The 2022 recession is upon us.
Here’s how we know it’s approaching, and how YOU can prepare and profit.
A recession is defined as two consecutive quarters of negative GDP growth.
Q1 2022 saw a -1.6% contraction, but how do we know Q2 will likely also be a contraction?
There are some telltale signs.
The Atlanta Fed GDPNow tool predicts a -1.5% contraction for Q2 2022, but what data does it use to make this prediction?
The Atlanta Fed GDPNow model mimics the methods used by the BEA to estimate real GDP growth.
The GDPNow forecast is constructed by aggregating statistical model forecasts of 13 subcomponents that comprise GDP.
Here are some other charts that support that the recession is here…
Small Business Optimism is the lowest EVER.
In the history of this index by the University of Michigan, respondents have never surveyed this negatively about their business outlook.
Manufacturing PMI is in a downtrend towards the recession midline.
Purchasing managers are also surveying quite poorly, signaling an economic contraction.
The 2-year 10-year Treasury Curve has inverted below a critical recession level.
Avoiding the technical jargon of why this happens – the 2-year 10-year Treasury yield curve inverting below the 30 basis point level precedes every major recession.
We’ve dropped and channeled below this level for some time now.
Growth expectations, represented by the 10Y Treasury Yield, are topping out – just like prior to every significant recession.
Unemployment is a lagging indicator that bottoms out before every major recession.
We’ve just bottomed out, at a level that has not been broken since the late 1960s.
The labor market is beginning to roll over in many headlines.
This is signaling to us that a major economic slowdown, maybe a recession, is right around the corner.
We know a major economic contraction is ahead.
So, how can YOU position yourself to not only defend yourself but also move offensively and potentially profit?
Watch the entire video and find out!
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⏰ Timestamps ⏰:
0:00 – Intro
0:22 – What is a Recession
1:21 – GDP Estimate Q2
1:48 – Small Business Optimism
2:51 – Consumer Sentiment
4:16 – ISM Manufacturing PMI
5:00 – Inverted Yield Curve
5:56 – Growth Expectations
6:31 – Rate Cuts Coming Soon
8:12 – Unemployment Rates LOW
9:36 – Defensive Strategies
11:45 – Offensive Strategies
13:17 – My Thoughts
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Hey everybody welcome back to whiteboard Finance my name is marco and i’m here to Help you master your money and build Your wealth in today’s video we’re going To be talking about the 2022 recession How it’s here how to prepare and how to Profit from it so let’s get right into The presentation that my research Analyst and i put together uh my Research analyst name is joe consorty uh He’s on twitter if you haven’t checked Them out there please do so so let’s Talk let’s start with this first slide Here this is gdp growth per quarter so What is a recession why am i showing you This so a recession is generally Identified by a fall in gdp in two Successive quarters meaning two back to Back quarters so this chart is just Showing you basically quarter one of 2018 all the way to quarter one of 2022 Excuse me quarter 2 of 2018 there’s only Three bars here so we had positive Growth or at least positive gdp not Necessarily growth all the way from 2018 Uh to basically 2020 and then we had Two quarters of consecutive negative Growth which is a recession this Happened in quarter one and two of 2020 And then we had crazy growth and q uh Three and then it’s kind of leveled out Since then okay however in quarter one Of 2022 this was the first quarter which We had negative growth since quarter 2
Of 2020. so if we don’t have two Quarters of negative growth why am i Saying the recession is here well this Is why because right now according to The atlanta federal reserve or the Atlanta fed gdp now real gdp estimates For quarter two of 2022 this is the Quarter that just ended is coming back At negative 1.5 the reason i say 1.5 and Not 1.2 is because this is updated Weekly uh you can see how it’s been Dropping basically since may and this is Actually sitting at negative 1.5 at the Time of this recording not when this Chart was made okay so that would Technically put us in a recession So let’s take a look at some charts here That kind of verify these things that Are kind of leading indicators some of These are leading some of these are Lagging but i think it’s important to Understand all this so this is small Business optimism okay this is a chart Or a survey that goes out to several Small businesses in the united states Monthly to survey the health of their Business these kinds of businesses make Up over 50 percent of the private Workforce in the united states so let’s Take a look at this so the small Business optimism is lower than the Start of the great financial crisis in 2007 so as we take a look at this arrow We bottomed out over here kind of like
