The Bad News Report

[JHart]

18 hours ago, A2. said:

WeWork will go down in a ball of flames. The comments above are correct and the company is a laughable joke on Wall Street. 

It’s a dumpster fire of a company and is already looking for a cool Billion to even continue. 

https://markets.businessinsider.com/news/stocks/softbank-reportedly-talks-with-wework-ipo-1-billion-lifeline-2019-9-1028555201

Definitely agree. If anyone is looking for an entertaining article, this was written describing the disclosings before WeWork's IPO. 

https://www.theverge.com/2019/8/15/20806366/we-company-wework-ipo-adam-neumann

 

Edited September 30, 2019 by JHart

[elrodvt]

On 9/30/2019 at 1:21 AM, A2. said:

I personally believe what is coming will be quite severe (worse than 2008). I also believe it will impact all facets of the economy. Both stocks and real estate will be impacted, and probably quite dramatically. On the Real Estate side (including commercial), the depth of falling or stagnating prices will be location dependent. So properties in hot markets will fall harder than those is markets with less froth.

There are already signs of stress under the surface that Joe public doesn’t see and other signs that are already in plain view (think personal, corporate, and government debt loads at all time highs).

That said, timing is always challenging. Sometimes markets (both Real Estate and Stocks) can stay elevated longer than the most brilliant of economists and traders could imagine. That said, if I were a betting man, I’d put volatility entering in the markets by years end, but no later than 1Q of 2020. After that I see a real escalation of turbulence taking us into the next election (so essentially most of next year will be quite challenging).

If I were forecasting, I would say the real material issues come after the election and beyond. Regardless of the election results, the future beyond mid 2020 looks to be quite tentative from a economic standpoint. 

This might be construed to be a doom and gloom comment, and make no mistake, I’m not here to pretend it’s not. However, I am suggesting that when we do drop, it’s not going to be a garden variety correction, but a structural shift in the markets and economy. The other thing that I see (and am more worried about) is that unlike the severe downturn a decade ago, this one will not be “V” or “U” shaped in its response to the Fed. This go around it will be a fall in asset prices, followed by a longer term trough and anemic growth (if any)  that will last much longer than a year in duration. Think of it as more of an “L” shaped recovery or stagnation, with a true reset in expectations in returns for many investable assets. Simply put, people are going to be forced to reevaluate what market returns will yield going beyond the next reset. 

Lastly. I am more concerned that our country, with the impacts a deeper recession/depression might have, will drive a wedge between people politically even further than they are already (if that is even possible). Along those same lines I also see war on the horizon. As sad as I am to admit it, economic downturns often always are accompanied by military conflict. 

****please note, I pray I’m wrong, but for now, I’m simply calling it as I see it. I would rather be wrong and called out and ridiculed than being right. Being right isn’t some kind of bighead thing that I would pound my chest over. I could care less about my future predictions, and honestly would love to just cheer on more cranes. And quite frankly, I just like it when things are going up and everyone is happy. 

A2

 

So, what's one to do if nearing retirement? I personally don't trust bonds or stocks at this point. Inverted rates and all are beyond my ability to comprehend economics.

[A2.]

1 hour ago, elrodvt said:

So, what's one to do if nearing retirement? I personally don't trust bonds or stocks at this point. Inverted rates and all are beyond my ability to comprehend economics.

The simple answer is pay off any and all debt (including one’s primary residence). Then the next step would be to fund an emergency fund of at a minimum of 6 months (preferably 12) of cash. 

Investment wise:

short term: T-Bills, Money market, 

mid term:  High Grade corporates (A+ rated or better from cash flow positive firms, with a very low debt burden, I would prefer companies that are more recession proof like consumer staples), then maybe some Preferred stock from similar firms that are highly rated (this is a little more risky, but would have positive yields in an otherwise low yield environment)

long term (7+ years and beyond) :

precious metals (Gold/Silver/Platinum  for at least 10% of your net worth. I know that is a heavy allocation, but it’s an excellent wealth protection vehicle when all hell breaks loose), 

Government securities: I know rates are low, but they are backed by the full faith of the government and still have the ability to tax their citizens, and if they default then all this information can be trashed as we are all screwed. 

