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Recession predictions

Pussyhands

Give your predictions for if/when a recession will occur.

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Geuze

See here for USA case:

http://econbrowser.com/

http://econbrowser.com/recession-index

2.7% for 2018 Q1.

Geuze

realitykeeper

Pussyhands wrote: »

Give your predictions for if/when a recession will occur.

The next recession will be a depression which will be more devastating than any in human history. One can only guess when the next recession will start. My guess is October, 2019.

Pussyhands

realitykeeper wrote: »

The next recession will be a depression which will be more devastating than any in human history. One can only guess when the next recession will start. My guess is October, 2019.

Any reasoning for it being the most devastating in history?

Jimmy.

End of next year, this building of council houses and no one working will be the deal breaker.

KevinCavan

Well pussyhands/fish fingers. My prediction is the next crash will be due to p.c.p. credit. I predict that car company’s are taking huge risks at present, in order to get fast money in. I reckon guaranteed values given on cars sold now, for three years time will prove to be totally wrong. I believe that the car industry is going through huge changes. I think diesel cars will become almost worthless, petrol cars even won’t hold their value. I think the p.c.p. financing thing is a complete load of crap. Everybody will be driving an electric/hybrid in 15 years time. Somebody will have to take a hit on the 2 litre diesel being sold today through p.c.p., in three years time, when it comes to taking a new p.c.p. deal or paying a lump sum. In America p.c.p. has already proved to be s dodgy financing model. When you factor in people with bad credit ratings buying cars with p.c.p., this could easily be the next bubble ready to burst.

Mongfinder General

realitykeeper wrote: »

The next recession will be a depression which will be more devastating than any in human history. One can only guess when the next recession will start. My guess is October, 2019.

You’ve a serious horn for all things recession.

Pussyhands

KevinCavan wrote: »

Well pussyhands/fish fingers. My prediction is the next crash will be due to p.c.p. credit. I predict that car company’s are taking huge risks at present, in order to get fast money in. I reckon guaranteed values given on cars sold now, for three years time will prove to be totally wrong. I believe that the car industry is going through huge changes. I think diesel cars will become almost worthless, petrol cars even won’t hold their value. I think the p.c.p. financing thing is a complete load of crap. Everybody will be driving an electric/hybrid in 15 years time. Somebody will have to take a hit on the 2 litre diesel being sold today through p.c.p., in three years time, when it comes to taking a new p.c.p. deal or paying a lump sum. In America p.c.p. has already proved to be s dodgy financing model. When you factor in people with bad credit ratings buying cars with p.c.p., this could easily be the next bubble ready to burst.

I don't think car salesmen will cause a recession. Those garages may lose their arse but it won't be at the peoples expense.

Pussyhands

can someone explain what the whole "inverted yield curve" is people talk about?

What are treasuries and bonds and the difference in their terms and why is it important? And do you believe the point people make that when the yield curve inverts, a recession will result?

KevinCavan

Pussyhands wrote: »

I don't think car salesmen will cause a recession. Those garages may lose their arse but it won't be at the peoples expense.

You have real banks behind a lot of these deals, though admittedly some car manufacturers are acting as lenders. Mick the car salesman doesn’t give a ****. Real banks can go bust as we know.

Mumm_ra

KevinCavan wrote: »

Well pussyhands/fish fingers. My prediction is the next crash will be due to p.c.p. credit. I predict that car company’s are taking huge risks at present, in order to get fast money in. I reckon guaranteed values given on cars sold now, for three years time will prove to be totally wrong. I believe that the car industry is going through huge changes. I think diesel cars will become almost worthless, petrol cars even won’t hold their value. I think the p.c.p. financing thing is a complete load of crap. Everybody will be driving an electric/hybrid in 15 years time. Somebody will have to take a hit on the 2 litre diesel being sold today through p.c.p., in three years time, when it comes to taking a new p.c.p. deal or paying a lump sum. In America p.c.p. has already proved to be s dodgy financing model. When you factor in people with bad credit ratings buying cars with p.c.p., this could easily be the next bubble ready to burst.

