🔴 5 Obvious Indicators a Recession Is Coming in 2020 | Recession Watch


In this series so far we’ve spoken to many experts about the global macro economy and it’s both the Analysts and the hedge fund managers who’ve given us their views on whether they think we might be moving to recession or not But to get a true picture we need to look at the sectoral level the sort of micro to the macro And that’s to understand the component parts of what makes up the economy so in this show I’m gonna go and speak to a number of people to get their perspective on what’s really happening on the ground to really ascertain whether There is something more Kind of odious going on beneath the surface or whether things are relatively plain sailing The first person I want to speak to is Mark Hanson of Concord resources Mark’s business ships metals around the world and speaks of the world’s largest customers I think it’s going to give us a really good idea of what’s going on on the ground Mark, good to get hold of you You know we met in London recently and you explained that you’re in the metals business and I just thought you’d be ideal for This program because I really want to pick your brain and what you saw is going on Give people a bit of an intro of what what you actually do It’s good to see you again So I run a company in London called copper resources, and we’re global metals merchant and trader Very active in all the markets physically and also financially across the precious metals base metals and a little bit of energy as well For context we deliver 2.2 million tonnes of metal products and raw materials to about 400 customers in 40 countries So we’re a very active global participant in the flow of raw materials So we purchase things like copper concentrate zinc concentrate alumina And then supply that on big ships trains and trucks all over the world everyday To customers in the smelting businesses and the fabrication businesses all over the world So by definition therefore your business could be pretty cyclical in terms of each of the commodities and different You know times of the business cycle demand and that kind of stuff it is Yeah, we really do face the daily fluctuations both of the microeconomics There’s various commodity markets But then also the macroeconomic factors of the drive those various markets and most of our products are directly quite industrial so what we’re seeing and dealing with other the wholesale markets that have to deal with the Smelting industries and the fabricators that fabricate those metals products into parts for automobiles or for them in the intermediate uses They do they go into consumer products So what do you think the end use for most of the metals are that you produce? I mean kind of because I’m trying to understand the industries that really you’re going to affect more than others or you’re going to see The effect of so our raw materials will touch final fabrication industries in aerospace automobiles housing products sometimes chemicals and other industrial infrastructure There’s two things. I’m really interested in One is the trade tariffs thing as a starter you know people with all of those global linkages whether you’re seeing people change their behavior pattern whether it’s building inventories, or Or running down inventories. And also whether bricks it’s had some sort of inventory build and run down as well Just just at a starting level. So for sure that the bigger story is trade and trade tariffs and that was a unexpected development that many Particularly industrial customers hadn’t come to appreciate I think the seriousness with which the Trump administration is approaching that topic they had been used to but break down to barriers not imposition of barriers and when the industrial world all of a sudden had a content within particular tariffs in China and having to deal with tariffs on Chinese fabrication products and Chinese export products That was an unexpected change in supply chains And I think people weren’t prepared or had forecasted to deal with it all so that that’s me has been the biggest story When I talk to business customers and people that move goods around the world for various final fabrication into media processing in different places That to them was a major reorienting of the supply chain They become used to where China is a major importer and exporter of a number of commodity products and commedia products remember products to steel products to auto parts and other things that touch China is in numerous amounts of goods that all of a sudden became quickly on economic and that wasn’t forecasted So I think that was one the other one that has been in the u.s. Story Particularly in metals, which it is it relevances You know Trump was it was very quick to put steel and aluminum tariffs on when he came into office And so what he did there was to protect domestic industry He put 25 percent on steel and then 15 percent of aluminum. That was a Boost to the US domestic industry at the expense of neighboring industry. So it hurt Canada at her production in Europe koalas a few exemptions in Australia, for example but by and large that was the first side that Trump was going to take very seriously the idea of reassuring American manufacturing what that did is a Turbocharged and already pretty good at that time American I would say you argued an American labor market domestic manufacturing base in certain industries like that So our real booze, which is now starting to fade a bit even even with those tariff effects So I think people were caught off guard and how serious he was taking that and then he was you know going to put it local reordering of trade flows by us by the pen by Fiat very seriously, so There’s a couple of questions on that. So in terms of the the global that the Chinese tariffs have people found That the new supply chains yet Or are they still trying to figure out how they’re going to? Haven’t gonna find all this sources tomorrow because China has been a big supplier of this kind of stuff China is a huge participant in those markets, but it is also very possible for people to move production reasonably quickly to alternative places So Vietnam is a beneficiary. The Philippines is beneficiary Japan is a beneficiary these replaces that companies can move either because of technology or Cheaper labor or are shipping the ease where they can move operations reasonably quickly. Do you think so? Well that’s happened. We can speak to some business people. It’s very easy for them to look at alternative sites in Asia and move away from Production in China and I do think some of that’s happened in some basic industries I do think that’s also why Trump’s move to those tariffs has been arguably somewhat successful in bringing the Chinese to the table to dialogue around a number of issues that were of importance and so your role is in that is to For your own customers sauce product from different places Essentially so to get around the tariff. So yeah, that doesn’t necessarily affect your business negatively It just changes some of your know for us we read and we’re not in the processing business so the people that are affected negative negative by the horse or the people that have plant equipment in China and then have to pay The import or export errors that are associated with their processing So that those are the customers that I think will look at and have looked at alternative destinations Mexico Southeast Asia Japan is another one where you can see There are gonna be some benefit to the local economies from that from that movement for the u.s it is it’s sort of funny because it’s not necessarily a job back to the US or Manufacturing back to the US but rather moving into an alternative location. It doesn’t have that tariff And if you found that you said that the the US benefit is kind of fading now Do you think that because you you see the kind of globalized world of metals? And do you see that America can really compete even with tariffs or you gonna find that there’s always going to be somebody else with cheaper metal To import into the u.s U.s. The US economy was by far the strongest consumption economy as the data As economic data clearly showed that it was also true an industrial basis where the auto market was the strongest you had real Activity again in building some infrastructure you had the rehabilitation of certain plants with smelting as I mentioned earlier. These were micro things We were seeing that reflected a broader and broader macro picture Until the start of this year and that meaningfully cooled I would say late in the fourth quarter and then certainly in the first and second quarters of 2019 The reasons for that is I think is a few but important to me I think people began to lose confidence that these policies were going to be driving Stimulative activity domestically, whereas instead they were becoming seen as kind of attacks So the cost of to consumers ultimately pass some of the increases in the supply chain changes Whether people began to feel that the momentum was fading behind any stimulus or boost did there have been in the economy driven by these suits or restoring efforts and other things were failing and I Think that took activity in the u.s quickly off What I would say had been a very brisk level last year in terms of business we did and it was really a standout market to a much more muted pace and I wouldn’t say that it’s Shrinking per se at the moment, but I would say that we don’t see industrial growth doesn’t exist at the moment, right? So growth is flattened out significant in the US and what are you seeing globally in terms of growth because you see the whole picture I guess you’ve got customers all around the world How does it feel to you out there? Look, your Europe has been consistently poor for several years now so there’s been no real change, maybe look industrial metals