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NOTABLE! The Coming Recession (2019-2020?)

GlobalWealth

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And how, if I may ask?
In 2007-8 I liquidated nearly everything: real estate, stocks, bonds, etc.

I was concerned about market valuations so I put almost everything in UST's.

When the stock market crashed in 2008 there was a "flight to safety", and money flowed into treasuries.

This made UST's explode. I just bought the Vanguard treasury etf.


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andviv

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In 2007-8 I liquidated nearly everything: real estate, stocks, bonds, etc.

I was concerned about market valuations so I put almost everything in UST's.

When the stock market crashed in 2008 there was a "flight to safety", and money flowed into treasuries.

This made UST's explode. I just bought the Vanguard treasury etf.


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Looking at a similar scenario this time?

Or are you taking a different approach?
 

GlobalWealth

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Looking at a similar scenario this time?

Or are you taking a different approach?
The economy in general looks to be at a tipping point, but if there is something I am 100% certain of, it is that I cannot predict the future.

With credit card, auto, and student loan debt at or near all-time highs as well as government debt with a seemingly "print to infinity" monetary policy in place, all the pieces are in place for a hard crash.

Right now we just need a trigger for a crash.

It could be the trade with between the US and China.

It could be something similar to Lehman Bros crashing in 2008 that triggered the spiral down.

Who knows when? However, I don't think the question is "if", only "when".

Of course you could also look at Japan that peaked in the 1990's, and has been in a steady deflation or even stagflation, but no crash.

I pulled out of the stock market a few years ago, 2014 ish, I believe. I pulled out for the same reasons as I don't want to dive in today. I think there is a lot of risk in the equity and bond markets. Of course, look how much I "lost" (or in truth, didn't make) by getting out in 2014. In hindsight, I should have stayed in until early 2018. But as I said, I am 100% certain that I cannot predict the future.

As someone who deals with banks and other financial institutions on a weekly basis, I can say that regulatory compliance has gotten much, much worse around the world.

With FATCA and CRS, financial institutions have seen a dramatic increase in compliance costs that has impacted their businesses, but from the consumer perspective has made things incredibly difficult.

Ironically, this additional regulatory compliance has in part been a response to blockchain technology and cryptocurrency as a way to protect their turf but in fact has boosted the viability and use of the technology having the opposite of the intended effect.

You can even see in the past few days how the equity markets have been diving and the cryptocurrency markets have been going up. A lot of the flow of money out of equities has flowed into crypto.

I bring that up because crypto is definitely part of my hedging and growth strategy. As is real estate, private investments, my own businesses, and cash.

Aside from minor short term inflation, you cannot lose money with cash.

I made a killing in 2008-2012 in the equity markets post-crash, but only because I was very liquid.

I have every intention of diving back in once the crash happens, I just need to be patient......and liquid.
 

JunkBoxJoey_JBJ

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And then you see headlines like this today on market watch dot com:

Hop on now before Dow reaches 40,000, says forecaster who nailed 2018 selloff

 

Yzn

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The economy in general looks to be at a tipping point, but if there is something I am 100% certain of, it is that I cannot predict the future.

With credit card, auto, and student loan debt at or near all-time highs as well as government debt with a seemingly "print to infinity" monetary policy in place, all the pieces are in place for a hard crash.

Right now we just need a trigger for a crash.

It could be the trade with between the US and China.

It could be something similar to Lehman Bros crashing in 2008 that triggered the spiral down.

Who knows when? However, I don't think the question is "if", only "when".

Of course you could also look at Japan that peaked in the 1990's, and has been in a steady deflation or even stagflation, but no crash.

I pulled out of the stock market a few years ago, 2014 ish, I believe. I pulled out for the same reasons as I don't want to dive in today. I think there is a lot of risk in the equity and bond markets. Of course, look how much I "lost" (or in truth, didn't make) by getting out in 2014. In hindsight, I should have stayed in until early 2018. But as I said, I am 100% certain that I cannot predict the future.

As someone who deals with banks and other financial institutions on a weekly basis, I can say that regulatory compliance has gotten much, much worse around the world.

With FATCA and CRS, financial institutions have seen a dramatic increase in compliance costs that has impacted their businesses, but from the consumer perspective has made things incredibly difficult.

Ironically, this additional regulatory compliance has in part been a response to blockchain technology and cryptocurrency as a way to protect their turf but in fact has boosted the viability and use of the technology having the opposite of the intended effect.

