Hello guys its James here. Welcome to another episode of Econ-Donkulous. I just want to have a discussion about the possible 2020 recession, some say we are already in a recession. The global economy took a hit when the outbreak started. people got sick, we were not able to manufacture goods, we can’t make goods so we can’t not sell goods, traveling got restricted, now we are social distancing, people are staying home, not spending money and unfortunately companies are downsizing and laying people off. In hard times like these, people need help more than ever.
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Econ-donkulous Episode 1 where we cover the global recession
https://www.youtube.com/watch?v=mjMMOClSNRM&t=32s
So I want to cover the major causes of the 2007-2009 crash, todays possible crash, and how I plan to invest in this possible recession.
All recession are different. I just want to point out the similairties with the 2007-2009 recession, to what is happening today.
Here is a little background.
We went from an illness that sparked a global recession.
To liquidity issues - people were leveraged in the market, which led to the fed lowering rates, and doing repo. Bond yields went negative to the stimulus package which pumped the market up.
2007-2009 crash
Today's crash
Compare the two scenarios
and progress on my investment strategyhttps://www.tradingview.com/chart/WEJxwe43/
Here are some data I am looking out for.
The illness is spreading exponentially right now, looking for that to flatten and curve down.
Hospital workers are still do not have enough PPE.
Unemployment to flatten and curve down.
How many company bond ratings to get lowered to junk. Remember the fed said it’ll buy corporate bonds. I am not saying all companies will get lowered to junk but there will be a lot of companies with poor balance sheet that will get lowered.
How much Financial stress in the housing market and corporations.
Lastly data from company earnings. April there is going to be earnings coming out. It’ll show how they did the previous quarter, and their outlook in the future.So my plan has not changed. I am still looking to invest around the 1800 level. I got fomo on tesla and bought it but, I sold everything today and I am short the market. Everyone be safe and please use social distancing.
This is not financial advice or stock suggestions. I would love to hear your thoughts on your investment plans!
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