In the 82 85 range if you will it’s a Little bit less than 85 a little bit More than 80. that was after the great Financial crisis uh we bottomed out over Here after 2020 that brief recession That we just talked about and then now We are sitting at 89.5 okay so this is Actually lower than the start of the 2007 great financial crisis but not as Low as the bottom of that so what we’re Seeing is these small mom and pop Businesses they’re hurting and they’re Not having very much confidence in their Business right now Same thing with consumer sentiment so Consumer sentiment uh this is a survey Done by the university of michigan go Ohio state buckeyes uh consumer Sentiment is measured in a survey by the University of michigan and is showing That it’s lower than the great financial Crisis so even at the bottom of this Trough right here in 2007 2008 2009 We’re actually sitting at 50 okay so 50 Is down here you can see where 2007 was If you take a look at march of 2020 Which is right here this is still Significantly higher than what we’re Looking at right now so the reason for This i think is because inflation is Really getting to people what i mean by That is i think People don’t really know where to put Their money they’re scrimping and saving
Their savings rates may be higher However their actual confidence and Their sentiment is much lower so but if We take a look at this this chart was Only since uh 2000 okay So if you actually go to this next chart This one goes all the way back to 1978 And this is actually worse than the 1979 Oil crisis so if you look at my laser Pointer on the bottom left side of your Screen this is the 1979 oil crisis if You go all the way back or all the way To today’s date excuse me this is the Lowest ever for consumer sentiment So the people and their businesses are Signaling these are the plebs these are The people that run the economy when They’re hurting a market downturn is Approaching So this is the slide that i threw in Here this is the ism manufacturing pmi Purchasing managers index uh 47 which is This red line right here is considered The agreed upon line for official Contraction it’s kind of the threshold Preceding recessions typically So if we take a look at early 2000s with The dot-com bubble if we take a look at The great financial crisis if we take a Look at 2020 with corona uh you can see Right here that all of these have fallen Below that line uh and we’re actually Starting to come down again so we’re Sitting well above this line at 53.
Again this is not a fear-mongering Channel i’m just giving you facts you Can form your own opinion but we are Sitting at 53 right now with the ism Manufacturing purchasing managers index Okay so this is the big slide this is The one that typically precedes Recessions it’s a precursor to Recessions i’m sure you’ve heard of this And i’m sure you’ve heard of this term We’re looking at an inverted yield curve Okay so a two year versus a 10-year Treasury spread this is basically Talking about how the 10-2 treasury Yield spread is the difference between The 10-year treasury rate and the Two-year treasury rate so the 10-2 Treasury spread that approaches zero Signifies a flattening yield curve uh We’re actually sitting at negative three Right now as you can see right here so a Negative 10 2 yield spread has Historically been viewed as a precursor To a recessionary period So again going back to late 2000 or late 90s early 2000s of great financial Crisis uh 2018 this was basically when The stock market crashed after they kept Raising rates and then we had um 2020 and then now we’re actually lower Than that right now so this has Typically been a good indicator or Precursor to recessions So growth expectations this is basically
The 10-year treasury yield as we can see It’s mapped out here it goes all the way Back to 98 in this slide to 2022 Growth expectations typically top out Before every major recession you can see Where all the circles are And you can see the 10-year treasury Yield essentially representing growth Expectations So after we had 2018 i went down Cerveza right here and then now we’re Sitting at It coming all the way back up if this Keeps going up this could be a good Indicator of growth expectations topping Out before a recession So this slide right here i’ve used this In another video i think it’s important Though because not a lot of people talk About this uh we’re talking about rate Cuts coming soon okay i talked about This in my podcast with macro elf he Talks about how the fed or the bond Market excuse me is already pricing in Fed rate cuts in 2023 so if we take a Look at this chart y-axis one is talking About the implied policy rate the Percentage uh the blue line is the Implied policy rate as we can see here Uh topping out at 3.58 percent this is Basically what the fed is targeting uh Orange or yellow depending on your Screen is the number of hikes or cuts Priced in so that’s y axis two you have