demand and commodity demand your Eurocentric has been poor I would say for a number of years, but it’s it’s Consistent along a level where people don’t expect a meaningful pick up rate or do change in that industrial Activity a rather steady flow of business that reflects normal export markets and normal consumption It hasn’t been a meaningful uptick that I can recall in the last few years in European construction or in in the auto market Domestically in Europe who’s been flats a week for a number of years now, that’s a reflection I think of just What would my macro markets have told us for a while is that it struggled to get that kind of traction? Where’s the US since Trump’s election did have a noticeable increase I think in Consumption people’s plans business investment all that was real and we did see that in a number of opportunities and business development initiatives We took Leon Sheridan and an illuminator fire in Louisiana, for example, but when employing people for that operation for example was very difficult We sort of see these these micro Points where the labor market for example was very very tight. You couldn’t hire people to work with some operations We wanted to restart or we’re going to have to increase wages to reflect that the US was very healthy but I do feel that that Comparative advantage seems to have faded quite a bit in the last six And the reasons for that Is probably a few but most important seems to be the people’s confidence is kind of drained from the business plans They wanted to make and their certainty in terms of political Evolutions of tariffs and other policies has become more of a drag than it is. Yeah I’m getting that I’m getting that impression as well I just see people of putting plans on hold, you know, and also the US aircraft manufacturing industries It’s you know, there’s problems there. We’ve got problems with the car sector as well So you just see demand overall just feels like it’s slowing down As you said it’s not yet in recession yet in the US but it kind of feels like it’s slowing and sorry You arete say elsewhere About the new. Eeehm economies have been from a commodity demand perspective I would say very volatile from when there’s some markets have been very good some years and some markets been very bad market like turkey For example that previously has been a real real excellent market for metals consumption and construction fabrication fell off a cliff a few years ago with the political developments there and was lacking to the currency and lack of Confidence there was a real indicator that that economies, you know been very boring Reflexive subsequently in industrial demands. We haven’t seen come back Southeast Asia similar to China has also been very quiet There’s been some signs of that offshoring from China having effects in some smaller markets like Vietnam or Philippines on highlight These two countries are probably better than people think simply because you’ve seen more business activity come from other country from China in particular their fervor for investment South America similarly You know in southern Africa is sort of hit or miss depending on on the vacancies of sort of the cycle But certainly nothing stands out there in the Latin region. Certainly the last two quarters last six months hasn’t been anything special Yeah, so you’re not really seeing growth anywhere. I guess across the global economy So if I look at the chart of copper for example as a proxy for like, you know Industrial metals just doesn’t look good to me It feels that prices want to fall because as you’re saying there’s no real demand out there. You’re not telling me yet I don’t think that you’re seeing a full recession but you’re just seeing no real incremental demand and that copper chart worries me that the whole metals complex can come lower and Also, I’m worried about the dollar going higher as well Which obviously has a big impact in your business and he thoughts on on color metals prices Because of demand and the currency side to two most important drivers because Highland what is the dollar? That’s all for all metal is gonna be key driver mister direction of the US dollar it certainly is I think surprised a number of market participants that the dollar has remained as firm as it is even with the Seemingly and with the bond market moving as it hasn’t with the expectation for easing from the Fed as it has That’s compounded a lot of commodity market participants at the same time We have pretty significant short positioning across the metals markets and copper in particular out of highlight recently is that very strong signs of the market did turn very short as part of that expectation of slowdown yet the prices failed to make Any real significant negative headway? There’s one other conundrum that I haven’t quite been able to square with the slowdown. We have seen in business, which is real It’s the lack of increase in visible inventories on the exchange So logically you would expect to see metals inventories increasing as consumption slows down producers are still producing The prices are still pretty good and you would expect to see inventory Exchange grow as people deliver that unwanted metals They’ve changed that hasn’t been happening in any meaningful sense across the LME metals Which is interesting because that’s not something I can fully explain yet but it sort of suggests that things aren’t as bad as we might think in terms of metals supply the man balance even though consumption is recently weak and metals premiums which is a prices that are paid over the Change prices to deliver the goods into certain locations or also, they’re poor but they’re not horrible as well so for the moment, I feel that we’re this sort of the zone where people Expect things to get better in the next six months they’re for continuing to stock up on their products as they would expect but not budgeting for any sort of major increase and Therefore we haven’t seen the backup of inventory yet Which would be the clear bear assignment to look for when going short copper or another zinc or aluminum or something like that? We haven’t seen that yet Yeah, it’s fascinating because we’re seeing you know from speaking to a bunch of macro people about their view Everyone’s kind of at the same point it’s like, okay everything is now pricing in slow growth and There’s not clear picture of whether we go into recession or not And it’s kind of like we’re waiting for the next three or four months to see that data My view is I think it might be the dollar that does it but let’s see it certainly could be the Meaningful move higher the dollar would pressure or all commodity prices from energy to copper to other base metals lower than a question but there’s an interesting flipside of this which is if the Fed delivers as people expect and if that stimulus is enough to Ignite some of the confidence that seems to have been lost in the last six months I do believe that because of the Situation we see in some commodity markets where we have low visible inventory You have reasonably balanced supply demand balances that Creates a situation we could actually have a fairly strong rebound in some of those prices to reflect people’s short-term increase of confidence If we continue to see data deteriorate if we see visible inventories rise If we see things like time spreads weekend if people don’t want to hold money So then you see the contango is growing in those markets. Those would all be signs that Actually, what we’re seeing is there is a real meaningful move towards recession and then towards actually, you know Not just no growth but contraction it feels like being long volatilities the right answer because one way or the other We’re probably gonna get reasonable move. We either break down or break up based on their so it’s going to be super interesting Mark, listen, thank you for allowing me to pick your brains and get an idea of what’s going on It’s it’s incredibly consistent hearing from what you’re talking about. What everybody else is talking about as well? We’re kind of in that wait-and-see moment where none of us can really get any clarity yet We’re not seeing there’s not many signs of a sharp deterioration. There’s not many signs of a bounce So I guess we’ll have to wait and see for a while We’ll have a clearer view of Which one which way we’re going and we should see whether the whether the the Mac reviews that input out there. I’m fed Amazing work or whether we see a real industrial Retrenchment that is going to take us into a period of very very weak growth and possibly recession. Come see ahead. Which one I Think we’re due I think we’re due for a period where we do see business activity contract and we do see a bit of a pullback and I think we’re overdue for that and the number of you know Industrial leadership leaders CEOs of the companies involved in our industry They recognize that I’ll close with this song The commodity space is not the space that’s going to be hurt as badly as some other sectors this time around everyone If sort of looks at the contest, I’ll be horrible because of China. That’s true But the industries also have been through a very rough period already for four or five years So you look at commodity prices and commodity companies. Well, yes, they’re obvious. It’s going to be more more downside But but the the industry is a much cleaner and more disciplined shape than it was because we’ve already been through some lean years Miss prices have been lower in exodus 2012 commodities have been on a downtrend Therefore the balances and the sort of discipline that’s been associated with that Leave some of those markets in better shape than they would have been on the one several years ago. I had this happened Yeah, it kind of makes sense for me is at the end of this as our buying up You know if it does go to recession, there’s going to be a