Global Economic Recession: "US, China, India, Europe can't save global economy from recession - by Linette Lopez

The coronavirus depression will be much worse than the last worldwide recession, because this time no country is strong enough to rescue the global economy.

The story of the Great Recession goes like this: the US and Europe were crippled while working to clean up their devastated banking system, the global services sector suffered without its biggest player — the US consumer engine — but global economic growth didn't completely fall off a cliff because other countries kept money moving around the planet.

Over in China policymakers enacted a massive stimulus to skip over the recession entirely. The country's GDP grew 9.4% in 2009. India chugged along as if the crisis barely happened, with its GDP growing 7.9% in 2009.

But this time there is no corner of the globe that has been left untouched by the pandemic or its effects. And so, there's no country that can reasonably chug along and keep things from getting truly disastrous.

Read more at: 
US, China, India, Europe can't save global economy from recession - Business Insider

USA: COVID-19 crushes U.S. economy in second quarter; rising virus cases loom over recovery

The U.S. economy suffered its biggest blow since the Great Depression in the second quarter as the COVID-19 pandemic shattered consumer and business spending, and a nascent recovery is under threat from a resurgence in new cases of coronavirus.

Read more at:
COVID-19 crushes U.S. economy in second quarter; rising virus cases loom over recovery

South Korea enters recession as exports plunge by most since 1963

South Korea plunged into recession in the second quarter in its worsteconomic decline in more than two decades as the coronavirus pandemicbattered exports and social distancing curbs paralysed factories.

Read more at:
South Korea enters recession as exports plunge by most since 1963 - Reuters

Wall Street: in "Dream On Mode": Are stock investors too complacent about a full-scale blowup between China and the U.S.? Here’s what Wall Street experts say

MarketWatch’s sister publication Barron’s writes, the Sino-American issues are many and include actions taken by the U.S. to censure China’s new security rules that threaten Hong Kong’s

semiautonomous status, restrictions against Huawei Technologies, a push to increase scrutiny of Chinese companies listed in the U.S., funding for the World Health Organization, and accountability for the handling of the viral outbreak that has likely ushered in one of the most severe global recessions in the past 100 years.

“The list is long as my arm,” said Ian Bremmer, Eurasia Group’s founder and president, of the Sino-American tensions, during a Friday interview on CNBC.

“It’s never a good thing that the two largest economies in the world are battling,” Peter Boockvar, chief investment officer of Bleakley Advisory Group, told MarketWatch in an emailed exchange on Friday.

Tensions between the countries, however, don’t seem to have supplanted the intense investor focus on reopening the economy in the U.S., and elsewhere in the world, or attention on a cure for the COVID-19 pandemic, which have helped to buoy risk assets.

“I think the market likely sees the upside risk related to finding a vaccine or treatment as near-term, and the downside risk related to China as long-term, so they are focusing more on the near-term right now,” Lindsey Bell, chief investment strategist with Ally Invest, told MarketWatch on Friday.

“After a 30% plus rally from the March lows, the bar is definitely much higher. As the worries with China heat up, we do think investors could be a little too complacent here and now,” said Ryan Detrick, senior market strategist at LPL Financial.

“The economic recovery is still very fragile and any larger repercussions between the U.S. and China could put a halt to the equity rally quite quickly,” he told MarketWatch.

Read more at:
Are stock investors too complacent about a full-scale blowup between China and the U.S.? Here’s what Wall Street experts say - MarketWatch

USA Unemployment: US unemployment skyrockets as coronavirus crashes economy

However, the figures were recorded before Congress signed off on a $2 trillion stimulus package that seeks to help businesses and workers as coronavirus ravages the economy.

Yet it is unlikely that even the biggest government stimulus package in history can stop unemployment from soaring to record highs and the US entering a deep recession.

Commerzbank economist Christoph Bolz said: “The lockdown of the economy is likely to cost more jobs in the coming weeks. We fear that the US unemployment rate will reach a post-war record by mid-year.”

Bolz predicted the US unemployment rate could rise from 3.5 per cent to 11.5 per cent, putting roughly 19m Americans out of a job. That would be higher than the previous post-war record of 10.8 per cent at the end of 1982.

Read more at: US unemployment skyrockets as coronavirus crashes economy : CityAM

US economy: after holiday forecasts disappoint

The holiday season is no longer expected to pull corporate earnings out of a recession that has lasted the entire year..

