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Return to  Latest Economic News    Updated 9/17/18   Please link to
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#5 U.S. Headed for a Recession?
Late in Cycle is About Liquidity


Current Data     World Trade is Down    Weaker Counter Cyclical Measures   

Predictions        Recession Investment Alternatives


The U.S. economy is firing on all cylinders—
job growth is strong, wages are climbing, factories are humming and inflation is on target.
Yet stocks are sinking, yields on corporate bonds are rising and commodity prices are tumbling,
all typical 
precursors of a slowdown or recession. WSJ, Greg IP 11/20/18

Current Data

Consumer Interest Rates Up, Demand Will be Affected


So Will Mortgage Refinancing



Auto Sales Already Affected


Increased Refinancing Needs Will Affect Profit

World Trade is Down

Country Vulnerability

The Emerging Market Crisis is Back. and This Time it's Serious     Global Output Growth is Little Changed in First Quarter

Inflation Counts

Meantime, nobody told investors that trade wars usually are inflationary
and could cause an increase in the inflation-risk premium on debt.
 The effect could be distorted by a flight to safe and
 liquid assets thanks to deep do do between economic powers, the U.S. and China.
Trade concerns increased in June but
inflation compensation moved slightly lower.


Recession Hurts Many

This Key Counter Cyclical Measure is Very Weaker





Some are 50-50

Indicators Say No!





John Mauldin Sees Problems

David Rosenberg’s Stormy Outlook

Stormy Outlook for Bonds video

So Does Forbes

Listen To The Bond Markets: A Recession Is Just Round The Corner

Roubin Brunello see 2020 trouble

1. Fiscal-stimulus policies potential are unsustainable.

2. US economy is now overheating and inflation is also increasing in other key economies,

3. Trump administration’s trade disputes with China, Europe, Mexico, Canada, and others will almost certainly escalate, to add stagflationary pressure, prompting the Fed to raise interest rates higher still.

5. Growth in the rest of the world will likely slow down –China must slow its growth to deal with overcapacity and excessive leverage or face a. hard landing and emerging markets will continue to feel the pinch from protectionism and tightening monetary conditions in the US.

6. Europe will have slower growth, owing to monetary-policy tightening, trade frictions, populist polarized politics,. still-unresolved “doom loop” between governments and banks holding public debt

7. US and global equity markets are frothy. high-yield credit is also becoming increasingly expensive  leverage in many emerging markets and some advanced economies is clearly excessiv

8. Once a correction occurs, the risk of illiquidity and fire sales/undershooting  as there are reduced market-making and warehousing activities by broker-dealers, excessive high-frequency/algorithmic trading and fixed-income instruments have become more concentrated in open-ended exchange-traded and dedicated credit funds.

9. The temptation for Trump to “” by manufacturing a foreign-policy crisis will increase closer to election..

10. Policy tools for addressing it will be sorely lacking by massive public debt, more unconventional monetary policies will be limited by bloated balance sheets and the lack of headroom to cut policy rates.

In the US specifically, lawmakers have


FED Model Predictions Still Low


Fed Assesses Risk of Yield Curve Inversion: An Update



Recession Investment Alternatives

 Here is what happens during a typical bear market   econintersect

8 Fund Types to Use in a Recession   Investopedia

Recession Investing Tips Investopedia

Portfolio Positioning for Next Recession seeking alpha

Barclay's Recession Investment Advise