US economy thread (7 Viewers)

[The Z Machine]

Also

I guess it depends on industry. I’m a federal civilian, so we don’t live the cycles like y’all do. But one of the things I do is provide advice to those leaving us and going to work for DoD contractors. Our numbers have increased significantly over the past year and the offers they’ve been getting are ever increasing. So we sure haven’t seen any drawdown, but that might very well be a unique situation and defense tends to not be impacted (immediately anyway).

Also, the war in Ukraine is likely good for their business.

 

[-OZ-]

Also

I guess it depends on industry. I’m a federal civilian, so we don’t live the cycles like y’all do. But one of the things I do is provide advice to those leaving us and going to work for DoD contractors. Our numbers have increased significantly over the past year and the offers they’ve been getting are ever increasing. So we sure haven’t seen any drawdown, but that might very well be a unique situation and defense tends to not be impacted (immediately anyway).

Also, the war in Ukraine is likely good for their business.

Yes. The timing of that war is (sadly) somewhat fortunate for the industry after the pull out from Afghanistan.

 

[Sand]

Also

I guess it depends on industry. I’m a federal civilian, so we don’t live the cycles like y’all do. But one of the things I do is provide advice to those leaving us and going to work for DoD contractors. Our numbers have increased significantly over the past year and the offers they’ve been getting are ever increasing. So we sure haven’t seen any drawdown, but that might very well be a unique situation and defense tends to not be impacted (immediately anyway).

Also, the war in Ukraine is likely good for their business.

I work in defense and while the Ukraine situation isn't a huge driver for us the things that Russia and China are launching are. We can't come close to hiring the folks that we need. The parts of the budget that pertain to us are going up exponentially.

 

[Socrates11]

I'm not seeing any discussion here with regards to the BRICS nations and the ongoing attempt to decouple the US dollar as the currency of choice in international transactions, primarily in petroleum. Concerns on that from some economists paint an apocalyptic picture which will dramatically alter life as we know it. Other economists dismiss concerns saying the US dollar is too entrenched, with too many nations dependent on it's value, for any real downgrade to occur. I'm not smart enough to know who might be right. I do know that history teaches us that people rarely see bad times coming until they've already arrived.

 

[The Z Machine]

I'm not seeing any discussion here with regards to the BRICS nations and the ongoing attempt to decouple the US dollar as the currency of choice in international transactions, primarily in petroleum. Concerns on that from some economists paint an apocalyptic picture which will dramatically alter life as we know it. Other economists dismiss concerns saying the US dollar is too entrenched, with too many nations dependent on it's value, for any real downgrade to occur. I'm not smart enough to know who might be right. I do know that history teaches us that people rarely see bad times coming until they've already arrived.

The question I have is what currency are they going to turn to? RMB? Ruble? Why would any country willingly do that?

 

[Cowboysfan8]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

 

[Keerock]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I think the historic lows are because people are "employed" by uber and wallmart part time

The "historically low unemployment rate" is really just a politically charged statistic. Here is a decent read on what the numbers really are/mean. Also... I suspect that the rising inflation/economic issues that have already prompted many layoffs will continue and even the "basic" unemployment statistic will begin to rise.

 

[-OZ-]

Also

I guess it depends on industry. I’m a federal civilian, so we don’t live the cycles like y’all do. But one of the things I do is provide advice to those leaving us and going to work for DoD contractors. Our numbers have increased significantly over the past year and the offers they’ve been getting are ever increasing. So we sure haven’t seen any drawdown, but that might very well be a unique situation and defense tends to not be impacted (immediately anyway).

Also, the war in Ukraine is likely good for their business.

I work in defense and while the Ukraine situation isn't a huge driver for us the things that Russia and China are launching are. We can't come close to hiring the folks that we need. The parts of the budget that pertain to us are going up exponentially.

Yeah, we’re heavy on things that fly and things that shoot at things that fly. Engineers and people with the right scientific background will probably not have problems finding jobs.

 

[-OZ-]

I'm not seeing any discussion here with regards to the BRICS nations and the ongoing attempt to decouple the US dollar as the currency of choice in international transactions, primarily in petroleum. Concerns on that from some economists paint an apocalyptic picture which will dramatically alter life as we know it. Other economists dismiss concerns saying the US dollar is too entrenched, with too many nations dependent on it's value, for any real downgrade to occur. I'm not smart enough to know who might be right. I do know that history teaches us that people rarely see bad times coming until they've already arrived.

The question I have is what currency are they going to turn to? RMB? Ruble? Why would any country willingly do that?