The pcp model does feel wrong with people incurring depreciation loses quicker than gaining wealth. The loses will not be on a par with the property bubble previously experienced as hopefully people are not buying multiple cars

KevinCavan

Mumm_ra wrote: »

The pcp model does feel wrong with people incurring depreciation loses quicker than gaining wealth. The loses will not be on a par with the property bubble previously experienced as hopefully people are not buying multiple cars

What if cars aren’t worth anything near what they are expecting in three years? Take a big Diesel engine bought today, what is it’s realistic value in three years? Could it be worth half of its initial value in three years time? Who foots the bill?

benjamin d

In urban areas private car ownership will effectively cease within a short number of years. Tesla, Volvo, Toyota and many more are beginning to focus their efforts on carshare and someone will have to end up the bagholder when there's a bunch of worthless 3 year old cars floating around.

KevinCavan

benjamin d wrote: »

In urban areas private car ownership will effectively cease within a short number of years. Tesla, Volvo, Toyota and many more are beginning to focus their efforts on carshare and someone will have to end up the bagholder when there's a bunch of worthless 3 year old cars floating around.

Ya I think this p.c.p. is all about fast money, with no regard for actual future values. Anybody buying a 2 litre diesel new today is fcuked in my opinion.

Mumm_ra

KevinCavan wrote: »

What if cars aren’t worth anything near what they are expecting in three years? Take a big Diesel engine bought today, what is it’s realistic value in three years? Could it be worth half of its initial value in three years time? Who foots the bill?

Probably be worth half it's initial price anyways. If it's worth a quarter in two years, keeping it a few more years would see it right. The big difference is nobody buys a car as an investment so if you keep it and look after it - it should see you right. Anyway, anyone who buys a new car should know what they are in for - buy a two year old and let a company that needs to provide it as an incentive take the hit.

Deub

It is likely to be triggered by an unexpected event. There are many possibilties:
- Deutsche bank
- retail debt (many multinationals have to refinance their debt in the next 5 years)
- Italy because of the bad state of their books

Consequences of Brexit and US/China commercial war is a good environment to create a spark.

Big institutions say the bull market will continue at least until 2020. So I would say the next crisis will happen before the end if 2020.

fritzelly

Already heading for a recession (too many people pretending its not happening) - when the country becomes too expensive for the indigenous population to live in said country you know you're fecked.
When Brexit hits then the proverbial sh*t will really hit the fan regardless what Leo says but it's ok because Brussels has our back (when we're already on the ground)

Atlantic Dawn

KevinCavan wrote: »

Ya I think this p.c.p. is all about fast money, with no regard for actual future values. Anybody buying a 2 litre diesel new today is fcuked in my opinion.

The thing is though it only causes harm to fookwit lenders giving finance to people who couldn't afford it, I would assume we won't be bailing out such idiotic organisations but you never know how bent the government will be on it, perhaps they will put a €3k levy on a new number plates to bail out the German banks?

fritzelly

https://www.nationaldebtclocks.org/debtclock/ireland

Wipe away those tears now

Mumm_ra

fritzelly wrote: »

https://www.nationaldebtclocks.org/debtclock/ireland

Wipe away those tears now

Seen this in college - worth a look but would be more interested in net figures - every country (bar privately owed) is increasing but some must be increasing to be logical

traco

I'm going to say 30/36 months if things stay moving along as is, thats assuming the UK get some sort of Brexit deal sorted and Trump doesn't do something bonkers otherwise anything is likely to happen.

I think the next crash will be a combination of several things and that it will be worse than the last. PCP will be a factor but not the biggest. Property will be in the mix again as the current purchasing generation were in school or college 10 years ago and were somewhat insulated from it. They now have decent jobs, money and are buying the new houses and PCP cars. They are running on a money in / out model and thats fine while there are well paid jobs readily available.

I think the trigger will be corporate debt, the current market run will end and the debt will become unserviceable, profits drop, shares fall dramatically. Corporates will start to cut costs, people lose jobs and cant maintain their payments. It doesn't matter whether the mortgage was only 70/80% as if the job is gone then theres no way to pay and the chance of getting another job will be slim at best. BTW I think the open western economies will be hit the worst.

For Ireland - property will fall dramatically again, big corporates downsizing and pulling out will empty many full properties of transient workers and result in huge vacancies and the cycle starts again. Sadly our Government hasn't the wisdom to see beyond the next election and make some hard decisions now to try and insulate from a massive shock to the ecconomy again.