longer-term buying opportunity in the commodity complex I think just because as you say it’s the kind of final flush out if it happens and after that There’s been a lot of restructuring that goes on. Oh, sorry one more question president precious precious metals amount You know that’s base from a training perspective and also a Shipping of concentrates to content there’s a copper and gold I think those markets are are primed for resurgence, and we’re seeing it already where an investor interests coming back Physically speaking. I think that business is picked up as well We do a lot of sports moves that active and in those in the products and that business is gone I think it’s much better in the last few months Investor interest is critical to those prices and there’s no question in my mind That investors couldn’t be bothered at all that sector in the last few years And now we see that positive price action and that almost hedge If you like against some of the outcomes we’re talking about has people quite interested in the space again So I’m positive on the prices. I think that we will continue to see investor interest there and central bank behind It’s been very strong as well, which is something that hasn’t been seen at this rate in many many years so the floor seems to be under a lot of that and if that can maintain itself then I think the Prices will be an interesting place to be for the long side if the views that we’re talking about come to fruition Perfect. Well, thank you ever so much. It’s zero. Yeah. Good to see you Wes so mark is like some of the guests we’ve had so far he’s kind of in that Pause point of not sure whether the date is gonna weaken or strengthen he kind of think it’s probably going to But I guess we’ll have to wait and see I think one of the big things the commodity sector is going to be the dollar But the other area want to find out about it’s the chemical sector you know chemicals make the world go around the car the unsung heroes of the global business cycle and Our guy on the ground. There is Paul Hodges. So let’s find out from Paul what he’s seeing with the chemicals business around the world Hi Paul Hodges. How are you? Yeah, let’s just think you back when you know No, so I’ve interviewed up a whole bunch of people So rack row guys analyst trashes in this particular program the idea is to kind of get a secretory. ‘el the micro to the macro right brilliant But you know you were one of the people I first want to reach out to to pick their brains on What you think and sees going on because the chemical sector which you’re an expert on is one of the most economically sensitive areas of all and you know We hit it off when we first met because we realized we were looking at the world from the same perspective But from different ways of getting to that perspective so, you know I wanted to get an idea what you were seeing now because there’s a number of things obviously with tariffs going on and supply change Changing Plus, you know economic slowdowns in certain areas. Give me what you’ll think your perspective is right now Well, I suppose if we sort of get go go back and do a helicopter view As we said in previous interviews What we’ve seen since December 2017 is a definite slowdown in the chemicals industry and this matters because we are the third largest industry in the world after energy and agriculture and We go into all parts of the economy and we’re in that position in the value chain Where we we do get six to nine months lead time on what’s happening elsewhere So you just then sort of if we start to focus down a bit, you know One of the wake-up calls for me was October last year where there’s a big industry conference in Europe And I walked into my first meeting with some said senior people from a major company Said how’s business my always my first question. Oh, we were down 40% the second half of September Wow I said, oh, you know and it went through three days We had 20 odd meetings with companies you know judge not just European companies but global companies and one CEO joked halfway through I Said oh, no, actually we’re doing better than everyone else. He said we’re only down 20% No, no, I don’t want to sort of say. Oh, yeah, this is a collapse what I’m saying? Is that mark at the moment at which we transitioned from a stable slightly rising? picture towards a real significant downturn and so if we come back we’ve now got the may data from our friends at the American Chemistry Council and Normally May would show quite a sizable Improvement because it’s right in the middle of the second quarter so car sales should be going well Construction should be going well all of these things and the weather has been good was good in May But in fact the only bounce by 0.2 and percent, you know that’s less than half of what we normally get in May so what we’re seeing is a deteriorating picture in the industry in almost all of the of the major markets and The bounces this is something I look at a bit The bounces are weaker than they used to be and they’re getting weaker all the time So the outlook for the second half of the year isn’t terribly good I don’t think so when you talk to your clients in the chemical sector, are they getting concerned? What are they doing in terms of inventory bills and that kind of stuff. Are they running down inventory? Where are they and that kind of cycle as well if they’re perceiving growth growth to be weak going forwards? Well, I taught in fact earlier today To CEO of one of the European majors on it exactly this topic It’s difficult in the chemical industry because we have got the geopolitical issues around Iran and the oil market So you’d be it’d be pretty risky for you to D stock at this stage Because we don’t know what’s going to and what might happen in the Strait of Hormuz And so, you know if we wake up one morning and find things on fire and oil prices $200, you know That’s an easier way of people going out of business. So there’s this is pretty high risks out there So really one thing is the oil price and feedstock could be quite important. We’ve talked about in the past This time is just a sort of stable issue what people saying? Analogic will instruct me when we’re talking. He said look we don’t know He said I’ve been talking to a lot of my colleagues We don’t know at the start of the month how the end of the month will turn out is great uncertainty Now so far so far he was saying, you know Let’s not talk ourselves into a downturn so far actually in you know it what we’re seeing at The moment is is a patchy area. Some areas are very bad I mean the auto market obviously is very bad to see that see the numbers there and so on Other markets even in the environmental area for example the personal care markets So actually they not not doing too badly Rangers and growth So what he’s saying is that we seem to be moving away from where we’ve been over the last 20 or so years where to forecast growth you say Oh, well, let’s take IMF GDP numbers and you know Maybe it’s one x out of what are the half x or whatever and we’re now looking at a much more specific oh, this Nisha is doing okay that one no, I’d rather you know, and so on and so it’s very hard to to forecast and have people had supply chain problems from Us tariffs on how they dealing with that Well, I mean we are right at the heart of the terracing in chemicals because they went on very early a year ago and Particular if you look at this from the US perspective The US is expanding its its production of polyethylene the largest single polymer By 40 percent due to shale gas Developments and the idea was that that would mostly go to China because the US market for polyethylene It hasn’t grown for 15 or 20 years and in fact it worked declining with the single-use packaging problems that is developing and consumers moving away from plastic bags and so on but of course In actual fact because of trade tariffs the sales to China have gone down over the last two years rather than going up So so where is that product? Well, we were slightly lucky in the vertical verse with her accountants because they’ll actually delayed everything by here but now we’re starting to be right in part of this problem and There really aren’t many places for it to go But we’re seeing much more coming to Europe for example, but the european market is is not growing either. So it’s just destabilizing the market latin america the Market, there is pretty flat since nowhere for it to go middle east is already an exporter So you’re you’re getting pressures building up from the pressures so far are building up in price So prices are coming down very dramatically over the last six or nine months because people aren’t really having to push Hard to get the volume moved. So that’s the that’s I guess a lack of demand and plenty of supply which is Exactly. Yeah and so let’s look at the regions, so I think you’ve been highlighting that China’s been pretty slow and I think you were one of the first people to see that buy exactly this process took us through the regions and then finish up with the US, which is I’m specifically interested in because I think it may be slowing down more, but I can’t tell and Most people are speaking to aren’t sure either yet. So I’d love to hear your perspective Really what I think Machan has been slowing for it for a while now Basically because you know if we what happened From 2008 was that they doubled debt to GDP ratios from hundred and fifty to three hundred percent You know, it was never that China became as so many people believed middle class overnight It was just that there was a lot of borrowing out there So us you could afford to buy a new car bill car sales went in ten years from five hundred and fifty thousand a month to two and a half million now, I stopped normal, you know that is I think it is important that we recognize that what we’ve seen in some areas is