From what I understand, it’s not that they’ll go to another currency. Some expect them to use a blend of currencies.
I have no idea if that would actually be effective.

 

[ChiefD]

All I know is here in the HVAC business we are getting 5-8% price increases from our distributors 3-4 time PER YEAR for the last 3 years. So all of our filters, parts, systems...everything is way high right now on costs. And that doesn't include fuel, insurance, office costs, etc.

We've tried to raise prices as we can but we've had some pushback from customers. And people are definitely waiting to install furnace and AC's. It's getting rough out here. We are lucky we are in an industry where people have to have our services, but the high costs are certainly digging into profitability.

And not as many people are buying maintenance plans, which is the backbone of a lot of companies like ours since they are stable income.

 

[jvdesigns2002]

I'm not seeing any discussion here with regards to the BRICS nations and the ongoing attempt to decouple the US dollar as the currency of choice in international transactions, primarily in petroleum. Concerns on that from some economists paint an apocalyptic picture which will dramatically alter life as we know it. Other economists dismiss concerns saying the US dollar is too entrenched, with too many nations dependent on it's value, for any real downgrade to occur. I'm not smart enough to know who might be right. I do know that history teaches us that people rarely see bad times coming until they've already arrived.

I don’t see that happening anytime soon—at least not in our lifetimes. Nearly 60% of the currency held by central banks globally is US Dollars. Total global sovereign debt is sitting at around $300 trillion USD. The dollar is too entrenched globally for it to be replaced and consequently collapse. If the dollar were to collapse and to lose reserve status—the BRICS nations would also massively suffer—especially China. I’m certainly not implying that the dollar is immune to fluctuations and some volatility—but there isn’t any other currency that has been historically more stable and in demand. Brazil (one of the BRIC) nations has a currency that has been historically untrustworthy. The Yuan has been one of the most manipulated currencies in modern times in regards to value...etc. Even if the belief in the dollar were diminish a bit—-its trustworthiness compared to the other major currencies on the globe is unmatched.

With that said—I do think we are entering some hard times economically. I know some members here have posted that their fields of work are booming—but that doesn’t really mean much. Recessions don’t necessarily hit (or need to hit) every sector equally. There inevitably will be some sectors and businesses that boom even in recessionary times. I personally feel like the economy started slowing and stalling many months ago. A lot of the data that Wall Street releases is lagging (this is part of the reason why the fed was slow to fully realize how bad inflation was before they shifted their policy). I believe that there is a lot of financial engineering that skews the data in order to make things not look as bad as they really are. Sure—some sectors are booming and can’t find enough people to hire. For each of those—I assure you there is a sector that is struggling mightily.

 

[timschochet]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

 

[Mitchie]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

Have you ever been to a large city?

 

[Leeroy Jenkins]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

It is coming and it is going to have a significant impact in the financial markets and real estate values. Especially in urban areas. Cities are going to start looking different -- everything cannot be converted into luxury condos and apartments.

 

[FairWarning]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

It may be a while for your sector to come back also.

 

[Manster]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Not enough employees to sling 7 layers for 4th meal......sign of the apocalypse

 

[Jayrod]

With that said—I do think we are entering some hard times economically. I know some members here have posted that their fields of work are booming—but that doesn’t really mean much. Recessions don’t necessarily hit (or need to hit) every sector equally. There inevitably will be some sectors and businesses that boom even in recessionary times. I personally feel like the economy started slowing and stalling many months ago. A lot of the data that Wall Street releases is lagging (this is part of the reason why the fed was slow to fully realize how bad inflation was before they shifted their policy). I believe that there is a lot of financial engineering that skews the data in order to make things not look as bad as they really are. Sure—some sectors are booming and can’t find enough people to hire. For each of those—I assure you there is a sector that is struggling mightily.

The bolded is the main reason I started this discussion. Seeing things happen in real time instead of a 1-3 months after the fact can help some people get ahead of the issues. We've had a lot of problems economically as a country over the past 2-3 years, but I feel like things are coming to a head right now in a new and bigger way.

 

[jamny]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

Businesses should be trying to convert excess space to living quarters to offer to employees.

 

[zamboni]

I guess it depends on industry.

For sure - not every industry is struggling, but most are due to slowing economic activity that is being exacerbated by rampant inflation on consumers. And as someone posted above, the end of the pause on student loan payments is going to hurt consumers even more.

