How can we survive and even profit from the coming recession?

[hissho]

Hi all
Found a few articles which are quite gloomy:
http://www.intelligencer.ca/ArticleDisplay.aspx?e=918803+

And you thought that I had a gloomy outlook on the economy. Now the bad news pops up everywhere.
Harry Koza in the Globe and Mail quotes Bernard Connelly, the global strategist at Banque AIG in London, who claims that the likelihood of a Great Depression is growing by the day.
Martin Wolf, celebrated columnist of the U.K.-based Financial Times, cites Dr. Nouriel Roubini of the New York University's Stern School of Business, who, in 12 steps, outlines how the losses of the American financial system will grow to more than $1 trillion - that's one million times $1 million. That amount is equal to all the assets of all American banks.

and this one:
http://blogs.theaustralian.news.com...n/comments/australia_faces_recession_analyst/

THE economy is headed for recession next year, with a 50 per cent plunge in share values and a double-digit drop in house prices.

If all these became true, how can we profit from it? Which industries would prosper and which ones would wither? Where would people spend money on? etc etc

has anyone thought of these questions and got good answers?

Cheers

 

[vishalt]

Yeah, it is full of bull.

Notice how the writer is using an economist from Morgan Stanley? Which lost $US 9.4 billion in the subprime collapse?

Why should I listen to an economist from a bank which "forecasted" the end of the bull run just before BHP doubled and Rio Tinto tripled and comes from a bank that loses money?

I take no heed.

 

[Awesomandy]

As people say, if you bet in one direction long enough, you'll have to be right some time.

In terms of mere survival. Cash is king. Still, make sure they are making enough interest to at least match inflation, and spread the cash out to a few different banks. Banks can go bankrupt too, unfortunately. Also, some gold wouldn't hurt either.

 

[Happy]

If all these became true, how can we profit from it? Which industries would prosper and which ones would wither? Where would people spend money on? etc etc

has anyone thought of these questions and got good answers?

If recession will be very bad, money will be of no value at all, maybe gold, no idea about other metals or stones.

Earthy things will be of great value, like food, water.

Above all, bartering will become king and robbery as civil unrest and gangs almost inevitable with strongest surviving.
Mad Max comes to mind.

Probably non-perishable foods, simple clothing, weapons, hand tools as there might be no fuel no electricity no gas or supplies might be unreliable.

This is probably Doomiest gloom scenario, but as somebody mentioned, that there is possibility for every impossibility or something like that.

 

[pepperoni]

If recession will be very bad, money will be of no value at all, maybe gold, no idea about other metals or stones.

Earthy things will be of great value, like food, water.

Above all, bartering will become king and robbery as civil unrest and gangs almost inevitable with strongest surviving.
Mad Max comes to mind.

Probably non-perishable foods, simple clothing, weapons, hand tools as there might be no fuel no electricity no gas or supplies might be unreliable.

This is probably Doomiest gloom scenario, but as somebody mentioned, that there is possibility for every impossibility or something like that.

errr .. he said recessession not cataclysm In fact that could be the dumbest post since posting started ... and should keep the title til the road warrior finally does rule the highways.

 

[Gundini]

errr .. he said recessession not cataclysm In fact that could be the dumbest post since posting started ... and should keep the title til the road warrior finally does rule the highways.

I think he was talking about Depression...

 

[wayneL]

I think he was talking about Depression...

My folks lived in the north of England through the Great Depression. It was bad... but not that bad.

I think he was talking about a complete systemic collapse.

Possible, but ferchrissakes, let's hope not likely.

 

[Gundini]

My folks lived in the north of England through the Great Depression. It was bad... but not that bad.

I think he was talking about a complete systemic collapse.

Possible, but ferchrissakes, let's hope not likely.

I agree, systematic collapse.... Rocky times for us all for sure...

 

[tech/a]

Learn to trade short.
Indentify and embrace opportunity.
Reduce--eliminate consumer debt.
Dont be frozen by fear.
Dont listen to the masses.
Take care of your own affairs.
Learn as much as you can about mitigating RISK in all you do.
Shorten your timeframe.
Trade to target.
Take care of R/R.

 

[Smurf1976]

There's always a bull market somewhere in something. You just need to work out where and in what and invest accordingly.

Also, a lot of things get real cheap in a recession. For businesses (including shares) buy them in preparation for the next boom (it WILL come). For consumables, consumer goods etc get them while they're cheap rather than paying top $.

