The Approaching Recession

By Administrator ~ January 8th, 2016


I have not written an Arnold's Ramblings in about a year, but now I must warn you that it appears as though the DJIA and the S & P have entered into a bear market and clearly the economy is on the precipice of a very serious recession. George Soros, whose investing prowess is extraordinary, is calling this year a repeat of 2008. arnold would suggest that 2016 will probably be worse than 2008, and worse yet, the recovery from this "recession" will be even less than the recovery from 2008. We are heading into a very slow economic period where the DJIA will probably break the low of 2008 (which was about 6500) and the economy will be very weak. The real estate market will also correct and drop ultimately below the lows of 2009-2011. The next several years will not be pretty and in fact will be very slow. We are already seeing lower retail sales (except in autos). But Autonation CEO Mike Jackson announced that sales were up (to a record) by heavy discounting (which was not profitable) and that 2016 sales are very weak. While internet sales were up about 10%, total internet retail sales are under 10% of all retail sales.

It just keeps getting worse and worse. Layoffs are announced now virtually every day. And the numbers of laid off employees is growing significantly. Median incomes of Americans is down over 7% since 2008, and if you take out the upper 1%, median incomes are down over 10%.

arnold's advice is as follows:

1. If you are in the stock market, either sell or at least use stop losses. DO NOT USE ANY MARGIN!

2. Do not invest in real estate.

3. Pay down any and all debt.

4. If you are looking to start a business, the time will be right near the bottom, in mid 2017 until early 2018.

5. Reduce expenses in order to live within your means.


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