 

[Keerock]

With that said—I do think we are entering some hard times economically. I know some members here have posted that their fields of work are booming—but that doesn’t really mean much. Recessions don’t necessarily hit (or need to hit) every sector equally. There inevitably will be some sectors and businesses that boom even in recessionary times. I personally feel like the economy started slowing and stalling many months ago. A lot of the data that Wall Street releases is lagging (this is part of the reason why the fed was slow to fully realize how bad inflation was before they shifted their policy). I believe that there is a lot of financial engineering that skews the data in order to make things not look as bad as they really are. Sure—some sectors are booming and can’t find enough people to hire. For each of those—I assure you there is a sector that is struggling mightily.

The bolded is the main reason I started this discussion. Seeing things happen in real time instead of a 1-3 months after the fact can help some people get ahead of the issues. We've had a lot of problems economically as a country over the past 2-3 years, but I feel like things are coming to a head right now in a new and bigger way.

Yeah... and it's not just Wall Street. Our government (regardless of party) will finger point and/or hide actual information to further their agenda instead of doing what is needed to address the issues.

 

[Stoneworker]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

Businesses should be trying to convert excess space to living quarters to offer to employees.

This sounds good in theory but is mostly a pipe dream from a practical standpoint, except in isolated instances.

Zoning issues, mismatched floor plates, building shape and overall design, centralized HVAC systems, etc, etc. A recent study of the Denver market showed only 4 out of 208 were even viable from a vacancy and physical standpoint.

Then add the cost of the conversion and the economic fact that office rents are generally higher than apartment rents on a psf basis. The resulting apartment rents would have to skyrocket to make sense for a developer to undertake the conversion.

 

[timschochet]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

Businesses should be trying to convert excess space to living quarters to offer to employees.

This sounds good in theory but is mostly a pipe dream from a practical standpoint, except in isolated instances.

Zoning issues, mismatched floor plates, building shape and overall design, centralized HVAC systems, etc, etc. A recent study of the Denver market showed only 4 out of 208 were even viable from a vacancy and physical standpoint.

Then add the cost of the conversion and the economic fact that office rents are generally higher than apartment rents on a psf basis. The resulting apartment rents would have to skyrocket to make sense for a developer to undertake the conversion.

Correct and in particular the zoning issues- look for existing apartment house owners to fight to death before they allow any zoning changes that would create cheap competition.

 

[timschochet]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

It may be a while for your sector to come back also.

I’m mostly in retail, though we dabble in office which is why I’m getting a bad feeling about it.

As far as retail goes, spaces with large square footages are having trouble, but that’s been going on for years. Most of the businesses that were hurt or shut down by Covid are up and running again- the exception are some of the chain restaurants.

 

[Cowboysfan8]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

Have you ever been to a large city?

No, what’s it like ?

 

[Mitchie]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

Have you ever been to a large city?

No, what’s it like ?

Like Boyz in the Hood, just like you're imagining it.

 

[Cowboysfan8]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

Have you ever been to a large city?

No, what’s it like ?

Like Boyz in the Hood, just like you're imagining it.

Sounds wonderful!

 

[General Malaise]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

I've heard downtown San Francisco is a ghost town in the financial district. Just floors and floors of empty offices.

Downtown Portland is in the same predicament. What the city's onerous tax burdens didn't drive out to another county the homeless population and crime did. I think Covid played a part too, but city leadership in Multhomah County has forced business owners out.

 

[Keerock]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

I've heard downtown San Francisco is a ghost town in the financial district. Just floors and floors of empty offices.

Downtown Portland is in the same predicament. What the city's onerous tax burdens didn't drive out to another county the homeless population and crime did. I think Covid played a part too, but city leadership in Multhomah County has forced business owners out.

Oddly enough (and gladly), Detroit is doing pretty well. A decent amount of businesses and people are moving into downtown. Now don't get me wrong, there are still areas I wouldn't send my worst enemies to, but all-in-all, it seems the city and most of SE Michigan is doing "OK"

 

[massraider]

As far as retail goes, spaces with large square footages are having trouble, but that’s been going on for years. Most of the businesses that were hurt or shut down by Covid are up and running again- the exception are some of the chain restaurants

I wouldn't want to be long on these chain restaurants that rely on middle class and lower middle class going out and spending disposable income.

 

[BeTheMatch]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

I've heard downtown San Francisco is a ghost town in the financial district. Just floors and floors of empty offices.

Downtown Portland is in the same predicament. What the city's onerous tax burdens didn't drive out to another county the homeless population and crime did. I think Covid played a part too, but city leadership in Multhomah County has forced business owners out.

