Forget China for a minute and it's recession.There's growing concern about the U.S. falling back into recession. Recall the Fed with one rate hike of a mere 25 basis points under its belt, it's essentially out of economic bullets. And returning rates to ZIRP land again, the globe needs like you need a wart on your nose.
The world’s financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, according to a leading global banker.
William White, chairman of the OECD’s review committee and former chief economist of the Bank for International Settlements, who suggests the stresses in the financial system are now “worse than it was in 2007”.
Speaking to the UK Telegraph’s Ambrose Evans-Pritchard before the start of the World Economic Forum in Davos, White warned that macroeconomic ammunition to fight further economic downturns is essentially “all used up”.
“Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief,” he told the Telegraph.
“It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something.”
Davos is that big party in Switzerland, for big people, that gets big press coverage annually that turns out to be a big nothing burger. And maybe someone from the ECB or the Fed, both of which claim they can't find any inflation, 2% or otherwise, should read this story.
JOHANNESBURG – The weaker rand has resulted in prices sky-rocketing in Davos for South Africans who have travelled there for the World Economic Forum.
A meal has cost one business reporter a whopping R700.
It could cost an individual anything up to R500,000 to attend this year's World Economic Forum in Davos.
Editor and Publisher of biz news, Alec Hogg, says this is his thirteenth trip.
Yesterday he purchased a chicken Caesar salad and a glass of milk - the same meal he bought last year.
“It cost me 41 Swiss francs and 50 cents and that’s worth up to R700 as compared to last year where it was just over R500 and the year before it was under R400.”
Hogg says this shows how the rand is falling.
There are about 80 South African delegates attending this year and the overall cost is about 40 percent more compared to last year.
The rand is not the only currency falling against the dollar. Look at charts of the Canadian loonie, The Brazilian real, the Russian ruble, the New Zealand and Aussie currencies, to mention a few.
Last week industrial production numbers came out and the news was not what economists expected. According to data from the Federal Reserve, industrial production dropped in December 0.4%A meal has cost one business reporter a whopping R700.
It could cost an individual anything up to R500,000 to attend this year's World Economic Forum in Davos.
Editor and Publisher of biz news, Alec Hogg, says this is his thirteenth trip.
Yesterday he purchased a chicken Caesar salad and a glass of milk - the same meal he bought last year.
“It cost me 41 Swiss francs and 50 cents and that’s worth up to R700 as compared to last year where it was just over R500 and the year before it was under R400.”
Hogg says this shows how the rand is falling.
There are about 80 South African delegates attending this year and the overall cost is about 40 percent more compared to last year.
The rand is not the only currency falling against the dollar. Look at charts of the Canadian loonie, The Brazilian real, the Russian ruble, the New Zealand and Aussie currencies, to mention a few.
Well, the news is out and it's not what economists expected. According to data from the Federal Reserves, industrial production dropped in December 0.4% and the previous period was toned down to 0.9%, a drop of 0.6%. So the 4Q number was on an annual basis down 3.4% for industrial production.
Capacity utilization, an indicator to gauge how ramped up or down industry is as a whole, also disappointed. Economists were expecting a higher number than the 76.5 they got for the month. The indicator is supposedly about mining, manufacturing, electric and gas utilities since it takes energy to run industry.
Last week, following a long period of poor internals and weakening order surplus, we observed fresh declines in industrial production and retail sales. Industrial production has now also declined on a year-over-year basis. The weakness we presently observe is strongly associated with recession. The chart below (h/t Jeff Wilson) plots the cumulative number of month-over-month declines in Industrial Production during the preceding 12-month period, in data since 1919. Recessions are shaded. The current total of 10 (of a possible 12) month-over-month declines in Industrial Production has never been observed except in the context of a U.S. recession. Historically, as Dick Van Patten would say, eight is enough
A broad range of other leading measures, joined by deterioration in market action, point to the same conclusion that recession is now the dominant likelihood. Among confirming indicators that generally emerge fairly early once a recession has taken hold, we would be particularly attentive to the following: a sudden drop in consumer confidence about 20 points below its 12-month average (which would currently equate to a drop to the 75 level on the Conference Board measure), a decline in aggregate hours worked below its level 3-months prior, a year-over-year increase of about 20% in new claims for unemployment (which would currently equate to a level of about 340,000 weekly new claims), and slowing growth in real personal income. advisorperspectives.com/commentaries/20160119-hussman-funds-an-imminent-likelihood-of-recession.
Fear can be oversold and it can be overbought.You have to decide.
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