High grade dividend paying securities (equities), and here we are talking utilities, and firms that are “good for it”. 

If you are seeking Income, a great way to create a personal pension is an Income Annuity with a reputable, highly rated Insurance company (no snake life of Iowa crap!). Believe it or not, there are still some really strong products out there with substantial income benefits. 

Stocks: yes I said stocks. Longer term, you still need some money allocated towards Stock. They need to be well diversified in different sectors of the economy, and also diversify Internationally and domestic. I think they will always have a place in a portfolio for the longer term. That said be prepared to hold for a long time, just keep the allotted amount of money less than what would be normal. For someone north of 60, that would mean NO MORE than 40% of their entire portfolio (and given what’s coming, I would suggest maybe half of that).

Sandbox money (speculation):

consider taking a portion of one’s portfolio and laddering options (straddles and selling calls are also some great ways to earn in a falling market with increased volatility) . Savvy investors will actually make plenty of money going short the market. It is risky and hard to time, and would require professional assistance if your not used to actively trading.

I still believe crypto currency is the wave of the future and having a little exposure isn’t a bad idea. I have done really well personally in Bitcoin, and still own quite a bit. However, this is the Wild West of investing and would limit a person entering retirement to a strict limit of maybe 5%-10% max. Closer to 5% if your not comfortable with volatility. 

The above is really just an idea, I don’t know everyone’s personal situation, but if one is of middle class means and has little to no debt and was entering retirement, they need to be VERY careful. Another 2008 would essentially wipe a person out that is no longer accumulating and in the distribution phase of their life. Remember a 50% correction, requires a 100% gain to recover. For someone already taking Income from their nest egg, that becomes essentially impossible.

PS—-if you were a person of means and know how to trade, then the above is probably a bit boring. Some of my best years are when markets are falling, but that is again coming from someone typing that watches markets daily (and sometimes hourly). I know most can’t do that. But just remember there are two sides to every trade. Someone buys and another sells. That also means people make money in falling markets, just like they do in rising markets.

The biggest risk to all of the above is a currency crisis or a massive sovereign debt default. At that point your glad you have some precious metals (and even some stored food). I pray we don’t go there, but at this point, I wouldn’t be surprised at anything. Point being, just use common sense and try to limit large purchases (this doesn’t include a primary residence, if planning on staying there for the long haul)  and know that we are all in this thing together!

just my $.02

 

A2

 

 

Edited October 2, 2019 by A2.

[urbanlover568]

Manufacturing has entered contraction.  Autos and everything down. Very few outlets also covering the FED's desperate attempts to save the banks.  Charlotte got VERY lucky finishing most buildings before the cycle ended. DEC also was completed right before the last recession. Now we have Legacy complete. When the next cycle starts, Charlotte will be a juggernaut of growth.  

 

[A2.]

2 minutes ago, mpretori said:

Manufacturing has entered contraction.  Autos and everything down. Very few outlets also covering the FED's desperate attempts to save the banks.  Charlotte got VERY lucky finishing most buildings before the cycle ended. DEC also was completed right before the last recession. Now we have Legacy complete. When the next cycle starts, Charlotte will be a juggernaut of growth.  

 

That is what truly scares the heck out of me! Most aren’t familiar with the Repo market, but that is a harbinger of really nasty things dead ahead. Thanks for posting that, as I know most aren’t familiar with it. That video will clarify some of the stuff going on under the surface for anyone curious and can invest ten minutes to watch. Good find mpretori! 

[A2.]

That’s fine by me, we can start a new thread.  I don’t want to be the one to hijack a thread, just responding to a question (plus this one is actually titled “Bad news report”, which is kind of apropos).

I know that macro economic events are probably not what most are looking for when clicking on this thread, but one thing I can promise is that all I posted will have a material impact on the QC and future projects, which is what the spirit of this thread is all about. 

