Two Recession Warning Signs Are Here

[ClaraD]

Correction: they don't want to work these jobs if they're going to be paid so little that they can barely get by.

kids have to be trained, training requires money, time and effort....apprentices don't get to demand larger wages than those who are experienced....and btw, our kids don't want these jobs.

 

[ClaraD]

OKAY, the purchases of residential housing is slowing....but....what is the other "Recession Warning Sign"?

The other warning is our interest rates.

 

[phattonez]

kids have to be trained, training requires money, time and effort....apprentices don't get to demand larger wages than those who are experienced....and btw, our kids don't want these jobs.

Of course they do. They just can't compete with 3rd world labor who will work for next to nothing and often get paid under the table to avoid taxes.

Sent from my HTC phone. Instaurare omnia in Christo.

 

[phattonez]

Please help me figure this out, because I just dont see that. Again I deal with clients, I see their actual gross sales and operating cost and then their payroll. Labor/payroll is USUALLY the largest expense can you edify that its NOT?

Not for agriculture.

Sent from my HTC phone. Instaurare omnia in Christo.

 

[AlbqOwl]

Please help me figure this out, because I just dont see that. Again I deal with clients, I see their actual gross sales and operating cost and then their payroll. Labor/payroll is USUALLY the largest expense can you edify that its NOT?

Certainly that is true in the service industries. Actually materials/equipment may loom larger in the construction and manufacturing industries. My small business, among other things, involved looking at a LOT of payroll as well as P&Ls in a lot of businesses from mom and pop operations to those with a hundred or more employees. And labor is significant.

In addition to base salaries paid to the workers, the employer also has mandatory:
--6.2% SUTA match on every paycheck
--Mandatory FUTA
--Mandatory SUTA
--Mandatory work comp premiums most of which are based on wages paid

Plus:
--Liability insurance that is frequently based on wages paid
--E&O insurance if business includes liability for employee error
--Cost to bond vulnerable employees
--Any contributions to employee's 401Ks or a company retirement plan
--Any healthcare provided employees
--Costs to comply with federal and state mandated worker safety regulations
--Miscellaneous incidental supplies such as toilet paper, paper towels, coffee & other amenities, etc.

And that doesn't include the cost of overhead--building(s), utilities, etc.--and cost of materials, property insurance, advertising, transportation, etc. etc. etc.

All good employers will pay as much as they can to get dependable, competent employees, and will provide whatever benefits they can afford.

I mothballed my business toward the end of the Obama administration due to a sluggish economy that especially impacted us. (Trying to decide if I want to reopen on a limited basis now that the economy is booming again--some of my clients have inquired if that might be possible.) But during that time I wasn't seeing much if any increase in those P&Ls in those businesses I audited, was seeing a lot of reductions in labor force, and wages were largely stagnant with a lot more part timers being used in place of the full time jobs that were previously mostly the norm.

But you are right that all, maybe most, employers cannot always pay more. It is just plain ignorant to suggest that any employer could pay a higher minimum wage or provide more benefits without any negative consequences being involved.

 

[Fishking]

https://money.cnn.com/2018/08/01/investing/markets-now-lindsey-piegza/index.html

The housing market is puttering out....our gooses are cooked.

One of the biggest concerns is the housing market," said Lindsey Piegza, chief economist for Stifel, on CNNMoney's "Markets Now" live show Wednesday. "It's throwing up a very large red flag and suggests maybe this 4% growth we saw in the second quarter is not sustainable."

This is nothing compared to what's going to happen with the over trillion dollar college loan bubble pops.

 

[bluesmoke]

And liberals everywhere are waiting with baited breath to cheer on an economic downturn

Conservatives were condemning Obama every step of the way while his economic plans brought us out of the Great Recession, the worst recession since the Great Depression, an economic upturn that Trump stepped in on and claimed as his own.

 

[Moderate Right]

https://money.cnn.com/2018/08/01/investing/markets-now-lindsey-piegza/index.html

The housing market is puttering out....our gooses are cooked.

One of the biggest concerns is the housing market," said Lindsey Piegza, chief economist for Stifel, on CNNMoney's "Markets Now" live show Wednesday. "It's throwing up a very large red flag and suggests maybe this 4% growth we saw in the second quarter is not sustainable."

