Biden creates an economic crisis--Unemployment, Inflation, risk of STAGLFATION increasing

[B-Man]

 

 

CAROL ROTH: What are the warning signs of a recession?

 

Changes in inflation, including rapid inflation, can be a sign of a pending recession. Increasing commodity prices, which are obviously linked to inflationary pressures as they trickle through the economy, can also flash a warning sign.

 

Obviously, those indicators are definitely not bullish for the economy. Inflation is at the highest levels in four decades, and commodity prices are continuing to add to costs throughout the supply chain, impacting consumers.

 

 

Naturally of course, Biden takes no blame:

 

 

 

 

[Chef Jim]

1 hour ago, B-Man said:

 

 

CAROL ROTH: What are the warning signs of a recession?

 

Changes in inflation, including rapid inflation, can be a sign of a pending recession. Increasing commodity prices, which are obviously linked to inflationary pressures as they trickle through the economy, can also flash a warning sign.

 

Obviously, those indicators are definitely not bullish for the economy. Inflation is at the highest levels in four decades, and commodity prices are continuing to add to costs throughout the supply chain, impacting consumers.

 

 

Naturally of course, Biden takes no blame:

 

 

 

 

Both of those are from 4/20. Coincidence??  

[B-Man]

 

 

 

NO PROBLEM FOR JOE BIDEN, HE’S GIVEN US PLENTY OF ALL THREE: 

 

Americans’ 3 Big Concerns Are Inflation, Immigration, and Incompetence

 

 

https://www.dailysignal.com/2022/04/21/americans-have-3-big-concerns-inflation-immigration-and-incompetence-rep-mike-johnson-says/

 

 

 

[Precision]

On 4/15/2022 at 2:54 PM, B-Man said:

Thanks Joe.

 

WaPo: Inflation about to kill off the great real-estate boom

 

https://hotair.com/ed-morrissey/2022/04/15/wapo-inflation-about-to-kill-off-the-great-real-estate-boom-n462641

It won't be just the end of a boom, it's going to be a crash.

 

Prices are going to plateau (happening now) as purchasing slows due to higher payments from the higher interest rates.  Then prices are going to fall as rates go even higher and the interest payment becomes a more significant percentage of the monthly payment.  Once prices drop enough, people are going to find that they're significantly upside down on their mortgage.  Many will decide they aren't going to pay on a $600K mortgage for a house that's only worth $400K.  They're going to walk away and then, that's when prices really plummet.

 

This is all very similar to 2008 with the exception of the more stringent loan requirements now.  I don't think this crash will be nearly as bad but then again the Fed wasn't raising rates in order to fight inflation like today.

 

For a $250K mortgage, a 1% rate increase on a 30 yr fixed increases the monthly payment by almost $140.  If rates go up by 5% you're talking about an additional $700/month!

[PetermansRedemption]

39 minutes ago, Precision said:

It won't be just the end of a boom, it's going to be a crash.

 

Prices are going to plateau (happening now) as purchasing slows due to higher payments from the higher interest rates.  Then prices are going to fall as rates go even higher and the interest payment becomes a more significant percentage of the monthly payment.  Once prices drop enough, people are going to find that they're significantly upside down on their mortgage.  Many will decide they aren't going to pay on a $600K mortgage for a house that's only worth $400K.  They're going to walk away and then, that's when prices really plummet.

 

This is all very similar to 2008 with the exception of the more stringent loan requirements now.  I don't think this crash will be nearly as bad but then again the Fed wasn't raising rates in order to fight inflation like today.

 

For a $250K mortgage, a 1% rate increase on a 30 yr fixed increases the monthly payment by almost $140.  If rates go up by 5% you're talking about an additional $700/month!

I’m not sure I agree here. IMO housing is a supply problem that is going to take years to correct. Interest rates rising might push some out of the market, but your not going to see a crash like 2008, or really any crash at all. In fact, what higher interest rates will do is keep people in their houses longer. Someone with a 3% interest rate probably isn’t in a hurry to buy a new house at 5-6%.  
 