As for predicting economic chaos, there are always gloom and doomsday folk and always will be. I’m Not that person, just a professional trader and one who is commenting for those asking. I have been super bullish this last ten years, but now is the time to prepare for what is coming (even if my calls are off by a few months). And that isn’t something I type lightly. Im not some sensational blogger looking for likes or web traffic, just a guy looking out for my UP peeps. I’m ok to just keep things happy. Just don’t ask me what I really think. 

ps—-I do understand that this stuff isn’t fun to discuss and no one wants to stare into the abyss. The problem is that hiding from the truth, doesn’t make it go away. The last time I came out in 2006/2007, I was mocked and ridiculed. Made me realize that people don’t really care about a dire forecast, they truly just want to live life and do nothing. Again, I get it. Probably best just to focus on UP as a forum for discussing city development.  

From this point forward, please seek  guidance with a personal financial planner. I’m just here for the pics! Ha! 

A2

 

 

Edited October 2, 2019 by A2.

[KJHburg]

this is some local bad news and this happens every few years with Freightliner.  They are laying off 900 people in their 2 plants on in Mt Holly and one in Cleveland which is outside Salisbury. 

It is constant boom and lots of hiring and then lots of layoffs with Freightliner.

https://www.wbtv.com/video/2019/10/01/layoffs-two-weeks-freightliner-plants/

[urbanlover568]

I am in a better position right now than I was before with adequate savings and minimal debt. I am heading the warnings. If I'm wrong, I'm loosing nothing. 

From personal perspective, I knew people who didn't believe the great recession was coming in 2007. They were the ones who lost their homes, cars, and jobs. People should always be prepared. 

[tozmervo]

9 minutes ago, KJHburg said:

this is some local bad news and this happens every few years with Freightliner.  They are laying off 900 people in their 2 plants on in Mt Holly and one in Cleveland which is outside Salisbury. 

It is constant boom and lots of hiring and then lots of layoffs with Freightliner.

https://www.wbtv.com/video/2019/10/01/layoffs-two-weeks-freightliner-plants/

Freightliner's business model is baffling to me. As you say, this happens every 2-3 years. Hire like crazy, then lay off like crazy.

[KJHburg]

3 minutes ago, tozmervo said:

Freightliner's business model is baffling to me. As you say, this happens every 2-3 years. Hire like crazy, then lay off like crazy.

Nucor the Charlotte based steelmaker has NEVER laid off an industrial worker EVER.  Some companies can manage the ups and downs better.  

here is  a story about it but it legendary.  Too bad they don't have a plant in the Charlotte region. 

https://www.jsonline.com/story/money/business/top-workplaces/2019/04/12/top-workplaces-steelmaker-nucor-says-doesnt-do-layoffs/3189792002/

I just hope the workers laid off got some good experience there (more than likely last hired first fired) and get a job with a company that is more stable and there are manufacturing jobs in the area expanding in the outer parts of this region. 

Edited October 2, 2019 by KJHburg

[A2.]

10 minutes ago, ricky_davis_fan_21 said:

Delete

 

 

Sent from my iPad using Tapatalk

 

Im deleting too RDF! Ha!

By the way, the new pic by your name has made me smile. Thanks for that! And that’s certainly not bad news. 

A2

[CarolinaDaydreamin]

37 minutes ago, A2. said:

Im deleting too RDF! Ha!

By the way, the new pic by your name has made me smile. Thanks for that! And that’s certainly not bad news. 

A2

I still remember PO Box 968 New York City, New York State 10108 .... @ricky_davis_fan_21

[elrodvt]

54 minutes ago, mpretori said:

I am in a better position right now than I was before with adequate savings and minimal debt. I am heading the warnings. If I'm wrong, I'm loosing nothing. 

From personal perspective, I knew people who didn't believe the great recession was coming in 2007. They were the ones who lost their homes, cars, and jobs. People should always be prepared. 

You know it's not so simple. If the market jumps, when you're positioned for catastrophe, you may not loose equity but you certainly loose on potential returns.

That said I'm doom and gloom too. Way too many bad things coming together. This from a guy who could have 2% or so more in my investments if I didn't bail right after the 2016 election out of total abject terror.

[Desert Power]

10 hours ago, A2. said:

That is what truly scares the heck out of me! Most aren’t familiar with the Repo market, but that is a harbinger of really nasty things dead ahead. Thanks for posting that, as I know most aren’t familiar with it. That video will clarify some of the stuff going on under the surface for anyone curious and can invest ten minutes to watch. Good find mpretori! 

