Hey it’s Tom and, this recession is going to be unlike any other we've seen, assuming it doesn't turn into a global depression. Now, Benjamin Franklin once said, “By failing to prepare, you are preparing to fail” – so instead of ignoring it or hoping it away, let’s see how we can prepare for what’s coming so we survive it and come out on top.
00:00 intro
00:34 Recession Likelihood
03:33 GDP Paradox
06:06 Personal Finance Strategy
06:29 Investment Strategy
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00:00 intro
00:34 Recession Likelihood
03:33 GDP Paradox
06:06 Personal Finance Strategy
06:29 Investment Strategy
Improve your investment strategy by getting access to institutional-grade research tools and data from TipRanks. Get a 10% discount for TipRanks by using this link below:
https://bit.ly/3BJA7KJ
*Disclosure: I only recommend products I would use myself and all opinions expressed here are our own. This post may contain affiliate links that at no additional cost to you, I may earn a small commission.
👏👏 Big shout out to our growing list of Patreons. For those of you want (and can) support our channel, here is how you can help: https://www.patreon.com/user?u=13016082
The audio and video equipment I use to make videos:
* Sony A7Siii: https://amzn.to/3IW4AcF
* Sony 16-35 GM: https://amzn.to/3g7o4i2
* Ninja Atomos: https://amzn.to/3451Zya
* Rodecaster Pro: https://amzn.to/3KWUhqf
* Shure sm7b: https://amzn.to/3GfbasL
* Light Nova p300 C: https://amzn.to/3AIZb5M
DISCLAIMER: All of Tom's trades, strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching Tom's videos, please Don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
This is tom and unfortunately this recession is going to be unlike anything we have have ever seen. Assuming this doesn't turn in into a global depression. Now benjamin once said by failing to prepare you're preparing to fail so instead of ignoring and holding it away let's see how we can prepare for what's coming so we can survive. It and even come out on top.
A recession is sometimes at least in part. A self. Fulfilling prophecy. People who fear a recession spend less thereby starting.
A chain reaction of layoffs less spending. And so forth now that is why the university of michigan has a consumer sentiment index that is widely considered as the very best predictive tool of an upcoming recession just a year ago. We were 81 currently at 51 the lowest number we have been at since the late 70s even lower than the great recession of 2008. Okay so we know people are convinced we're headed for recession.
But here's the problem in every recession. We have seen so far in history the gdp goes down while unemployment goes up now in q1 gdp decreased by 16. Percent. We know that and we also know that according to gdp now.
It is expected to decrease by another one and a half percent for the second. Quarter what about unemployment well in december. 2008 unemployment was 72. Percent.
Which is the last time. We crashed super hard right now you want to guess where we at we're three and a half percent. Which is the lowest unemployment rate. We had in the past 50 years.
The crazy part is that most economists will tell you that these two are connected since they are derivatives of each other literally more workers more production more gdp and vice versa. Less workers less gdp. So why are they behaving in an opposite. Manner is this a sign that every session is not coming well not exactly.
So the first reason. Why most of these available jobs are out there is because companies are having trouble filling low paying stressful jobs. That honestly people not that interested in but that's just part of the story secondly and more important is that corporate profit margins right now are literally at an all time high cash reserves by us. Companies are at all time high even despite this latest pullback in the stock market now.
This is exactly why you don't see any layoffs. Yet at least not major ones employers fear that it would be more expensive to rehire somebody rather than to retain the current employee. Even if times are not that good. It's pretty much a game of chicken.
So here it is gdp is falling companies are not firing this obviously cannot go on forever. Now if gdp gross domestic product does not recover soon. The floodgates of the employment market or rather. The unemployment market will open up faster than my grandpa falls after fourth of july party and the layoffs will be coming so can we get out of this before the job market.
Absolutely goes berserk well that depends on how quickly we can start increasing gdp that is the key to this whole thing. Because a decreasing gdp is a freaking ticking time bomb for the job market and the job market is the key to the economy. If the job market goes. It's game over and welcome recession. But first i have to explain the paradox. I've never heard people talk about to grow gdp. Which we absolutely have to we need to invest in infrastructure. R.