Oddly enough (and gladly), Detroit is doing pretty well. A decent amount of businesses and people are moving into downtown. Now don't get me wrong, there are still areas I wouldn't send my worst enemies to, but all-in-all, it seems the city and most of SE Michigan is doing "OK"

A buddy of mine recently went to Detroit on business and said it was wonderful.

 

[IvanKaramazov]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

The standard "econ classroom" argument for this is that businesses absolutely hate cutting wages. Most firms would literally fire people before imposing across-the-board wage cuts. It follows that firms would often welcome spurts of inflation, because it allows them to reduce real wages without cutting nominal wages. They can always choose to award COLAs if they want, but it makes sense that they would want to preserve the option not to do so.

 

[beer 30]

What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Did they raise? I've seen data that showed wages stayed fairly flat over that time while profits skyrocketed. Might be BS and don't ask me to produce it because I don't have time but wages don't seem to have kept up. Last week my company came out and said hourly is getting 5% and salary are getting 3% for the year. COL is around 6% so thanks? Better than a sharp stick in the eye but the company has records for EBITA, revenue and profit for the last 7 years (excluding 2020). How's about a little something for the trouble, eh?

The timing of that war is (sadly) somewhat fortunate for the industry after the pull out from Afghanistan.

Since Eisenhower's speech, the military industrial complex has invented ways to print money. "Timing" is an interesting word to use. I would say they were just the next scheduled confrontation to keep it chugging along. My guess is once this cow is milked, and this is all assuming we don't mutually assured ourselves, the next conflict will be somewhere in Africa, probably the Congo. I don't think China does the Taiwan thing, too much to lose for everyone.

 

[STEADYMOBBIN 22]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

Do you live in a large city? If so they’re probably tired of being robbed

Have you ever been to a large city?

No, what’s it like ?

Like Boyz in the Hood, just like you're imagining it.

Sound like you grew up in the opposite side of town so how would you know?

 

[dickey moe]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

People have been talking about this for a few years now and I think the era of cheap money delayed the inevitable. As opposed to residential, where there is a huge supply problem.

 

[JAA]

I'm not seeing any discussion here with regards to the BRICS nations and the ongoing attempt to decouple the US dollar as the currency of choice in international transactions, primarily in petroleum. Concerns on that from some economists paint an apocalyptic picture which will dramatically alter life as we know it. Other economists dismiss concerns saying the US dollar is too entrenched, with too many nations dependent on it's value, for any real downgrade to occur. I'm not smart enough to know who might be right. I do know that history teaches us that people rarely see bad times coming until they've already arrived.

I have a longer post I want to write, but this specifically like to make note of. Ive been following along also, and while i believe this type of successful decoupling of the US dollar would be the start of the downfall of the US. However, I say "successful" as I dont think the world is ready for it yet. I mean, look at what happened with the Euro. How long did that last? Look at all of these European countries and how unstable their small-ish economies are. I think most of them are perfectly satisfied with their 6 week per year Holiday's and 30% tax rates. I dont think China and Russia will be able to push the Middle East far enough. My reasoning for this is Russia and China cant offer the middle east the next great F-?? fighter jet or missle system. And if they dont play by our rules they wont get them. And then we get to the "aircraft carrier rule" discussed in the forum not-to-be-named which is basically the who has the aircraft carriers rule.

 

[JAA]

So my comments are pure speculatory, but i've been thinking about this topic for a while as clearly the economy is being hit, though it doesn't feel like everyone is being hit in the same way.

My assumptions is our 'system' is designed to ensure:

• the top .01% stay rich
• The top 10% can become the top 1%
• There is no simple way for the top 1% to become the top .01%
• Its easy for the top 1% and below to move down quickly

What I am trying to convey in the above is that there are really three wealth classifications. Uber elite, top 1%, and have nots. I realize this is a super broad stroke, but when I say 'have nots', I don't mean folks in the street. I mean purely 'upward mobility', in that the ability to grow upward.

Example A: Teacher in an amazing school district with a reasonable cost of living and making salary of ~$100k. They are a have not. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a beautiful house, maybe a summer home, but overall they will not have much means to get to the 1% and above.

Example B: Working at Lowes/Home Depot in a middle role in a good school district with a reasonable cost of living and making $60-70k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a modest home and most likely won't have a summer home though maybe a small boat they bring to the lake, but overall they will not have much means to get to the 1% and above.

Example C: Working as an Auto Dismantler as a primary job in a low level role and a side hustle as a landscaper, living in a below average school district with a below average cost of living and making $40-60k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a below average home, most likely won't have a summer home or a boat they bring to the lake, but maybe a small camper they take to campgrounds. Overall they will not have much means to get to the 1% and above.