Completely at normal and so we shouldn’t be too worried You know if we come down from two and a half million to 1 million or one of the 1/2 million sales Actually, that would still be quite good growth compared to where we were it just doesn’t look very good You know compared to the last like last four or five years. So there is of us. Well, we need a historical perspective if we look at the top 10 market top ten economies What we see is that only two of them are on the rising trend. So Italy’s on a rising trend but only up to zero India’s on a rising trend but only up to two point two percent so pretty flat otherwise They if we look around Europe is is negative so France and Germany are negative do UK slightly strange because the May data which I’m using here is Still affected by the pre brexit stockpiling that we talked about in April You know every village hall in the UK was filled with stuff You know, it was a it was a false alarm so all of that has to Has to change so hard to see a pattern in the UK, but that doesn’t look as though it’s it’s growing very fast Of course, we’ve got the worries about October and a real brexit No Deal coming up then Otherwise if we look at them things are relatively flat Now, you know if we look at the US What is surprising? Is that the u.s Conceptually has this fantastic advantage because of shale gas and so the fact that the u.s Is not growing and the chemical Ret railcar shipments are not growing and so on is one of these things it’s a bit like the Sherlock Holmes Story if you remember that of the dog that didn’t bark in the night and you know, the great detective realized well Wait a minute the dog didn’t pop when this murder took place. So actually they can’t have been a stranger there It must have been the owner who did the murder And and we’re seeing that a bit in the states because the state’s ought to be rocketing up if the economy was doing well Then you know and then the states would be doing well because so much of you know so much of chemical business is trade So if you if you ask me where I think we are I think that what Trump is doing with trade restrictions is really damaging the chemical industry and that we are seeing the first signs of that because the whole Growth of the chemical industry has lost 25 years or so has been due to globalization and now that’s being cut off of them At the knees as it were the chemical industries got to be an indicator for the global economy And and so what you’re basically I’m interpreting what you’re saying is well if the chemical industry Is going to suffer from trade tariffs then trade itself is suffering and therefore the global economy Yeah, and in terms of the US and your you’re seeing a slowdown in the u.s You know what we’re What we’re also seeing was and I think we you know we we began to see this six or nine months ago, but There are lots of lots of signs, you know we look very closely at the auto industry because it’s three and a half thousand dollars worth of chemicals in every new US car and As you saw the volumes were down in the second quarter they were particularly down in in in June and at the same time, you know, we look at the used car market and that was up 9% and Experian reporting that you’ve now got record numbers of prime and You know super prime our buyers deciding to buy a used car rather than a new car now That seems very significant to us That’s you know, the people with the best credit scores and presumably the best incomes are saying, you know I need a new new new auto but I think yeah the price differential which is ten thousand dollars or so I think for this for the moment, I think I’m going to trade down. Yeah, that is super interesting so overall if you look at your indicators for across the chemical sector you’re seeing continued slow down or are you seeing a stabilization because in some sectors like the Metals industry they’re kind of seeing it’s stable at zero growth I don’t know how you’re seeing it right now You seeing a continued deterioration with the US slipping or you know, what’s your kind of prognosis? We’ve virtually on the point of saying we are either in a recession or about to enter the global recession You know, what what what could change that view? well, normally quarter three is pretty quiet because it’s the holiday season and everything else if it turned out that we’ve just been seeing a pause for some reason and Suddenly everybody has got low stocks and they need to rebuild and so on then yeah Then we would get a bit more confident. But as I say we’re saying about the oil price Think stocks are left below out there I think that stocks are actually you know If I was a buyer today And I talked to them a lot of the time I would have my stocks slightly above average Because I’d be nervous about geopolitics and so on but what’s your in it is really? you you’re you’re in a battle between the negative impact of trade terrorists and The way that the world economy is now being driven in a downwards direction versus the short-term issue of what’s happening in oil markets and feed stock markets, which Makes you nervous short term now both of those factors if you stand back and think about them, you know And if we talk about this in three or four months time, what we’ll say is well, both of those factors were negative There’s nothing out there that’s showing me that people are feeling confident about buying new cars about buying new homes about you know, We talked that six months ago about what we saw on the smartphone we’ve talked in November, you know, smartphones sales went into recession and then suddenly you know in January the street woke up to this and There was there was there was panic all around with Apple and so on. Oh Yeah, these three core consumer markets which have driven the world economy for the last 20 years or so They’re looking pretty weak some weaker than others in certain places. But no, I I I’m I’m afraid to say I’m Pretty pretty good pretty negative now poor. That’s what yeah I just wanted to pick your brains because you see it with a different perspective and I think it’s super useful for everybody To hear then. I really appreciate getting the time to chat with you Getting an idea and let’s how this plays out. I think I think it’s crucial. I think the next couple of months They’re kind of into the summer early. Autumn. I think we’ll have a really good idea I’m 10 to be like you I don’t think we’re gonna get the pickup the kind of Q3 q4 pickup that some people are expecting But yeah, let’s wait and see I’m yeah, I’m a little bit more sanguine as you are as well I mean the final thing that I’d say route is that we don’t take the view that the Fed is key in this What we’ve always said is that China did the massive stimulus? You know, he took the debt up and so on and it was like the car sales You know car sales in the rest of them of the world compared to 2007 and today are they up at all? It’s because of China and everything that went into that So we look at shadow banking and we look at this steamers Pro and they are clearly reigning that back And and that’s the key thing They’re uncovering debts all over the place for local government and so on and so that’s the real Headwind here that what that does. Is it brings forward demand from the future so if China is now finally having to cut back and you know 300 percent of GDP is a kind of level it makes you cut back You know People keep saying oh they must do new stimulus Well, there’s no sign of that and I think they’d be crazy if they did do it so So if China is is going to continue cutting back like that Then I don’t see there’s much option for anybody else and whatever the fact does to me I mean, I’m not a trader as you know I stock market trader III I think is relevant today where they can drop interest rates tomorrow to zero I don’t think it would make it. What effect it will get you bounce on the S&P Yeah, people have talked about that. They’re pushing on a string approach that the Fed whatever they do This is really gonna make a difference because there’s no true source of demand out there That’s all brilliant to speak to you as ever really good to get job Thanks you thanks a lot both mark and Paul Talked about how important the car sector is for metals and the global business cycle in the chemicals industry So obviously my go-to guy on this is Daniel Daniel Ruiz Has a deep understanding of the car sector and I want to find out globally What’s going on? because we’re all seeing global car sales shrinking and what his view is on the US where and know he’s got some strong views and They’re kind of Against the mainstream narrative. So let’s see what Dan and has to say Daniel good to get in touch with you finally cuz I’ve been talking to Mark Hanson in the metals business. I was speaking to Paul Hodges in the chemical business. They’re like, it’s all about a car industry Really you need to understand what’s going on there and you are my man in the car industry. So Give me a top-down perspective Of what you see is going on on a global level and then we’ll get down to the US where I’m really interested in What you’re saying, sir? So starting at the global level? Total global vehicle sales are down about six point four percent This is kind of more than two like a every market phenomenon, and it’s very concerning It’s it’s starting to have ripple effects on not just the the automakers but the suppliers and I think the phrase you use often is There’s quite a bit of knock-on effects that that are yet to be seen But some are starting to filter through so why is this happening globally right because I’m noticing the phenomena I mean, these are some big fools in car sales numbers all around the world What was it was that the rising interest rates that preceded it or is it excess inventory or is it what the hell’s going on? Others are Sifl, you know, it’s it’s they don’t they don’t