Tag: recession

Leading economist says predictions for a mild recession are ‘delusional’ as severe financial crisis looms

ETH – July 26, 2022

Recession indicators are ringing and key commodities have plunged into a bear market, signaling a downturn may be on the horizon. And Nouriel Roubini dismissed hopes that an incoming recession will be shallow.

According to MSN, The famed economist, who called the 2008 financial crash, told Bloomberg that the economy is headed for a severe recession as well as a severe debt and financial crisis.

Roubini, also known as “Dr. Doom,” said debt ratios are historically high at 420% for advanced economies and climbing, while bailouts during the pandemic have resulted in “zombie corporations” that put the economy at risk.

In contrast, the stagflation seen during the 1970s was accompanied by low debt ratios, and the debt crisis during the 2008 financial crash saw falling inflation.

“This idea that it’s going to be short and shallow, it’s totally delusional,” Roubini said. His warning goes against other predictions on Wall Street for a mild recession, including those from Goldman Sachs, Morgan Stanley, Wells Fargo, Pimco, Nomura, and BlackRock’s Larry Fink.

https://endtimeheadlines.org

Global economy on the brink of recession as investors are now less tolerant of monetary policy tightening

Strange Sounds – May 20, 2022

The global economy is “teetering on the brink of recession” as the war in Ukraine, Covid-19 lock downs in China and a hawkish US Federal Reserve weigh on activity worldwide, the Institute of International Finance said in a report.

In its latest forecast, the IIF estimates global gross domestic product to grow 2.2 per cent this year, with activities slowing to 0.5 per cent in the fourth quarter. The Euro area as well as emerging markets, excluding China, are anticipated to go into a recession by the end of the year.

“Since the statistical carryover from 2021 is 2.3 per cent, this is a de facto flatlining of global GDP,” the report said.

The IIF’s estimates are below the latest prediction from the International Monetary Fund, which has also lowered its growth forecast this year, due to the Ukraine war and inflation stoked by soaring commodity prices.

The IMF projects global growth at 3.6 per cent this year and next, down 0.8 and 0.2 percentage points from its January forecast, respectively.

With the possibility of a recession, market regulators must approach policy normalisation more cautiously, the IIF said.

“In the past, rising uncertainty and mounting recession risk have had important effects on investor psychology, making markets less tolerant of monetary policy tightening that is seen as no longer warranted,” the institute said.

It cited the Fed’s last rate hiking cycle in December 2018, which it was forced to end abruptly after the S&P 500 index fell sharply. Markets judged that hike to be “unwarranted”, given the escalating trade war between the US and China at the time, the report said.

https://strangesounds.org

Deutsche Bank becomes the first big bank to forecast a US recession by 2023

Ricky Scaparo – April 5, 2022

The Federal Reserve’s fight against inflation will spark a recession in the United States that begins late next year, Deutsche Bank warned on Tuesday. The recession call — the first from a major bank — reflects growing concern that the Fed will hit the brakes on the economy so hard that it will inadvertently end the recovery that began just two years ago.

“We no longer see the Fed achieving a soft landing. Instead, we anticipate that a more aggressive tightening of monetary policy will push the economy into a recession,” Deutsche Bank economists led by Matthew Luzzetti wrote in the report. 

‘The US economy is expected to take a major hit from the extra Fed tightening by late next year and early 2024,’ the bank’s economists said in a note to clients Tuesday.

‘We see two negative quarters of growth and a more than 1.5 percent point rise in the US unemployment rate, developments that clearly qualify as a recession, albeit a moderate one.’

The prediction comes as the Fed voted to raise interest rates last month by a quarter-point for the first time in three years to curb inflation, which is at nearly 8 percent and the highest its been in 40 years. It also comes as a 2-year Treasury yield momentarily surpassed the 10-year yield last week, a classic sign that has preceded every US recession.

While the Federal Reserve is aiming to raise interest rates by 2 percent by the end of 2022, Deutsche anticipates the Fed will go beyond that and raise rates to 3.5 percent into 2023.

The central bank projects overall inflation will be up 4.3 percent just this year. Meanwhile, economic growth is projected at 2.8 percent this year, a steep drop from the 4.0 percent growth projected in December.

https://endtimeheadlines.org

The U.S. Economy Hasn’t Experienced Anything Like This Since The Great Depression Of The 1930s

– July 7, 2020

The recession of 2008 and 2009 was bad, but it was nothing like this.  Even though this new economic downturn is only a few months old, we are already seeing numbers that we haven’t seen since the worst parts of the Great Depression of the 1930s.  More than 48 million Americans have filed new claims for unemployment benefits over the past 15 weeks, well over 100,000 businesses have permanently closed their doors, and civil unrest has turned quite a few of our major cities into war zones.  But not all areas of the country are being affected equally.  For example, there are rural areas that haven’t really seen a lot of COVID-19 cases where life seems to have changed very little from six months ago.  On the other hand, some urban areas that have been hit really hard by COVID-19 have been absolutely devastated economically.  For example, the New York Times is reporting that a million jobs have been lost in New York City, and the unemployment rate for NYC “is hovering near 20 percent”…

The city is staggering toward reopening with some workers back at their desks or behind cash registers, and on Monday, it began a new phase, allowing personal-care services like nail salons and some outdoor recreation to resume. Even so, the city’s unemployment rate is hovering near 20 percent — a figure not seen since the Great Depression.

We are going to be using the phrase “since the Great Depression” a lot in the coming months.

http://theeconomiccollapseblog.com

Global Stock Markets Continue to Plunge

Newsmax-Friday, 28 February 2020

The S&P 500 fell for the seventh straight day on Friday and the benchmark index suffered its biggest weekly drop since the 2008 global financial crisis on growing fears the fast-spreading coronavirus could push the economy into recession.

However, stocks regained some ground right at the end of a volatile session.

The Dow and the Nasdaq also registered their deepest weekly percentage losses since October 2008.

The Dow Jones Industrial Average swung back from an early slide of more than 1,000 points to close around 350 points lower. The S&P 500 fell 0.8% and is now down 13% since hitting a record high just 10 days ago. The Nasdaq reversed an early decline to finish flat.

The Dow lost nearly 3,600 points this week and the S&P 500 posted a double-digit weekly percentage loss for only the fifth time since 1940.

https://www.newsmax.com