Recession incoming

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Mr. North
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Re: Recession incoming

Post by Mr. North »

You are correct about inflation.

A decade plus of low interest rates has allowed inflation to run unchecked. Wages have not kept pace and the housing market along with the general cost of living continues to increase. The most effective means to bring inflation under control is to raise interest rates (perhaps aggressively), along with higher taxes and a reduction in government spending. It can be difficult to control inflation during periods of low economic growth, quite often the remedy results in a recession.
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derateNO
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Re: Recession incoming

Post by derateNO »

Just wait until the Bank of Canada drops rates again because of the economy right now.
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privateer
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Re: Recession incoming

Post by privateer »

On cue :lol:
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piperdriver
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Re: Recession incoming

Post by piperdriver »

Another brutal day on the markets. If you turn on the TV it seems like mass hysteria, a run for the exits mentality. But my family and friends are still going on vacation I don't personally know one person that has changed their travel plans. People are still buying toys atv's, snowmobiles, vehicles the list goes on. I realize the world is a bigger place than just Canada but it just seems like a total disconnect between the media and reality. Any thoughts or insights on this from the people involved in the markets? Roockiepilot what are your thoughts on the market action recently?
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7ECA
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Re: Recession incoming

Post by 7ECA »

A reversal of some sort has been in the cards for a while now, historically the market tends to "correct" every five to seven years or so. These corrections can be slow to bottom out, though.

The current period of "growth" is unprecedented because it's been going on for a decade. Mind you, all signs have been pointing to instability for a while now with most economies barely meandering along even with record low interest rates. Quantitative easing has been a marked failure, and yet reserves just keep creating money out of nothing...
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ayseven
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Re: Recession incoming

Post by ayseven »

Um. Money is created out of nothing. It is entirely arbitrary and not zero sum.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

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Last edited by rookiepilot on Wed Mar 25, 2020 6:02 am, edited 1 time in total.
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Re: Recession incoming

Post by rookiepilot »

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Last edited by rookiepilot on Wed Mar 25, 2020 6:02 am, edited 1 time in total.
palebird
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Re: Recession incoming

Post by palebird »

Here is the funny part:

There is no more stimulus. Europe shot it's wad some time ago introducing negative interest rates. They are toast. The EU is going to splinter and the Euro is going away. Good luck over there. Here we have no leader and the C dollar is being beaten on the head with a big stick mainly because of these ridiculous Liberal policies. Get your toilet paper here.. We are so close to negative rates and they are actually discussing going there. Once you go you cannot come back. Stupid. The US will be the temporary winner as the USD always has been and will continue to be, for the near term, a safe haven in a crazy world. You should be in USD right now. The Canadian economy as we knew it is gone. There is going to be a lot of unemployed people wandering the streets this summer.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

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Last edited by rookiepilot on Wed Mar 25, 2020 6:03 am, edited 2 times in total.
Kosiw
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Re: Recession incoming

Post by Kosiw »

First world problems
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complexintentions
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Re: Recession incoming

Post by complexintentions »

Kosiw wrote: Fri Mar 13, 2020 4:55 pm First world problems
Economic disruption on this scale is actually more harmful to developing nations than it is is to the "First World". The poorest always suffer more during a downturn.

Only the naive would think a market collapse of this magnitude only hurts the "rich". Where do you think your pension is invested? How are you going to afford basic necessities like food when inflation starts to accelerate?

Something like 40% of Canadians only $200 away from economic pain in any given month. What happens to them when their job just - ends? Even if it's "temporary"? It's coming for many. A business can't survive with ZERO customers. And that will describe many in the short term. Fear does that to people.

Rookiepilot has good advice. Unfortunately, it's advice that needed to be taken a couple years ago. It's too late now for vast numbers of Canadians.

But hey. "First World problems".
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Old fella
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Re: Recession incoming

Post by Old fella »

Early 1980’s anyone, I know because I was there. At one point the Bank of Canada rate hit 20%, inflation was calculated at 12%, imagine mortgage and general credit rates. GDP declined by over 5%, unemployment hit over 12% nationally. I had a young wife my age and a newly minted little tyke. I had a job - in aviation and managed to get by in the small house, small car, bit of grub on the table. Very little entertainment and absolutely no vacations on what average pukes do today. That was then and this is now, I didn’t bitch then and I don’t gloat now because I am retired with a DB pension, not a full one mind you but better than nothing.
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rookiepilot
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Re: Recession incoming

Post by rookiepilot »

Yup. Wrong audience. Good luck, stay well.
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Last edited by rookiepilot on Wed Mar 25, 2020 6:12 am, edited 3 times in total.
SkySailor
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Re: Recession incoming

Post by SkySailor »

Ok Rookienostradamus, no more prophecies. Instead, tell us how to defend our assets for the upcoming financial apocalypse.

I'll make it easy to start this....

