The new recession is arriving?
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Maybe this is the start?
https://www.bbc.com/news/business-46445913
Wall Street shares tumbled on Tuesday, sending all three major indexes down more than 3% in some of the steepest declines in weeks.
The IMF thinks so
https://www.theguardian.com/business/2018/dec/11/imf-financial-crisis-david-lipton
David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system.
“As we have put it, ‘fix the roof while the sun shines’. But, like many of you, I see storm clouds building and fear the work on crisis prevention is incomplete.”
Lipton said individual nation states alone would lack the firepower to combat the next recession, while calling on governments to work together to tackle the issues that could spark another crash.
Nobody can hold the bull by the horns. Any reforms implemented will not stop the world recession
“Fears are growing about the state of the global economy after a slump in Chinese manufacturing output growth and a dramatic slowdown in business activity across Europe and the US.”
Maybe this is the signal of the arriving slump
Could it be this is the start?
“The Dow Jones fell more than 650 points on Monday, and is on track for its worst December since 1931 during the Great Depression.”
When mankind is going to learn and understand that capitalism is a very unstable economic system?
Japanese stocks plunged Tuesday and other Asian markets declined following heavy Wall Street losses triggered by President Donald Trump’s criticism of the U.S. central bank.
The Nikkei 225 fell by an unusually wide margin of 5 percent to 19,155.14. The Shanghai Composite Index ended off 0.9 percent at 2,504.82 after being down as much as 2.3 percent at midday. Benchmarks in Thailand and Taiwan also declined.
Japanese stocks plunged Tuesday and other Asian markets declined following heavy Wall Street losses triggered by President Donald Trump’s criticism of the U.S. central bank.
Old peoples used to say that the fever is not in the blanket, it is in the body itself. World capitalism is in crisis, and there is not any kind of regulations, laws, financial genius, or leader able to stop it
From today’s Times:
A measure of short-term borrowing costs in the US known as the “near-term forward spread”, which is closely monitored by the Federal Reserve turned negative for the first time since 2008. This means that the market expects interest rates to fall in the short term because recession is looming.
Art Cashin, UBS director of floor operations for the New York Stock Exchange, said: “Everybody is terrified that this is a sign of a global slowdown.
In other words, not just a fall in Stock Exchange prices but a fall in actual production.
More on the “near-term forward spread” here:
journal.firsttuesday.us/using-the-yield-spread-to-forecast-recessions-and-recoveries/2933/
Not sure how reliable this is, but any downturn is predicted for 2020.
They always come as a surprise. As Morgan Stanley Investment Management’s Ruchir Sharma notes, professional forecasters have missed every U.S. recession since such records were first kept half a century ago.
It’s easy to see why there’s reluctance to predict recession: There’s often no concrete evidence for it, even if signs of a slowdown become visible. Growth in pre-recession quarters is often strong
“We’ll never be able to develop macro models capable of predicting demand-side recessions. And we shouldn’t even try,” wrote Scott Sumner, an economist and professor at Bentley University in Waltham, Massachusetts
“We’ll never be able to develop macro models capable of predicting demand-side recessions. And we shouldn’t even try,” wrote Scott Sumner, an economist and professor at Bentley University in Waltham, Massachusetts.
Good advice for us socialists too, as well as drawing a distinction between a stock market “correction” and a downturn in production.
Could this be the cause
https://www.theguardian.com/business/2019/jan/12/subprime-timebomb-back-companies-lighting-the-fuse
“The Bank of England, Australia’s central bank, the International Monetary Fund and members of the US Federal Reserve have raised red flags over so-called leveraged loans, which are offered to companies already in debt but often come with few strings attached.”
Will this trigger the next recession?
“Boom times in many global real estate markets are turning to bust. Australia, several Asian countries and North America are starting to see large price corrections that are leaving speculators racing for cover.”
https://www.dw.com/en/global-property-markets-on-the-turn/g-47234757
There is another over production of houses and apartments in the usa and they have not being sold like in 2008.
Real estate prices are declining, and peoples are not buying houses, banks and contractors are stuck with their investments.
There might be a big default in cars financing and banks are going to lose a large amount of money
Peoples should tie their seat belts because this new crisis is going to be worst than 1930 and 2008, even more, bourgeoise economists are predicting it
The shutdown showed that the us workers are living from one paycheck into another paycheck if they miss one they will go in bankruptcy and they will become homeless
In a few weeks without pay federal workers were eating at homeless shelters
Cash please
Equity investors in Europe are hanging on to unusually big cash piles, signalling growing unease over the market’s prospects.
They prefer keeping large sums of money parked until the protectionist war between Washington and Beijing clears up or Britain agrees on a Brexit deal, or data gives them some comfort that the global economy is not so in bad shape.
“There’s no reason to be 100 percent invested,” said Gilles Guibout, head of European equities at AXA Investment Managers, which manages a total of 759 billion euros ($872 billion) in various assets. “The bounce we’ve seen has no real foundations. We remain sceptical on any strong market recovery because many uncertainties have still no answer.”
JPMorgan, BlackRock, Allianz, Goldman Sachs and Schroder had also significantly increased their cash buffers to above average levels over the last few months.
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