 Good day, fellow investors. I don't think I ever mentioned it, but I'm subscribed to almost all out there. Bloomberg, Wall Street Journal, Morningstar and many others that I don't want to mention, not to publicize them, because most don't deserve my money. But still, even if I get a little bit from there, it's good. However, something nice that came in the email yesterday was, of course, Wall Street Journal and I'm subscribed to their DailyShut, which gives a lot of slides about what's going on in the economy markets, etc., which is always nice to look at on a daily basis. The title of the email was, what can cause the next recession and when it's coming. So I'll go through the slides, explain a little bit more in detail the slides for those who are not very familiar with economic things and we will explain what can happen and whether we will see a recession soon or not. So all sources from the DailyShut, Wall Street Journal. Let's start with the triggers for a recession. We see here the triggers, what triggered a recession since the 1850s. However, the dark blue is what triggered the recession post World War II and that's what's interesting to us. The top trigger was always monetary policy, monetary policy tightening. So higher interest rates, bam, you get a recession. Then we had asset price collapses, which could happen if the stock market continues to decline, but that was mostly pre-World War II and then we have oil price spike unlikely. Fiscal policy in this case is helping the economy and then we have investment, the leveraging cycle, a lot of that in the market, governments, etc. And then we have also foreign financial contagion that might happen. We'll just mention Italy quickly. So let's start going through these factors that have led to a recession in the past and see where we are now. Home sales in the US have been higher and higher every year since 2011, but they have quickly declined in August, September of this year. Why did that happen? Because home prices, home sales are related to the 30-year mortgage rate. You can see here from 2013, inverted on the right side is the mortgage rate and left are existing home sales in millions. As the mortgage rate kept declining, so inverted on the right side, you see it went from 4.6 to 3.4, home sales increased. When the mortgage rate started going up and going back to 4.6% because the Fed increases interest rates, we have seen also with the six months leg a decline in home prices as they usually follow interest rates. The first sign of trouble for the economy. Also, you don't want to own home building stocks when that happens and the Bloomberg America's home builders index is severely down. So you don't want to own home builders cyclical stocks in the late part of the economic cycle. Those might rebound, but you never know how deep will the recession be. Further, the job market. That's also crucial for the cycle. At some point, you can't hire more people. Thus, there is less growth. There is less fuel for growth. Further, despite everything, what Trump is doing, the trade deficit is widening. The trade balance is getting bigger. It's still negative month per month plus the real deficit trade in goods import, export is also widening. So that's not really working well for the states. As said, the Fed is increasing interest rates and we have already seen housing down. We are seeing now more volatility in the markets that we will see whether will lead to a crash or not. A crash mark might also be a trigger for recession. So a lot of crazy things going on there. Plus, these are the probabilities for a recession from J.P. Morgan's model. So you can see one year recession, 20, 20 something percent, two years higher, three years, four years, almost 100 percent chance of a recession. So I think we are in the late part of the economic cycle. When will that recession hit? Soon, later this year, next year, four years, doesn't really matter. Long-term investors know, okay, the risks are high. Also, something very important to note here is that the U.S. federal budget usually correlates with GDP growth and the deficit should be smaller. But now the budget is already stimulative. If there is a recession, the budget should go even lower to 8, 9, 10 percent deficit. And then that can be trouble because of interest rates. Most of the U.S. government debt is short-term. So with higher interest rates, the cost of financing debt, that increases. You can see here 66 percent of the U.S. government debt is below five years. Below 10 years is about 90 percent. And just 10 percent is long-term. So the government didn't take advantage of the extremely low interest rates over the last year, two years to refinance the debt for the long-term. Italy issued the bond of 50 years, the U.S. government didn't focus on that. So that might be another trigger, higher debt levels, slower GDP growth, higher interest rates, higher costs, less stimulation from a fiscal perspective in combination with less stimulation from higher interest rates from the Fed. Another point that we mentioned is foreign shocks. Italy is a ticking bomb in Europe that could bring trouble to the whole world. The Italian government forecasts 50 percent faster GDP growth than Goldman Sachs or the IMF. So I know it has been a great wine season in Italy. There is a lot of wine, good wine, a lot of sun, hot weather, great weather. But I think the government is still a bit high from perhaps too much wine as they are all comedians, aren't they? So to summarize the Fed's increasing rates, recession. Housing is down already, unemployment can't go much lower. Debt continues to pile as the government stimulates to counter the Fed tightening. That's just kicking the can down the road. A recession shouldn't be that bad and shouldn't be fear, should be normal, cyclical. We fall a little bit, we bring out the weeds and we grow stronger in the future. Kicking the can down the road is not good in my opinion. So higher debt can be much more trouble if rates rise and then globally there is always something that can happen. Be it Italy, be it China, be it something else in the world. When will a recession happen? With all the manipulation in this world, from fiscal, political to monetary, nobody knows. The only answer I have is be ready for anything, be diversified and think common sense and think how am I prepared to whatever happens. Thank you for watching, I'll see you in the next video tomorrow.