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The recent global government over reaction may throw us into a global depression the likes of which we have never seen…

One thing I've learned in business is when the tough times arrive I learn the tighten the belt and spend better. And get more creative. All of which should make for a healthier business once we're out the other end.

to repeat what has already been said here on bowsite as well as by many others, a recession is on the horizon and has likely already started. i'm not smart enough to see what steps could be taken to avoid it other than a complete flush.

recently janet yellen said she didn't understand the indicators when a few months ago she said the spike in inflation was transitory. c'mon, wtf.

biden recently said the same regarding the baby formula shortage. again, wtf. you shutdown a manufacturer that supplies forty percent of a consumable and you can't foresee the impact? smh.

i won't get too specific but i am sure many of you, like me, see the different groups and states that are being impacted, and intentionally targeted (no pun intended), and those that are ignored or demeaned. it is so obvious the saying 'even steven wonder' can see it applies.

will enough voters see it to make a difference by not just voting, but holding their representatives accountable? i'm a pessimist.

Plus, We’ve bid and won several commercial jobs. Only problem is the county commissions and federal money that has been a large part of my companies cash flow previously, has been put on hold or we are being told the local governments are choosing to wait this out before moving forward.

So, the jobs are in limbo. Which sucks because I’m men heavy in preparation of their start date. They just keep getting pushed back due to lack of funds being released or frozen.

So, there’s two huge entity’s, that were 80% of my business last year, that have pulled out of moving forward. It’s definitely going to hurt losing that anticipated income.

It’s hard to keep large crews busy on strictly residential work. We do have a couple houses on schedule but, the site work hasn’t been started yet. So, I’m not counting them until it’s time to start the framing.

All these new happenings keeps my foreman’s and myself hoping trying to get enough work to move foreyard. Which severely hurts productivity. Which is the defining variable in profitability.

It’s about to get real tough. Real soon for businesses. By the time it’s over, every small business in this country is going to have to really tighten up to get through this with any resemblance of what they started with. I pray I’m one of them that does.

I'm in construction in MT and we are not yet seeing anything resembling a slow down. Not enough workers to do the work is going to keep demand high for a bit. The demand is so high because no one wants to live in the hell holes the dems have created in their states. My phone rings multiple times every week with people moving out here. I agree the economy is going the wrong way and our current leadership is pathetic. Criminals, liars and thieves at the wheel. Nothing good will come of it.

I'm in both home Reno and travel industry. Home Reno's was hotter than ever, travel obviously dead, and slowly picking up. For travel it just sucks that recessions are hitting just as the travel is opening up. With travel being dead for a couple years, labour all vacated and moved into other industries so it has been a slow start up. Airports can't even staff TSA agents to get people moving. All around a giant stupidity that anyone with a brain saw coming. Unfortunately it seems the number of people with a brain is vastly overshadowed by those without.

My favourite quote: "Just remember how dumb the average person is, and realize that half are dumber than that." lol

I personally had to reschedule my off shore fishing trips due to bad weather last month. I was fortunate to be able to reschedule the house too. However, I was unable to get a refund on the house. So, I was forced to reschedule the charters in the time line that matched the new reservations this fall.

I was blessed in that. But, frankly I’d cashed them all back in if I had that option and not even go. By doing this, it took out my planned elk hunt. But, I wasn’t prepared to just throw $2300 away. So, it is what it is.

I think a lot of people are in the same boat. I keep hearing how tines are t affecting travel. And, in my opinion, it’s naive to think that. Because it is going to affect it once people aren’t locked in and paid up on these travels. Next spring is likely to be different for tourism and recreation business. Very different. I’d hate to be setting on a dozen or so properties geared around tourism right now. If they aren’t paid for, a lot are going to be going back to the bank if these conditions persist.

We have also seen a shift in the amount of money people have for down payments, and are seeing less people with good credit. The percentage of people trying to buy that can not get financing has also increased.

Also started seeing significant price drops on homes listed for sale in the area in the last 10-14 days.

Some definite change in the air.

Lumber, Plywood and OSB retails should be down already, and by a fair amount. Prices are still dropping just won't see the bottom on the retail end for another 3-5 weeks. Just look at the lumber futures market it's lost 60% in just a few months

Are we in a recession? I believe yes it’s already here

Drop off in business? To a point. Some residential “remodels” etc are slowing down. However, people will always want heat, hot water and working plumbing systems. The biggest problem I see around me is, one man shops. Tough to compete when they work for a beer and dinner at the end of the night and a company like us has a full time office, 5 vans, 4 trucks and your typical overhead. Our commercial and industrial contracts still need stuff done so we’re doing good. Sit back and watch. See what happens. FJB Let’s go Brandon

Matt

Seriously hope we all make it through the next few years and prosper.

Doesn’t the interest rate for savings have to be above the inflation rate or don’t too many dollars continue to chase too few goods? Isn’t this the most basic of economic truth?

Matt

The 10 year treasury rate in 1980 and 1981 was 11% to 16% to counter a 10-13+% inflation rate. The 10 yr rate now is 2.85%, with talk of it going up just another 1%, how does that counter inflation that is 8+%? The math doesn’t add up does it?

Matt

PS. I bought 2 ebikes in the last 2 years and went riding today in CO

Matt

A bike question. We traveled a lot today with the bikes on a rear carrier down dusty gravel roads. . They are both cached with dust. Would it be wise to wash them down with a water hose. Maybe covering the motor area with plastic?

Covering the motor sounds good.

Many of us are still so busy because WE CANT FIND GOOD HELP.

That alone is keeping the “ Wheels on the bus” around here.

That alone is keeping the “ Wheels on the bud” around here.

Plenty of open jobs around here. What I suspect is that, during the Covid shutdown, a lot of folks re-assessed their careers and said 'screw that!'

