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The Anatomy of the Coming Recession

 
 
Reply Sun 25 Aug, 2019 06:58 am
https://www.project-syndicate.org/commentary/global-recession-us-china-trade-war-by-nouriel-roubini-2019-08?fbclid=IwAR3n8ROyz3Nea1AzHifkKhaZCAAo-H8_92WKY4OEZgHe99FtgrcKvJCj99A
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Type: Discussion • Score: 7 • Views: 750 • Replies: 13
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edgarblythe
 
  2  
Reply Sun 25 Aug, 2019 08:58 am
If the linked article is correct, a lot of coming consequences will be permanent.
0 Replies
 
Jewels Vern
 
  -1  
Reply Mon 26 Aug, 2019 12:49 am
Analysts have been predicting this crash since Nixon abolished gold backing of the USD in 1971. The only difference is now the verbs are in present tense instead of future tense. This is the first time in all history that an unbacked currency has lasted more than forty years.

BTW when you post a link you can delete everything from the question mark on. https://www.project-syndicate.org/commentary/global-recession-us-china-trade-war-by-nouriel-roubini-2019-08
RABEL222
 
  0  
Reply Mon 26 Aug, 2019 05:20 pm
@Jewels Vern,
Don't worry. The federal reserve will lower the rates because trump told them too in order to keep the recession from happening untill after his reelection.
roger
 
  1  
Reply Mon 26 Aug, 2019 05:42 pm
@RABEL222,
Maybe, but there is a distinct limit on how low they can go. Honestly, I don't get the impression the Fed much cares about Trumps orders.
RABEL222
 
  1  
Reply Tue 27 Aug, 2019 02:01 pm
@roger,
The have gone to 0 %.
livinglava
 
  -1  
Reply Tue 27 Aug, 2019 05:41 pm
@RABEL222,
RABEL222 wrote:

The have gone to 0 %.

I've read that currently governments in some countries are paying people to take mortgages, i.e. offering negative interest rates. The prices of property in those markets is probably so high that buyers are taking out interest-only loans that amount to renting, except they get all the rights/responsibilities and tax benefits of ownership.

Still, many people still don't want to own and be responsible for a mortgage, so those people are really just waiting for prices to come down, which signals overvaluation of real estate, which in itself signals cause for recession. in addition to stock markets being high.

The thing that's staving off correction at this point is volatility. The problem is that volatility generates a lot of short term profits, which stimulate spending if investors aren't very frugal with their 'winnings.'

If all the money being made on stock volatility would become frozen as long-term savings, that could cool the economy and prevent, or at least soften, a correction; but whenever I think the economy could become tempered by tightening of liberal consumer behavior and the economic/development activities that accompany it, my expectations are contradicted by widespread growth and development activities.

As a result, I expect a correction to occur at some point as markets become oversaturated with new developments and price overvaluation.
0 Replies
 
edgarblythe
 
  1  
Reply Sun 1 Sep, 2019 02:31 pm

Wall Streeters Dumping $600 Million PER DAY In Stocks As Recession Fears Increase
0 Replies
 
vikorr
 
  2  
Reply Sun 1 Sep, 2019 03:53 pm
@edgarblythe,
The article didn't even mention the perilous state of Western Economies. From http://worldpopulationreview.com/countries/countries-by-national-debt/ we have the following country Debt to GDP ratio (so the higher the number the worse it is)

Japan 234%
Greece 181%
Italy 127%
Portugal 117%
US 109%
Belgium 99%
France 96%
Spain 95%
UK 86%
Canada 83%

(And Brazil is 95%)

Those figures may not seem 'so bad', but they are Debt:GDP ratios, not Debt:Federal Revenue ratios, which ratios would be much worse. Once you take into account essential expenditures for each country, the ratios worsen yet again.

Of those, Greece, Spain and Portugal are deemed basket cases, there are concerns Italy's debt is becoming impossible for them to manage, and many of them are still borrowing to avoid recessions (which is unsustainable).

Asia is still largely a manufacturing of commodities economy, so they rely on exports. If the west can't buy, then they too start having problems.

That is to say, the US China trade war, in the above environment, adds to the risks.
0 Replies
 
edgarblythe
 
  1  
Reply Wed 18 Sep, 2019 01:00 pm
0 Replies
 
edgarblythe
 
  1  
Reply Wed 18 Sep, 2019 10:59 pm
https://www.bloomberg.com/news/articles/2019-09-14/a-pulse-on-freight-signals-u-s-economic-contraction-by-year-end
A Pulse on Freight Signals U.S. Economic Contraction by Year-End
0 Replies
 
edgarblythe
 
  1  
Reply Sat 21 Sep, 2019 07:25 pm
NY Fed to pump $75 bn into money markets daily through Oct 10
https://news.yahoo.com/ny-fed-pump-75-bn-money-markets-daily-154943871.html
0 Replies
 
edgarblythe
 
  1  
Reply Fri 27 Sep, 2019 01:56 pm
Plunging stock prices for recent IPOs like Peloton, Uber could signal a market meltdown is coming

https://finance.yahoo.com/news/plunging-stock-prices-for-recent-ip-os-like-peloton-uber-could-signal-a-market-meltdown-is-coming-173242713.html
livinglava
 
  1  
Reply Fri 27 Sep, 2019 08:43 pm
@edgarblythe,
edgarblythe wrote:

Plunging stock prices for recent IPOs like Peloton, Uber could signal a market meltdown is coming

Uber could be positioning itself for strength in the event of a widespread market correction that causes other, highly-inflated stocks to crash. Uber might actually lose less value in terms of percentage of price, and thus come out looking like a more stable bet than stocks that appreciate more over time.

Who knows how deep the rabbit-hole of balance-sheet-analysis-driven-speculation-stimulated-stock-pricing/trading can go.
0 Replies
 
 

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