The above examples are 'have nots'. They have no upward mobility. If in either of the above examples both family partners work full time, maybe there is a greater chance to leap into the 1% but it's unlikely they will stay as inflation/cost of living, will typically outpace their COLAs. So in my opinion, just above the poverty line to just below the 1% will basically have the same life except less vacations, older cars, not as good school districts and less amazon deliveries. These have nots are expected to pay into the system to ensure a foundation for the .01%.

The 1% are just the jobs which make the .01% richer. Typically this is tech and finance. These are the roles which 'make the rich richer'. These .01% uber elites want more and more and more and more. They get into venture capital investing, they get into the stock market, they get into these high money situations and expect zero risk. They expect zero risk because they help put people/process into power which ensure their little to no risk. Without getting political, this is our capital system and its by design. The 1% are just more cogs like the 'have nots', but they have the potential, or they work for companies, which have the potential of the 100x payout. That's what the VCs want, that's what the investors want. They are fine with 50 failed tech startups as long as they hit others a long the way. Just so they can be richer. The .01% use the 1% for these means and pay they appropriately. I believe this is why we have seen such a demand for tech labor. And I do not believe there will be less desire to make the .01% richer so I imagine a continued demand for the 1%.

So, that's how I believe the system is designed today. What I believe will happen in the next 5-10 years, unless we the people make some changes, is more disparity between the .01%/1% and the have nots. This disparity will be the cost of goods due to demand and amount of currency in circulation. The have nots will pay more for health care, more for property, more for insurance, and have less and less disposable income based on COLAs and less and less upward mobility.

 

[Terminalxylem]

With that said—I do think we are entering some hard times economically. I know some members here have posted that their fields of work are booming—but that doesn’t really mean much. Recessions don’t necessarily hit (or need to hit) every sector equally. There inevitably will be some sectors and businesses that boom even in recessionary times. I personally feel like the economy started slowing and stalling many months ago. A lot of the data that Wall Street releases is lagging (this is part of the reason why the fed was slow to fully realize how bad inflation was before they shifted their policy). I believe that there is a lot of financial engineering that skews the data in order to make things not look as bad as they really are. Sure—some sectors are booming and can’t find enough people to hire. For each of those—I assure you there is a sector that is struggling mightily.

The bolded is the main reason I started this discussion. Seeing things happen in real time instead of a 1-3 months after the fact can help some people get ahead of the issues. We've had a lot of problems economically as a country over the past 2-3 years, but I feel like things are coming to a head right now in a new and bigger way.

What do you believe individuals in at-risk industries should be doing to ameliorate impending economic hardship?

 

[Leeroy Jenkins]

I can only discuss what I know, which is commercial real estate. And there is a huge problem with office space: in simple terms Covid caused people to work out of their homes and companies came to realize as a result that they didn’t need all the office space they thought they did. So there is, and going to be, a lot of vacancy. In cities with many skyscrapers devoted to office space, that’s going to hurt big, if it isn’t already.

I've heard downtown San Francisco is a ghost town in the financial district. Just floors and floors of empty offices.

Downtown Portland is in the same predicament. What the city's onerous tax burdens didn't drive out to another county the homeless population and crime did. I think Covid played a part too, but city leadership in Multhomah County has forced business owners out.

Philly is similar. Train schedules have not changed much since the pandemic adjustments -- meaning people just aren't commuting anywhere CLOSE to pre-pandemic levels. And I think this is as good as it is going to get barring everyone forced back to the office. Lots of closed shops in the train concourse and on the street. More homeless than passengers too (exaggeration but the homeless problem is really bad).

 

[fruity pebbles]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I think the historic lows are because people are "employed" by uber and wallmart part time

Exactly this. People are working 2…3 jobs to keep up.

 

[-OZ-]

So my comments are pure speculatory, but i've been thinking about this topic for a while as clearly the economy is being hit, though it doesn't feel like everyone is being hit in the same way.

My assumptions is our 'system' is designed to ensure:

• the top .01% stay rich
• The top 10% can become the top 1%
• There is no simple way for the top 1% to become the top .01%
• Its easy for the top 1% and below to move down quickly

What I am trying to convey in the above is that there are really three wealth classifications. Uber elite, top 1%, and have nots. I realize this is a super broad stroke, but when I say 'have nots', I don't mean folks in the street. I mean purely 'upward mobility', in that the ability to grow upward.

