The Recession and Housing Crash are about to get worse in 2023. That’s because the leading economic indicators for the economy are pointing to big layoffs and job losses later this year. The Fed could be forced to Pivot by the Summer.
Check out Adam’s conversation with Michael Kantrowitz on the Wealthion YouTube Channel:
The Conference Board’s Leading Economic Indicator Index (LEI) is deep in recession territory currently. Moreover, the US has completed the first “3 stages” of the Recession already – a decline in Housing, Manufacturing Orders, and Corporate Profits. The next stage is a big drop in employment.
If the unemployment rate surges in coming months, it won’t be good for Home Prices. Since job losses will mean mortgage defaults and foreclosures. As well as forced sellers from those who have been waiting to sell. Of course – some don’t believe the Recession is going to come at all.
But Michael Kantrowitz’s HOPE model that predicts downturns says a Hard Landing and bad Recession in the economy in 2023 is likely. And that it’s a matter of it, not when. Jerome Powell and the Federal Reserve will have some interesting decisions to make throughout the next several months of 2023.
On one hand – the economy looks destined for a bad recession. With all the leading indicators pointing to the Fed needing to pivot and cut interest rates. However, Powell has remained adamant that they will continue to hike rates.
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As the world grapples with the ongoing COVID-19 pandemic, the global economy has been hit hard, with businesses forced to shut down and millions of people losing their jobs. The recession, which has been looming for some time now, has finally taken a turn for the worse, with stage 4 just beginning.
What is stage 4 of the recession?
Stage 4 of the economic recession refers to the point at which the economic downturn becomes more severe, and the recovery period becomes more prolonged. The fourth stage of the recession is characterized by a significant contraction in the economy, often accompanied by high levels of unemployment and slower productivity. At this stage, businesses that have survived the first three stages may struggle to keep up with the demands of an economy in flux, and many may eventually fail.
What can we expect in stage 4?
As the recession continues to deepen, we can expect to see more businesses close, higher unemployment rates, and lower consumer spending. Furthermore, governments may struggle to keep budgets controlled, and the public may pressure them to take drastic measures such as austerity measures, raising taxes, and cutting spending.
Governments around the world are adopting a variety of measures to keep their economies afloat. The US government has recently passed a $2 trillion stimulus package to help keep Americans afloat during these challenging times. Other countries have also taken action to try to activate their economies and protect citizens from the worst of the recession.
How long will stage 4 last?
It’s impossible to predict how long stage 4 of the recession will last, but it’s likely to last for several months, if not years. Economies around the world will take time to recover, and it will take longer for some countries to return to pre-recession levels than others.
Conclusion
The fourth stage of the recession has just begun, and it’s likely to be one of the toughest periods many of us will experience in our lifetime. However, in times like these, we must come together, support one another, and keep a long-term perspective. This can help all of us in the long run, and ensure that we come out the other side of this challenging period a more resilient and united global community.
The 4 Stages of a Recession listed @ 1:28
1) Home Sale Collapse – check
2) Manufacturing Orders Collapse – check
3) Porifts Collapse – check
4) Employment Collapse – coming soon
You can find more analysis from Michael Kantrowitz's on his HOPE Framework on the Wealthion YouTube Channel in this interview: https://www.youtube.com/watch?v=IWg-9VKxTw4
The fractional banking system increases the money supply as bank loans increase. As bank loans decline this shrinks the money supply. As the money supply shrinks this results in a reduction in economic activity —> recession.
Recessions are an unavoidable part of the economic cycle; all you can do is prepare for them and plan accordingly. I graduated into a slump (2009). My first job after graduating from college was as an aerial acrobat on cruise ships. Today, I work as a VP for a global corporation, own three rental properties, invest in stocks and businesses, run my own company, and have increased my net worth by $500k in the last four years.
Prices will never go down if they don’t hike the interest rates
Everyone sitting on cash… Things people want like cars & housing is too expensive.
Everything else is relatively affordable in comparison.
If they wanted to draw out cash they have to get people to buy homes not save cash. High interest rates have the opposite effect.
Recession is already here, which is why the government changed the definition of Recession. What we're walking into is a depression. Plan accordingly.
This guy's metaphors and analogies are ridiculous. What a distraction just talk about the topic at hand you idiot.
What is with this basis points nonsense? Is it really ever anything other than a quarter or a 1/2 of a point? Why don't we simply say a quarter or a 1/2 point the basis point nonsense? I think people do it to make themselves sound sophisticated but it's getting actually ridiculous.
