Via the New York Times, a slowing economy?:
The global economy is under increasing stress as growth cools and trade tensions take a mounting toll. On Wednesday, the tremors were felt worldwide.
Shares on Wall Street were off sharply, only a day after they had rallied as President Trump narrowed the scope of his next round of tariffs. The S&P 500 was down 2.9 percent. And bond markets offered an ominous warning on American growth prospects, with yields falling to levels not seen in years.
The financial jitters, which continued Thursday as markets in Asia were down in early trading, came after new data showed the German economy hurtling toward a recession and factory output in China growing at its slowest pace in 17 years.
The trouble in two of the world’s manufacturing powerhouses indicated, in part, how hard both have been hit by Mr. Trump’s tariffs. And it increased concern that the United States, too, is headed for an economic reckoning...Certainly the brief appearance of an inverted yield curve was a potential sign of a recession. From my perspective, I don't think we've seen a slowing economy in either the personal life of my family and friends, or my work life, but it remains to be seen. I think it is possible that we may have a recession in 2020, but I don't think there is sufficient evidence from either the broader economy, or the chemical enterprise - yet.
Remember, the economy is controlled mainly by men who spent their college years chanting "Chug, chug, chug, chug!"
ReplyDeleteI'm always astounded that guys I remember as frat partiers who barely graduated are now finance types with huge salaries. One of them admitted to me that he's essentially a wildly overpaid salesman, and someone behind the scenes is actually picking the investments.
DeleteYou mean the heirs to bank owners in Ivy League?
ReplyDeleteI've been following the market pretty constantly since 2010 and less devoutly since about 2001. People always seem to be calling for a recession, economic calamity,etc. Based on market patterns, it seems that one should be hitting. It's curious that we have been doing so well given that we hit a bottom in March 2009. All things considered, I don't think there will be a recession. I feel like a lot of these pieces/analysis are skewed by the politics of the reporter. When Obama was president a lot of people were saying that this socialist will destroy everything. 8 years later we were doing quite well. On the Eve of Trump's election we heard similar things. On Facebook, one of my "friends" who is a PhD/Attorney wrote "Taking one last tear filled look at my 401k." Nobel prize winning economist Paul Krugman stated that the market would probably never (and he meant never) recover from the severe drop in the price of futures. Next day the market is up. I tend to side with Buffet on matters of economy. Recessions come and go, but overall we will do well. I think that the current talk of recession is another one of those "I want to be the analyst/journalist" who predicts the next recession before it happens.
ReplyDeleteAt some point, we're going to have to pay the debt to SSI and the other debt holders, which will probably require tax increases and spending cuts, and will likely hurt when it happens. The higher spending and deficits will make that come sooner, I would think. It's also possible that people will go nuts when the pathways to riches (or even comfort) seem closed off to almost everyone (that the structure of the economy is inconsistent with what people perceive as American principles). I don't know why I would think the latter is imminent though (the former will probably come sooner).
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