I really don’t think many people look at their home equity and go “screw it, might as well stop paying and go back to renting”. That seems to be what your crash theory is based upon, people willingly walking away. 2008 was different, people were getting loans they couldn’t afford. They had no choice but to walk away. 
 

You will see some slight cooling in the market for sure. You’ll only get a couple bidders instead of ten bidders. You might get asking price instead of 10-20% over. But we are a long, long way away from a housing crash. 

[Precision]

2 hours ago, PetermansRedemption said:

I’m not sure I agree here. IMO housing is a supply problem that is going to take years to correct. Interest rates rising might push some out of the market, but your not going to see a crash like 2008, or really any crash at all. In fact, what higher interest rates will do is keep people in their houses longer. Someone with a 3% interest rate probably isn’t in a hurry to buy a new house at 5-6%.  
 

I really don’t think many people look at their home equity and go “screw it, might as well stop paying and go back to renting”. That seems to be what your crash theory is based upon, people willingly walking away. 2008 was different, people were getting loans they couldn’t afford. They had no choice but to walk away. 
 

You will see some slight cooling in the market for sure. You’ll only get a couple bidders instead of ten bidders. You might get asking price instead of 10-20% over. But we are a long, long way away from a housing crash. 

Happened all the time in '08.  I knew multiple people that sent their keys back to the bank because they wouldn't pay for an asset that depreciated over 30%.  They called it, "jingle mail".  These were engineers with good paying jobs, they could afford the house but refused to pay for their purchasing mistake for 30 years.  

 

Will it be as bad as '08?  I don't know but real estate has appreciated too quickly for too long.  I feel the market has peaked so I pulled a lot of cash from the market in the fall to purchase the right property.  We'll see what happens, I've been right and wrong but I've made enough where it isn't an issue.  My money is on fall '23 as I think it will take that long for rates to hurt prices and the recession to be full swing. 

 

Below is a graph from Fannie Mae that shows growth slowing dramatically.   

 

[ALF]

This is making the supply chain worse

 

Shanghai escalates Covid lockdown restrictions

 

Authorities in Shanghai have said they will tighten the enforcement of lockdown measures, as a Covid surge continues in China's financial capital.

New measures include placing electronic door alarms to prevent those infected from leaving, as well as evacuating people to disinfect their homes.

Earlier this week, hundreds were forcibly evacuated from their homes to allow for buildings to be disinfected.

The restrictions will take Shanghai's lockdown into its fifth week.

 

https://www.bbc.com/news/world-asia-china-61137649

[PetermansRedemption]

13 hours ago, Precision said:

Happened all the time in '08.  I knew multiple people that sent their keys back to the bank because they wouldn't pay for an asset that depreciated over 30%.  They called it, "jingle mail".  These were engineers with good paying jobs, they could afford the house but refused to pay for their purchasing mistake for 30 years.  

 

Will it be as bad as '08?  I don't know but real estate has appreciated too quickly for too long.  I feel the market has peaked so I pulled a lot of cash from the market in the fall to purchase the right property.  We'll see what happens, I've been right and wrong but I've made enough where it isn't an issue.  My money is on fall '23 as I think it will take that long for rates to hurt prices and the recession to be full swing. 

 

Below is a graph from Fannie Mae that shows growth slowing dramatically.   

 

Excellent analysis, I appreciate the response. Always love to hear perspectives from people with knowledge of the subject. 

[Precision]

7 hours ago, PetermansRedemption said:

Excellent analysis, I appreciate the response. Always love to hear perspectives from people with knowledge of the subject. 

Thanks, not sure I'm knowledgeable but '08 left an indelible mark on me.  Save my response and please harass me to no end if my fall '23 guess is wrong!

 

Here's my scary story from the '08 crash....

 

I was at one of my daughter's friend's birthday parties.  It was the typical thing where the kids bowl, the moms gossip and the dads drink beer. 

 

Well, the dads were hanging out and a one of them, Steve rushes in late with his wife and daughter.  Of course, we have to give him a hard time and he says he was working all day, on a Saturday.  Well Steve works for the propane company so that just opens up more jokes because really why would a propane guy be working late on a Saturday?   