Zero cuts one cut two cuts three cuts Four hikes cuts whatever if it’s going Up it’s a hike if it’s going down it’s a Cut right common sense so with rate cuts Uh increasing the velocity of money Meaning that money is cheaper Oh sorry creative cloud has been updated Oh nice thank you Sorry So this is essentially used to stimulate A slowing economy so when you start Cutting the rates companies start taking Out cheap debt this is basically what Fueled everything for the past 14 years So if we start to see these rate hikes Keep going they’re trying to stop Inflation uh they’re trying to slow Things down they’re trying to cool off Inflation this is the point at which we Start to stimulate again and then now There will be cuts the uh the x-axis Down here is basically Dates so this date this proposed date is The end of quarter one 2023 uh the Specific date if you can’t see it is March 22nd 2023 So as we move on here you can see the Next slide is basically unemployment so Unemployment is a lagging indicator that Bottoms out before every major recession You can see employment is bottoming out Again so if you take a look at this Chart goes all the way back to the 1950s Y-axis is the percentage of unemployment
Rate uh you can see it bottoms out and Skyrockets bottoms out in the 70s then Skyrockets all these gray lines are Recessions by the way you guys in case You didn’t know that when you look at These charts that’s what these great Columns imply So if you look at 2000 bottoms out Explodes 2008 bottoms out explodes you Look at cerveza bottoms out then really Explodes because people are taking Advantage of stimulus and then now in June of 2022 we were sitting back at 3.6 Uh if you want to know when your boy Graduated with a finance degree december Of 2010 peak peak unemployment at that Time period for that generation uh Sitting at 10 percent nobody was hiring Um okay and then oracle considering Thousands of layoffs labor market Slowdown layoffs layoffs layoffs right So people are slowing down and hiring They’re actually laying off i referenced This in my last video the everything Bubble we’re starting to see tech Companies do tons of layoffs over the Past year or so And we’re going to continue seeing this You have meta you have coinbase you have Tesla you have oracle This is what’s going to be happening and This all ties back to recessions you Guys jobs are super important for Stability so talking about stability
Let’s get into defensive strategies so What is the whole point of this video How do we benefit and how do we Strategically um position ourselves to Benefit and also play defense so let’s Start with defense first defense wins Championships so pay down high Percentage debt unless we’re seeing Hyperinflation uh so a lot of people Don’t understand this pretend pretend You have uh a hundred thousand dollars On your kitchen table right and you go Through hyperinflation so the person That has the mortgage the car loans the This the that they’re able to take that Hyper-inflated currency and easily pay Off that debt okay because they only owe X amount of dollars which hasn’t moved At a fixed rate uh your currency Hyperinflates at a much higher rate you Pay down the debt that you took out in Year zero with ease now let’s pretend You have no debt and you have a hundred Grand sitting on your kitchen table if Your currency hyperinflates what can you Buy for that hundred grand okay maybe a Chicken maybe some toilet paper That’s obviously a worst case scenario But that is a realistic scenario in Countries like venezuela for example so Pay down high interest rate debt unless We’re seeing you know hyperinflation Then it makes sense to have debt uh Always have the emergency fund i’m a