You can even see in the past few days how the equity markets have been diving and the cryptocurrency markets have been going up. A lot of the flow of money out of equities has flowed into crypto.

I bring that up because crypto is definitely part of my hedging and growth strategy. As is real estate, private investments, my own businesses, and cash.

Aside from minor short term inflation, you cannot lose money with cash.

I made a killing in 2008-2012 in the equity markets post-crash, but only because I was very liquid.

I have every intention of diving back in once the crash happens, I just need to be patient......and liquid.
Great posts. What if the Dollar itself crashes due to the economic crisis and countries turn away from the US and start using Yen and Ruble as an alternative? What will happen to the cash?

 
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Kevin88660

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A friend of mine talked to her financial advisor at Morgan Stanley to review their current investment portfolio.

The advisors told her they are recommending a very cautious approach to their customers as they are getting ready for a major market correction. Their general suggestion was to move their investments and 401(k) portfolio into a very conservative stance as a wait to minimize loses.

Obviously, I can't tell how good these guys are, but they do manage money for millionaires and this is what they are recommending, so I thought of this thread right away.

Assuming they are correct, how would one move their investments into a more conservative posture?

Bonds?
Large corps?
Stick to Large cap indexed funds?
I am a financial adviser and I have been hearing that since 2011.

My thesis is as follow: There will not be a MAJOR downturn like 2008 for major economies (U.S, China, Japan and Europe) because the leaders of the world has seen the 2008 devastation and are prepared to use whatever it takes-the printing press primarily to prop up the asset market. There is no doubt that they will succeed. The real question is at what cost.

For investors with moderate risk appetite (myself included) is to load up depressed emerging market equities.
My TUR ETF play has been successful (liquidated most) and now China FXI is still cheap (thanks to the trade war).

My opinion on the trade war as follow. The market is pre-occupied with the disagreement between China and USA but forgetting that China and U.S. have more in common than difference in the long term vision. China is trying to move towards a higher Tech, more consumption based economies. The one belt one road is also building up the production capacities of poorer countries so that they can take over the lower margin labor cost dependent manufacturing industries and satisfy Chinese demand in the future. In the 60 and 70s the Japanese were exporting but in the 80s and 90s all those production capacities moved to the Asian Tigers. Same Script.

What Trump really is saying is China is not doing this transformation fast enough, and Trumps wants a share of the pie when Chinese become more like a big global consumer. And Trump wants U.S. to have manufacturing exports (lower ends as well).

For that story to be played out, what has to happen is the long run appreciation of RMB and depreciation of the dollar. The Chinese wanted it to be a long run process but Trump wants to speed it up.
 

Envision

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Great posts. What if the Dollar itself crashes due to the economic crisis and countries turn away from the US and start using Yen and Ruble as an alternative? What will happen to the cash?

This would never happen and if it ever came close we'd have much bigger problems than the economy.

The US prints as much currency as they desire and in doing so can finance and control the largest military in the world. If we run into catastrophic fiscal problems they will hit the reset button like they did in 2008 and if anyone has a problem with it they subsequently will be dismantled.

When you hear the term "U.S. dollars are backed by the “full faith and credit” of the U.S. government" it can be translated via urban dictionary as "US dollars are backed by the full faith and arsenal of the US military".
 

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1. Head and shoulders
2. Nothing lasts forever
 

Tossek

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I like to add some indicators from the last german unemployment report.
Though the spring should decrease the amount of unemployment worker, it actually rose since a long time again unexpectedly.
24975
Most interesting curve is the upper bolder line. IT shows the seasonally adjusted unemployment rate.


Also interesting is the grey bottom curve. It shows the application of short term work. Short term work is a tool to overcome seasonal issues and a government help to educate workers in downturn times.

24974

Applications of short terms increased also dramatically.
 

Yzn

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This would never happen and if it ever came close we'd have much bigger problems than the economy.

The US prints as much currency as they desire and in doing so can finance and control the largest military in the world. If we run into catastrophic fiscal problems they will hit the reset button like they did in 2008 and if anyone has a problem with it they subsequently will be dismantled.

When you hear the term "U.S. dollars are backed by the “full faith and credit” of the U.S. government" it can be translated via urban dictionary as "US dollars are backed by the full faith and arsenal of the US military".
Golden post. Therefore military action on China/Russia if it requires it?