We are long overdue for a recession. They come fairly regularly every so many years. Mosts economists were predicting one at the end of Obama's presidency but so far it has yet to materialize. Trump has held it off for now but you can only hold off the inevitable for so long. Of course when it hits, the left will blame it all on Trump.

 

[bluesmoke]

That is no excuse. Immigrant labor has forced labor wages down to where your are in a "low pay, hard work" scenario. Once you pay labor what it takes to attract it, the scales will follow into balance. And yes, being honest managing the nation's labor market is inflationary.

One can make a valid argument that we have inflation "stored" in our economy, waiting to be let free when we treat our labor force honestly and legally with no under market immigrants allowed to gut wages.

Honest labor markets create wage increases that are balanced by production efficiencies. (trailing result).

What evidence can you provide, including reference, to support your claims? If you have no evidence, your claims are unfounded.

 

[phattonez]

I see where you are coming from! That being said though I am confused LOL, You say Workers are being paid less now than they are historically? I am not sure that is correct in exact context right? I think inflation has eclipsed wages and that is "why" it seems like wages are less? That is my assumption that something is broken?

We had far more inflation in the 1970s, and still labor was paid a far higher share of revenue.

More so again the basic luxuries needs have changed from years ago.

1)Multiple Cars,
2)Multiples Electronics,
3)Multiples Services
4)Cellphones

These LUXURIES were no where near what they were 20 years ago. I saw luxuries as again I personally have and CAN walk away and give it all up if I have to. But MANY cannot and HAVE not I have seen them spiral out of control SO when you say something broke?

Here's the thing. The cost of all of those luxuries has come down considerably. Do you know what's gone up in price? Necessities. Housing, education, health care, etc., all are more expensive in real terms. That's a problem when wages are only barely keeping up with inflation, since it means that these necessities are now taking up much higher proportions of incomes.

1) Entitlements, College graduates expectations exceeding the actual work market? When all these graduates come out they expect $50,000 starting Salaries with benefits. These Jobs dont exist for 22 year olds with ZERO experience

Therefore education shouldn't be as expensive as it is.

2) American Life Style. Many Americans CANT live without a Cellphone. Hell 10 year old kids cant. An Iphone can be $600-$1000 and then the service $50-$100 a month minimum. A Cell phone alone can be a person's minimum Wage

$50 per month is only 2% of the monthly income of someone making $30,000 a year. This isn't breaking anyone.

3) Artificial inflation causes wages to be eclipsed, MY state, a Brand new semi luxury 1 bedroom condo, 450 sqft goes for about $450,000 WTF!!!! My old 1969 condo is currently about $290,000 and its only 515 sqft. Other states you can buy a 10,000 sqft lot with a 5 bedroom house for $100,000. MY sisters 4 Bedroom was $75,000

This is the real problem (though I'm not sure what you mean by "artificial" inflation). Unfortunately there is nothing that poor workers can do about this. They have to have housing. They're stuck.

3a) Kids buy stuff on credit. How many kids (19-23 year olds) Come to me their first purchase car, BMW 328 or Lexus IS. Monthly payment for them is $500-$700 a month (zero credit) Their insurance is $250 a month. JEEBUS their car ALONE is $800 a month $9,600 a year after Taxes, meaning they need $11,250 gross in wages minimum to be able to JUST pay for the car.

Actually many millenials are delaying car buying.

Millennials and car ownership? It's complicated

So broken? American Society and Peoples NEEDS vs Wants.... Credit and Financial irresponsibility.

That's the thing. For their biggest expense, millenials aren't left with a choice. The cheapest housing available to many of them will take up 50% of their income. That's not irresponsibility. That's poor economic conditions.

 

[Top Cat]

And liberals everywhere are waiting with baited breath to cheer on an economic downturn

Bull ****ing ****.

 

[Exactice]

We had far more inflation in the 1970s, and still labor was paid a far higher share of revenue.


...........

Thanks for your edification! Actually now I see where you are coming from. My apologies as some of my opinions may be misguided or expressed in error. But your retorts are sound. With that I need to adjust to agree.