 

Steve gets all serious and quiet and says "it's the banks".  Now we're really laughing because well at least it wasn't aliens!  Steve is even more serious and says "I'm not supposed to say this but I'm working overtime because the banks are winterizing the houses they're stuck with.  They can't sell them so they're being winterized and I'm working more hours to shut off the propane to the houses."  We're all like well that's great Steve but he interrupts us and said something to the effect "I'm talking about hundreds of properties, hundreds.  More than that in MA.  The whole real estate market, the whole economy is done.  You need to get ready so you can protect your families."  At this point Steve is visible upset, like almost in tears upset.  There wasn't any more joking in the dad corner after that.

 

When I got home my wife and I talked about what happened.  The crash was in the news but we live in Southern NH so felt safe and there wasn't much reporting regarding New England.  It was a difficult conversation because the outcome was that we cancelled a vacation and made cutbacks elsewhere.  Tried to hoard cash (I even thought about buying MRE's) but you can only do so much so fast.   Steve was right, the crash came to New England albeit less than other places.  In retrospect the crash did not impact us as our jobs were secure so we were ok.  

 

Even now when I relive that day, replay that conversation in my head it bothers me.

[thenorthremembers]

Paid $310 dollars for groceries this week.  Thats up $110 dollars from the usual.   Gas is double what I paid under Trump, and somehow people keep voting democrat.

[ALF]

37 minutes ago, thenorthremembers said:

Paid $310 dollars for groceries this week.  Thats up $110 dollars from the usual.   Gas is double what I paid under Trump, and somehow people keep voting democrat.

 

Covid destroyed the world economy . Massive retirements due to it , schools closed parent had to stay home , daycare no workers ,supply chain collapse. 

 

Too much stimulus causing inflation , Buttigieg not qualified to deal with supply chain lack of drivers. Starting in Nov not too many voters happy with democrats , Biden and progressives (and far right) not being realistic. Not going for energy independence till alternatives are in place is crazy. Afghanistan pullout another disaster. No I'm not happy with Biden and I switched to Democrat for the first time after Jan 6 

[thenorthremembers]

4 minutes ago, ALF said:

 

Covid destroyed the world economy . Massive retirements due to it , schools closed parent had to stay home , daycare no workers ,supply chain collapse. 

 

Too much stimulus causing inflation , Buttigieg not qualified to deal with supply chain lack of drivers. Starting in Nov not too many voters happy with democrats , Biden and progressives (and far right) not being realistic. Not going for energy independence till alternatives are in place is crazy. Afghanistan pullout another disaster. No I'm not happy with Biden and I switched to Democrat for the first time after Jan 6 

I was a democrat until after Obamas second term.   Politicians allowed COVID to destroy the economy.  Completely agree on the energy alternative.    The plan makes no sense and the gas hike is a ploy to try and sell eletric cars.  Sick to death of out of touch millionares who have never worked a job a day in their lives dictating everyday life.

 

[B-Man]

 

 

 

 

 

 

[ALF]

wow

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Future of cruising
Disney Wish Tower Suite: The stunning Wish Tower Suite will debut on the Disney Wish this summer. Though prices will vary depending on the length of the trip, rates per cruise start from $21,000 for two adults.

 

Our new Monthly Ticket series continued this week with a look at the world's most incredible cruise ship cabins. We're talking $200,000 mattresses, cashmere bedding, hot tubs, in-suite slides and TVs so large they're home cinema level.

 

https://www.cnn.com/travel/article/pandemic-travel-news-mask-mandate-tourist-tax/index.html

[Doc]

3 hours ago, ALF said:

Covid destroyed the world economy . Massive retirements due to it , schools closed parent had to stay home , daycare no workers ,supply chain collapse. 

 

Too much stimulus causing inflation , Buttigieg not qualified to deal with supply chain lack of drivers. Starting in Nov not too many voters happy with democrats , Biden and progressives (and far right) not being realistic. Not going for energy independence till alternatives are in place is crazy. Afghanistan pullout another disaster. No I'm not happy with Biden and I switched to Democrat for the first time after Jan 6 

[Irv]

What a mess.  

