The new recession is arriving?

October 2020 Forums General discussion The new recession is arriving?

Viewing 15 posts - 31 through 45 (of 184 total)
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  • #183115
    ALB
    Participant

    According to this from CNN it’s going to start on 30 March 2019:

    https://edition.cnn.com/2019/01/29/opinions/world-should-be-scared-of-no-deal-brexit-opinion-intl-gbr/index.html

    The rest of the world should be far more afraid of a no-deal Brexit than it has been so far. Yes, this situation would be more damaging to Britain than to anyone else, but it is hard to see how a no-deal could take place that would not launch a global economic crisis and perhaps one to rival last decade’s financial crash in scale.

    Personally I don’t think it’s going to happen, but you never know.

    #183124
    Anonymous
    Inactive

    I think there is an economic crisis on the making, but I don’t think it is going to happen so soon. As Alban said, we never know, the dynamic of capitalism changes constantly.

    There is already a crisis in the overproduction of houses,  and the real estate industry is losing profits and sales, thousands of new home are empty and the population of homeless is increasing, and foreclosures have not stopped yet

    https://www.liberationnews.org/the-absurdity-of-capitalist-overproduction-html-2/

    There is another crisis that is on the making which is the industry of overproduction of cars, and car loans and many dealers are not able to sell their inventory, but bourgeois economists want to cover the real causes

    https://www.liberationnews.org/the-absurdity-of-capitalist-overproduction-html-2/

    According to the last economic reports, China is going to become the biggest retailers of the world, which means that,  many companies that are in the brink of bankruptcy in the USA, such as Sears, JC Penney, and Macy, probably, will move most of their operations to China.

    There is also a large overproduction of food but peoples continue dying due to hunger, diseases,  and lack of proper diet. and then, bourgeois economists write about the so-called law of scarcity,  which is totally false

    This is an economic system  which will never benefit the majority of the human being, but we still continue supporting it

    #183143
    ALB
    Participant

    I wasn’t expressing scepticism about a new recession coming (I think one will at some point as capitalist production is cyclical, but we can’t know when) but about the possibility of a no-deal Brexit scenario. It’s that that I don’t think will happen.

    #183901
    alanjjohnstone
    Participant

    safety in cash

    https://uk.reuters.com/article/uk-funds-poll-global/global-funds-reached-for-a-bigger-cash-buffer-in-february-reuters-poll-idUKKCN1QH1LX

    Cash holdings – a key gauge of investor caution – were increased to their highest since June 2015, to 7.2 percent from 6.2 percent last month.

    “…We expect the year to be quite volatile with the market mood continuing to swing between fear and greed,” said Pascal Blanqué, chief investment officer at Amundi Asset Management

    #184706
    alanjjohnstone
    Participant

    I’ve shouted wolf so many times but is this the first signal of the downturn and one of those times I will be right?

    The wolf will be at the door.

    https://www.bbc.com/news/business-47689069

    “…Asian stocks sank on Monday amid growing concerns of a slowdown in the global economy. Unusual moves in the US bond market have also raised concerns about a possible US recession…”

    #184707
    Anonymous
    Inactive

    Interest Rates and the US Economy. The Capitulation of Federal Reserve Chairman Jerome Powell

    The US Economic Slowdown Has Arrived

    For those who believe the business press and government ‘spin’ that the US economy is doing great, and recession is not just around the corner, consider that US retail sales have fallen sharply in recent months. In December they declined by -1.6%, the biggest since September 2009. Residential and commercial construction has been contracting throughout 2018. In January, manufacturing, led by autos, dropped by -0.9%. The manufacturing PMI indicator has hit a 21-month low. Despite Trump’s early 2018 multi-trillion dollar business-investor tax cuts, investment in plant and equipment growth by year end slowed by two thirds over the course of 2018. Recent surveys show CEO business confidence has declined the last four quarters in a row—i.e. a bad omen for future business spending on equipment and inventories. Despite Trump’s ‘trade wars’, the US trade deficit finished the year at a record $800 billion in the red. Service sector revenues rose a paltry 1.2% in the fourth quarter 2018 compared to the same period a year earlier.

    #184759
    alanjjohnstone
    Participant

    ‘People aren’t panicking enough’: Financial analysts are spooked as a key economic warning sign is ‘flashing red’

    A bit technical for me

    “…When I started working on a yield curve inversion explainer, I was prepared to conclude that worrying about this is overblown but then it totally dropped out of mainstream coverage and I actually think people aren’t panicking enough…”

    #186102
    alanjjohnstone
    Participant
    #186103
    Anonymous
    Inactive

    The prediction is that this economic crisis could be worst than the one that took place in 2008 when all the big banks went into bankruptcy and the capitalist had to bail then out ( the workers did not bail out  the capitalists )  . Let’s fasten our seat belt because it is going be a very bumpy ride.

    It is not a problem that governments are not governed by experts and experienced leaders, and that there are not enough banking and business regulation. it is a natural logic of capitalism to enter into periodic crisis which produces hungers, unemployments, and many others social problems. With or without regulations, or employing econimists with PHD degrees,  crisis always takes place.