Example A: Teacher in an amazing school district with a reasonable cost of living and making salary of ~$100k. They are a have not. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a beautiful house, maybe a summer home, but overall they will not have much means to get to the 1% and above.

Example B: Working at Lowes/Home Depot in a middle role in a good school district with a reasonable cost of living and making $60-70k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a modest home and most likely won't have a summer home though maybe a small boat they bring to the lake, but overall they will not have much means to get to the 1% and above.

Example C: Working as an Auto Dismantler as a primary job in a low level role and a side hustle as a landscaper, living in a below average school district with a below average cost of living and making $40-60k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a below average home, most likely won't have a summer home or a boat they bring to the lake, but maybe a small camper they take to campgrounds. Overall they will not have much means to get to the 1% and above.

The above examples are 'have nots'. They have no upward mobility. If in either of the above examples both family partners work full time, maybe there is a greater chance to leap into the 1% but it's unlikely they will stay as inflation/cost of living, will typically outpace their COLAs. So in my opinion, just above the poverty line to just below the 1% will basically have the same life except less vacations, older cars, not as good school districts and less amazon deliveries. These have nots are expected to pay into the system to ensure a foundation for the .01%.

The 1% are just the jobs which make the .01% richer. Typically this is tech and finance. These are the roles which 'make the rich richer'. These .01% uber elites want more and more and more and more. They get into venture capital investing, they get into the stock market, they get into these high money situations and expect zero risk. They expect zero risk because they help put people/process into power which ensure their little to no risk. Without getting political, this is our capital system and its by design. The 1% are just more cogs like the 'have nots', but they have the potential, or they work for companies, which have the potential of the 100x payout. That's what the VCs want, that's what the investors want. They are fine with 50 failed tech startups as long as they hit others a long the way. Just so they can be richer. The .01% use the 1% for these means and pay they appropriately. I believe this is why we have seen such a demand for tech labor. And I do not believe there will be less desire to make the .01% richer so I imagine a continued demand for the 1%.

So, that's how I believe the system is designed today. What I believe will happen in the next 5-10 years, unless we the people make some changes, is more disparity between the .01%/1% and the have nots. This disparity will be the cost of goods due to demand and amount of currency in circulation. The have nots will pay more for health care, more for property, more for insurance, and have less and less disposable income based on COLAs and less and less upward mobility.

I get what you’re saying. But many of us “have” plenty without caring to be part of the 1% or .01%.

I guess I’m a “have not” but we live well and have plenty.

 

[Mitchie]

So my comments are pure speculatory, but i've been thinking about this topic for a while as clearly the economy is being hit, though it doesn't feel like everyone is being hit in the same way.

My assumptions is our 'system' is designed to ensure:

• the top .01% stay rich
• The top 10% can become the top 1%
• There is no simple way for the top 1% to become the top .01%
• Its easy for the top 1% and below to move down quickly

What I am trying to convey in the above is that there are really three wealth classifications. Uber elite, top 1%, and have nots. I realize this is a super broad stroke, but when I say 'have nots', I don't mean folks in the street. I mean purely 'upward mobility', in that the ability to grow upward.

Example A: Teacher in an amazing school district with a reasonable cost of living and making salary of ~$100k. They are a have not. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a beautiful house, maybe a summer home, but overall they will not have much means to get to the 1% and above.

Example B: Working at Lowes/Home Depot in a middle role in a good school district with a reasonable cost of living and making $60-70k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a modest home and most likely won't have a summer home though maybe a small boat they bring to the lake, but overall they will not have much means to get to the 1% and above.

Example C: Working as an Auto Dismantler as a primary job in a low level role and a side hustle as a landscaper, living in a below average school district with a below average cost of living and making $40-60k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a below average home, most likely won't have a summer home or a boat they bring to the lake, but maybe a small camper they take to campgrounds. Overall they will not have much means to get to the 1% and above.

The above examples are 'have nots'. They have no upward mobility. If in either of the above examples both family partners work full time, maybe there is a greater chance to leap into the 1% but it's unlikely they will stay as inflation/cost of living, will typically outpace their COLAs. So in my opinion, just above the poverty line to just below the 1% will basically have the same life except less vacations, older cars, not as good school districts and less amazon deliveries. These have nots are expected to pay into the system to ensure a foundation for the .01%.