D. And education right healthcare. All that good stuff. That set up the best conditions for production to increase and flourish.
The problem is we have over 30 trillion dollars in national debt. Which is one and a half times. Our gdp and when the interest rates on these debt payments keep going up every single month to battle inflation. It's going to come at the expense of other investments in business and private productivity and everything i just mentioned so as we pay more on us.
Debt. Because we're trying to battle inflation. We cannot invest in the same things we need to boost gdp. We're pretty much trapped.
The other thing is that don't forget we are part of a global economy now. I just made a video about sri lanka. I'm going to put the video right here it just collapsed. But i believe sri lanka was just the canary in the coal mine.
Yes. It was partially self induced. But covered slow down in supply. Chains.
Oil prices. Ukraine war increased boring costs more expensive. Money. Means.
Trouble supply chain is going to means trouble war in ukraine. Means trouble all of these played a huge part in the collapse of sri lanka and they are not going away anytime soon in the us. Because what happens is that all of these factors are basically eating away and are purchasing power cost of living keeps going up. So if we are paying twice as much to put gas in our cars to drive the work and we're paying 30 more for food while getting pretty much the same amount of salary.
We will have to cut back on other spending that's just normal and if the cost of living continues to outpace the increase in wages. Which it has so far with flying colors the consumption will drop and the recession will be pretty much inevitable and then even the mighty job market will take a massive hit so instead of crying about it. I think. It's time to prepare your personal finance.
As well as your investment strategy for what's to come so. Let's start with personal finance. You need to do a few things diversify your income streams. Add new skills to make yourself more valuable for current and future employees.
Increase cash reserves don't buy new you don't need like a new car don't create new fixed payments create a personal balance sheet a personal cash flow. Report. A personal budget cook make coffee at home be responsible do not panic and obviously reduce debt now on the investment side. You have to look for companies with non discretionary products and services in a market. With little competition. Essentially. Things people or businesses cannot live. Without.
And there's not a lot of alternatives that structure would allow such companies to pass along inflation expenses to their clients through high pricing power high margins basically leading to sustained profitability even in the recession. Now ideally it would be a company that does not need a lot of working capital to operate has little debt plenty of cash and is not exposed to energy. Prices. Commodity prices and shifts and supply chains that would be the ideal one and obviously that's just the executive summary of preparing your personal finance and investment strategy for the upcoming recession.
If you actually want to watch a full tutorial on both of these issues. There's the video right here about personal finance. Preparation for recession. There's a video right here for investment strategy in the recession and right here you can subscribe to the channel.
If you haven't yet we'll see you in the next video.
The coming recession is basically already priced in so we are close to the bottom, give or take abit.
IMO the bottom was mid May. Going higher from now on
The unemployment numbers are fake. The unemployment statistics only counts the number of people collecting unemployment check. If somebody became unemployment during covid. They filed and started collecting unemployment. When they're unemployment benefits ran out. Even though they did not return to a job. As far as the government's concerned they are no longer unemployed. The only factor in the people they pay checks to. Once you are no longer collecting your unemployment check. Magically as far as it comes concerned, you are no longer unemployed. Man of these people do not want to go back to work. And why would they after they got spoiled with $900 a week. And amount that most of them never made at their actual job to begin.
Fantastic!
I believe that the >fear< and greed index with a new low value of 6 reflects how the crypto market reacts to a full blown recession. Yes, there were crypto bear markets in the past, either caused by regular cycles or extraordinary events such as COVID, but we never experienced a true economical recession in the crypto market. Keep in mind that crypto market is just another financial market (meaning that is 100% dependent on major macro economic events) and is more volatile than other markets (which is a good thing, cause that offers long term opportunity to get rich in an extended timeframe meaning buying like crazy during these times and selling at the peak of the next bull market – whenever that may be). The only "catch" is that you must NOT buy speculative cryptos (aka sh*tcoins), but the biggest, most "boring" coins right now (BTC, ETH, BNB) with big utility and market cap that will not go to 0 until the end of this bear market. I buy and just trade long term more than ever, I have made over 19` btc from day trading with Shirley Bagshaw Crypto in few weeks this is one of the best medium to backup your assets incase it goes bearish. Technical analysis is my second language.