Read more at:
https://www.marketwatch.com/story/earnings-recession-is-expected-to-swallow-all-of-2019-after-holiday-forecasts-disappoint-2019-11-22

The US economy: America’s yield curve is no longer inverted - Inverse psychology

Read more at:
America’s yield curve is no longer inverted - Inverse psychology

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

Eurozone Economy: the shadow of recession deepens over the Eurozone - by John Weeks

Read more at:

https://www.socialeurope.eu/shadow-of-recession-deepens-over-the-eurozone
 

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EU Economy: Shadow of recession deepens over the eurozone - by John Weeks

Read more at: 

https://www.socialeurope.eu/shadow-of-recession-deepens-over-the-eurozone

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US Economy - Recession?: Dow opens more than 150 points lower - by Fred Imbert as yields keep falling on rising fears about the economy

Stocks fell on Wednesday as bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-U.S. trade fight also weighed on markets.

The 10-year Treasury note yield fell to its lowest level since September 2017 and traded around 2.22%. A portion of the so-called yield curve further inverted as 3-month Treasury bills last yielded 2.351%, well above the 10-year rate. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.

Bank shares fell along with yields. Citigroup, Bank of America and J.P. Morgan Chase all dropped more than 1%.

Read more at: Dow opens more than 150 points lower as yields keep falling on rising fears about the economy

US ECONOMY: COULD RECORD US DEFICIT TRIGGER THE NEXT RECESSION: ? "As U.S. trade gap widens to dangerous hights."

The U.S. trade deficit rose to a seven-month high in September as imports surged to a record high amid strong domestic demand, offsetting a rebound in exports.

The Commerce Department said on Friday the trade gap increased 1.3 percent to $54.0 billion, widening for a fourth straight month. Data for August was revised to show the trade deficit rising to $53.3 billion instead of the previously reported $53.2 billion.

Could the US Economy collapse?

But here's the bigger question that retail investors and Wall Street are currently asking: Is the current stock market correction over? Given the many headwinds facing stocks and the U.S. and/or global economy, the answer may not be what investors want to hear.

Here are 25 reasons and/or scenarios that could cause the stock market to head substantially lower than where it's currently valued.

1. The ongoing trade war with China escalates, raising material costs, curbing consumer spending, and hurting corporate profits.
2. Corporate share buybacks fail to boost per-share profits as much as expected.
3. Democrats win one or both houses of Congress, hurting the chance of Republicans to pass further fiscal stimulus legislation.
4. The federal budget deficit continues to soar, placing added emphasis on our growing national debt, currently at more than $21 trillion.
5. The U.S. dollar keeps strengthening, placing pressure on exports and worsening the U.S. trade deficit with foreign countries.
6. FANG stocks – that's Facebook, Amazon.com, Netflix, and Google (now Alphabet) -- continue to draw the ire of short-sellers.
7. The Federal Reserve gets overly aggressive with interest rate hikes, sapping lending demand.
8. The yield curve flattens, reducing the desire of banks to lend money.
9. Interest rates rise, providing incentive for investors to ditch volatile equities for the safety of bonds and bank CDs.
10. Britain falls into a "hard Brexit." With few or no trade deals in place, the U.K. falls into recession, taking the U.S. and other developed countries with it.
11. China's economy experiences its slowest growth in decades, placing pressure on its ability to import from the U.S. and other key players.
12. The U.S. housing market shows signs of weakening, with important markets like California seeing a steep drop-off in new home sales.
13. Credit-card delinquencies begin to trickle higher, demonstrating the inability of consumers to meet their payment obligations.
14. The subprime auto loan market bubble bursts.
15. The U.S. goes to war, regardless of the reason or the country in question.
16. An errant tweet from President Trump stirs Wall Street and investors.
17. A flash crash caused by computer algorithms results in substantially reduced liquidity and perpetuates a rapid move lower in the stock market.
18. Investor emotions (especially those of day traders) get out of hand and send traders running for the exit.
19. The unemployment rate, which is at a 49-year low, begins to rise, signaling peak employment and the possibility of a weakening economy.
20. Disruption in important oil-producing countries causes crude prices to skyrocket or plunge. Either way, it could create sticker shock or job losses and adversely impact the U.S. economy.
21. U.S. GDP data shows slowing growth, which, in turn, cools investor expectations for stocks, sending them lower.
22. Inflation comes in far lower than expected, signaling that businesses have little pricing power. The prospect of deflation could wreak havoc on corporate earnings, causing the market to fall.
23. The U.S. debt ceiling is hit (yet again), but the political divide in Congress becomes too great for lawmakers to overcome, allowing the shutdown to perpetuate for months.
24. European debt crisis 2.0 hits, with countries like Italy unable to dig their way out of years of loose borrowing.
25. A widely followed pundit, such as Warren Buffett, sounds the cry of the stock market being overvalued.

