The coming recession will be brutal

According to the Fed’s recession probability model, the odds of a recession in the next 12 months are the same now as they were in July 2007. That was when the credit markets first seized up, leading to the 2008 Great Recession five months later.

It's both amazing and depressing how many statistics that I can quote that you would normally expect to find in midst of a deep recession.
These sorts of trends should never, ever be seen late in an economic expansion, like we are now.

The number of homeless kids in public schools has increased by about 70 percent over the past decade to 1.3 million.

71 million, 31.6 percent of US adults, have debt in collections reported in their credit files.

Nearly 1 in 5 families saying they had experienced difficulty paying for food or medical care, and 39 percent of Americans ages 18 to 65 experienced at least one type of material hardship.

1 in 4 renters spends more than half their income on housing costs. The black homeownership rate stood at just 40.6%, the lowest since 1960.

Four in 10 adults couldn’t cover a $400 emergency expense.

48 percent of Americans felt economic conditions were worsening

For the second time in three years, the average life expectancy in the United States has actually gone down, driven in large part by suicide rates, reaching 14 per 100,000 in 2017 (up from 10.5 per 100,000 in 1999).

U.S. households have a record-high $13.86 trillion in debt.

CEO compensation surged 940% between 1978 to 2018 while the average worker saw a meager 12% pay hike over the same 40-year period.

"I think there is a misnomer that the recession has passed and that we are on an upward trajectory with jobs and the unemployment rate, but many are left behind. The living wage is not something that is the reality in many communities."
- Marjory Givens

For roughly one third of Americans there was no recovery.
This same group will be the ones impacted first and hardest by the next recession.
Tens of millions of people who are only barely making it now will be pushed into abject poverty, hunger, and homelessness.
Just blaming the victims, or scapegoating immigrants, will no longer be good enough. Not when you stomach is empty.

What's worse is that there will be no monetary solutions because the central banks have no ammo, after leaving interest rates too low for too long.

Things could get ugly.

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Comments

ggersh's picture

what occurred since 2008, while in reality it was a WS bailout

Recession for bankers and their ilk just never happened.

So being true to his wordnothing but the bankers lackey empty suit
bailed out WS, millions of people saw their lifes savings/houses stolen from them.

It was a great recession for the masses and Xmas for the
bankers.

the next "Great Downturn" will make 1929 look like a walk in the park

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28 users have voted.

trump will be amerika's last president

ameriKa's been crapified and yes that
has trickled down

snoopydawg's picture

@ggersh

Recession for bankers and their ilk just never happened.

The so called recovery from the Great Recession was just a huge transfer of wealth to the banks and the elites once again went shopping during the fire sale. I recently read a Twitter thread that discussed what Obama did and didn't do after he became president. One of the worst things that he did was to allow the banks to continue foreclosing on people's houses through fraudulent acts. Robo signing MERS with judges agreeing with banks over people. People would pay their mortgages, but the banks wouldn't credit them for it. Or telling them to stop paying on it while it went through moderation and another department working on foreclosure anyway.

Just remember that congress has made it legal for banks to keep people's money to bail themselves out. This includes pensions and other retirement accounts. I believe that credit unions are exempt from that, but you all might want to do some duckling searches to make sure. This was one of Obama's last gifts to the banks who are busy paying him back for what he did for them at $400,000 a pop. Nice gig in this gig economy.

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30 users have voted.

America is a pathetic nation; a fascist state fueled by the greed, malice, and stupidity of her own people.
- strife delivery

lotlizard's picture

@snoopydawg  
https://duckduckgo.com/?q=obama+65+million

And the Obamas’ Netflix deal . . .
https://duckduckgo.com/?q=obama+netflix

Trump: rich dealmaker, then president

Obama: president, then rich dealmaker

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16 users have voted.
Raggedy Ann's picture

become as self-sufficient as possible. Even with that, I, too, believe this is going to bring grave suffering to the 99%.

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22 users have voted.

“It is dangerous to be right in matters on which the established authorities are wrong.”

-- Voltaire

@Raggedy Ann might come in handy to have things to barter.

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4 users have voted.

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5 users have voted.

at some community bank.
If those funds are subject to a buy in, I may as well give it up, call it a day.

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15 users have voted.

@on the cusp I think most of the US ought to give up and call it a day.

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8 users have voted.

n/t

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3 users have voted.

@davidgmillsatty Very soon.

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8 users have voted.

@on the cusp Not specific enough. Pundits have been saying that for several years now. I want genuine insider information or I am going to be screwed (again for the third time -- 2000 & 2008 previously ) like every other sucker who is forced to invest or save without the benefit of insider information.

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11 users have voted.

@on the cusp Jim Cramer is not buying it.