You have a million bucks in Canadian cash. Whatta gonna do to preserve it? This also means inflationary concerns. Forget tax issues. Don't go on a rant about the current meltdown. Just informed, educated advice for all these desperate aviators looking to safeguard their measly assets.

Oh yeah, forget advice about using your cash to pay off all debt. Smart ones all ready know it. The rest, well, it's lost on 'em.

So c'mon Rook....

Bring it.
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SkySailor
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Re: Recession incoming

Post by SkySailor »

Crickets......

Well, not exactly. I see a few posts have been "edited". "Good luck, stay well"???? How's that gonna help me with my cash preservation problem? After 13 some odd years of following this site, despite all the solid financial websites out there, I was convinced this site had the advice to lead me to financial bliss. Now it seems gone. What a shame.

So, I've finished the multi/IFR and am ready to take a hack at this commercial aviation nirvana. Any of you highly informed commercial aviators wanna enlighten me as to what's gonna put me in the left seat of some big tin makin' 240 grand? Please advise. I'm gettin' kinda old an' don't have a whole lotta time.

Hope I didn't kill this thread. It was definitely top of the heap for informed opinions.
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Zaibatsu
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Re: Recession incoming

Post by Zaibatsu »

Do what the fat cats do. Start a business and exploit your workers. Beg the government for a bailout when you can’t make it.

Do it in America because they have no taxes and their debt doesn’t matter. They are doing just ok in this crisis. And so are investors especially if you bought indexed funds at the beginning of the month!
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SkySailor
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Re: Recession incoming

Post by SkySailor »

Zaibatsu wrote: Wed Mar 25, 2020 7:39 pm Do what the fat cats do. Start a business and exploit your workers. Beg the government for a bailout when you can’t make it.

Do it in America because they have no taxes and their debt doesn’t matter. They are doing just ok in this crisis. And so are investors especially if you bought indexed funds at the beginning of the month!
THERE WE GO!

The classic, off-the-cuff typical one liner from our esteemed Avcanada bright lights. Classic because it contributes nothing to the conversation! Tomorrow, at 0600, I'm gonna start my new investment model.

1. Blame the fat cats. Check.
2. Build a business for the sole purpose of exploiting my workers. Check.
3. After guiding the business to sure destruction, blame it on the gov and "beg" for a bailout. Check.

And then, the Grand Finale..... Be a typical, insecure little Canadian, wag my crooked lil' finger at that big, bad.......US of A. Because it's all their fault. CHECK!!!

Brilliant Zaibatsu. Wanna join my new company? By the sounds of it, you'd make a great CFO.

:roll:
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iflyforpie
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Re: Recession incoming

Post by iflyforpie »

If you had a million in cash and your worried about inflation or failing investments?

Commercial income property. Something like a small strip mall or medical building or maybe small light industrial or storage. Something with a safe or diversified or adaptable income source where you can meet your fixed payments and still have a bit of income even with high vacancies. Something outside of overly inflated real estate markets (has to be for only a million) but in an area not dependent on only one or two industries.

That’s what I’d do.
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Geez did I say that....? Or just think it....?
SkySailor
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Re: Recession incoming

Post by SkySailor »

iflyforpie wrote: Wed Mar 25, 2020 9:29 pm If you had a million in cash and your worried about inflation or failing investments?

Commercial income property. Something like a small strip mall or medical building or maybe small light industrial or storage. Something with a safe or diversified or adaptable income source where you can meet your fixed payments and still have a bit of income even with high vacancies. Something outside of overly inflated real estate markets (has to be for only a million) but in an area not dependent on only one or two industries.

That’s what I’d do.


The million in cash was a hypothetical amount. In the real world, if I had the smarts to grow it to a mil, I'd probably have the smarts to preserve it. I could have suggested 10 grand, but I doubt that would trigger informed debate. Unfortunately, I suspect the lesser amount probably reflects the vast majority of younger posters on this site. I don't mean to sound elitist or condescending. I've been in those shoes. Perhaps the ones who have bridged the years of financial turmoil can weigh in with their advice (c'mon back, Rookiepilot).

Commercial income property might certainly have it's place in a well diversified portfolio. I would prefer exchange traded funds REIT's over direct investment. ETF's with a long historical track record, so one could "stress test" the fund during bad years, might be worthy of say, 5 to 10 percent. Bricks and mortar over worthless paper IOU's is better, but in a declining or bottomed out economy, can struggle for many years (think all of Alberta, 2016 and now 2020+?).

Given the continuing employment and financial meltdown, some may view this debate as heartless. Again, not my intention. Folks, not more than 2 months ago the worlds markets were extremely murky as to their direction. As the markets continue decline, the downside (or risk) will decline (think bounce back 2009/10). Question is, what sector does one jump in? Look at the Dow Jones for 2009 to 2020. Deja vu anyone?
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