go up forever there’s normal cycles and You know It just it’s things like that that happened that happened naturally in terms of interest rates It’s not so much what happened with interest rates? About in terms of them going up the issue here is that interest rates have been low for so long? that auto prices are inflated to levels that can’t be supported so You’re starting to see in my opinion Pushback from consumers that that have you know that have been stretched as far as they can go There’s no longer a financial mechanism to keep monthly payments low in terms of affordability, so It’s happening. It’s having a negative impact on sales. That would be my my you know, my my best guess on a global scale I’m very very Confident that that’s a big part of the issue in the u.s. Although there’s a lot of nuance. Yeah Well, I’m gonna come on to the US and a sec Are you seeing any pickup anywhere or do you seeing continued slowdown in sales outside? In the rest of the world. Is there any bright spots anything stabilizing or does it all look pretty shit still? Yeah, so China Appear to be a green shoot in June, right? So for the first time in a year there increased first glance I said, hey, that’s that’s great news, you know the economy seems Possibly. This is a sign that that yeah, the auto market is is turning in China But soon after reports started coming in that what fueled that sales increase was Pretty heavy discounting up to fifty percent I’m not saying that all the sales were fifty percent. I’m sure there’s somewhere in between but you know Large discounts fueled via the sales result but more importantly the thing that stands out particularly important to the viewers is that whole sales declined For the twelfth month in a row Despite the retail increase and another little important nuance that that was reported is that there’s no pickup in demand from dealers to automakers in sight So is it positive that that that sales increased? Yes that will bring inventories down. I Have some concerns about and anytime that there’s that there’s pricing pressure You can you can expect there to be other issues later on down the road I can say that with full confidence in the US. I know that the Chinese consumer is a bit different than the US consumer both from from purchasing habits and from Know that how they how they manage debt but anytime that you put pressure on a new asset it’s gonna filter down to the to the used asset and if The market is even remotely similar to ours That’s gonna have a negative negative impact on trade in values Which in other words is consumer purchasing power. So what I’m concerned with is that we see a spike that was very much related to heavy discounting that Has a negative impact on trade in values and then the following months. You have to have a Continued decline possibly worsening So I’m keeping a close eye on that. That was the one green chute. But otherwise all the markets are down Europe’s down Canada’s down mexico’s down. The u.s. Is down all the major markets are down So 220 by the us where you focus most of your attention what’s going on there? and you know how how rapidly are things changing the u.s. Is starting to get really really interesting a Couple months back that came on and I said that the US market is by far the most important the the automakers that I cover the reason why I cover them is because I have quite a bit of data and indicators that I use leading indicators that I use To forecast results in the u.s Extremely reliable and for the big three for GM and FCA north of 80% of full company EBIT comes from North America, so what I’ve been explaining to viewers is that the US has been very very Late to the party, right? It seemed like like auto sales worldwide turned down They also turned down to a greater magnitude than the data than they did in the US so the companies obviously have had headwinds overseas But they can overcome a lot of those overseas headwinds with us strengths or North American strength And that had been a story of the car industry for a while. Both America was strong enough Correct. Correct. North America was strong enough, you know at some point in time I think if we have time during this interview We should discuss the whole case for autos because it’s extremely important that that folks that are watching this understand the other side And quite frankly, I think it’s over which we can discuss in detail as well So what is happening to us growth? What are you saying you for the key indicators? what how bad is this gonna get I have three indicators that I use once a short term once a Medium term and provides confirmation for my forecasting and then one is a long term so my short term indicator is They supply and they supply is really really simple a really simple calculation But when used properly it is the absolute best indicator for you for the automotive industry Because in essence what you’re doing is you’re counting based on the sales rate How many days it would it would take for you to run out of it? Right based on the amount of inventory that you have so You can assume that if the rate of production is Equivalent to the rate of sales, then you have a very very steady day supply of vehicles however, when you see a spike and day supply You know that there’s an imbalance between production and sales that supply is outweighing demand and vice versa so There has been some improvement in base apply when you look at it on an overall market basis for the u.s It’s important to note that the improvement has come on North American production cuts not on an increase in demand or sales and When you when you start taking it a little bit deeper and you start looking at the companies that I cover for example for GM and FCA There’s there’s still there’s still risk in that in that indicator That suggests that there’s going to be further production cuts down the road. The medium-term indicator is is my wholesale estimates So in essence I can take day supply and forecast sales It’s a great indicator for that as I just explained wholesale estimates that I provide My clients are extremely accurate within a 1 to 2% margin of error. So So they provide confirmation on a monthly basis and then quarterly before of earnings We need to discuss those and Because I think there’s gonna be some surprises in q2. I Thought they were going to be coming in q3, but some are going to show up earlier and that’s a surprising weakness. You’re thinking. Yes yes, and Confirmation to a bigger theme that I have going right now which is critically important and I think largely misunderstood and then the long-term indicator which is which isn’t an important in the piece of this of the puzzle is Time to equity so time to equity in essence What I’m looking at is what a new vehicle buyers loan look like three years ago I’m looking at the average transaction price the average loan term the average interest rate I’m a merging that loan and then based on a proprietary formula that I developed I plug in used vehicle values and I can tell how long it takes for them to reach the break-even point in their loan So it’s it’s it’s it’s a terrific indicator because I always know what’s gonna how that looked how that picture looks three years into the future Because in essence I if I’m looking at three years back today meaning folks that purchase a new vehicle in 2016 I’m looking at them particularly because that’s your typical replacement cycle. Well, I’m logging data for 2019 currently and I can plug in the same formula for used car values and then I can determine how how time to equity is Shaping up going into the future And it’s not looking good. Well the best way to describe it is we have not begun the healing process. So So you’re saying your short-term indicators? down you’ll meet medium-term indicators are indicating an Acceleration of weakness and your long-term indicator is not showing any pick up Into the extended future yet. Is that right? That’s correct so this is quite a large bust coming in the hell in the car market if You’re if we’re not seeing it doesn’t looks more than a short-term cycle here. It’s not an inventory cycle We’ve actually got a bigger slump Absolutely, and that’s it That’s a great great point because we can go through ups and downs where inventories get out of hand Production gets cut all of a sudden day. Supply looks good, you know in three or four months later. We’re back in the same boat That’s just how it happens as as you as the market continues to weaken over time because of headwinds like time to equity so There’s a lot of people who were looking for a pickup in the back end of this year and So I’ve been talking to the other guys the chemical guys the metals guys and others about. Okay. What are you really seeing? The guy metals is is unsure because he’s seen kind of a balanced Kind of flatline of growth the chemical the guy from the chemical sector thinks it probably is turning lower and the u.s Is was a lag from the rest of the world. I think you’re saying Much of the same things that right That’s correct. And I think we got an important clue. Yes Sure, right, so I’m doing research and I’m trying to get prepped for this call And I want to be as current as possible and leer Supplier, I think they’re the eighth largest supplier of vehicle automotive parts they temper down their cue to guidance by I believe 10% and Importantly, they said that the back half of the year is gonna be worse than previously expected Well their customer their biggest customer or the automakers the biggest two customers are General Motors at eighteen percent of revenue Ford at sixteen percent of revenue and they very clearly stated that the reason why they’re cutting guidance is because They’re there. Their customers are decreasing production so we’re past in my opinion the Theory Thesis stage and we’re on to the confirmation stage. Yeah, and this is