Tom, watch for shrinking of 11 million open jobs as a serogate for job loss.
Hhhmmm…
GDP is over rated. Many things changed with the pandemic and political environment over the last few years.
We have to change our models to incorporate the 'great retirement'. Lots of people like me got tired of waiting for folks to stop spreading disease and said f-it, I'm out of here. We are still spending money on goods and services, but at a reduced rate. This is keeping unemployment low and greed is keeping companies profits and inflation growing. Now, add to that the reduction in cheap immigrant labor due to insane immigration fear and there you have it.
Why does everything money dislike you so much? I guess Jeremy does as well. It’s strange I like all 3 channels content. Some more then others lol. Keep it up!
Since the Fed (Central Bank) was created, its justification was stabilization of the dollar, to do the same for the economy. But its monetary policy has done the opposite for over a century starting with "The Great Depression", soon to be eclipsed by "The Greatest Depression" (starting now). All the govt. economists (who are Keynesians) have explained money creation (currency depreciation) stimulates the economy. The Austrian economists warned this is nonsense. They claim the stimulation is not economic, but political, causing malinvestment/malemployment which results in collapse (depression). Keynesians will be proven fools when the economy is hit with an "impossible" monetary condition called "stagflation", i.e., inflation + depression. The Keynesians told us this is impossible. It is, IF they are competent. Watch and you will see what fools they are, and how the populace suffers for believing them.
The failure is most the unemployed refuse to work and after 90days they are NOT counted as unemployed
Tom, that quote from Benjamin Franklin is based on scripture. Proverbs 15:22
It's almost like someones lying about the numbers.. or something.
Dems will win so that taxes can be increased. otherwise the world is f*#@ed.
UN and WEF have now agreed to accelerate “Agenda 2030”. I think the pain is really going to start in the near future. Just my 2¢.
Hi tom! Paul of everything money says hi
FED should change it's maximum employment objective with maximum labor participation. They flooded market with too much 0 interest cash in the last decade so many people got rich and exit labor force and companies have piles of money. By rising rates and QT companies will not fire, some people will reenter in work force and inflation will grow for 1-2years until all that money supply is sterilized. When they will read 10% inflation, unchanged uneployment and another 400k new jobs will go berserk with FED rate. Maybe we will see even hikes in taxation levels.
"Increase temperature slowly, so as to keep the frog from jumping out of the pot" – Chicken Little
Having a THIS IS BAD thumbnail pic is a self fulfilling prophecy. 😂😂
There's no way unemployment is only 3.3%
Whata the difference between a recession and a depression? A recession is when your neighbor is out of a job and a depression is when you are out of a job.
I did my part today to help the economy. Bought 3 kindle books and a subscription to only fans. 🥳
So already back to Click Bait. You are better than this Tom! Your content is awesome.
This must be bad 😂. On a serious note, great videos Tom I love your educational content that simply explains complicated stuff!
Tom Nash basically said stop eating avocado toast
Alot ot people cant collect unemployment if they dont have hrs worked after they collected 2yrs ot unemployment
Its deceiving the low unemployed. Low for people collecting how many unemployed not collecting they wont know that number.
Lot of words but no strategies. Ugh.
Could unemployment be a false indicator in a new market structure. I suspect that side hustlers, early retireries, and vanlifets falsely lower the unemployment rate because they are not filing. We have a lot more unemployment that is not being counted. When side hustle slow down with less disposable income and inflation hits hard by Thanksgiving. you will see a hidden mass of unemployment filings. My guess and why you can’t fight a new war with the last wars tactics.
Economics was one of my favorite subjects at college. I think everyone should be taught a basic understanding of supply and demand compounded interest and how to grow personal wealth. I have been poor most of my life. Now I'm not but I still spend like I am. Learning how to get by on so little has made me wealthy. No debt is the key.
Tom, this is one of your best videos…
Logical. Well stated. Appreciated.
H'mm nor so sure. Where I live people seem to have more money spend than ever.
Anyone pretending we aren't already in a recession just baffle me.