"We are looking at a global economic crisis leading to stagflation. The evolving bilateral technological, trade, economic, IP rights, political and military conflicts will culminate into a real confrontation globally. The crisis and emerging conflicts will lead to the third world war between the US and China. The US and China will meet to end the war, as all wars end with agreements. A new world order governed by the G-2 (US and China) will emerge. The Arab region will witness a renaissance that will herald a global Marshal-like economic plan leading to a global economic recovery and prosperity.
Based on the above, my best advice is to prepare for a recession, even if it may not happen. I am advocating to others what I have already started implementing within TAG.Global." - Talal Abu Ghazaleh

 

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Envision

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Golden post. Therefore military action on China/Russia if it requires it?

"We are looking at a global economic crisis leading to stagflation. The evolving bilateral technological, trade, economic, IP rights, political and military conflicts will culminate into a real confrontation globally. The crisis and emerging conflicts will lead to the third world war between the US and China. The US and China will meet to end the war, as all wars end with agreements. A new world order governed by the G-2 (US and China) will emerge. The Arab region will witness a renaissance that will herald a global Marshal-like economic plan leading to a global economic recovery and prosperity.
Based on the above, my best advice is to prepare for a recession, even if it may not happen. I am advocating to others what I have already started implementing within TAG.Global." - Talal Abu Ghazaleh

I don't think there would be a war. It doesn't benefit anyone. I can't see how the US dollar would ever take a backseat to any other currency even if China and Russia come to an agreement.

The only variable that may in the future would be some sort of decentralized currency but even then it would base it's value off a real currency which would default to the US dollar once again.
 
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MJ DeMarco

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Great posts. What if the Dollar itself crashes due to the economic crisis and countries turn away from the US and start using Yen and Ruble as an alternative? What will happen to the cash?
ZeroHedge has been saying this for over a decade, among other calamities.
 

Yzn

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ZeroHedge has been saying this for over a decade, among other calamities.
I see. Well I just randomly got the link to backup the post, I actually got the dollar crashing from a book called Currency Wars where he predicts that if the Chinese and the Russian base their currencies back on Gold, they will eventually crash the Dollar. Recommended to read.

The book is by James Rickards.

"On September 10, 2009, Rickards testified before the U.S. House Science Subcommittee on Oversight about the risks of financial modeling, VaR, and the 2008 financial crisis." Wikipedia.
 

andviv

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Bring it on!

I bought a house, left my stable job to launch my own business, paid off my mortgage and travelled the world during the last recession.

I'm even more ready now.
Interesting.

You launched your business. In what industry?

That has been one of my main interests... what industries have proven to do well in downturns?

I would love to hear about real examples, from real people who have done it.
 

guy93777

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Interesting.

You launched your business. In what industry?

That has been one of my main interests... what industries have proven to do well in downturns?

I would love to hear about real examples, from real people who have done it.

you have to look to primal needs . the 3 big markets in any society : relationship sex - money- health

and then you become an investor in the technologies of the future : a futurist

you can't be wrong with that
most people want sex /relationship ( who doesn't ? only hermits don't want them )
most people want money ( who doesn't ? only hermits don't want it )
most people want health ( who doesn't ? even even hermits want it )

for example: David Angelo ( real name Eben Pagan, a famous marketer )was unemployed and he had skills in marketing

he asked " how can i reach people with my skills and make money fast ? "

he immediatly knew his future was in the primal needs of men : getting laid

years later, he was able to leverage this business and teach his marketing skills. and then to become an investor

unemployed --> " dating guru " ( LOL ) --> marketer , entrepreneur ---> investor.


David Angelo is not a " dating guru " at all. he is a marketer who starts businesses in the big markets : dating , money

this is genius at work


25028




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View: https://www.youtube.com/watch?v=2amW1TvmoCY




25029



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JScott

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That has been one of my main interests... what industries have proven to do well in downturns?
Anything that is a NEED (versus a WANT) and anything that allows people to escape reality...

For example:
- Grocery/Food
- Medical
- Lower Income Rental Housing
- Gambling
- Alcohol
- Cleaning Services
- Consignment
- Repair Services
 

Yzn

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Anything that is a NEED (versus a WANT) and anything that allows people to escape reality...

For example:
- Grocery/Food
- Medical
- Lower Income Rental Housing
- Gambling
- Alcohol
- Cleaning Services
- Consignment
- Repair Services
I would like to make a comment here.

