arch stanton
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A few things that I have been thinking about in a possible recession.
1 there is always somebody saying the end is near and bad news sells its hard to get people to get motivated to go your way if you say every thing is roses people will keep doing what they have been, but we do get recessions every 10 plus years.
2 what I remember about the last one was money got very hard to barrow and I had my credit lines reduced and cards cancelled even though I had not been using them and had payed off all my equipment debt. This time I bought my equipment with nothing down and kept the money I could have used for down payments in T bills, I have 3 outstanding loans one pays off in 6 months and the other 2 are around 2 and 3 years but i have all my unused down payments that will allow me to make payments for more than 2 years and that is longer than most down turns last and I'm betting longer than some of my competitors can hold out, while I'm afraid of bank failures There are places like short term T bills were your principle is safe and currently earn over 4%
3 I hear all kinds of analysts decry the stupidity of the fed and complaining how the fed is causing the problem but I have heard an interesting theories and will combine them in saying the fed wants a crash they fight the down turn and cause the economy to stay on an upswing longer than a up cycle would normally last without there influence. the reason is because the long up cycle creates so much wealth that things like space X and other gigantic money sucking private ventures could never find funding without the excess capital looking for an investment so we all reap some benefit from the new tech that is created. then we have the crash and those that are ready will make fortunes buying things for Pennys on the dollar and the cycle starts again
4 I don't see anybody do this math but there is a big difference between a 20% increase in the value of something like a house and a 20% decrease.
if you pay 100,000 for something and the value decrease 20% your value is now 80,000 now you will need a 25% increase in value to get back to 100,000 the math gets worse if say the value decrease 2 years in a row up swings usually add value slowly until FOMO kicks in and the we get what happened in the last few years
100,000 - 10% = 90,000 x11.1% = 100,000
100,000- 20% = 80,000 x 25% = 100,000
100,000- 30% = 70,000 x 42.9% =100,000
100,000-40% = 60,000 x 66.6% = 100,000
100,000-50% = 50,000 x 100% = 100,000
100,000-60% = 40,000 x 150% = 100,000
anybody see this before, I think the stock traders use this kind of thinking in setting a stop loss
5 I have seen some analyst say that big recession has a small down turn into a short up swing then into the dumpster we go or my favorite saying the dead cat bounce.
1 there is always somebody saying the end is near and bad news sells its hard to get people to get motivated to go your way if you say every thing is roses people will keep doing what they have been, but we do get recessions every 10 plus years.
2 what I remember about the last one was money got very hard to barrow and I had my credit lines reduced and cards cancelled even though I had not been using them and had payed off all my equipment debt. This time I bought my equipment with nothing down and kept the money I could have used for down payments in T bills, I have 3 outstanding loans one pays off in 6 months and the other 2 are around 2 and 3 years but i have all my unused down payments that will allow me to make payments for more than 2 years and that is longer than most down turns last and I'm betting longer than some of my competitors can hold out, while I'm afraid of bank failures There are places like short term T bills were your principle is safe and currently earn over 4%
3 I hear all kinds of analysts decry the stupidity of the fed and complaining how the fed is causing the problem but I have heard an interesting theories and will combine them in saying the fed wants a crash they fight the down turn and cause the economy to stay on an upswing longer than a up cycle would normally last without there influence. the reason is because the long up cycle creates so much wealth that things like space X and other gigantic money sucking private ventures could never find funding without the excess capital looking for an investment so we all reap some benefit from the new tech that is created. then we have the crash and those that are ready will make fortunes buying things for Pennys on the dollar and the cycle starts again
4 I don't see anybody do this math but there is a big difference between a 20% increase in the value of something like a house and a 20% decrease.
if you pay 100,000 for something and the value decrease 20% your value is now 80,000 now you will need a 25% increase in value to get back to 100,000 the math gets worse if say the value decrease 2 years in a row up swings usually add value slowly until FOMO kicks in and the we get what happened in the last few years
100,000 - 10% = 90,000 x11.1% = 100,000
100,000- 20% = 80,000 x 25% = 100,000
100,000- 30% = 70,000 x 42.9% =100,000
100,000-40% = 60,000 x 66.6% = 100,000
100,000-50% = 50,000 x 100% = 100,000
100,000-60% = 40,000 x 150% = 100,000
anybody see this before, I think the stock traders use this kind of thinking in setting a stop loss
5 I have seen some analyst say that big recession has a small down turn into a short up swing then into the dumpster we go or my favorite saying the dead cat bounce.