For reference - I am no economist and have just worked through two major crashes the Dotcom bust in 2000 and the Global domestic mortgage one 10 years ago. In light of that I really hope I'm wrong because I'm sick of this boom bust merry go round. Rereading that I sound like a miserable auld tosser - maybe I am???

realitykeeper

In Venezuela, cars have to queue for up to five hours to refuel despite the fact that they have the world`s largest oil reserves. This is a concern because if similar bad times were to beset Ireland, even things that are abundant here, like milk, these things could become inaccessible for most people.

jimmycrackcorm

Mumm_ra wrote:

The pcp model does feel wrong with people incurring depreciation loses quicker than gaining wealth. The loses will not be on a par with the property bubble previously experienced as hopefully people are not buying multiple cars

It depends on your viewpoint. If you regard PCP like renting then essentially you are only paying for the use of an asset and not as an investment.

KevinCavan wrote:

Anybody buying a 2 litre diesel new today is fcuked in my opinion.

Even for HP or a back loan, the period is only going to be no more than five years. So you'd have to be very pessimistic to be that concerned.

If the argument was about the switch to electric vehicles, then the time period is going to be longer.

lisasimpson

The next 12 to 18 months id say.The PVP is going to be the next negative equity issue. Thanks to all the UK imports they value of the cars has fallen and some people will be in for a nasty surprise when the term is up. Read somewhere a few month ago 1 UK bank has a massive exposure when ot comes to PCP financing.
Another "sector" thats going to hit by the next reccession will be these so called social media influencers gone will be the freebies some blag like the free cars , free dinners free makup and clothes that they then flog on line.
Ive heard a number of self employed people recently (mostly middle aged) say they are working long hrs 6 day week now making as much as they before tthe next reccession hits as to build up savings or trying to pay the mortgage off a quuick as possible

dhaughton99

San Francisco earthquake.

Geuze

Pussyhands wrote: »

can someone explain what the whole "inverted yield curve" is people talk about?

What are treasuries and bonds and the difference in their terms and why is it important? And do you believe the point people make that when the yield curve inverts, a recession will result?

http://econbrowser.com/archives/2018/07/worries-about-the-yield-curve

1st July 2018

Geuze

fritzelly wrote: »

https://www.nationaldebtclocks.org/debtclock/ireland

Wipe away those tears now

Note that the interest payments referred to are incorrect.

A quick check of CSO / NTMA data will confirm.

Geuze

Pussyhands wrote: »

can someone explain what the whole "inverted yield curve" is people talk about?

What are treasuries and bonds and the difference in their terms and why is it important? And do you believe the point people make that when the yield curve inverts, a recession will result?

http://econbrowser.com/archives/2018/07/the-ten-year-seven-year-treasury-spread

Figure 1: Ten year-three month Treasury spread (blue), and Ten year-two year Treasury spread (green), %. 7/17 observation as of noon, using on-the-run yields. NBER defined recession dates shaded gray. Orange denotes Trump administration. Source: FRED, Bloomberg, author’s calculations.

maldondo

KevinCavan wrote: »

Well pussyhands/fish fingers. My prediction is the next crash will be due to p.c.p. credit. I predict that car company’s are taking huge risks at present, in order to get fast money in. I reckon guaranteed values given on cars sold now, for three years time will prove to be totally wrong. I believe that the car industry is going through huge changes. I think diesel cars will become almost worthless, petrol cars even won’t hold their value. I think the p.c.p. financing thing is a complete load of crap. Everybody will be driving an electric/hybrid in 15 years time. Somebody will have to take a hit on the 2 litre diesel being sold today through p.c.p., in three years time, when it comes to taking a new p.c.p. deal or paying a lump sum. In America p.c.p. has already proved to be s dodgy financing model. When you factor in people with bad credit ratings buying cars with p.c.p., this could easily be the next bubble ready to burst.

It feels like there's a perfect storm brewing. Take Spirit Motors for example, massively financially leveraged due to aggressive expansion and very reliant on the p.c.p. model for revenue. If there's a dip in the economy the cars will be handed back = disaster!

greenfield21

Will globalisation survive another recession? We still haven't got over the last big one. If people want change now what will they be like then?