In other words, there is no shortage of reasons the stock market could tumble from its recent all-time highs.

Bottom-line, however -it does not look good for the US Economy as the deficit is coming close to a trillion US dollars.Impossible to pay it back, unless by slashing government spending, and increasing taxes.

Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.

The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some president and Congress decide to reverse them, that is, to increase taxes and make cuts to popular programs.

EU-Digest

US Economy: An American recession may come just in time for Trump’s re-election bid - by Rich Miller

Here’s another reason to circle the 2020 election year on the calendar. It may well be the year of the next U.S. recession.

Hefty tax cuts, stepped-up government spending and robust global growth should help insulate the economy against a downturn over the next two years, in spite of last week’s stock market swoon. That would allow the expansion that began in 2009 to become America’s longest ever.

But after that, watch out, economists warn. Fading fiscal stimulus, higher and rising interest rates, and cresting world demand could leave the economy vulnerable to a contraction — just in time for the presidential campaign.

“2020 is a real inflection point,” said Mark Zandi, chief economist at Moody’s Analytics Inc., in West Chester, Pa.

It’s not only President Donald Trump who needs to worry after claiming his policies of deregulation, deficit-widening fiscal measures and trade protectionism will lift the world’s largest economy out of a decade of mediocre growth. Investors should fret, too. A recession — or more accurately, the anticipation of

Read more: An American recession may come just in time for Trump’s re-election bid | Pittsburgh Post-Gazette

Global Economy: Economic Recession in 2017 -

Next year, we will see a recession.

I’m calling it.

Why? Well … there are just too many events unfolding this year that will set the stage for a recession, including a corporate earnings recession, a growth-stunting Brexit vote and a U.S. presidential election unlike any we have ever experienced.

Any one of these events could be the direct catalyst for next year’s recession, or it could be one of the many other reasons not listed.

While I can’t predict the exact catalyst for the event, I do know that I’m not the only one expecting the worst.

In fact, according to a recent report, companies are preparing for a recession as well … and you should be doing the same.

In the latest durable goods advance estimate for June, orders tumbled 4% versus expectations of a 1.7% decline. Durable goods orders represent orders for products that last typically for at least three years, like appliances, office equipment, motor vehicles and turbines.

Earlier this month, I explained how declining durable goods orders mean that the Federal Reserve’s hands are tied, and that interest rates are not going higher by any meaningful degree for at least another decade.

This remains true, but you also have to be prepared for the inevitable — a recession.

Your takeaway here is simple: Prepare for a recession-like investment environment.

That means you want to own safe-haven stocks — think gold-related stocks, utilities or telecommunication companies, bonds and even some blue-chip stocks.

But the main thing you want to consider, if you haven’t already, is to find a strategy for profiting from declining stocks.

Depending on how you manage your money, this can be easy to do. If you are managing your own portfolio, a long-term put option on the SPDR S&P 500 ETF (NYSE Arca: SPY) (expiration in 2018 would be ideal) is a simple way to profit from a recession and decline in stocks.

If, instead, you have an adviser who manages your portfolio, tell them you want more bearish exposure, assuming you have little at the moment. It’s your money, and they will listen and help you prepare for the imminent recession.

They should be able to put your investment in some simple bear funds that benefit from a market fall, or they might also consider buying an inverse ETF that returns the opposite of the underlying equity.
Just keep in mind that these positions are used as protection to hedge your portfolio from a crash.

The further we get into 2017 without the expected stock market crash, tilt your portfolio more and more to positions that will rise when the crash hits.

A crash is coming. It’s just a matter of when, not if.

Read more: conomic Recession in 2017 - ValueWalk

Britain: First, the Brexit. Now the United Kingdom is falling apart - by Ben Wellings

Britain: Playtime is over

Britain’s decision to leave the EU is a major moment in post-War European history. This is like the collapse of communism, but with the West on the losing side. It is the first defeat for the British Establishment for centuries.

It is hard to believe in the wash-up of the referendum campaign but this was meant to be cathartic. It was supposed to heal divisions within the Conservatives by giving the people of the United Kingdom a say on membership of the European Union. But it has only entrenched and exacerbated divisions rather than healed them.