Whilst yes grocery is a need, however remmember that in an economic crisis/recession that means the oil/gas will go up, which means at least in my developing country the government will increase electricity costs, which again means a cut in your profits.

I'm speaking from my own grocery store experience, without the recession coming yet, the government has increased the electricity pricees to almost double. And believe me, the sales do go DOWN. Because people start to have a mentality of spending less. Our sales have gone down by half compared to last year, without altering any variables.

It makes sense why I might be selling the business soon because we still have a three year contract left, and if the shit goes down harder, we will be losing these three next years for sure.
 

Sanj Modha

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Interesting.

You launched your business. In what industry?

That has been one of my main interests... what industries have proven to do well in downturns?

I would love to hear about real examples, from real people who have done it.
There are so many industries that thrive during recessions: lipstick, pizza etc.

Do some research and pick one. People might not spend as much during a downturn but they will spend money on the right things.
 

windchaser

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Interesting.

You launched your business. In what industry?

That has been one of my main interests... what industries have proven to do well in downturns?

I would love to hear about real examples, from real people who have done it.
Cosmetics tend to do very well. My grandfather usted to hace a nail polish business. He had a high quality product selling at low price as his main niche were low income women. Business was running during booming economy and recessions and has steady sales in all scenarios.
No matter how bad economy goes women will not cut down in high quality cosmetics, maybe switch brands but never stop buying.
 

guy93777

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No matter how bad economy goes women will not cut down in high quality cosmetics, maybe switch brands but never stop buying.
according to Maslow pyramid, this is not so obvious

25070



in Europe, the Deutsche bank is about to crash soon. it means a global financial crash is coming




quotation : "If it breaks below $6.40, it can go out of business. So, it’s a very serious situation... I think all the markets can have a bounce in a couple of days to the end of July. That’s why DB might hold up, but if it gets below $6.40, the world is in trouble.
 

MJ DeMarco

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As I mentioned somewhere (not sure if it is in this thread) that there will be no trade deal. China will simply wait until the 2020 election. A big market downturn (and more expensive consumer goods for Americans hell-bent on consuming) will guarantee new leadership, leadership that will allow China to continue to do whatever they want.

China can go back to business as usual by simply being patient, one of the benefits of having unelected leaders and a one party system.

So is this the big economic break and the end of the bull?
 

msufan

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Is it coincidence that crypto is moving up nicely today (+8.5% for Bitcoin as I type this)? I expected this to be the trend -- crypto up when stocks were down -- but in the past this has not been consistently the case. It'll be interesting to watch that side plot as well.
 

socaldude

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All you gotta do is look at how the news over in China portrays it. They are very nationalistic and literally treat this like a war.

To get the trade deal Trump wants China basically has to change their own laws. :rofl: Not too much to ask for right?

This is gonna be a wild ride. Expect more tweets from Trump saying "I talked with china and its positive, making progress on a deal" or "China has ignored and failed to keep its promises".

But that was pretty Messed up how quickly the tone on this trade deal changed by our politicians. First they said all good we are close to a deal then all of a sudden we are gonna put more tarriffs they are ignoring us. :rofl: :rofl:
 

daivey

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crazy drop, but seems over blown on same old-same old trade worries.
it's been a great earnings season across the board.
 

socaldude

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crazy drop, but seems over blown on same old-same old trade worries.
Huge bull trap.

It was pretty predictable that they would devalue their currency to counter the tariffs. Was just a matter of when.

So now the USD is relatively strong. Trump has to come in and put more tariffs in.

I knew we were in for a big move today with the way treasuries were moving on Sunday.

Look at the 3 month and 10 year treasuries its now inverted like in 2007.

:duh::duh::duh:
 

Tossek

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I'm short since last week, so its fine for me. However, what I did not predict is that usd/eur is getting worse (for me). I did not expect the usd to drop as well - kind of bad because the rising us bonds are eaten up this way. I might should cash in on this part ... mhmm... but one never know, it is just educated guessing.... I guess ;-)

Still, here we go about indicators from German perspective:

1. all bonds up to 30 years are negative: People are super afraid and move into bonds + Germany just refinances old debts but avoids new debt
2. German yield curve has a 3m/10y inversion - but it is not big
3. index of registered open positions is declining (happend last time 2007 :) )
4. earning warnings from all big oems (except of VW) and tier1s and some tier2s (BASF)
 

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