[Big Blitz]

Notice how the "report" doesn’t say something like "Economic data blow to Biden Administration."  You know, like you would have seen during the Trump administration.  

 

Or "Biden Economy abysmal - doesn't even account for recent surge in energy costs - worst yet to come."

 

Or "Recovery Summer Part VII Looks bleak as Biden scrambles to avoid mid term disaster."

 

Or "Democrat hopes in November delivered another crushing blow based on latest economic report."   

 

 

State Run media.  Lol at "lack of government hand outs to blame" to.  Hilarious.  You don't have an economy if it's this reliant on spending for growth.  And "Masking a broader recovery."  What a freaking joke these people are.

 

 

 

G.D.P. Report Shows the U.S. Economy Shrank, Masking a Broader Recovery

 

 

The U.S. economy contracted in the first three months of the year, but strong consumer spending and continued business investment suggested that the recovery remained resilient.

 

Gross domestic product, adjusted for inflation, declined 0.4 percent in the first quarter, or 1.4 percent on an annualized basis, the Commerce Department said Thursday. That was down sharply from the 1.7 percent growth (6.9 percent annualized) in the final three months of 2021, and was the weakest quarter since the early days of the pandemic.

 

The decline was mostly a result of the two most volatile components of the quarterly reports: inventories and international trade. Lower government spending was also a drag on growth. Measures of underlying demand showed solid growth.

 

Most important, consumer spending, the engine of the U.S. economy, grew 0.7 percent in the first quarter despite the Omicron wave of the coronavirus, which restrained spending on restaurants, travel and similar services in January.

 

“Consumer spending is the aircraft carrier in the middle of the ocean — it just keeps plowing ahead,” said Jay Bryson, chief economist for Wells Fargo.

 

But choppy waters may lie ahead. The first-quarter data mostly predates the spike in gas prices that has accompanied Russia’s invasion of Ukraine and the lockdowns in China that have threatened to further disrupt global supply chains. The Federal Reserve in March raised interest rates for the first time since the pandemic began, and several more rate increases are expected this year as policymakers seek to tame the fastest inflation in four decades.

 

“We are watching a bunch of seismic changes in real time,” said Wendy Edelberg, director of the Hamilton Project, an economic policy arm of the Brookings Institution.

 

https://www.nytimes.com/2022/04/28/business/economy/us-gdp-q1-2022.html?smid=url-copy

 

 

"A bunch of seismic changes."  All bad...we're just gonna keep carrying Brandon's water for him and tell you everything is awesome.

 

And inflation - Russia and China's fault!

Edited April 28, 2022 by Big Blitz

[Big Blitz]

UNEXPECTEDLY!!

 

 

The US economy unexpectedly shrank in the first quarter for the first time since the pandemic crash

 

https://www.businessinsider.com/us-gdp-q1-economic-growth-inflation-omicron-wave-coronavirus-recovery-2022-4

[B-Man]

 

[Big Blitz]

More from State Run News!

 

NO RECESSION!!!

 

 

 

Did the U.S. economy really shrink in early 2022? Is a recession near?  No, and here’s why

 

The surprising contraction in the U.S. economy in the first quarter has been written off by Wall Street as a misleadingly weak number that in no way signals an oncoming recession.

 

So how well did the economy really perform?

 

Not bad, it seems. Maybe even pretty good, economists say.

 

“The first quarter was not as bad as it looks at first glance,” said chief economist Bill Adams of Comerica Bank in Toledo, Ohio.

 

A better way to assess the economy’s performance, economists say, is to look at final sales to U.S. customers. Simply put, the measure strips out exports and inventories and focuses on how much stuff Americans are buying from U.S. and foreign sellers.

 

Can the good times last?  YES THEY ACTUALLY WROTE THAT!

 

Economists predict GDP will accelerate to a 2% clip in the second quarter, but as always, the devil will be in the details. The U.S. could be facing tougher times with the Federal Reserve raising interest rates and more turbulence overseas.

 

https://on.mktw.net/3KuFCkF

 

 

Freaking Stupid Federal Resrve.  And Russia!