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Thread: World Recession Looming?

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    World Recession Looming?

    Dow Plunges 800 Points Over Growing Recession Concerns

    US stocks plunged rapidly on Wednesday, following news that several European countries could soon see slumping economies and the arising of a key indicator of coming recession.

    Wednesday was the worst day for US stocks in 2019 and the fourth-largest point drop on record for the the Dow Jones Industrial Average, which declined by almost 3% amid poor economic reports from Germany and the United Kingdom, and the discovery of an “inverted yield curve” in US savings bonds. Economists fear the news signals a recession on the horizon.

    Yannis Koutsomitis, a Belgium-based political and economic analyst, told Sputnik Wednesday that "Germany and the UK will almost certainly go into recession in the next quarter, and the US bond yield curve inversion is a strong indication that the US could follow suit next year."

    Bank stocks led the decline, with Bank of America's stock value falling by 4.69%, Citigroup's by 5.28% and J.P. Morgan's by 4.15%.

    The world market is growing increasingly unstable. The Buenos Aires Stock Exchange crashed by 38% on Monday amid news of a leftist victory in primary elections, and the Argentine peso lost 11% of its value as the state bank slashed exchange rates. Chinese markets also declined by 2.6-3.3% on August 6 as a result of the ongoing trade war with the US.

    "China is not our problem, though Hong Kong is not helping," Trump tweeted Wednesday afternoon, about 40 minutes before the New York Stock Exchange closed. "Our problem is with the Fed. Raised too much & too fast. Now too slow to cut. Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve."


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    Senior Member velvet's Avatar
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    The greater danger lies in the negative yields, not only of bonds but of everything. ECB with its policies made several banks starting to charge their customers for storing large amounts of money. All European central banks are bust. On the other hand, the zero policy build a housing bubble reminiscent of that prior to the crash in 2008. Credits are cheap, people buy, prices go up way beyond actual value.

    Max Kaiser equated "world economy" with the Titanic. It was hit by an iceberg in 2008, half broke apart, the tail now goes up into the sky (also all the indexes went up and up with no real value underpinning these hypes), everyone believes oh look we're rich, and then *whoosh* the ship sank straight to the ocean ground. This is about to happen to global finance. There's a massive deflation looming.

    It's all "Oh panic Recession". But remember that this is part of the plan for the One World Government. Nothing of this happened by chance, the bubble highway and turbo "market" (pure finance tricks, no real goods involved) bubble was brought about by "keynesian" Mario Draghi, a Goldman-Sachs (you dont quit working for Goldman-Sachs, neither Draghi nor Alice Weidel, for that matter), a lobbyist of the G30, who at least helped fake the Greek numbers to get them into the Euro trap, a Bilderberger and Jesuit and a whole list more of things which had disqualified him in a normal world for even be a cashier in a supermarket. In EUSSR he's made chef of the ECB. But what can I say, we have for almost 16 years now the GDR ministry for agitation and propaganda as a chancellor... so there you go. Apparently the people just are that blind and retarded... and the looming crash will make people give (((them))) what they want: a voluntary acceptance of the One World Dictatorship.
    Ein Leben ist nichts, deine Sprosse sind alles
    Aller Sturm nimmt nichts, weil dein Wurzelgriff zu stark ist
    und endet meine Frist, weiss ich dass du noch da bist
    Gefürchtet von der Zeit, mein Baum, mein Stamm in Ewigkeit

    my signature

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    ...........One World Dictatorship.

    and one world currency

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    Sees all, knows all Chlodovech's Avatar
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    Someone Should Probably Step In and Stop the Economy From Tumbling Into a Recession

    The world’s economy is looking very, very dicey at the moment.



    Source: compote.slate.com

    Investors enjoyed a brief, sweet moment of relief from their perpetual anxiety over Donald Trump’s trade war on Tuesday, when the White House announced that it would delay some of its upcoming new tariffs on Chinese goods until mid-December, in order to avoid mucking with America’s holiday shopping season. But this morning, a whole raft of bad news reminded everybody that, oh yeah, we’re very obviously in the midst of a global slowdown. As Bloomberg summed things up:

    "China reported the weakest growth in industrial output since 2002. Germany’s economy shrank as exports slumped, and euro-area production plunged the most in more than three years as the overall expansion cooled."

    Prognosis: not great! There have been other danger signs, too. Britain’s economy shrank during the last quarter, partly thanks to pre-Brexit fears, and appears to be on the cliff’s edge of an outright recession. Then there are the bond markets, which are probably best visualized as a sweaty, red-faced man in an expensive suit shouting, “This sucker is about to blow!”

    Desperate for safe places to put their cash in a moment of turbulence, investors have piled into government debt all over the world. As a result, bond prices are skyrocketing, and yields (the returns bond owners can expect) are plummeting. Many bonds are now offering negative yields, meaning that a growing share of the world’s finance types are so pessimistic about the economy that they’re essentially paying for the privilege of having someone hold onto their money.