1) Education, I agree, But this also goes to health care too. Why does a hospital Charge $300 for an xRay why cant they charge $5? I just went in recently 2 weeks ago for a potentially fractured finger. Took literally 15 seconds to do. My co-pay was $10 but the Xray and the Doctor review was a total of $372. Who and what sets these cost. Reality as well.... in regards to Education. Im a High-school Graduate, 3 days after graduation I was in basic training. Did 10 years got out and hit the business world, NO college NO relevant experience. started in the basement for 6 months shredding paper. Mind you I was a contractor for the military getting paid 6 figures due to my background, when I got out? $6.75 was the minimum wage, I went from $100,000 to $14,040 a year $80,000 decrease in income To start over. Did I complain? Nope I just shut my mouth and worked. I got some designations got qualified sucked it up for 2 years and earned a decent wage about $35,000 moved companies after 4 years, got a slight raise, and 2 years letter went completely independent. The first Months 1099 was $297. I did not know how I was going to survive, But I shed EVERYTHING, lived purely in my means. As of 2018, I have a family, 2 cars, a Condo and a New home being built. Im doing just fine with NO COLLEGE. College is essential I would say as common place... But the ability and the humility to WORK regardless is even more Powerful.

2) $50 per month especially when they are on a finance for the phone of $34 per month meaning about $85 per month JUST for the phone. that IS significant. I go into section8 Housing and what do I see? BMWs, Lexus's, Escalades on 24" etc. Why? Because they are getting subsidies not based on their expenses but income. So they dont have to pay for house, nor food, so their pure income can go to luxuries.

3) Housing and working. While I personally agree housing actually the greatest on going expense that I live with, BUT per a prior post I explained my thought, When I bought my condo years ago, I was single on single income qualified for $400,000 based on DTI. Which WAS STUPID. I knew I could only realistically afford MAX $250,000. The banks and real estate people were like you will be fine, go look for something bigger... I said NO its not sustainable. THIS IS why many people are in debt. Also realistically, location and wants..... sometimes the state you live in or the actual location is NOT what you want. If there is a will there is a way. I was a homeowner at 25 with a $837 mortgage..... that is Livable and quantifiable. My circle of friends NOT many were able to own a home till their early 30's and that was DUAL income Husband and wife.

4) Milennials, My apology while I dont know fact I am spewing my experience. Sure now with Ride-share systems and the Health trend sure, but there are STILL many "kids" getting BMWs and Mercedes Before their Parents. ignorant choice and victim of current society beliefs

5) Millenials aren left with a choice. I disagree... While I am NOT a Millenial I am not old either Im 36. I am doing just fine with NO education and living within my means.... I budge in reverse WHAT I absolutely need anything after that is gravy. If I cant afford it. I wont credit it. Or if I can build it or obtain it on my own accord I will do it. (My new home I building. is falling out of budget I sucked it up and now ever weekend I spend installing the flooring myself. I have never done it before, But what the heck it saves me money and I am able body and willing to sweat.



So LOTS of excuses to go around.... but where there is a will there is a way.

as far as poor economic conditions... WE created it..... We did our OWN housing bubble, Greedy businesses. Iphone is a WANT not a need. internet access is a Want not a need its a matter of convenience.

 

[Top Cat]

No kidding.

You voted for the asshole and now you reap what you sow. All the liberals I know are deeply concerned and not a single one if them wants the economy ylto fail.

That is pure unadulterated Hannity type horse****.

 

[Peter King]

https://money.cnn.com/2018/08/01/investing/markets-now-lindsey-piegza/index.html

The housing market is puttering out....our gooses are cooked.

One of the biggest concerns is the housing market," said Lindsey Piegza, chief economist for Stifel, on CNNMoney's "Markets Now" live show Wednesday. "It's throwing up a very large red flag and suggests maybe this 4% growth we saw in the second quarter is not sustainable."

the wages supposedly are not going up much either, so that will not boost the economy. As soon as businesses have enriched themselves enough they will start scrimping and saving and they will not invest if the US public is not going to start spending more.

 

[Exactice]

Not for agriculture.

Sent from my HTC phone. Instaurare omnia in Christo.

I cant say for sure..... but I work with 2 Nurseries.