I don't think what is happening in the repo market necessarily portends anything for the wider economy right now.  The squeeze is due to the liquidity buffers that banks are now required to hold mostly has reserves.  The Fed has reached the limit on how small it make its balance sheet under that criteria.  That does not mean there is an actual lack of liquidity. 

[urbanlover568]

9 hours ago, elrodvt said:

You know it's not so simple. If the market jumps, when you're positioned for catastrophe, you may not loose equity but you certainly loose on potential returns.

That said I'm doom and gloom too. Way too many bad things coming together. This from a guy who could have 2% or so more in my investments if I didn't bail right after the 2016 election out of total abject terror.

Very true. It's all a gamble in the end. ADP job report was below expectations again today. 

[hinsp0]

10 hours ago, KJHburg said:

Nucor the Charlotte based steelmaker has NEVER laid off an industrial worker EVER.  Some companies can manage the ups and downs better.  

here is  a story about it but it legendary.  Too bad they don't have a plant in the Charlotte region. 

https://www.jsonline.com/story/money/business/top-workplaces/2019/04/12/top-workplaces-steelmaker-nucor-says-doesnt-do-layoffs/3189792002/

I just hope the workers laid off got some good experience there (more than likely last hired first fired) and get a job with a company that is more stable and there are manufacturing jobs in the area expanding in the outer parts of this region. 

Your first sentence is precisely the reason why I’ve invested heavily in Nucor over the years; in good times and bad.  I’ve always been impressed with its loyalty to its workforce and its ability to develop executives internally who have worked in all aspects of the business and even a past longtime CEO who started as essentially an entry level industrial worker.  I probably could’ve better traded the peaks and valleys of the stock, but I’ve always liked it as a dividend reinvestment hold vehicle.  Wish I loaded up on more of it than I did back in 2008, but that’s a lesson learned and I squirreled away some cash that’s going to be directly invested in Nucor when it’s stock price tanks during the next recession.

A recession is coming.  It’s inevitable and it’s the way of the world.  Always has been, always will be.  Economic peaks and valleys have existed for as long as mankind, all the way back to our hunter/gatherer days.

When there’s big talk of a recession or even a depression, I take a little time to be grateful for the things I have and most importantly the non-material things like healthy children.  I also am grateful that I was born and raised in Charlotte and found my way back to this town.  We charlotteans have been among the more fortunate in times of economic turmoil during my lifetime.  The Great Recession was bad, but we weathered it and we came out of it much better than many of our peer cities and fellow countrymen.

Recessions and depressions also fortunately end.  There’s always a bottom.

[A2.]

1 hour ago, Desert Power said:

I don't think what is happening in the repo market necessarily portends anything for the wider economy right now.  The squeeze is due to the liquidity buffers that banks are now required to hold mostly has reserves.  The Fed has reached the limit on how small it make its balance sheet under that criteria.  That does not mean there is an actual lack of liquidity. 

The Repo market is a way of raising short term capital, and the simple fact that the rates blew out is actually a big reason to be concerned. Without belaboring the point due to the amount of time it would take to type it all up, anytime you have Bank’s seeking short term capital you have to wonder why. I will say this in closing, every financial sign post we pass (ie ISM data, Repo Rates Blowing out,  inverted yield curve, debt to gdp, bankruptcies, etc) are all just letting you know the road your on. Nothing more, nothing less. I’ve been in Finance/Trading for the last twenty years, and I have never been more concerned about the future of our economy as I am today. I’m not knocking what your saying, I am simply suggesting to be careful out there. 

PS—-after the billions daily being offered up in the Repo market wears off, be on the lookout for another round of QE. If that is brought up, you will know exactly where we are. You have to ask yourself one question. If things were so rosy, then why are central banks pumping so much money into the system. Why are we lowering rates when markets are at all time highs? I will tell you. They know the system is a sham and their house of cards is crumbling. Ok, I said it. The gig, she’s  over. They might be able to pump it up once more to a nominal all time high (and even here I have my doubts), but once that is done, it’s game over. The real recession never was fixed, it was papered over. It’s like a drug addict. The person seeking to stay high needs an ever increasing amount of drugs just to stay normal. At some point the Drug doesn’t work and it kills the person. In this case the drug is liquidity/debt, the drug dealer is the Fed, and the person is the economy. 