    The bond market is flashing special signs of trouble for the United States, too. For months now, the Treasury yield curve has been inverted, meaning that returns on long-term bonds have fallen below those on short-term bonds. This is generally considered a sign that investors are pessimistic about growth and believe that interest rates in the future will stay low. It has also happened before every single recession over the past 50 years—without generating a single false alarm during that stretch.

    In response to Wednesday’s buffet of bad news, the alarm got a bit louder. Yields on 10-year Treasuries fell below those on two-year Treasuries, which basically means that the yield curve is now, officially, extra super-duper uber-inverted.

    It is possible, of course, that this time will be different—that the inverted yield curve won’t be followed by a downturn. But there are other reasons to be worried about the U.S. economy, besides abstruse signals coming from Wall St. For instance, U.S. growth slowed in the last quarter as business investment dried up, likely thanks to uncertainty generated by the trade war. And even if Trump may be delaying some of his tariffs, once he imposes them, they’ll still amount to new taxes on American consumers, which could mean yet another slight drag on GDP.

    With all that in mind, it seems like maybe … someone … should … think about taking some action to keep the economy from tumbling into a hole?

    There are plenty of people who could theoretically step in. The Federal Reserve, for instance, could lower interest rates again. It might be hesitant to do so—when the Fed lowered rates last month, Fed Chairman Jerome Powell hinted that it could be a one-off event. But at this point, it’s not clear what the downside of reducing them further would be. Powell has admitted that inflation has been too low. The chances that it would suddenly rise and spiral out of control are effectively nil. Sure, keeping borrowing costs down might encourage some bad lending or investment bubbles that could lead to problems down the line, but that concern should probably be outweighed by the near and present danger of an actual recession. Some people might also worry that if the Fed cuts now, it won’t be able to cut later should a recession actually arrive—but that concern doesn’t make a whole lot of sense either. We’re better off trying to prevent the economy from veering off into a ditch in the first place, rather than trying to push it back onto the road once we’ve already crashed.

    This, for what it’s worth, is what Donald Trump would like to see. On Twitter today, he lambasted the Fed for keeping rates too high and vented about the “CRAZY INVERTED YIELD CURVE.” He’s not wrong.

    Of course, Congress could also consider jumping into action. Sure, infrastructure week has become a running joke in America, but seriously, this would be a fabulous time for the United States to stimulate its economy by borrowing a whole boatload of cash and spending it on upgrading our rotting transportation networks. Thirty-year Treasury bonds are trading at around 2 percent right now, and threatening to drop lower—meaning the government can borrow for practically nothing for three decades at a time. Maybe we should take advantage of that? Fix some subways? Repair some roads? Make good on one of Donald Trump’s central campaign promises, even if it mildly hurts the Democrats’ chances in 2020?

    Finally, Trump himself could call off the so-far ineffective trade war he’s been waging without much strategy or direction. We know the trade war is causing trouble for American farmers, despite the administration’s bailout. As I mentioned above, it’s also pretty clearly hurting domestic business investment. And as Neil Irwin writes at the New York Times, it’s driving global trouble too. Our tariffs seem to be putting a dent in China’s factory production and scaring Chinese consumers out of spending. Trump almost surely sees this as a plus, but as a result, Germany is exporting fewer cars to the People’s Republic, which is weighing on its own growth, which is bad for all of Europe. And the weaker the world economy gets, the more likely it is that companies everywhere will cut back on hiring.

    Things are looking a little bleak at the moment. The good news is that there are several ways to brighten the picture. Cut interest rates. Borrow and spend money to build stuff. Stop trying to mindlessly bludgeon our trade partners. Somebody just has to take some responsibility and do something.
    "If we were going to stand in darkness, best we stand in a darkness we had made ourselves.” ― Douglas Coupland, Shampoo Planet

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    The Norwegian kroner (NOK) is currently weakened because of this, 1 euro is over 10 NOK now and the USD is also very expensive.
    I want to buy property, so hope there's no further issues.

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    Ayghhh the sky is falling, the sky is falling.....quick everybody spread doom and gloom and with a little luck we can get the orange man out of office

    Quote Originally Posted by 1285559
    Things are looking a little bleak at the moment. The good news is that there are several ways to brighten the picture. Cut interest rates. Borrow and spend money to build stuff. Stop trying to mindlessly bludgeon our trade partners. Somebody just has to take some responsibility and do something.
    This is exactly what not to do, you will never be able to borrow your way out of debt nor into prosperity. Spend, spend, spend, borrow, borrow, borrow, spend, spend, spent that is all these "experts" scream and you know who is standing their wringing their hands.

    The article is fake news and a hit piece aimed at the economy to get Trump out of office, they very well know the American people will support Trump as long as the US economy is strong. Sure some of the tariff wars are a bitter pill to swallow, but to say Trump is foolish and aimless is fake news, Trump wrote "The Art of The Deal" he damn well knows what he is doing and it's working.
    Life is like a fire hydrant- sometimes you help people put out their fires, but most of the time you just get peed on by every dog in the neighborhood.

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    Senior Member Tripredacus's Avatar
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    The market has been over-inflated for almost 10 years now. It hasn't been working relative to the economy, at least in the US. The reason is because it is finally "understood" in ways it wasn't in the past, and is being used to make money.

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