Huge proponent of an emergency fund this Is how you build your foundation how you Build your skyscraper uh three to six Months if you have a job uh 12 plus Months if you are in commission sales if You’re an entrepreneur if you have an Unstable income Uh number three do not panic sell okay i Had a million consulting calls in march Of 2020 when the market was crashing People were asking me hey marco what Should i do should i sell should i sell Um i just told them what i was doing Okay i wasn’t giving financial advice Just telling them what i was doing i Didn’t sell a thing didn’t sell a penny Okay um didn’t sell a share the reason For that is because you need to be a Long-term investor and know what and why You’re investing in the first place if You’re holding butt floss coin that’s a Big difference than holding you know a Blue chip stock or a blue chip etf for Example i invest for the long haul i’m Not some fomo you know hype investor That’s on youtube or tick tock for Example Those people i save them a lot of money By telling them that Because the market just exploded a few Months later so maintain your income via Job or side hustle i know that sounds Like common sense but the reason for That is because we’re gonna play offense
Right here so you need to build up your Cash flowing assets during recessionary Periods it’s a great time to scoop up Some real estate it’s a great time to Scoop up some underpriced dividend Stocks it’s a great time to scoop up Long spy If you want to trade the spy i mean i Don’t want to get into specifics in this Video but you can actually sell covered Calls and create a monthly income or Weekly income that way if you want So build up your cash flowing assets Monetize your skills bring value to the Marketplace and build up your free cash Flows you can use these cash flows to Purchase cash flowing assets aka real Estate and the things that i just Mentioned Because there will be a fire sale okay So what people don’t realize is after 2008 people built generational wealth Okay my lawyer built Bought up properties for 30 40 grand Here in a suburb of cleveland uh this is A place that i could live it’s not we’re Not talking about the hood we’re not Talking about a war zone uh now those Same properties are worth almost two Hundred thousand dollars and they’ve Been renting for twelve thirteen Fourteen fifteen hundred dollars a month This whole time bought those in cash That was in 2011 2012 2013. uh buy
Systematically okay dollar cost average I’ve been talking about this forever Smart money buys into weakness and it Sells into strength okay if you are Holding an asset that’s appreciating you Don’t even have to do this part you Don’t even have to sell smart money buys Into weakness be greedy when others are Fearful right so empires are built During market downturns i just gave you That example um that’s the time to start Playing offense So that’s all i have for you today you Guys a lot of this is common sense but i Did want to paint the picture that we Probably are going to technically be in An official recession in a couple weeks Here after the numbers come out um i did Want to show you the consumer sentiment Purchasing managers index rate hikes and Cuts all that stuff is important if You’re watching a finance channel or a Finance um Like a cnbc or whatever and they’re not Talking about this stuff you need to Find better sources of information this Is the meat and the leading indicators That actually help you become a better Investor and help you become savvy okay You can’t time the market you can’t Predict the future but these things do Help So play defense always have the Emergency fund always pay down your high
Interest rate debt not necessarily low Fixed rate debt i’m not talking about a Two percent mortgage or you know one Percent car loan i’m talking about 23 uh Credit card debt for example um unless You see us going into a Hyper-inflationary scenario you can then Pay those things off relatively easily As long as your income keeps up with Inflation right uh and then offense you Know i just finished that slide i don’t Need to repeat myself i think that Offense is extremely important during These recessionary periods because a They don’t come around often they’re Only going to come out come around maybe Once or twice in a lifetime in my Lifetime so far that was 2008 if you’re A little bit older maybe the dot-com Bubble you know you could have invested That maybe the savings and loan crisis If you’re that old i don’t know but my Point is um build your war chest you Should have defense and offense the Offensive part is sitting in cash or Being able to raise money from other People opm other people’s money so i Hope you got value out of this video uh Please give me a follow on twitter it’s Whiteboardfin fin uh follow my research Analyst joe consorti And then also uh check out the links in The description below i will be coming Out with my private membership group
Here soon i know i’ve been talking about It for a while but i want to make sure That i have the right staff members in Place before i launch that i’m going to Have guests i’m going to have subject Matter experts i’m going to be talking About a little bit of everything that i Am an expert in And it’s going to be an unbelievable Community and i highly suggest you check It out thank you so much everybody have A prosperous day Uh