Will There Be A Recession Soon?

My Comments: Having been around for a few years, I can tell you without question that while the good times come to an end, so do the bad. And vice versa.

We’re now ten years plus into an economic expansion which can be translated to read good times. When and if it reverses, and I believe it will, the depth of the inevitable bad times will be equally signficant.

To the extent the good times are extended, either by greed, fake economic incentives, misguided dictates by those in charge, or some as yet unseen pressure, the longer it takes for there to be a correction, the deeper the correction is likely to be.

Frankly, I’ve been wrong about all this for the past five years. I’ve been expecting a slow down, maybe with an associated stock market crash, and positioning my money to reflect that for a long time. And I’ve paid for my fear as my money hasn’t grown the way it might have.

There are pressures on the global economy that are natural phenomena and there are pressures being imposed for political reasons. Sooner or later, these pressures will hit a tipping point and down the tube we go. And there we’ll stay until the bad times end. And they will.

Meanwhile, I respond with interest to articles like the one that caused me to write this blog post. It comes from a highly respected publishing house that I follow. Whether it’s accurate or not remains to be seen as I no longer feel qualified to make a judgement.

If you have money invested that you intend to use in your retirement to extend your good times, I encourage you to read this and take note.

by Lisette Voytko \ August 13, 2019 \ https://tinyurl.com/y5cnhbf6

Topline: Falling stocks, trade wars and an inverted Treasury yield curve are three signs that analysts say are predicting a U.S. recession—the only problem, however, is that no one can definitively tell when (or if) one will actually happen.

  • The White House announced Tuesday it would delay some China tariffs from September 1 until December 15, causing the Dow Jones Industrial Average to zoom up nearly 500 points by mid-morning.
  • Stocks fell Monday and were predicted to decline Tuesday, as uncertainty mounts for a China trade deal and global economic health.
  • After President Trump surprised the world with more tariffs on Chinese goods, Goldman Sachs analysts estimate a new trade deal will not materialize before the 2020 election.
  • In the bond market, an inverted Treasury yield curve—long used by economists as a recession predictor—is nearing the same level it had reached before the 2007 recession.
  • Bank of America analysts said the odds of a recession happening in the next year are greater than 30%.
  • And Morgan Stanley analysts predict a recession in the next nine months if the trade war between the U.S. and China continues to escalate.
  • Overall, economists cannot accurately forecast recessions, but they suggest de-escalating the trade war with China could soothe fears—and help Trump’s reelection chances.

Surprising fact: Analysis by the New York Times found that recent economic downturns occur in late summer. August of 1989, 1998, 2007, 2011 and 2015 all saw slowdowns.

Key background: One of President Trump’s key platforms is a strong economy, and the stock market has reached historic highs since he assumed office. The President has often used Twitter to demand economic changes, like interest rate cuts and trade deals, and the markets tend to respond to the president’s Twitter proclamations, but it remains to be seen if the economy will continue to grow.

 

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