1) they have Acres of land that requires maintance
2) they have a staff of employees that care and a warehousing team, finally a family staff member that does the numbers
3) Sales and business over head for their products


In relation to the above I get what you mean that lets face it the AG land in its entirety is likely more costly than the 5 employees in its basic form. BUT the Sales vs expenses, there is NO additional money that can be paid to the employees unless 2 things happen.

1) Increase productivity that increase greater sales
2) Increase pricing for product sold.


Cutting back on any expense is not possible due to water and soil and feed cost. Maintenance equipment is all at skimmed levels, WHERE will the business owner Come up with $4 per hour more per employee to go from $8-$9 to $12-$15

Its just not going to happen.

 

[phattonez]

Thanks for your edification! Actually now I see where you are coming from. My apologies as some of my opinions may be misguided or expressed in error. But your retorts are sound. With that I need to adjust to agree in more port.

Thank you. I'm not a socialist, I believe in property rights. I am just complaining about policy that I think should be focused more on poor workers than on making the super rich even richer.

[quoteIm doing just fine with NO COLLEGE. College is essential I would say as common place... But the ability and the humility to WORK regardless is even more Powerful.[/quote]

What burns me is that people who made the mistake of getting student loan debt are stuck with it for life. There's no chance of bankruptcy for them. I think it's only a matter of time until that changes. This is simply affecting too many people.

2) $50 per month especially when they are on a finance for the phone of $34 per month meaning about $85 per month JUST for the phone. that IS significant. I go into section8 Housing and what do I see? BMWs, Lexus's, Escalades on 24" etc. Why? Because they are getting subsidies not based on their expenses but income. So they dont have to pay for house, nor food, so their pure income can go to luxuries.

I understand that there are irresponsible people who take advantage of the benefits that they get to live beyond their means. I detest that, and I think that our welfare programs ought to hang these kinds of people out to dry. I'm not defending these people. I'm defending those who make little and are stuck in their situation.

3) Housing and working. While I personally agree housing actually the greatest on going expense that I live with, BUT per a prior post I explained my thought, When I bought my condo years ago, I was single on single income qualified for $400,000 based on DTI. Which WAS STUPID. I knew I could only realistically afford MAX $250,000. The banks and real estate people were like you will be fine, go look for something bigger... I said NO its not sustainable. THIS IS why many people are in debt. Also realistically, location and wants..... sometimes the state you live in or the actual location is NOT what you want. If there is a will there is a way. I was a homeowner at 25 with a $837 mortgage..... that is Livable and quantifiable. My circle of friends NOT many were able to own a home till their early 30's and that was DUAL income Husband and wife.

I would be fine with many of these people not being able to afford mortgages since current prices are so high. What I'm not fine with is people not being able to get a mortgage with a payment far below their current rents. The poor are being milked.

4) Milennials, My apology while I dont know fact I am spewing my experience. Sure now with Ride-share systems and the Health trend sure, but there are STILL many "kids" getting BMWs and Mercedes Before their Parents. ignorant choice and victim of current society beliefs

I have no sympathy for those who are living beyond their means and spending money on luxuries. None at all. I have sympathy for those who are falling behind while not buying new cars, not living in opulence, and cooking at home.

5) Millenials aren left with a choice. I disagree... While I am NOT a Millenial I am not old either Im 36. I am doing just fine with NO education and living within my means.... I budge in reverse WHAT I absolutely need anything after that is gravy. If I cant afford it. I wont credit it. Or if I can build it or obtain it on my own accord I will do it. (My new home I building. is falling out of budget I sucked it up and now ever weekend I spend installing the flooring myself. I have never done it before, But what the heck it saves me money and I am able body and willing to sweat.

What choice does someone when the cheapest rent that they can find is 50% of their income? Finding new work isn't a viable option as there's still a ton of slack in the labor market (see activity rates). Moving isn't a viable option, since the places with cheap housing don't have as many jobs. Sure, on a case by case basis you can help some people, but these aren't solutions for a large masses of poor.

as far as poor economic conditions... WE created it..... We did our OWN housing bubble, Greedy businesses. Iphone is a WANT not a need. internet access is a Want not a need its a matter of convenience.