    During the crisis of 2008 many famous economists have to run to the bookstore or the librart  to look for Marx’s capital to understand why the crisis was taking place, their academics knowledge did not give them the answers, and despite that, they did not go to the real root of the problem which is superproduction, admiting that would be a clear indication that capitalism is a very unstable system and workers would stop supporting capitalism.

    #188226
    alanjjohnstone
    Participant

    2020 for the recession according to noted economist, Nourel Roubini.

    https://www.theguardian.com/business/2019/jun/14/the-risk-of-a-2020-recession-and-crisis-is-growing

    So much for the hopes of the IMF to reverse cuts in welfare.

    https://www.theguardian.com/world/2019/jun/14/nations-must-protect-spending-on-the-vulnerable-says-imf-chief-christine-lagarde

    “The International Monetary Fund is urging countries to protect spending on health, education and vulnerable groups amid growing concern among its members about excessive levels of inequality”

    #188551
    alanjjohnstone
    Participant

    Is this going to be the cause of the next slump?

    “Corporate borrowing poses a danger to the global financial system and could trigger a crisis in the same way US sub-prime mortgages sparked the 2008 banking crash, the organisation that represents the world’s central banks has warned, the Bank for International Settlements (BIS)…$3tn (£2.4tn) market for low-grade corporate debt was already “overheating” and risked provoking a panic that could send market values crashing as happened 11 years ago.”

    https://www.theguardian.com/business/2019/jun/30/corporate-debt-could-be-the-next-subprime-crisis-warns-banking-body

    #188680
    Dave B
    Participant

    It looks like Deutsche Bank are in trouble; there has been some talk about that for a few years eg that they were effectively already insolvent and bankrupt.

     

    If they go down it could be like another Lehman Brothers thing and they will take down several others with them no doubt.

     

    As well as perhaps the president Trumps empire.

     

    Rumour has it that he financially he is a man of straw, mortgaged up to the hilt and in negative equity eg owing more than he is worth.

     

    Including several hundred million to Deutsche Bank.

     

    If they go under the new owners of his debt may foreclose on him.

     

    https://www.businessinsider.com/trump-deutsche-bank-mueller-2017-12?r=US&IR=T

     

    #189436
    alanjjohnstone
    Participant
    #189483
    schekn_itrch
    Participant

    I think a crisis may actually be very close indeed. My logic is as follows: most countries have already had their peak oil, with only a few now supporting ever growing demand. The one thing that “saved the day” back in 2014 was American shale oil revolution which brought millions of barrels per day into the market. But as shale is more expensive, they have been burning cash for several years, and are already slowing down. When shale oil industry finally goes belly up, it will trigger a huge price spike, and a worldwide recession. My prediction is for end of this year or beginning of the next.

    Time-Is-Almost-Up-For-US-Shale

    #189492
    ALB
    Participant

    “When shale oil industry finally goes belly up, it will trigger a huge price spike, and a worldwide recession.”

    But that’s not what the link you give says. The US shale industry is in trouble because, apart from  the easiest to extract beginning to be exhausted putting up costs, the price of oil has fallen. The news item talks about the present being “a time when oil prices more broadly are in freefall” and “oil prices languishing below $60 per barrel” and quotes a shale  company executive as  saying:

    “Sheffield said that he doesn’t see global oil prices staying below $55 per barrel over the next few years. That would likely mean WTI would be under $50, which he says is just too low for shale companies to be making money.”

    In other words, if the US shale industry does go belly up this will be because oil prices generally have fallen and remain low. Its demise would not trigger a huge price spike. In fact, if there was a huge increase in the price of oil (which, if it was sudden as with the outbreak of a war in the Persian Gulf, Gulf, could well trigger another world recession) this would make the shale industry profitable again.

    The real price of most goods tends to go down over time due to increasing productivity. The exceptions are minerals extracted from the ground. The easiest seams are exploited first but, once these have been exhausted, productivity falls and costs rise as more difficult seams have to be exploited; the price rises.

    Oil is in this situation. As the easier sources are used up, if demand remains the same, its real price rises. If demand increases, the price rises further and other sources become profitable. In fact it was precisely because the price of oil had risen that marginal sources like shale became profitable.

    This is where the concept of “peak oil” is a bit dubious or at least needs careful defining. Of course the amount of oil on Earth is limited and so in theory could eventually be all used up but this is not an immediate prospect. What is is that, at some point, the cost of extracting oil will become so high that it will no longer be profitable to extract it rather than use other sources of generating energy (e.g. nuclear, solar, wind power, etc).  This could be said to be the point at which “peak oil” was reached but it wouldn’t mean that all oil reserves had been exhausted, only that the reserves that could be profitably exploited start to decline.

    Whether or not this point has been reached is a matter of controversy and in any event depends on the price of other sources of energy which can also fluctuate, though, not being based on a mineral, the cost and so the price of renewable energies such as solar and wind is decreasing all the time as productivity increases.

    It only remains to add that, in a socialist world, energy policy would not be based on such irrationalities as the changing price of alternative sources of generating energy relative to each other, as it is today under capitalism.  Given the fact that burning oil contributes to global warming, a socialist world will be in a position to decide to use it to make plastics instead of burning it to generate energy. A capitalist world can’t as long as it is profitable to burn it.

     

     

     

     

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