something you’ve been flagging for a while. You said it’s coming It’s coming and now it’s in full swing the equity price of moving around with Confidence but you know global confidence But the reality is you see is nothing but a slowdown going ahead and perceptions Narrative can can move stock prices around in between earnings calls but if the earnings don’t support the narrative or The perception then you’ve got a problem on your hands And I’m hoping I can provide some insight on that topic Daniel look perfect I just wanted to pick your brains and it’s been really interesting to hear you Because so many people said it’s all about the car sector and you’ve said very clearly the car sector it’s screwed It’s going down for a period of time and I think you know that’s very useful for us For on the ground to put this whole macro picture together to learn. I really appreciate it And I’m sure as this develops as the story develops You’ll come back to real vision and update people on their more, you know because you have a big detailed thesis and I think it’s important for you to come on real vision in due course and and Come and talk to us about that. But in the meantime, thank you so much for talking to me today so I think it was interesting to see how Concerned Daniel is by what’s going on in the in the car sector? I think that’s right I think there’s definitely something going on and it’s a at a global level as well Which I think is very important in this kind of recession outlook. I think the other thing I’d really like to understand is that other very cyclical businesses shipping and Harris is the person that might go to on shipping who really knows the details particularly the US shipping market So we’re gonna get some idea of what’s going on there And what he sees is moving around the world and whether there is a pervasive slowdown going on Harris good to speak to you again soon. Yeah listen I wanted to pick your brains because my idea here is that I’m concerned about a slowdown that may be larger that may go into something recessionary and you know, I’m looking across both the global landscape and in the US and It’s not clear where it’s headed but I know that you look at some of the things that are quite Cyclical in some of the markets that use trade and I know shipping is one of them So I just want to pick your brain to see what you’re thinking now I know things like shipping a more complex because there’s a secular thing, you know secular shipping prices had fallen significantly over time But there’s also a cyclical element and if you could tease apart any of that for us in in kind of what you’re seeing out there right now, right so Global macro, I’m seeing similar phase. You are the World trade seems to be slowing When you look at shipping, it’s a little bit different because you have local forces at play particularly with what’s happening with IMO 2020 IMO 2020 says that all bets will start January 1st have to only blower and low slow for fuel or they’ve installed into scrubbers and what that’s doing is it’s Forcing vessels off the market as they install scrubbers so supply is contracting somewhat Also, a lot of older vessels are getting scraps because they’re not going to be fuel-efficient this new low sulfur fuel is very expensive Compared to the previous fuels so you’ve seen a lot of older vessels getting scrapped So in the supply side you’re seeing contraction on the demand side We’re gonna have to see what happens, you know the trade war obviously has both drivers and shipping isn’t this monolithic thing people love to look at the Baltic Freight index for there’s many different categories of shipping sub sectors. So maybe look at some of the containers. Yeah demand For Chinese containers going into Los Angeles is slowing but when you look at other things like Baltic Freight or You know crude oil anytime you have trade wars in the trade disruption it means that the number of vessels on the water have to go further in the number of ton-miles increases take the Situation with Venezuela right now. It used to be that America imported a lot of Venezuelan crude That’s now all become circuitous where Venezuelan crude goes somewhere else and then eventually usually comes to America and Venezuela Which is importing refined product from America is not directly reporting it it’s going somewhere else first. So what that’s doing is its increasing Shipping routes and it’s increasing the number of ton miles. It’s actually bullying Prices even though the global economy and world trade and especially index you look at my cash shipping index are showing serious Declines it hasn’t yet hit shipping. And if anything I think shippings do it quite well Yeah, it’s interesting because one of the people I interviewed as part of this program a guy called mark Hanson He runs a metals distribution business essentially so metals trading attribution so He’s shipping metals around the world and the same thing all these supply chains breaking Has meant there’s more shipping going on has everyone scrambling to find new supply chains But what he’s seeing on those so the supply side for that and demand for that he can see But he’s what he saw was the overall demand for metal itself was falling yeah, and I think it’s interesting with your Port of Long Beach and some of these kind of things to see that container shipping seems to be Seems to be slowing and that would be an indication of global demand what that makes it I mean containers is one of those direct indicators of global demand and the important of stuff into America. That’s Consumer products. Yeah, I think that’s definitely slowing But when you look at other indexes Baltic Freight indexes, and we’ll take your highs right now And that’s because US soybeans don’t go to China anymore. They go to Brazil Brazilian soybeans go to China It’s just being all the trade routes longer. Yeah, exactly So shipping itself is not necessarily the it’s not a bearish But within that you need to kind of flip out you need to tease apart There’s two stories going on or going through it Actually, probably three stories one is the change in fuels so you can yeah, that’s that’s huge Then there is the new shipping routes which is which is another big story and then there’s probably a falling of demand for in world trade within that whole sector So it’s a really complicated thing Which is interesting because a lot of people will look at Baltic Freight and go well the world’s fine But what you’re actually telling me is now the Baltic price is fine for a bunch of very specific reasons. Does that make sense? Which is that you’re in year 10 of a bear market in? Dry bulk and these vessels last about 20 years and after these guys have been ordering vessels for ten years in losing money every day They stopped or any more vessels and so the supply is cutting off. I remember if you take weights to zero it’s very easy to buy vessels and especially we have Chinese and Koreans and other state banks giving Interest-free loans and very high LTV is you have these Greek guys. That kind of are say man If it doesn’t cost me anything to hold on to it Let’s just take three more poets and we’ll figure it out later and it’s not lasted for a decade you have its oversupply thing While the financing cost is very low so the operating costs if you losing a few thousand dollars a day operating these things eventually go broke and It’s taking a very long time because of the low interest rates to go broke But they’ve all gone broke and they stopped ordering and what a vessel hits 20 years again scrapped So you start to see more scrapping pickup Especially if I’m alone 20 20 and you’re starting to see less alluring So we’ve had is sort of a shift and it’s why it’s a cycle. It’s unto itself There any other areas that you’re seeing that that maybe we can tease out some economic indicators from weather? from within shipping for example, not in particular You know most global trade Continues no matter what happens with the overall economy And shipping when you really think about it you’re looking at very small changes in supply and demand one to three percent a year that then have huge changes on shipping rates and with IMO 2020 and the vessels coming off line right now to get Scrubbers installed you seeing that shrinkage in supply and that’s why rates have been bit up It’s gonna be probably a couple of months before we start seeing data as to total tons of products that have been moved around and that data usually gets refined and you know cleaned up over time also to get to an exact number of Tonnes moves tons miles it’s easier to look at just because you see the the rates daily. Yeah interesting One thing I’ve noticed is also As well as is air freight another freight, you know rail freight air freight. They’re all in freefall right now. It’s really yes I mean rail is terrible Every week maybe this is one of those data series you get weekly actually from their work us round and every week It’s sequentially worse and it’s pretty amazing to see this just roll over you look at Cass You look at Asian air freight gets company negative 20 or something is it’s really quite surprising And one more thing on the shipping side, which I think is really interesting a lot of these banks lost so much money on shipping and with new rules related to Basel they can’t keep the It’s harder for them from a risk weighting the other standpoint to have shipping loans You’ve seen a lot of banks basically saying we’re not going to be doing shipping loans You put our shipping book in to run off and you guys need to refinance these loans when they come to You’ve also seen a lot of massive portfolio sales So it’s kind of credits the sector which I mean it’s gonna have a long-term consequences They’re probably that are good for the sector Short term to be a lot of pain with a lot of people who can’t roll debt and are forced to go