The 1% are just the jobs which make the .01% richer. Typically this is tech and finance. These are the roles which 'make the rich richer'. These .01% uber elites want more and more and more and more. They get into venture capital investing, they get into the stock market, they get into these high money situations and expect zero risk. They expect zero risk because they help put people/process into power which ensure their little to no risk. Without getting political, this is our capital system and its by design. The 1% are just more cogs like the 'have nots', but they have the potential, or they work for companies, which have the potential of the 100x payout. That's what the VCs want, that's what the investors want. They are fine with 50 failed tech startups as long as they hit others a long the way. Just so they can be richer. The .01% use the 1% for these means and pay they appropriately. I believe this is why we have seen such a demand for tech labor. And I do not believe there will be less desire to make the .01% richer so I imagine a continued demand for the 1%.

So, that's how I believe the system is designed today. What I believe will happen in the next 5-10 years, unless we the people make some changes, is more disparity between the .01%/1% and the have nots. This disparity will be the cost of goods due to demand and amount of currency in circulation. The have nots will pay more for health care, more for property, more for insurance, and have less and less disposable income based on COLAs and less and less upward mobility.

Not everyone wants or needs upward mobility. There have been tons of studies on happiness and people are generally not any happier over a certain amount of income. Don't recall the #s and will vary based on where you live anyway (and maybe net worth factors into this but point still stands), but it's in the ballpark of the people you list here.

 

[Sand]

With that said—I do think we are entering some hard times economically. I know some members here have posted that their fields of work are booming—but that doesn’t really mean much. Recessions don’t necessarily hit (or need to hit) every sector equally. There inevitably will be some sectors and businesses that boom even in recessionary times. I personally feel like the economy started slowing and stalling many months ago. A lot of the data that Wall Street releases is lagging (this is part of the reason why the fed was slow to fully realize how bad inflation was before they shifted their policy). I believe that there is a lot of financial engineering that skews the data in order to make things not look as bad as they really are. Sure—some sectors are booming and can’t find enough people to hire. For each of those—I assure you there is a sector that is struggling mightily.

I'm fully aware that my particular position (a microcosm) is pretty specific. I believe it can be generally extrapolated to the defense industry here, but that certainly doesn't make it representative outside of that. From my experience lately, though, I think I can say pretty confidently that those with college degrees or graduate degrees in engineering are looking darn good right now. There is negative real supply - way more demand than good people.

 

[Sand]

So my comments are pure speculatory, but i've been thinking about this topic for a while as clearly the economy is being hit, though it doesn't feel like everyone is being hit in the same way.

My assumptions is our 'system' is designed to ensure:

• the top .01% stay rich
• The top 10% can become the top 1%
• There is no simple way for the top 1% to become the top .01%
• Its easy for the top 1% and below to move down quickly

What I am trying to convey in the above is that there are really three wealth classifications. Uber elite, top 1%, and have nots. I realize this is a super broad stroke, but when I say 'have nots', I don't mean folks in the street. I mean purely 'upward mobility', in that the ability to grow upward.

Example A: Teacher in an amazing school district with a reasonable cost of living and making salary of ~$100k. They are a have not. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a beautiful house, maybe a summer home, but overall they will not have much means to get to the 1% and above.

Example B: Working at Lowes/Home Depot in a middle role in a good school district with a reasonable cost of living and making $60-70k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a modest home and most likely won't have a summer home though maybe a small boat they bring to the lake, but overall they will not have much means to get to the 1% and above.

Example C: Working as an Auto Dismantler as a primary job in a low level role and a side hustle as a landscaper, living in a below average school district with a below average cost of living and making $40-60k. There is basically zero way for them to be upwardly mobile. They will pay their ~30% taxes, pay into retirement, pay sales tax. They will have a below average home, most likely won't have a summer home or a boat they bring to the lake, but maybe a small camper they take to campgrounds. Overall they will not have much means to get to the 1% and above.

The above examples are 'have nots'. They have no upward mobility. If in either of the above examples both family partners work full time, maybe there is a greater chance to leap into the 1% but it's unlikely they will stay as inflation/cost of living, will typically outpace their COLAs. So in my opinion, just above the poverty line to just below the 1% will basically have the same life except less vacations, older cars, not as good school districts and less amazon deliveries. These have nots are expected to pay into the system to ensure a foundation for the .01%.

The 1% are just the jobs which make the .01% richer. Typically this is tech and finance. These are the roles which 'make the rich richer'. These .01% uber elites want more and more and more and more. They get into venture capital investing, they get into the stock market, they get into these high money situations and expect zero risk. They expect zero risk because they help put people/process into power which ensure their little to no risk. Without getting political, this is our capital system and its by design. The 1% are just more cogs like the 'have nots', but they have the potential, or they work for companies, which have the potential of the 100x payout. That's what the VCs want, that's what the investors want. They are fine with 50 failed tech startups as long as they hit others a long the way. Just so they can be richer. The .01% use the 1% for these means and pay they appropriately. I believe this is why we have seen such a demand for tech labor. And I do not believe there will be less desire to make the .01% richer so I imagine a continued demand for the 1%.