I'm wondering if people who went through the financial crisis in 2008 had an easier time than me right now. The stock market is making me really worried because I've lost over $27,000 in just this month and I'm not making as much money as I used to. This is making me concerned that I might not have enough money saved up for my retirement since I can't add to my savings.
Recession is often the result of external factors, and it appears that the United States is losing its grip as a federal reserve currency. With a decreasing ability to control inflation and a reduction in stock and oil trading, it seems that a new multilateral world order is on the horizon.
Book; alcohol can be a Gas
Would the US benefit from switching oil to alcohol for fuel?
Will the Govt step in with rent controls?
We minorities are hoping!!!❤
A perfect storm is brewing in the United States. Inflation, bank collapse, severe drought in the agricultural belt, recession, food shortages, diesel fuel and heating oil shortages, baby formula shortages, available automobile shortages and prices, the price of living place. It's all coming together and it could lead to a real disaster towards the end of this year (or sooner). With inflation currently at about 6%, my primary concern is how to maximize my savings/retirement fund of about $300k which has been sitting duck since forever with zero to no gains.
Major indexes booked their worst yearly performance since 2008 thanks to drivers like the recession, war, hiked interest rate and inflation which so far doesn’t seem to be easing off, so I’m left wondering what 2023 has in store for us investors, I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here, is it a good time to buy or do I wait?.
It was a very bad decision to remove the Glass-Steagall Act in the late 1990s, which led to the spectacular failure of huge banks during the financial crisis of 2007–2008. To prevent another disaster, Dodd-Frank and this statute both need to be reestablished right away. What happened with SVB is only the beginning of what will happen if nothing is done to address the current situation.
How many stages??
There’s a bunch of things contributing the catastrophe explosion of financial collapse: rising for prices in everything, layoffs, debt rising, and the rise of BNPL, it’s going to be a rough couple of years
Really great interview, no, actually, a really great conversation between you, Adam, and the "third panelist" Michael Kantrowitz (lol). Adam interviews the experts and has become an expert in his own right. You guys have chemistry, so keep it up, looking forward to more conversations between you two.
Thank you for putting out this information.
Spreading FUD.
They started layoffs at my job yesterday
Wait till florida tripples at the end of 23
You may be onto something. I work in the IT department for an international bank. We just cut roughly 10% of our staff and we've been asked to plan another round of headcount reductions to be implemented in the next 3 months. It's all happening very quickly.
Hmmmmm. Just how many stages are there??? 10? 20.? 50 perhaps???
Hello can you ring me
How can you possibly expect the US consumer to keep buying when greedy corporations keep raising prices on everything to the point that people can no longer afford to buy. A dollar only goes so far.
In order to mitigate the risk associated with an investment given the present state of the market First and foremost, you should give some thought to the possibility of keeping your assets diverse over a wide range of categories of assets in a manner that is commensurate with the level of the personal risks you are willing to assume, the amount of time you are willing to wait, and the specifics of your financial objective. Keep in mind that diversity is a strategy that may assist in the management of investment risk. It does not remove the possibility of suffering a loss if the values of securities go down. Because making investments may be a difficult process. If you're just getting started on the path of accumulating funds, you may want to give working with a financial advisor some consideration so they can assist guide you along the way. My opinion though.
Here in Southern California, the housing market is still going crazy with bidding wars. The inventory is so low that most people don't see how the market could come down. What is going to have to happen to take the market down here?
Inflation is producing a slew of problems throughout the world, including food shortages, diesel and heating fuel shortages, and housing prices and financial market crash. This global collapse might end up being a part of us for a very long time. With inflation currently at about 9%, my primary concern is how to maximize my savings/retirement fund of about $300k which has been sitting duck since forever with zero to no gains.
Dude your comment section is literally all scammers. Take a look.
Great insight. I agree 99%
Looking forward to the recession. So many pointless jobs in tech will be cut…they hella overpaid too. Lower house prices would mean less in tax for houses, and houses being more affordable. Stocks crashing is good too it means thees rich fuckers get screwed over and that makes me happy
Thank you for the detailed information I could understand. Great interview and believable forecast.
I'M so happy I made productive decisions about my finances that changed my life forever, hoping to retire next year… Investment should always be on any creative man's heart for success in life.
QUESTION: What if any sign would there be for a possible soft landing? Rates drop?
NOTE ON LAYOFFS: Many tech companies are staffing from third world companies, so if not them getting your children's position, Ai will!