Well, I think we need to dial back the hysteria first. The markets are up huge....so let’s kind of be a little more cool. There a many people who I think are sowing panic. That’s not necessary. This does not have to end poorly, we can avoid a recession.

https://www.blabber.buzz/conservative-news/637669-jim-cramer-tells-media...

That is apparently the spin coming out of the conservative press.

So the answer to the question of when is it coming depends on who you ask.

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7 users have voted.

@davidgmillsatty

This does not have to end poorly, we can avoid a recession.

No, we can't avoid a recession.
The only question is when it hits.

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11 users have voted.

@gjohnsit That doesn't help anybody. There will always be ups and downs as long as we have a central banking system that issues the currencies of the US and Europe. And the bottom line is that those with insider knowledge know when the ups are going to happen and when the downs are going to happen (because they create them) and the rest of us don't.

They can extend credit and create a period of economic boom and then they can turn around and shut down the extension of credit and cause mayhem in the economy. They know when they are about to do it and the rest of us don't. If you spend your entire life trying to figure out what these people are about to do, you obviously have a better idea of what might be coming than those of us who do not have that kind of a career. So maybe you don't get hurt as bad, or maybe you get lucky and even can turn a national tragedy into a personal gain.

And that is how capitalism works for the very few and for the 99%.

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Hawkfish's picture

@davidgmillsatty

Jim “Bear Stevens” Cramer is either a twit or a market manipulator.

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7 users have voted.

We can’t save the world by playing by the rules, because the rules have to be changed.
- Greta Thunberg

edg's picture

@davidgmillsatty

on the sixth Friday in November.

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9 users have voted.

@edg Excellent answer. I will be ready to bail the day before.

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5 users have voted.

One, the low unemployment rate is probably a sham, thanks to the gig economy - people who drive for Uber and such give up in a month or three and are counted as employed when they aren't.
and two, I think that maybe the coming recession might not be as bad as we think, but because the last one never ended. We won't drop as far as we think because we don't have as far left to fall as we admit.

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19 users have voted.

A PROUD Hillary hater since 1993

Daenerys's picture

@doh1304 To hear some of my coworkers tell it, there's a labor shortage. Bollocks! So why aren't wages rising? Pay people a living wage!! There's still too many people desperate enough to work for minimum wage and not rock the boat and demand more. Why can't people understand that people don't want to work for nothing? Shit, I'd pick fruit or vegetables for $15+ an hour, just slather on some 60+ SPF and a wide-brimmed hat, IDGAF. Brainwashed boot lickers. Nea

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19 users have voted.

This shit is bananas.

@Daenerys I was just “let go” from my job a few weeks ago. Prior to that I did not receive my annual raise, which last year was pretty small anyway. Our department was understaffed by two people. The claim we kept hearing from management was they couldn’t find anyone good because the labor market was so strong. Before they let me go, they did hire someone straight out of college and about half my age. Hmmm...

I’d heard through the grapevine after I left, a rumor went around about the company losing money. Apparently it was so bad they had to address it that afternoon. They gave my coworkers some cock and bull story about why I “left”. I’m sure they didn’t mention that in my final meeting, they offered me a position in another department at about half the pay I was making. Hmmm...

Without getting too in to it, it’s worth mentioning I worked for a utility in IT. So it’s not like my employer was a service people could do without, especially with energy consumption being at an all time high this summer. They have been expanding into some areas that none of us could see how they were turning a profit, so who knows there.

As for the job hunt, luckily I had started months ago due to a general bad feeling I’d been getting. Still, it hasn’t been easy. I’ve had many interviews that went fantastic and I would get the thanks but no thanks. What info I could glean was it always amounted to someone with more qualifications willing to work for less. I wasn’t exactly aiming too high, in fact, I was requesting a good deal less than I had been making just to get a foot in the door. I did get an offer this week, so I feel fortunate but I started seriously looking in February.

At least based on what I’ve seen, the idea that it’s a good market for workers is a myth, at least in IT. There were plenty of short term contracts paying ridiculously low wages. Lots of low ball jobs out there. Lots of jobs expecting the world as far as qualifications, certifications and experience but not willing to pay for it (such as my old job, I saw the job postings.) But I was even willing to come down $10k from what I was making (which, again, for the field wasn’t extravagant in the first place) and couldn’t get a bite.

So take that for what it’s worth. Yeah, there’s a lot of openings out there but I’m seeing employers still acting like they hold all the cards, which leads me to believe they do.

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24 users have voted.

@Dr. John Carpenter The company that laid me off tried roughly the same crap. But it did turn out that my role was simply shipped to India. In fact, the entire division was basically moved to India. The company typically does a yearly "stealth lay-off" in numbers that did not require any public noticiation for the sole purpose of increasing profit margins to increase stock price (and hence executive compensation).