into the market And issue 10 percent preferred debt as opposed to borrowing at LIBOR plus 25 or 50, which is where it’s always historically been So it’s just an interesting change what’s happening as anxa tightening up? Yeah exactly, right? Brilliant. Okay. Well look. Thank you I really appreciate your kind of input into this part of that happy the jigsaw puzzle of Trying to piece together all the parts of the global economy and figure out what economic signals are real signals What are different signals and that kind of stuff? So I think it’s really interesting Yeah, definitely and we’ll get you back on real vision soon Yeah, so I think house has really helped to shape the understanding of what’s going on in that shipping market But the final part of the equation for me is housing and are now housing is not really the epicenter of what’s going on Right now but there are signs I think and I showed it in my first video that there is a slowdown in housing I think housing knocks onto consumer confidence. So it’s something we should understand So I wanted to speak to Keith to find out what Keith thinks on the housing market overall Because I know he’s looking at some forward-looking indicators that might really help us Keith’s great to finally get to talk to you. I really wanted to pick your brains about the housing markets You’re one of our experts in the housing market So I really wanted to get an idea of what you’re seeing in the top-down picture right now Housing markets are really hard to understand you just can’t look up prices the way you can with a stock or an ETF and That’s why there’s so much nonsense that Have been written about stock housing markets for forever So I’ve tried to look at things that I think tell us a lot about what’s going on with housing markets that for some reason Wall Street in the media just doesn’t pay any attention to right now, for example There are some serious red flags out there that if I could just briefly run through them I think they’re important for example Home sales have been weakening in even the hottest major metros for a year or so Some of them most of them are down double digits Now slowly home sales by itself isn’t necessarily a problem but Combined with that you have the rising inventory of homes for sale two months ago it was in the house market in the country Silicon Valley, San Jose was Double the inventory of a year ago and it’s still up substantially. See the other hottest markets Seattle Denver, LA are all showing a pretty substantial rises in Inventories you put those two together and that it suggests to me that we’re going to see and we have been seeing increases in Reductions at home prices. The last had I’d point out is the media pays no attention this so ever But I’ve for years. I’ve looked at it closely. What about Investors in housing markets. They’ve been a factor forever but there’s some evidence the last couple of years that Investors are plant even broader role in housing markets and had it not been for that I think there was a good chance that home prices would have already Plunged let me give you an example the largest website out there in terms of advice and information Good information for investors in single-family houses. It’s called the bigger pockets two years ago. They had 700,000 members now they have almost a million and a half and They took a recent survey. They have a lot of good information that it took a recent survey. Ok Was it an enormous survey? But it showed that in the last year those surveyed 80% of them had actually purchased in the last year so I think that the role of investors, let’s just say in the last 18 months has Increased now the numbers are all over the place So it’s really hard to get reliable figures what percentage of homes now are being purchased by investors By I I think it’s my best estimate is twenty to thirty percent are Investors and these are not flippers. These are people buying to invest and to rent out because they think there’s That it’s still profitable. I think they’re probably wrong, especially in the heart of markets but 20 you take away those twenty to thirty percent of buyers the market just Implodes it’s as simple as that, but I’m working on this on my next column, but it’s hard to get really reliable numbers in terms of what percentage are now buyers But I think it has been Increasing the past 18 months and it’s crucial much more important for example than foreign buyers the Chinese buyers we know they have gone away, but that’s this is much bigger than Than that 30% from the entire was caught so Keith. Are you concerned about a broader slowdown in prices going forwards? Is that what you’re looking at something that’s kind of less benign than we’re seeing right now Well, that’s the question. I mean I get questions Keith. Is this just a slowdown? You know The prices are no let me out but that in something temporary or is it longer-term? And I just don’t see anything at all that could turn around this trend I just don’t see it buyers if they have an extreme interest on the house of my but what could turn it around for example, so that more Millennials can purchase that’s just not going to happen the fact that Inventory is rising is just telling me that that you can’t find enough buyers at these prices Well, if that’s the case, then the only alternative is what they start reducing their asking price and You know like you I don’t like to make predictions, but I just the more red flags. I see the more I think that that these houses that housing markets have topped out and that we’re hitting lower I’m not saying necessarily. It’s gonna be like 2008 through 2012 But I’m not saying that it’s not one of the other things that you were suggesting there that demographics plays a role I mean, it’s something I look at a lot do you think that there’s a there’s a supply of property that comes from the baby boomers and The Millennials aren’t able to buy yet because the prices are so far apart. Is that a key element here? That means there’s an ongoing amount of supply that could Lower prices or flatten prices for the next ten years or so. Is that something that that’s within your framework? Yeah, I mean Democrat demographics are important. I don’t think they’re as important as these other factors that I mentioned But you certainly have to consider how many Millennials? Can afford at these prices now and the numbers out There are are pretty pretty frightening But like you I mean numbers tell me a lot and if you take a look at the numbers that I mentioned, they’re all They’re all Suggesting that you can’t find enough buyers at these prices and you know as would stop If you can’t then prices will go down. It’s just harder to trace them. I just saw today Adam data a reputable Sub data supplier about housing markets that I have used They said Oh median prices just hit for June hit a record-high Well, so what did I never talk about median prices they don’t tell you anything They hide a lot depends on the mix of houses and between that and Case Shiller, that’s what everybody looks at to me They tell you nothing That’s why I’ve been looking at these these factors Which I think suggest what’s going really going on in housing markets It may not be going on in the in the smaller markets but I don’t focus on smaller market because people are interested in what’s happening in the 50 largest metros, that’s where the markets are really made so what you’re suggesting is that that may be you probably the indicator here with inventories building up and that imagery build up is a future indicator of prices falling one of the things I’m thinking about in my world is if prices are falling does that mean that We’re gonna start seeing confidence hit as well. And does that filter through to the broader economy? Does that people make people less liable to buy cars or less viable to it invest in the stock market if they see? Household net worth coming down as their house prices come down. How do you see that playing out? Yeah I mean I try like you I try not to say that the world is falling apart and it’s going to happen tomorrow and You know and batten down the hatches but I think I’m also comfortable in saying that if We’ve topped out and in prices in certain metros, even the hottest one Silicon Valley Prices have started declining if that continues then surely likely that inventory of unsold homes will will increase people who may have there a lot of people who have held off putting the house on a market while prices will going up if They no longer think the prices are going up. They will start putting them on the market which will add to the inventory build-up and You can just see this thing beginning to snowball and I just you know, there were reasons I’ve written about for six years Why prices went up it was an artificial? Reduction in the supply of homes because the servicers stopped foreclosing It wasn’t it had nothing to do with demand. It’s the supply side and They can’t do that anymore. There are still millions of delinquent properties that are out there that have to be dealt with At some point the banks and let other lenders are gonna have to start putting them on the market All of these things you add them all together there and I just don’t see how how this can Turn around. I think we’re really at 2006 You know it had been okay. That’s my take keep well fascinating to talk to you Thank you so much for giving us a better guidance on this housing market I think it’s really interesting when I’ve been looking at the top level numbers as well And for me the whole thing looks a little bit concerning as yes It doesn’t look like it’s falling off a cliff as you say, but it’s concerning enough that we need to pay attention And if the economy starts getting a little bit more sluggish as well housing I think will go with it Great to talk to you and keep up the great work. Thanks so much, Keith