Referendums are not compulsory in the UK. Any decision to hold one is essentially political. Usually, you only initiate referendums that you are certain to win; Brexit has altered the rulebook.

What was proposed as a catharsis has induced trauma: trauma that the process and politics of Brexit will do little to repair. The referendum campaign laid bare deep divisions within the United Kingdom.

Other divisions were evident: between young and old; city and country; men and women. The biggest division that this exposed was between the so-called ‘winners’ and ‘losers’ of globalization and European integration: those who have done well out of these political structures and those who have not.

The disbelief amongst the ‘winners’ that Brexit might have been a realistic and attractive prospect was matched amongst the ‘losers’ by anger directed at the prosperous and secure classes.

 Perhaps the most pernicious division was between politicians and people. The murder of Jo Cox was not only a horrific attack on an individual striving for what she saw as the good society. It was an attack on democracy. Her example showed that not all politicians are remote fat cats in thrall to big business. Politicians still hail from the deprived areas in which they grew up, lived and worked.

Of course, direct blame cannot be laid at the door of the Brexit campaign. But in adopting UKIP’s anti-immigration language, Vote Leave’s leaders subordinated some principled critiques of the EU’s failings to a xenophobic politics of fear.

The referendum campaign deepened existing divisions within the Conservatives, from which they may not recover for years. Cameron’s position is surely untenable. BoJo is waiting in the wings.

The Labour Party under Corbyn was missing in action during this campaign, hoping that the Conservatives would hang themselves whilst Labour’s own internal divisions were overlooked. Many former Labour voters opted to leave and the party must answer questions about how its successive leaderships became so divorced from grassroots opinion.

The main beneficiary of Breixt is UKIP. Its message dominated the last three weeks of the campaign and will shape discussion about national identity, inclusiveness and tolerance in England for years to come. There are calls for it to disband having achieved its central aim. But the wind is in the sails of HMS UKIP and we should expect it to change into an established right populist party, ironically making British politics look much more ‘European’ at the very moment when it left.

The term ‘England’ is used advisedly since this was in many ways an English revolt. Outside of London it was rural England and, admittedly, Wales that dragged the UK out. Whether Scotland will abide this remains to be seen. Northern Ireland’s situation is similarity unsure.

There will always be an England; whether there will always be a United Kingdom remains far from clear.

For the first time in history the process of European integration has been reversed. The idea that Brexit will represent ‘the end of western political civilization’ as Donald Tusk claimed may have been alarmist. But Brexit is part of a wider revolt against the established political order whereby the ‘losers’ in the globalized economy are given voice by rich tribunes, be they Old Etonians, City stockbrokers or New York property magnates. This is their first major victory.

Brexit is the product of a revolt against the way that people have been governed in the past thirty years. This was its sole unifying function. It united left and right against the political ‘elite’, ushering in the first defeat for the British Establishment since the loss of the American colonies.

It is hard to be optimistic about this referendum and the politics that it unleashed. The Scottish independence referendum in 2014 was seen as a laudable exercise in democracy. In contrast the Brexit referendum revealed an angry and ugly streak in political life, especially in England.

The United Kingdom is a divided country. It may have won its independence or have made a catastrophic error, depending on your point of view. The fact that it took a xenophobic campaign to achieve this result is nothing to be proud of.

This foundational moment will be tainted with shame for decades to come.

Read more: First, the Brexit. Now the United Kingdom is falling apart - The Globe and Mail

US Economy: US recession probability at highest levels since fall 2011

The chances of a recession in the United States are at their highest levels since the fall of 2011, according to the CNBC Fed Survey.

The survey also showed recession fears rising for the sixth straight time among respondents, and are now sitting at 28.8 percent.

One fairly reliable recession indicator, the spread between the 2-year and 10-year bonds has weakened just about to its lowest level since the last recession. But it tends to signal recession at zero...

So at 118 basis points, it's softer, but not soft enough to signal recession.

Read more: US recession probability at highest levels since fall 2011: Survey

Wall Street: forget about market corrections - the party is over - "this is a meltdown for Wall Street folks"

The Dow implosion continues -364.81 / -2.21%today Wednesday January. 

Year to end  a -7.31% drop. Wall Street might have been able to fool some people, but they can't fool investors all the time.

The party is over folks, at least for the time being, and nothing seems to be on the horizon to be a reason for optimism.

EU-Digest