Businesses that rely on discretionary spending ought to be hit hardest at least in theory. As long as they are able to survive through the recession, they offer the greatest % growth when the next boom comes. The key is making sure it will survive to see the next boom.

And of course if you want a nice boat, car or whatever then there ought to be plenty going real cheap as debt laden consumers seek, or are forced, to sell up and reduce debt. One rather obvious example that comes to mind there is Jap import cars since they're generally owned by young people, often without stable employment, on 100%+ loans. Ought to be plenty for sale, at the same time as the normal buyers can't afford to buy, which points towards rather cheap prices. There are plenty of other examples if you think about it.

But if you want to profit directly from the recession, rather than using it to simply buy cheaply before the next boom, then there's always short selling, debt collection agencies etc.

 

[numbercruncher]

Thats one investment area I hadnt given any thought Smurf, Debt Collection agencys, any publicly listed ones around ? They must be highly profitable in certain stages of the cycle.

 

[tech/a]

Businesses that rely on discretionary spending ought to be hit hardest at least in theory.

A couple of Mates are financial Planners and not only are they bleeding but copping stacks of flack from clients.
A profession I'd hate to be in!

 

[zt3000]

Cant we all see we are just going through a self furfilling prophecy

Just because a few people say things are bad, they talk and then their friends talk ect ect and soon the genius at brain washing institute have the masses thinking sell, recession, depression, apocalypse

WTF???

China will continue to grow at 10%, india currently at 9%, there is 1/2 the worlds population there ... they want some action, yes i know their consumer buying power is not even close to US but that doesnt matter.

There is a crap load of capital outlayed for things to turn upside down, especially here in Australia. Heck, investors may come here to seek a safe haven from elsewhere

Forget about the US, de-couple from it and get on with business

bah, the doomsayers were no where to be seen and now all of a sudden its i told you so from left right and center ... what the?

Give it 6 months, American jobs will recover, everyone will go **** that was close, and get on with it

BHP/RIO merger company, lets call it "China Mining" will be going ballistic, oil will be at $20 a barrel due to discovery of new type of fuel,

gold will be as usual, on the up and everything else nice and dandy

everything will self adjust and go back to normal

lol

Hrmm, how many people will be ripping me to bits now ... cant wait for the day in 6 months were i say "i told you so ... long live the Bull!"


LoL - this was for your entertainment only

 

[cuttlefish]

errr .. he said recessession not cataclysm In fact that could be the dumbest post since posting started ... and should keep the title til the road warrior finally does rule the highways.

Obviously not highly likely, but political and economic stability are not axiomatic states and its easy to get complacent. It would not be easy to predict the effect of a true systemic failure in the US economic system (e.g. major banks collapsing or hyper inflation brought on by an attempt to prevent the collapse of major banks). A brief look at the history of the world shows that power shifts and resultant political fallout are a regular occurrence throughout history. So highly unlikely but never say never imo.

 

[trishan9390]

Learn to trade short.

Best way to make money in tough times.

 

[pepperoni]

Obviously not highly likely, but political and economic stability are not axiomatic states and its easy to get complacent. It would not be easy to predict the effect of a true systemic failure in the US economic system (e.g. major banks collapsing or hyper inflation brought on by an attempt to prevent the collapse of major banks). A brief look at the history of the world shows that power shifts and resultant political fallout are a regular occurrence throughout history. So highly unlikely but never say never imo.

Never

But feel free to stock your bomb shelter with guns and canned food. And zombiecide which you are unlikely to need buuuuuuut .....

 

[cuttlefish]

Never

But feel free to stock your bomb shelter with guns and canned food. And zombiecide which you are unlikely to need buuuuuuut .....

Ok we won't be huddled inside makeshift compounds hording fuel and eating cockroaches any time soon. But political instability?

To name a few situations:
Europe WWII (really created by German economic decline after paying their WWI debts)
Japan/China - WWII
China - pre-communism, Mao communism, current
Middle East - various (Iran/Iraq, Iraq/US, Israel/Palestine, India/Shri Lanka, Russia/Afghanistan)
US/Cuba
US/Russia
Russia (pretty much fell apart didn't it)
Africa pretty much the whole place. (e.g. Zimbabwe, Kenya to name a few recent ones).
Indonesia - Miliitary rule, Aceh, Timor
Vietnam
Thailand recently
Fiji

and I don't know much history and thats just the last 100 years or so.

But wouldn't happen in Australia or America of course because ...?

Anyway - I think I'm going off topic - better get back to work on the bunker lol.