A2

Edited October 2, 2019 by A2.

[A2.]

***JUST CREATED NEW THREAD IN COFFEE HOUSE***

This current thread can resume its rightful place as to being specific about certain job announcements or projects. Please consider taking further discussion to the CH for any macro economic chat.

A2

Edited October 2, 2019 by A2.

[A2.]

29 minutes ago, hinsp0 said:

 

A recession is coming.  It’s inevitable and it’s the way of the world.  Always has been, always will be.  Economic peaks and valleys have existed for as long as mankind, all the way back to our hunter/gatherer days.

When there’s big talk of a recession or even a depression, I take a little time to be grateful for the things I have and most importantly the non-material things like healthy children.  I also am grateful that I was born and raised in Charlotte and found my way back to this town.  We charlotteans have been among the more fortunate in times of economic turmoil during my lifetime.  The Great Recession was bad, but we weathered it and we came out of it much better than many of our peer cities and fellow countrymen.

Recessions and depressions also fortunately end.  There’s always a bottom.

Amen!

[Desert Power]

1 hour ago, A2. said:

The Repo market is a way of raising short term capital, and the simple fact that the rates blew out is actually a big reason to be concerned. Without belaboring the point due to the amount of time it would take to type it all up, anytime you have Bank’s seeking short term capital you have to wonder why. I will say this in closing, every financial sign post we pass (ie ISM data, Repo Rates Blowing out,  inverted yield curve, debt to gdp, bankruptcies, etc) are all just letting you know the road your on. Nothing more, nothing less. I’ve been in Finance/Trading for the last twenty years, and I have never been more concerned about the future of our economy as I am today. I’m not knocking what your saying, I am simply suggesting to be careful out there. 

PS—-after the billions daily being offered up in the Repo market wears off, be on the lookout for another round of QE. If that is brought up, you will know exactly where we are. You have to ask yourself one question. If things were so rosy, then why are central banks pumping so much money into the system. Why are we lowering rates when markets are at all time highs? I will tell you. They know the system is a sham and their house of cards is crumbling. Ok, I said it. The gig, she’s  over. They might be able to pump it up once more to a nominal all time high (and even here I have my doubts), but once that is done, it’s game over. The real recession never was fixed, it was papered over. It’s like a drug addict. The person seeking to stay high needs an ever increasing amount of drugs just to stay normal. At some point the Drug doesn’t work and it kills the person. In this case the drug is liquidity/debt, the drug dealer is the Fed, and the person is the economy. 

A2

I don't disagree with a lot of this and have moved about half of my equity investments out over the last couple of months.   And maybe saying that banks have a regulatory need instead of an actual need for that liquidity is a distinction without a difference in terms of the broader system, but I do not believe the banks are at risk.  And, yes, absent a change in regulation, more QE seems like a near certainty.  

Yield curve inversion and the ISM data are big sell signals.

[Hushpuppy321]

 Drone crashed  into building Uptown - they reported it was Bank of America ‘Tallest Building in Charlotte’ (BOACC) but gave a S. Tryon St. address (BOAT).  Hope it wasn’t anyone on here.  This is the description:  

The suspect is described as a white man last seen wearing a gray T-shirt, khaki cargo shorts, white socks and black boots.

 

 

[gman430]

1 hour ago, Hushpuppy321 said:

 Drone crashed  into building Uptown - they reported it was Bank of America ‘Tallest Building in Charlotte’ (BOACC) but gave a S. Tryon St. address (BOAT).  Hope it wasn’t anyone on here.  This is the description:  

The suspect is described as a white man last seen wearing a gray T-shirt, khaki cargo shorts, white socks and black boots.

 

 

It definitely wasn't me.  I actually know how to fly mine. 

[XRZ.ME]

https://www.cnbc.com/2019/10/17/what-happens-if-wework-runs-out-of-cash.html

Wework would be out of cash by mid Nov if no new Investment or Borrowing

[Madison Parkitect]

Wonder if WeWork is the first domino that starts the looming recession, like pets.com did with the dot com bust.

[videtur quam contuor]

Pets.com

 

pets.com

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