Too many *lousy* jobs, but even those employers are finding out that low wages and lousy treatment means people won't show up. Today I could go get a job washing dishes for better money than I made ten years ago doing skilled fabrication.

I retired three years ago and I would *not* go back to that work for what I was being paid.

Add that to the fact that a lot of people learned to do with less during the shutdowns. People learned how to cook from scratch, hang their clothes out to dry like granny did, do more car repairs etc. etc. The learned that they didn't need a week at the beach every summer.

People are going back to work, but the days of 'you'll take what we pay and we expect 65 hours a week' are done.

Edit- I should clarify, my one company is a small niche contracting business that is in very high demand… both of my businesses are pretty inflation proof.

I should be retired but I think I’m going to work a couple more years to buy a hunting or fishing property

I tend to agree on the recession point, or think any recession that does occur will be short-lived (at least based on current sight lines). And I don't think that negative growth should necessarily be looked at as a really negative economic factor. We had artificially inflated growth for a couple of years due to gov't stimulus and scarcity due to supply chain constraints due to COVID and now the war in Ukraine. At some point that will cool and growth will normalize, resulting in negative GDP growth. That is healthy - a return to normalcy so to speak, and not necessarily something to be scared of.

Fundamentally, I think anyone who is seeing signs of another 2008 are being overly pessimistic and ignoring some the economic fundamentals which are signs of a healthy economy (low unemployment, high inflation).

On the oil supply side, from what I have been reading it sounds like it is more likely that any price reductions will be caused by demand destruction and not increased production reconciling with current levels of demand. The notion is that at some point, these high prices will reduce consumer willingness to pay them, and demand and ultimately prices will decrease.

"Matt, by savings I mean the treasury rate, or the rate you can get with say a government bond, and not spending it on goods, not with a simple savings account with your bank. I know you think you are so much smarter than everyone else on everything though, so I do understand your smart ass remark.

The 10 year treasury rate in 1980 and 1981 was 11% to 16% to counter a 10-13+% inflation rate. The 10 yr rate now is 2.85%, with talk of it going up just another 1%, how does that counter inflation that is 8+%? The math doesn’t add up does it?"

Fed funds and savings rates are not set to "counter" inflation in a proportional sense - meaning if inflation is 10% the fed won't increase rates to 10% to counter it. I can't recall a time in the past 25 years that any savings instrument would keep up with inflation although they generally increase and decrease in roughly the same timeframe.

"Saw 3 yr Treasury hit almost 3% other day. You wont see this guy Powell rAise rates 5% over inflation rate."

I agree, and not just under Powell. In the late 2010's, the economists at the bank I worked at had a consistent message that we will never see interest rates increase to levels we saw in the late 1900's as sovereign debt had increased to such a high % of GDP for most major countries that the interest burden that would result from rates over ~5% would be crushing. That somewhat limits the tools that the federal reserve and its counterparts internationally have to counteract inflation.

Anyone else see the irony in this quote?

I can’t find a time it did going all the way back to 1960. Or does anyone else know of a time when this happened? I’d like to be a half glass full kind of guy when it comes to our upcoming economy.

I guess the way to out it is that the current reason for inflation may not be sustained so they may be more self-correcting and may not require big changes to fiscal policy to address.

What is going to change? This admin just plays the blame game- with their focus on social issues and Climate policy.

One positive, We will see lower oil prices if the war ends…but otherwise the same bottlenecks are there and this admin is doing nothing to change it.

Food it’s going to go through the roof, it has only just started. If it gets to a panic stage that can have a ripple effect on many other things.

Folks that paid $300k over asking price for their homes recently will be in a negative equity situation- never good.

If you have a Pulse you can get a job right now but just wait when things get tight and lean and mean efficiency matters, then its a whole different ballgame.

Sounds like I’m chicken little but I’m actually an optimist. I predicted this early on while the talking heads called it transitory. Maybe it being overly Optimistic….or maybe lack of experience. Many of the current wall st geniuses have never seen it when money isn’t being pumped into the system. We will have to pay the piper for this flawed monetary policy at some point. FFWD, now even JPM’s Jamie Dimon says brace for a hurricane.

Save your money keep your powder dry and buy when there is blood in the street and you will come out of this smelling like a rose.

The bond market has done some of the feds bidding already, but as long as the supply side is constrained, especially with the staples, commodities or goods we all “need” , it will be painful. As inflation works its way through the system, those selling essentials vs discretionary goods will likely be less affected. ..demand for services currently seem to be preferred to discretionary goods, but that too will slow the longer inflation persists at these higher levels.

We sell to businesses and lived through the slowdown in the early 2000s then in 2008 and now in 2020. We should do fine this year and next but are watching our inventory levels more closely than usual as we have 6 month lead times so unexpected growth or contraction hurts in different ways.

Shipping cost increase had been the main source of our cost inflation. We have successfully passed through the increases, so far, by raising prices. We are concerned sales fall if have to keep raising prices every 3 months.

I have a couple businesses here in CA. The one was impacted by Covid...but now its humming along though now impacted by tight labor...in fact both of my businesses I cannot find enough folks to work. It seems that the easy money of stay home and get paid has a negative affect on businesses like mine where we need the employee to show up.

My construction business- I deal with the top 3% wage earners....so no problems there, plenty of work we just can't get them done.

There is the shortage of labor....and the supply chain is still a mess, not much solved though it may be easing a little. Prices have gone way up....one example is we build a lot of stuff with an Indonesian Hardwood, Ipe- its like Teak. It was $6/board foot for 1"x6" 18 months ago...now its $21....an over 300% increase. Thats fun to explain to clients that are thinking maybe a 10% or 20% increase that have been on contract at the old pricing. This usually triggers a redesign- always fun.

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