Yah, there are people who yell "bullshit" when high tech CEOs claim they need H1b visas to bring in people because of engineering shortages--and skeptics point to a lack of wage growth if there were really a shortage. Seems supply and demand are outdated concepts.

And good foresight to start looking before you were let go. One expert on high tech jobs said that the new "too old" in high tech is now 35. Many older high tech works that were let go simply were never able to find a job in high tech every again. Same reports--great resume, good interviews, highly qualified, but no thank you.--that is if they got interviews. Two guys I know became bus drivers.

In terms of looking at jobs outside high tech. I was amazed at the jobs that wanted bunches of qualifications/certification for skilled welders, truck drivers, etc yet did not pay more than $15.00 a hour with no benefits. The local convienence stores were paying almost equal to that and with some benefits.

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snoopydawg's picture

@MrWebster

How about congress just passing legislation that will allow over 300,000 HB1 or HB2 visas from India that was written by Kambama Harris that passed with a huge majority. How many people had to train their replacements if they wanted a decent severance package? Hey... aren't democrats supposed to be the party of the working people? Sadly no, that concept went away decades and moons ago. Now the union leadership have even sold their workers out and do everything that can to work with the employers instead of the workers. Yay! Vote Blue..

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18 users have voted.

America is a pathetic nation; a fascist state fueled by the greed, malice, and stupidity of her own people.
- strife delivery

@snoopydawg I read where studies have shown that the shortage of STEM graduates was just bullshit. The problem is that new college hires are not being hired. As Norm Matloff (critic of H1B misuse) has stated, most of the jobs given for H1B visas are entry to mid-level work. The H1B was meant to bring in the best and brightest where none could be found in the American job market--not to hire low cost foreign engineers for low-to-medium level work.

Given the revolts we have seen withing places like Google and youtube, I can see those companies really wanting indentured foreign labor (if the foreign engineers are let go, they must immediately return to their countries of origin).

Looking at the various teacher unions in states with wildcat strikes, they were useless and pathetic. Well, 2016 should haved shown a lot of people how a lot of union leadership were simply quizzlings to corporate democrats.

Link to Matloff
http://heather.cs.ucdavis.edu/matloff.html

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15 users have voted.
snoopydawg's picture

@MrWebster

This country makes very few products anymore so why should corporations hire people and pay them benefits when they can hire someone from another country who will work for far less? Well we can see why it's kinda important to hire the best people even if it hurts your profits. Boeing fired lots of people and hired others that would work for half and it came back to bite them in their asses big time. Boeing has had to ground its flagship plane since March and it will most probably not be back in the air this year. Not only are they losing billions in profits, but they are losing future profits because people are buying a better plane. Plus they are losing money in their stock prices.. this is what greed will bring you. Not looking so smart now are you Ms. Boeing CEO?

Looking at the various teacher unions in states with wildcat strikes, they were useless and pathetic. Well, 2016 should haved shown a lot of people how a lot of union leadership were simply quizzlings to corporate democrats.

Randi Weingarten who is head of the teacher's union worked against the teachers to get them to accept less than what they were asking for. If teachers strike again I'd like to see more states joining them at the same time. Or all of them at once. We saw how much power the air traffic control group has. Hopefully this country is moving towards a general strike. I don't know if this actually happened, but I read that an Amazon worker died and it took a long time to move the body. Amazon workers are worked to the point of insanity while bezos pockets more than $100 million an hour, but congress lets his workers rely on government assistance. Bernie has the right idea. If companies are that successful then they can help support their workers. Walmart has food drives for its workers and I bet any monetary outflow gets written off. Dumb way to ruin run a country.

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13 users have voted.

America is a pathetic nation; a fascist state fueled by the greed, malice, and stupidity of her own people.
- strife delivery

@snoopydawg I remember him urging progressives to vote against Obama in 2012 as he was a regressive president--Stoller was spot on about Obama day one. But he had a recent tweet that ran roughly like "not only did we export our manufacturing base but also our knowledge on how to make things."

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@MrWebster

One expert on high tech jobs said that the new "too old" in high tech is now 35. Many older high tech works that were let go simply were never able to find a job in high tech every again. Same reports--great resume, good interviews, highly qualified, but no thank you.--that is if they got interviews. Two guys I know became bus drivers.

I’m 44 and I walk with a cane. I used to be able to ditch the cane for job interviews at least but I can’t anymore unless I’m 100% sure I’m not going to walking more than a short distance with no stairs.

Honestly, I was starting to reach the point of looking at what else I can do outside of the field. I’ve just about had it anyway, though that could be the toxic workplace I was in.

The place that hired me actually gave me a no thanks, but we’ll keep you in mind at first. I was shocked that they apparently meant it! I’ve never heard from an employer again when they said “we’ll keep you on file, blah blah blah.” So I really consider myself lucky here. I don’t think next time I’ll be as lucky.

