EU-US Trade War: A flood of new data from the US and eurozone suggests recession risks are flashing red. Here's a full rundown of the wreckage - by Ben Winck

Key economic metrics are flashing red for the US and the European Union as tensions between the two reach new highs.

The latest readings from prominent purchasing managers' indexes show manufacturing sectors the US and EU struggling amid global trade conflict and slowing economies. Service and non-manufacturing industries also slowed through September in both areas.

The negative signs arrive after the WTO granted the US permission to levy $7.5 billion in tariffs on EU imports, specifically targeting Boeing competitor Airbus.

Further escalation of trade conflict between the bloc and the US could plunge the two economies into deeper economic woes.

Read more at: A flood of new data from the US and eurozone suggests recession risks are flashing red. Here's a full rundown of the wreckage. | Markets Insider

Currency wars coming in leaderless world: Citi's Buiter

The global economy is bound to remain leaderless, as G-20 countries meeting in Shanghai on Friday are unlikely to produce anything more than a rhetorical statement, Citigroup's chief economist Willem Buiter said.

Buiter said Friday the global economy truly needs an agreement on exchange rates that will be defended through intervention, as well as expansion of supportive monetary policy, fiscal stimulus modulated according to countries' needs, and "supply side reforms that sustain animal spirits in the corporate sector."

"You're not going to get any of that in substance. There is no leadership in the global economy. And there is no willingness to forgo the short-run benefits of beggar-thy-neighbor exchange rate depreciation. Currency wars will be the reality of what we'll see over the next few years," he told CNBC's "Squawk on the Street".

Buiter and Citigroup analysts said in a note Wednesday the risk of the global economy falling into a recession is rising as fundamentals remain poor.

"We are currently in a highly precarious environment for global growth and asset markets after two to three years of relative calm," Citigroup said, noting that global growth was "unusually weak" in the fourth quarter at around 2 percent.

Buiter said central banks are nearly out of ammo when it comes to using conventional and unconventional monetary policy as a means of stimulating demand.

"If we have a further slowdown, it will have to be combined more with the fiscal policy, and the world just isn't ready for that, institutionally, politically and any other way," he said.

At the same time, the private and public sectors in most advanced economies have become highly leveraged, he noted.

Citi is not expecting a U.S. recession, provided no surprises from abroad send the dollar sharply higher. But it does anticipate a further incremental slowing in the absence of a supportive Federal Reserve and as corporations ratchet up debt following a period of "unspectacular, mediocre" growth, he said.

US Economy: Buckle up! This economic doomsayer sees plenty more volatility- by Bryan Borzykowski

The stock market may be taking a breather from its big fall — the S&P 500 was up about 1.5 percent on Jan. 22 — but one economist thinks that we're going to see plenty more volatility in the next few months and another big correction in about two years.

Alan Beaulieu, economist and co-principal of ITR Economics, a New Hampshire-based economics consultancy firm, thinks that macroeconomic fears will make investors jittery for some time, at least until China's government intervenes with a stimulus program.

 Looking further into the future, we'll see another decline, of at least 10 percent, in late 2018, when U.S. interest rates reach 3.5 percent, he said. That will make it more difficult for the consumer to continue propping up the economy with spending.

Beaulieu, who runs the firm with his twin brother Brian, also an economist, has a history of getting calls right. He predicted the current drop back in 2009. He also called the recession, and according to him, their predictions have come true 95 percent of the time over the last 60 years.

The Beaulieus use a proprietary mathematical equation called cycle theory, but a big part of their work focuses on the rate of change in leading indicators — or how fast indicators change from one month or one year to the next.

Most of its predictions are short term — a year out — but it does make much longer calls, too. Its firm has given advice to major companies, such as Honda, Caterpillar, J.P. Morgan, Wells Fargo and more.

While he doesn't think we'll experience a more than 20 percent market drop like we did in 2008 — America is in a much better position than it was back then, he said — we will likely see some more large swings and increased volatility until at least the middle of the year. Why only until the middle of the year? Because market ups and downs are usually related to people's fears, and those worries won't dissipate for a few months.

Investors are nervous about where the global economy is headed, and the cycle of mass sell-offs discount buying and then selling again will continue until people start feeling more comfortable, he said. It will take two things for people to feel calmer. They need to see America's economy growing — and it is, Beaulieu said — and an intervention in China.

"The U.S. is leading the way, economically speaking," he said. "The American consumer is doing yeoman's work. It's marvelous. We have low debt, low delinquencies, good savings in terms of dollars, and spending is at high levels. There's job creation, and the economy is strong."

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