60 thoughts on “🔴 5 Obvious Indicators a Recession Is Coming in 2020 | Recession Watch”

  1. Recessions are like rain. When it rains I can only put on my rain coat. There's a recession? What can I do? Just like the rain I have to go with the flow. I have to protect myself.

  2. During the Russia issue heard nothing abt recession. Now the mainstream makes this a issue. Please enough already.

  3. Just project yourself and be ready if the recession comes! Learn a thing or two that will help you find opportunities on it.

  4. Well done Raoul. You are rapidly creating one of the most important, unbiased, uninfluenced, 'real' news channels the world has ever seen.

  5. Brilliant approach to gathering different perspectives and many were on point. No real growth in Q3! If you listen to each of these interviews it gives you an idea of where you should be investing and/or which companies may experience growth.

  6. this has been, by far, the most informative on the current financial conditions & where we are, most likely heading, of all the channels/people I've seen. thank you.

  7. I think everyone knows it's coming. Could you tell us where to put our money (of course not as an advice but educational only). Would be nice if you could be specific.

  8. Hey man you called it right a few months ago. USA officially in a transportation recession and manufacturing is officially in contraction. EU is 1 quater away from recession confirmation. Other emerging markets already in recession and China hovering above it – 4.6% growth – dont buy it more like 3% and will fall of by end of 2020

  9. Love these perspectives from real people living their lives, each in their own special field of knowledge. Fantastic idea, Raoul.

  10. If the Rest of the World is near, or in a Recession, how will the US avoid the Recession as well, to say nothing about the Inverted Yield Curves? MSM is desperately selling the denial of the "R" word!

  11. U.S. car companies make the wrong products for a changing market. Hint: Where are the diesel auto products excluding unnecessary over sized trucks? The engines get over 4 times the lifetime with more than double the mpg and the fuel is slightly cheaper. Your average idiot could do better than the current crooked CEOs running these companies.

  12. Besides Raoul Pal being devilishly handsome and well dressed, he delivers fantastic overviews of our financial climate. Very much appreciated. Thank you Real Vision!

  13. Yeah, I got some put options on the auto industry for December, maybe the equity value will start to reflect this recession by then.

  14. Why are you pumping videos on a recession? hummm sounds an awful lot like pump and dump material. This is extremely lopsided and misses a lot of information. Where I don't disagree that we have an insane amount of debt and other financial issues, the rescission pumping videos are slumlord trading methods.

  15. With a 120M Americans out of work, we are in a recession or don't people count. All presidential administrations have covered this up with false figures. The problem is preventing the economy from getting worse.

  16. Yes, they don't go to China anymore but they go outsourcing to outside China and definitely outside the US. So, tell me, how is that benefiting the Americans ?

  17. An inverted yield curve is caused by a loss of investment confidence, distorting the statistics. A loss of long- term investment confidence has the power to generate a recession; it can also create a bull-run in gold. Similarly, it creates preppers, who might collect together a pantry not dependent upon power; or people who withdraw their funds from banks, or people who build an underground shelter. Threats and counter- threats in political powers shows that financial instability begins as government policy. All these people are showing an educated response to try to protect themselves and their assets; and they are the BRIGHT ones. There are also some who have searched in God's word for the solution, and they FOUND it.

  18. Thx for the great content if not the greatest on economic related topics. Thx for bringing the real truth from the real people!

  19. Can we also have 5 opinions which say that there is no recession coming in 2020 or shortly after? This would provide a balance of perspectives. [This does not mean that I think there will be or will not be a recession]

  20. Always old content posted later than it being fully useful.. Needs to be more timely.. Hire more ppl to edit else it is a waste of time since the minute it comes out in todays world it is stale. Peter Schiff's podcast is a perfect example of timely output since there is literally no delay to market.

  21. Yeah…for the countries whose leaders have sold their people and resources out (which are all Western nations) including here in America. However, we overthrew those leaders and put Almighty President Trump in.

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