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14 users have voted.

@Dr. John Carpenter
current position, after losing my previous job in a post-takeover layoff/firing binge, which happened just as the economy was poised at the precipice -- August, 2008. I was incredibly lucky to get this job -- 15 months later. (Though it took me 4 years to get back to what my salary had been in 2008 -- and we've been fortunate enough to receive regular annual raises that have at least kept pace with inflation.) I've had amusing conversations with some younger coworkers (late 20s to late 30s) when I explain to them that if/when I lose this job for any reason, it will be the end of my professional career. They don't get it, can't imagine it.

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12 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

@UntimelyRippd I am much older worker having spent my entire work life in high tech when I was laid off (my first computer expereince was a VAX with real UNIX, and oh some punch cards). Just as things were at the very edge after 18 months, I lucked out and got same job at 30% less than I was making--yes, I consider that lucky. And man, did I luck out in that the new company was taken over by a European company that was not very interested in out-sourcing or in youth movements (low wage movement really).

And if the coming repression recession finds me, that is it for my career in high tech--my life long passion and work. And that is it for anything approaching a middle class income. As for your younger co-workers, reality will find them sooner than later as it did for me. And they will find that it ain't that easy to find jobs in their fields even though they may be qualified.

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8 users have voted.

@MrWebster
to run on an 11/780 running VMS, and on a microVAX (for which I was the sysadmin) running whatever flavor of VMS ran on those. My boss splurged on the microVAX, it had 11 meg of RAM.

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4 users have voted.

The earth is a multibillion-year-old sphere.
The Nazis killed millions of Jews.
On 9/11/01 a Boeing 757 (AA77) flew into the Pentagon.
AGCC is happening.
If you cannot accept these facts, I cannot fake an interest in any of your opinions.

@UntimelyRippd your last paragraph really resonated with me. I was the token old in a crew of 20 somethings. I think I had the reputation of being the crazy old guy who always thought the sky is falling. From what I heard, my firing shook them up greatly, especially the new guy who is 23 and only been there about a month. I really hope they take note and don’t just write it off as being this particular situation (although that helped.) I’m probably going to be planning ahead for my after-IT job now. I’m not anticipating issues, but I believe this is probably going to be the last tech job I’ll have before I age out according to them.

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6 users have voted.

@Dr. John Carpenter I saw the proverbial writing on the wall but thought I could find a job in my area. Big mistake in that regard. But I lucked out. I wish I had looked at fields outside of high tech way before and prepared myself. But then again, I probably would have chosen something in high tech which would have been a mistake.

Knowing as I do how people do hiring, the cane think would definitely be a problem, unstated, but definitely a facort.

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5 users have voted.
The Liberal Moonbat's picture

Yesterday, I shared gjohnsit's earlier spiel about gold investment with my father, who (to my surprise) bought a not-trivial quantity of gold on the spot after reading it, saying he had already heard most of what it said, and actually agreed with much of it.

Next thing you know? Wall Street lays another egg, the darned stuff shoots up in value on the spot, economagically!

I suppose thanks are in order, gjohnsit!

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15 users have voted.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

@The Liberal Moonbat Unless he bought actual gold he just bought paper. But good for him. Paper seems good for now. Same shit, different century.

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5 users have voted.

@The Liberal Moonbat
After shooting up more than $200 an ounce, it has hit a resistance level.
So expect it to go sideways for a while.

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8 users have voted.
The Liberal Moonbat's picture

@gjohnsit He's made the occasional precious mineral investment in the past, and says they have generally been a poor investment - but this was never about high profit margins in the first place, now was it?

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5 users have voted.

In the Land of the Blind, the one-eyed man is declared insane when he speaks of colors.

@The Liberal Moonbat
But I bought most of my gold at $300 an ounce, when it was totally unloved.

However, gold is about preserving your savings. Not striking it rich.

I've learned a few things about investing. One of those lessons is - don't buy something that you don't understand. You don't have to buy now. You can save your money and wait for an opportunity to come to you.

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Just a general thanks to the entire crowd here for these economic discussions. Money's always been a weak spot for me analytically speaking (materially too lol) but I have learned a lot from reading all of your essays and comments. Plus that discussion y'all had the other day about gold was the thing that finally made the light bulb go off about understanding the gold standard and fiat currency, which was a frustrating mystery to me for many years, so really, a big genuine thanks to all of you.

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18 users have voted.
edg's picture

You wrote "scapegoating immigrants, will no longer be good enough". That's not usually how it works, though. When the economy deteriorates, immigrants competing for scarce jobs become larger targets. As we used to say in the Army, shit rolls downhill.

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7 users have voted.

@edg
Sure, immigrants will be scapegoated, but that won't put food on the table.
It won't be enough. If you get my meaning.

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8 users have voted.