Iphones and internet access are costing 5% of monthly income, tops. These aren't the problem. It's the cost of living being 50% of income that's the problem.

 

[iguanaman]

We almost had a depression last time.

We are very likely to have a depression this time.

That's what Trump is shooting for. A depression would pave the way for a dictatorship. Which is the only thing that can save his neck.

 

[phattonez]

I cant say for sure..... but I work with 2 Nurseries.

1) they have Acres of land that requires maintance
2) they have a staff of employees that care and a warehousing team, finally a family staff member that does the numbers
3) Sales and business over head for their products


In relation to the above I get what you mean that lets face it the AG land in its entirety is likely more costly than the 5 employees in its basic form. BUT the Sales vs expenses, there is NO additional money that can be paid to the employees unless 2 things happen.

1) Increase productivity that increase greater sales
2) Increase pricing for product sold.


Cutting back on any expense is not possible due to water and soil and feed cost. Maintenance equipment is all at skimmed levels, WHERE will the business owner Come up with $4 per hour more per employee to go from $8-$9 to $12-$15

Its just not going to happen.

I have a solution:

So why don't farmers get these? Because it's cheaper to pay Jose $5 an hour under the table.

 

[Exactice]

I have a solution:

So why don't farmers get these? Because it's cheaper to pay Jose $5 an hour under the table.

ACTUALLY There is an answer.

That machine Upfront cost $100,000 to $200,000. NO operating business has that kind of cash. they would then need to take out a loan or use credit to get it. But the business is already sitting on credit or potential other debts disqualifying them for more loans. Secondly the interest rates on Machines like that is NOT the housing market its not 3.5-4% Those machines are closer to 7-9% Thats significant for a $100k to $200k machine.

So up front is it cheaper to "pay Jose" $5 under the table. Well yeah it is.... thats what the business has to do to survive.

 

[Exactice]

Thank you.

Iphones and internet access are costing 5% of monthly income, tops. These aren't the problem. It's the cost of living being 50% of income that's the problem.

Thanks for your respectful debate and not getting personal or excited like some others! Your points are all good and I think we are coming to the middle of highlighting the WASTE and cause of the breakdown and bubble.

Government subsidies are wasted like mentioned through Welfare programs and such WE should revamp it. If they have a car beyond their means.... that should be counted as Gross income and affect their ability to qualify for subsidies programs.

As for Iphone and internet access...Actually you are falling into my "trap" LOL sorry just kidding, BUT my point... its 5% here. then add in the Gucci bag, thats 5% there. now add in the D&G sunglasses its 5%. The little things SURELY add up. and then GUESS WHAT when there is a REAL need like a tire blow out and a tire COST $150 to replace in one crack they DONT have it. Or when a refrigerator breaks or a water leak that cause damage in the kitchen. Just the restoration company can charge $1000 for an emergency call. I ACTUALLY Accounted for "Oh !@#$" moments in my budge. LOTS of people Dont.


My point while the luxury is 5% what other 1%, 2 %, 3% luxuries are being spent in TOTAL.... likely 25%+..... seriously movie tickets, Xbox subscription, Amazon Prime, Hulu, Netflix.... This little itty bitty things ADD up to the ACTUAL wage and we always forget, Gross is MUCH different from Net...... I know Im 1099 and when I get my check I have to be discipline to take 20% of that check out immediately and NOT look at the number.

 

[bluesmoke]

Good to see everybody working together. Inflation up (at an accelerating rate). Interest rates up, and expect 2 more Fed hikes this year. Housing peaking (we know what happens after that). Two-year bond yield on track to go higher than the 10-year bond. Stocks overvalued at 148.5% total market cap., returning a likely -2.1% ending next year (but that’s with +1.74% of that in dividends, which makes up 40% of market returns, so stock prices are returning a -5.0%), so you better look for stocks with high dividends and a P/E below 24 (Have I got a deal for you. Berkshire Hathaway at half the P/E and only $301,390 a share. I’m rifling through my sofa for change right now). Don’t worry, though. People rarely buy anything based on logic without an overwhelming dose of emotion. Stocks could go up! Reduced revenues from the tax cuts and increasing debt service from rising rates. Trade wars we’ll win, just losing a limb (you oughta see the other guy). People dying faster than they can be replaced with more retiring than coming into the workforce while reducing immigration of people who have a higher fertility rate and higher percentage of working-age people. No short or long-term labor force supply problem there. And I’m already hearing from folks that there is no reason to believe we’re going to have a Great Depression! “Honey, I know some of your friends have been talking about this guy we’ve got coming over for dinner tonight. But, there is no reason to believe he’s going to murder you, me and Clara and Duane.” Then you immediately turn around and walk away. What, Me Worry?

