Published By Banyan Hill Publishing | | | | Published By Banyan Hill Publishing | | | | 16 in a Row… The Most Anticipated Recession? By Charles Sizemore
Chief Editor, The Banyan Edge | Banyan Nation, If we ever do get that recession, it really will be the most anticipated recession in history.
That’s not hyperbole. I mean it very literally.
The Conference Board’s Leading Economic Index (LEI) — a widely followed index of 10 indicators that have proven to predict recessions over the years — has been falling for 16 consecutive months.
The LEI has historically been a good predictor of recessions.
When it points lower — economists tend to take note.
So when I say “the most anticipated recession in history” … economists have been watching the index drop for close to a year and a half. When looking at an index, it’s important to consider the pieces that make it up.
After all, as we’ve seen this year, the performance of just a small handful of stocks has been responsible for most of the market’s moves.
Well, the deeper you look the worse the news gets.
Of the 10 indicators, 8 were negative in July. The only two that happened to be positive were initial jobless claims and the performance of the S&P 500 … and the S&P 500 turned negative in August.
Anecdotally, there are plenty of signs of stress.
As I mentioned Friday, Peloton, the high-end indoor bike maker, saw a drastic drop in subscriptions.
And I’ve been writing for weeks now that consumer credit is looking stretched.
But it’s important to remember: Recessions aren’t the end of the world.
And ultimately, the challenges of a recession force companies to innovate and sow the seeds of the next boom.
It might be rough, but we’ll get through this … and hopefully make a little money along the way.
And about that, let’s see what the team has been saying this past week. | | | The White House called this "a literal field of dreams." A small town in America's heartland is getting a $100 billion overhaul.
And early investors stand to see massive gains in the coming months and years.
Details here. | | | Weekly Recap - China, You’re Fired! Made in America is Back
Globalization is dead, and manufacturing is coming back to American shores for the first time in 40 years.
But this is not your father’s manufacturing plant. The new onshore factory is a marvel of automation technology powered by AI and promises to transform small towns across America.
This is a trend that will last decades, but you can get in on it now. - Why Wall Street Money Is Pouring into American Small Towns
$100 billion still goes a long way in small-town America. And yet one firm is investing that much into a small American town.
And there are stories like this across the country. The last time we saw a trend like this, the year was 1973 — 117,000 new jobs were created.
The area became the home of 74 billionaires and 76,000 millionaires. Now this mega opportunity could be unfolding right in your backyard! - Trade in Predictions for This Proven Strategy
The man that predicted the 2008 meltdown is predicting another market crash.
But here’s the thing … the same guy predicted crashes in 2015, 2017, 2019 and 2020, and none of those materialized the way he thought they would.
Predicting crashes is a losing strategy. You should try this instead. - Science Says Babe Ruth Would Have Been a Great Investor
Babe Ruth died 75 years ago but his legacy still has lessons for us to learn today.
What you probably didn’t know is that he excelled in almost every way. And he can help us become better investors today. - Hated, Feared, Neglected … And Mega Bullish
No matter how you feel about President Biden, there’s only one logical way to feel about his Inflation Reduction Act: Bullish on the future of energy.
But tucked away in the bill, beneath the reams of dollars headed straight for renewable sources like wind and solar, was a substantial tax credit for a highly efficient, safe, yet outright despised renewable energy source… And here’s the simple way you can take part today. | | | Suspended Animation in Real Estate I’ll wrap this up with a quick note on real estate.
It seems that high mortgage rates really are having an impact on home sales.
Sales of existing homes in July were 16.6% lower than July 2022. At an annual run rate of 4.07 million home sales, we’re now sitting at 2010 levels, not far from the low point following the 2008 housing bust.
Home prices have yet to really crack. The average home price has been holding steady at a little over $400,000.
And therein lies the rub.
Affordability is a problem at current mortgage rates, and homeowners are reluctant to sell their houses because buying a new one would mean getting a new mortgage at current rates.
So, prices stay high on low volume, and we’re sitting in suspended animation just waiting for something to happen.
I think it’s likely we get a really nice buying opportunity in single family homes within the next few years. But that time isn’t today.
Regards,
Charles Sizemore
Chief Editor, The Banyan Edge | | | Get The Banyan Hill App And start experiencing that "total wealth" freedom for yourself. | | | (c) 2023 Banyan Hill Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Banyan Hill Publishing. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 866-584-4096) Legal Notice
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