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 Chances of another recession like 2009 ?
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Posted on 03-27-18 4:59 PM     Reply [Subscribe]
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Market seems like it’s in a bubble and ready to nose dive , once market falls , pretty much everything will start falling including the housing . Do you guys see another recession like 2009 looming ? I am not feeling that good right now.
 
Posted on 03-27-18 5:17 PM     [Snapshot: 27]     Reply [Subscribe]
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frustu, why do you think that way? 2009 was different which was complete failure on housing. the rapid up and down which is happening recently is just a correction. Stocks can't just go up and up. Trump is just adding more fuel into it. that's all. but I do believe it will stabilize.
 
Posted on 03-27-18 9:32 PM     [Snapshot: 234]     Reply [Subscribe]
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The stock market is being choppy on the heels of impending rate hikes and fears of a trade war with China. Lending standards have become quite stringent since 08 so chances of a housing meltdown is low.

I think this a play by large institutional investors to sell now and buy at cheaper rates a month from now. After tax cuts were announced, large corporations have announced at least 800 billion in stock buy backs, which will push stock prices higher in the summer and fall.

The stock market crashed in 99, 01 and 08 due to economic slowdown in Asia/America. But right now the Fed is actually betting on growth rates rising, so all else equal, earnings themselves should drive up stock prices this year. Even if there is a bear market it should come back up quite quickly.
 
Posted on 03-27-18 10:40 PM     [Snapshot: 305]     Reply [Subscribe]
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Love having constructive conversation like this. Keep your thoughts coming and be nice :)
 
Posted on 03-28-18 12:05 AM     [Snapshot: 372]     Reply [Subscribe]
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"Lending standards have become quite stringent since 08 so chances of a housing meltdown is low. "

If there are few more interest rates hikes, what could happen to all the unprofitable companies on wall street? For example, I think it's Tesla that hasn't made any profit yet?? And I saw one tweet today which mentioned Tesla's debt has been given CCC...":high risk:...what happens if FED decides to hike the rates 2 or 3 or 5 times in coming months, in the name of 'healthy economy'? Ok, then it probably means that some companies that aren't profitable will go bankrupt...and what if more companies go bankrupt (the ones that aren't profitable)...and what if, such a scenario creates a mini recession after stock market crashes, and companies start firing employees (even though they have 800 billion worth of dollars to buy back stocks).... can that happen? And if all that happens....then... "Lending standards have become quite stringent since 08 so chances of a housing meltdown is low. " the people with good credits will be jobless for 6 months to a year...and by the end of they year...will they have savings left to pay for mortgage and property tax etc? In the past few years, house prices have gone up a lot but has the wage also gone up a lot? Anyway...this is just an observation and I hope nothing bad happens...but who knows...I do think that there is IT boom happening around the world...the whole world is now using more IT than ever before...more data than ever before to do business...which is good for the economy...Manufactured recession could make people's lives difficult.....

TSLA tweet -   https://twitter.com/sridinats/status/978734496542576644  
Last edited: 28-Mar-18 12:12 AM

 
Posted on 03-28-18 12:37 AM     [Snapshot: 394]     Reply [Subscribe]
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@regidk, you're drawing big conclusions here. At its absolute worst, Tesla as company may not exist but it will surely be bought out by another motor company because the technology behind it is revolutionary. This happens all the time, companies get bought out by competitors, it is the very nature of capitalism-- creative destruction.

It typically takes startups like Tesla, Amazon, Shopify, Uber, Snap (you name it) at least a decade to start generating profits, not because they're inherently bad companies, but because they're scaling up their businesses at a massive scale, which as you can imagine is very capital intensive. This creates losses in the short run but stunning profits down the line.

Interest rates will still be historically low even with the planned rate hikes. The Fed will not increase rates too much because that could make the Federal government insolvent (!!). The housing situation will also remain intact because of the strong job market and tight lending standards. Even when people enter dire financial situations where they have to choose between what bills to pay first, mortgage is always number one.

Finally, realize that unlike 08', the current boom in the economy is not because of a speculative bubble on a non-productive asset like real estate. It's based on the massive digital revolution that has been upon us since the start of this decade, This has created entire new industries and has also monetized existing industries at significantly higher rates. Companies are still posting record profits and unless there is massive collapse of the Chinese ponzi scheme economy, this boom still has legs to last another 4-5 years.
Last edited: 28-Mar-18 12:37 AM

 
Posted on 03-28-18 2:37 AM     [Snapshot: 458]     Reply [Subscribe]
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Ok cool and dhanawaad mitra... who knows where market is heading short term but in the long term....certain industries and companies will do well...as it has always been the case......

if there is a recession anyway, buy Dollar Tree or Ross..
 
Posted on 03-28-18 4:58 PM     [Snapshot: 739]     Reply [Subscribe]
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I really hope there is a crash.....opportunity opportunity
 
Posted on 03-28-18 5:36 PM     [Snapshot: 785]     Reply [Subscribe]
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santa lil helper, sure you will be out of the job and there will be opportunity for you to find a new job. Remember crash affects everyone except top 1%. So be careful what you wish for. Those of us who had been through 2008 recession exactly know the pain. First thing companies will do the cut the cost is lay of you off.
 
Posted on 03-29-18 2:20 AM     [Snapshot: 1025]     Reply [Subscribe]
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"Those of us who had been through 2008 recession exactly know the pain" - That is why, it's better to own a small business and become an entrepreneur than help someone else become one...So that, you will be the last on line to get fired if there is recession...:)


List of stocks that did well in 2008...

https://finance.yahoo.com/news/best-worst-stocks-2008-crash-205844396.html
Last edited: 29-Mar-18 02:23 AM

 
Posted on 03-29-18 10:39 AM     [Snapshot: 1135]     Reply [Subscribe]
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"That is why, it's better to own a small business and become an entrepreneur than help someone else become one...So that, you will be the last on line to get fired if there is recession...:"
Just being an entrepreneur will not solve the problem, if a recession hit small businesses they will also get affected. As an employee, I can ship the boats at any time but business owners can't. It's high risk high gain vs low risk low gain.
 
Posted on 03-31-18 10:19 AM     [Snapshot: 1407]     Reply [Subscribe]
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The yield curve is about to flatten and the shiller PE ratio is at its peak. It is just about time. Remain on cash. Put some money on inverse SPY. When the fed starts selling bond this october, it will suck money out of the economy. Meanwhile, balancesheet of auto industry is dismal. Auto industry may be the new housing industry this time.
 
Posted on 04-02-18 2:46 PM     [Snapshot: 1665]     Reply [Subscribe]
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@ sajhamitra

i've been thru the housing bubble crash/recession.
I know what it was like....and i made fortune.
that is why i'm hoping it happens again.
 


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