 

[phattonez]

ACTUALLY There is an answer.

That machine Upfront cost $100,000 to $200,000. NO operating business has that kind of cash. they would then need to take out a loan or use credit to get it. But the business is already sitting on credit or potential other debts disqualifying them for more loans. Secondly the interest rates on Machines like that is NOT the housing market its not 3.5-4% Those machines are closer to 7-9% Thats significant for a $100k to $200k machine.

So up front is it cheaper to "pay Jose" $5 under the table. Well yeah it is.... thats what the business has to do to survive.

This is what the business has to do because all of his competitors are doing. If he buys the machine, yes, he becomes more productive, but the payments are more expensive than the foreign labor. What this amounts to is yet another subsidy for agriculture. We already give them direct subsidies, but on top of that they also get this cheap deal on labor. Does it help Americans? Nope. We pay what amounts to less than $100 per year for agricultural labor, so it's not as if we're getting massively cheaper prices. So American laborers are hurt, American consumers are indifferent. Who benefits? Shareholders of our largest agricultural companies like Monsanto. Once again, we sacrifice American workers to the super rich.

 

[phattonez]

Thanks for your respectful debate and not getting personal or excited like some others! Your points are all good and I think we are coming to the middle of highlighting the WASTE and cause of the breakdown and bubble.

It's because we actually don't disagree as much as you might think. I think that my position is just not the typical crazy socialism or neoliberal defense that you see on this site. Economic nationalism is a position that needs to be revived in this country.

Government subsidies are wasted like mentioned through Welfare programs and such WE should revamp it. If they have a car beyond their means.... that should be counted as Gross income and affect their ability to qualify for subsidies programs.

Agreed. Assets like this are supposed to count against cash assistance, but there seems to be a massive amount of abuse in this program. If we're going to do it, I'd rather see it done by the IRS, perhaps an expanded EITC. I also like the idea of giving people healthy food rather than food vouchers for whatever they want. These programs shouldn't be contributing to vices.

As for Iphone and internet access...Actually you are falling into my "trap" LOL sorry just kidding, BUT my point... its 5% here. then add in the Gucci bag, thats 5% there. now add in the D&G sunglasses its 5%. The little things SURELY add up. and then GUESS WHAT when there is a REAL need like a tire blow out and a tire COST $150 to replace in one crack they DONT have it. Or when a refrigerator breaks or a water leak that cause damage in the kitchen. Just the restoration company can charge $1000 for an emergency call. I ACTUALLY Accounted for "Oh !@#$" moments in my budge. LOTS of people Dont.

My point while the luxury is 5% what other 1%, 2 %, 3% luxuries are being spent in TOTAL.... likely 25%+..... seriously movie tickets, Xbox subscription, Amazon Prime, Hulu, Netflix.... This little itty bitty things ADD up to the ACTUAL wage and we always forget, Gross is MUCH different from Net...... I know Im 1099 and when I get my check I have to be discipline to take 20% of that check out immediately and NOT look at the number.

I'd be much more sympathetic to this if the poor were paying closer to 30% of their income on housing rather than 50%. You can get ahead when housing is only 30%. You're pretty much stuck when it's 50%.

 

[Hawkeye10]

That's what Trump is shooting for. A depression would pave the way for a dictatorship. Which is the only thing that can save his neck.

That is some top notch imagination that you have.

And your faith in America is far worse than mine.

 

[dobieg]

You voted for the asshole and now you reap what you sow. All the liberals I know are deeply concerned and not a single one if them wants the economy ylto fail.

That is pure unadulterated Hannity type horse****.

Of course liberals want the economy to fail so it will kneecap Trump. Your side is that bats**** crazy.


Go ahead and deny it but we know the reality.