So, that's how I believe the system is designed today. What I believe will happen in the next 5-10 years, unless we the people make some changes, is more disparity between the .01%/1% and the have nots. This disparity will be the cost of goods due to demand and amount of currency in circulation. The have nots will pay more for health care, more for property, more for insurance, and have less and less disposable income based on COLAs and less and less upward mobility.

Not everyone wants or needs upward mobility. There have been tons of studies on happiness and people are generally not any happier over a certain amount of income. Don't recall the #s and will vary based on where you live anyway (and maybe net worth factors into this but point still stands), but it's in the ballpark of the people you list here.

Actually, I reject JAA's whole premise. For the examples he gives those folks can absolutely be part of the 1%. They would need to stop become wage slaves and open a business that performs (which has risk), but it is possible. Having said that there is nothing wrong with being a W-2 worker. I am, make a decent living at something pretty fun, and consider myself fortunate. I have no need for the stress and risk of reaching for the 1%.

But, make no mistake, the thought that his three examples are shut out of the American Dream is complete nonsense.

 

[DallasDMac]

I guess it depends on industry.

For sure - not every industry is struggling, but most are due to slowing economic activity that is being exacerbated by rampant inflation on consumers. And as someone posted above, the end of the pause on student loan payments is going to hurt consumers even more.

Which is why I'll never understand the rabid resistance to the debt relief program Biden tried to offer on those loans. I think it would have been a very wise investment for the economy.

 

[Sand]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I think the historic lows are because people are "employed" by uber and wallmart part time

The "historically low unemployment rate" is really just a politically charged statistic. Here is a decent read on what the numbers really are/mean. Also... I suspect that the rising inflation/economic issues that have already prompted many layoffs will continue and even the "basic" unemployment statistic will begin to rise.

U-3 is a pretty restrictive statistic and definitely the rosiest number, therefore the politically favored one. U-6 is and always has been a better gauge of the real employment situation out there (they did write about it, so good on them). That article, though, is a bit over the top on their view of the "dark side" of employment.

 

[Sand]

I guess it depends on industry.

For sure - not every industry is struggling, but most are due to slowing economic activity that is being exacerbated by rampant inflation on consumers. And as someone posted above, the end of the pause on student loan payments is going to hurt consumers even more.

Which is why I'll never understand the rabid resistance to the debt relief program Biden tried to offer on those loans. I think it would have been a very wise investment for the economy.

Those with mortgages or car loans have as much claim to relief as any group, so why one and not the other? The govt. is picking and choosing winners and losers. It's a terrible idea with an ocean full of moral hazard. Obviously this leads to verboten discussion, so I'll leave it there.

 

[Phil Elliott]

I guess it depends on industry.

For sure - not every industry is struggling, but most are due to slowing economic activity that is being exacerbated by rampant inflation on consumers. And as someone posted above, the end of the pause on student loan payments is going to hurt consumers even more.

Which is why I'll never understand the rabid resistance to the debt relief program Biden tried to offer on those loans. I think it would have been a very wise investment for the economy.

If I no longer owed my remaining mortgage balance I would have more cash to pump into the economy. Plus you get the "multiplier effect".
ETA: political reference omitted.

 

[Terminalxylem]

I guess it depends on industry.

For sure - not every industry is struggling, but most are due to slowing economic activity that is being exacerbated by rampant inflation on consumers. And as someone posted above, the end of the pause on student loan payments is going to hurt consumers even more.

Which is why I'll never understand the rabid resistance to the debt relief program Biden tried to offer on those loans. I think it would have been a very wise investment for the economy.

Those with mortgages or car loans have as much claim to relief as any group, so why one and not the other? The govt. is picking and choosing winners and losers. It's a terrible idea with an ocean full of moral hazard. Obviously this leads to verboten discussion, so I'll leave it there.

While I don't support loan forgiveness in most contexts, surely you can agree that a higher education is much more likely to contribute to society than a new car?

And doesn't the government already pick winners and losers through things like tax policy?

 

[The Z Machine]

Cool, so a recession is likely here or coming soon and I should try and get ahead of it. How exactly do I do that?

 

[parasaurolophus]

Cool, so a recession is likely here or coming soon and I should try and get ahead of it. How exactly do I do that?

Wheat pennies