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Glass Half Empty ?



The big news is well, the fed has sky rocketed interest rates, and for the the magical beings, the Americans, which as we all know, are superheros, nobody isuffering, and everybody is happy, employed, and making their payments, and how do we know this ? The Fed tells us so. And here are 2 stories to prove it.




The numbers don't lie, your wrong, there is no Recession like you said there would be, so put away your crystal ball. No, if you read between the lines, what they are saying is... we don't see any sign of recession, or economic strife Right Now, as the numbers don't show it.


What dose that have to do with the future? Anything can happen, all it takes is a spark, so have we avoided a Recession, or Economic down turn? If you take a myopic snap shot today, the answer being fed to us by way of the Kool Aid is yes... this are rosey, and its gonna be fine, so lets keep pouring cold water on this econonomy until... oh May of this year. 4 months is a long time in an Economic cycle, and who knows what might happen.


But then you layer on a few more stories, based on the real world...




Bankruptcies, and China going to shit? What gives... oh, its only the US, as they live in a protected bubble, and are not connected to the rest of the world....


So yes there is a chance we are gonna be just fine, but the ship is still turning, with nothing to stop it, and yes your going to get spikes in data, but I do believe we will dip, before a new market cycle starts again.


But it doesn't matter. Long term investors stay the course, and don't worry about recessions, downturns etc. A recent story emphasized the difference between spenders and savers



1/3 of Canadians, and nearly 1/2 of all Americans have no savings, so, equitys, or high interest savings accounts, they have none. While savers are having a boom in wealth growth from higher stock prices, and GIC's pulling in 5%, half of us, are getting killed by credit card, and mortgage debt. Please explain to me how this is..."Doing Ok" and where will these people be in 4 months mr Powell ? We are not seeing the Data ? Is what he says, but I think you will, and by then... it will be too late.


But, this is not about being right or wrong. This is about you protecting yourself. I could be 100% wrong... time will tell. But I just don't buy the bullshit that is being handed out, sorry, believe what you want and who you want.


So the game plan is this:


a) No recession - stay invested in stocks, come May, start to move t-bills to equitys, and balance at 60/40 (currently about 50/50)


b) Mild Recession this year: wait for a pronounced bottom, in 4-6 months, and resume balancing act


c) Pronounce Resession: same as above, but the bottom may take longer to form


So for me, a saver, I am not really changing anything. The only debt I have, is a small mortgage, and like a dummy, 2 years ago, I drank the Kool Aid, and grabbed a variable rate at 1.5%... so yes, I would like rates to go down, but my payment cover all the interest and some principal as well. More on this in another thread.


My banker sold me on the idea of 4 staggered GIC's to fund my retiremt in one year, at 5% each, so I like the high interest rates, in a way, even though I am losing money on my mortgage. There is no sense in dumping it in, and that having to HELOC it back out again, the GIC rate closely matches my mortgage rate, and one of those is going to come down... this year in fact.


Happy reading...















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