neighborhood had bidding wars with forty folk driving housing prices through the roof.
    The papers were carrying articles stating that ten years hence would see a national housing shortage which would cripple hopes for the American Dream of home ownership.
    Crude spiked as well- remember that first one and the fear behind it as supply suddenly seemed so uncertain...
    The stumble was abrupt when real estate failed.
    I remember a bit in the paper- “when this happens the market is next”...
    That chap called it well enough.

    I used to think hard booms and busts are a generational thing.
    A social/institutional memory of aberrations serves to curve reckless behaviors which cause hard run ups.
    A safety valve if you will- the economy self regulates.
    Same here. All this crap about sky is about to fall is
    We’ve had the largest economic expansion since 1945 and things are starting to cool down. I could never understand how the DOW got to 27k? I’m not an economist or anything like it but if there is a bubble, the DOW and S&P is going to explode. The DOW doubles on $1trillion in buybacks to boost corporate EPS. They only added $200 billion in profits over the last 7yrs and 10% to GDP so why have they damn near doubled??

    The same with all the BS about the farmers and trade war. The Chinese aren’t buying the beans because they have no hogs to eat them. They’ll be down 300-350 million hogs by the years end because of some African virus. The politicians will push through another multi billion dollar farm/welfare bill and manufacturing will take it on the chin.

    Where are the manufacturing subsidies for the higher steel, aluminum and health care prices??

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    The democrat's fondest hope is that they can jawbone a recession before the 2020 election. Every possible effort is being taken to affect this anomaly through lies, market manipulation, and statistical calisthenics. The bond market rate inversion is tiny, at best. The inversion is the result of European investors, and governments, desperately seeking a return on their money in our market. No matter what the market conditions, there will be farmers crying the blues over something. The democrats are intent on destroying the free market economy and replacing it with a command and control production plan. Ignore this trend at your own peril.

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