I need a recession. I have too much work, too much cash and toys are too expensive.
Some politician got raked over the coals for saying unemployment needed to go up 50 percent to 5 percent. He was correct. We have people in the work force that it would be cheaper to pay them to stay at home and pet their cat.
The money we are losing through fatigue stupidity and planning inefficiency is staggering. Mal investment always leads to economic down turns. It doesn’t really matter if banksters do it, urban cowboys do it, or governments do it. The result is always the same.
At some point it is like waking up with food poisoning, might as well get up and sell a Buick to the porcelain god.
Not a word of it is true anyway. Regardless of the ‘toys’.
We get a mild recession starting now. Or close to now. It is not about labor. The old dogs here cut their teeth on labor costs equal to inflation. That is not true at this point. It was only true into 1990 anyway.
This is about asset values. That opens up opportunities for all of us with some cash.
Over the weekend TV news was that Biden has been promoting all he has done to improve the economy with bills passed. But surveys indicate voters are not buying in. Instead of low unemployment they see inflation and rising prices for food and gas.
Here is a short article about inverted yield curve and its predictability.
If you follow the 3 month vs 10 year, it is 8 for 8 since 1968. The original 2 year vs 10 year only missed the 1960 recession. Couldn’t find an article talking about lag time but IIRC, usually a 12-18 month lag. And again, depends on which inversion rules you follow.
I vote yes to a recession and probably starts in the January to April time frame if either of these predictors continue to hold true.
I just came off off 20 hours of overtime driven by a construction crew that was under trained, inexperienced and unsupervised.
Worse, we will spend another 120 MMH to find out just how extensive the damage really is. Then we will get to spend months putting together a project to fix everything. I am seeing this across industries and levels of training from unskilled labor to professional service. The old rule of thumb that 5 percent unemployment is full employment seem accurate from where I stand.
Worse I see stupid money chasing every product every where. Bidding against stupid money is always a bad idea. Again this reminds me of Houston in the 1970’s where the oil workers literally urinated away massive amounts of wealth. It does not matter if oil workers place capital in the toilet or executives toss it out the door while flying Lolita airways. The result is always the same.
Every day this situation lasts, more capital is miss allocated and the more is miss allocated the worse the correction will be.
So yes I am tired, and if they can cut my overtime or announce a lay off, I will take our contractual voluntary severance to save young folks jobs. However, I am probably not senior enough to get it.