Instagram


Sohail Speaks Yasir's Blog Fazeer's Focus

User Tag List

Results 1 to 5 of 5
  1. #1
    Debut
    Nov 2007
    Runs
    13,636
    Mentioned
    168 Post(s)
    Tagged
    2 Thread(s)

    Are we heading for another global recession?

    Is there a global recession on the horizon? Will governments simply print their way out of this one too like in 2008 or are policymakers setting themselves up for a rude awakening if they attempt to go down this route?

    Any other thoughts?











  2. #2
    Debut
    Oct 2010
    Runs
    5,937
    Mentioned
    26 Post(s)
    Tagged
    0 Thread(s)
    people have been doom mongering since 2008. if you say itll rain, it evenutally will, and given the cycles of economics thats no bad thing, having said that i dont think we'll see a global recession this year. the us china trade spat is essentially a giant squeeze on what was arguably an over heating american economy. i don't agree with it, but what it does mean is that trump has a pressure release valve to fall back on if the american economy starts tanking.

    china on the other would benefit similarly if this game of global chicken pushes either country too far. china's problems however are far deeper, the economy is still state directed, which has created huge pockets of vulnerability in a system where any form of an economic recession may become a situation of existential worry for the ruling classes.

    the worlds economy is driven by these two countries, with japan and europe playing supporting roles. a lack of real growth is however a global problem, and it has more to do with demographic trends and the reduction is added utility of technological advancement which has been misplaced on investments which add very little to global productivity.

    persistently low interest rates, money printing, etc, are all tools used to alleviate the problem of weak demographic growth and stalling tech. an argument for africa and the asian sub continent to lead global growth exists, but these regions have too much corruption for entrepreneurialism to thrive like the US or Europe 100 to 150 years ago.

    tl:dr i dont believe a global recession is coming this year, but systematically weaker growth will leave the global economy more vulnerable to potential recessions compared to the past 100 or 200 years.

  3. #3
    Debut
    Feb 2019
    Runs
    591
    Mentioned
    3 Post(s)
    Tagged
    0 Thread(s)
    There is a recessionary cycle, then there is a recession preceded by a crash.

    A crash will only occur when least expected, in other words, when panic and fear kicks in. If everyone is expecting a crash, it will not occur because rather than a sense of panic, there is a sense of expectation. However, when the crash does occur, the recession which follows will be like nothing we have seen before. There are few bullets in the gun. At the height of the 2008 crash, central banks had options, reduction of rates and QE. Now, with interest rates near zero in most of the Western hemisphere, the only way would be down into negative territory. This is not to say anything of the people in debt. Defaults, bankruptcies, and liquidations will rise. Bond yields will drop to negative territory too, and if could quite possibly see governments go bust. This is not a question of if, but a question of when.

    With respect to a recessionary cycle, this is long overdue, and some may argue that we’re already in a recession. UK high streets are taking a hit, one brand after another. The Gig economy has taken off, essentially zero contract hours. Less people are saving now than they were 10 years ago. I remember reading a stat that around 80% did not have enough savings to cover a shock bill of 500! This is just the surface. People are paying their monthly mortgage payments with their credit cards! The bank of mum and dad is pretty much exhausted, house prices are not rising, but declining as are the agreed prices below asking price. The reality is that people now have less disposable income than ever before. The wealth effect is what is propping up the economy [along with QE] certainly in the UK [releasing equity from property].

    If this is not enough, checkout the unemployment rate in the EU. Youngsters are struggling. Pensions are decimated, and the Euro is flaky. China cannot save the world from a recession. If the world is broke, who will buy off China? If EU is broke, who will sell to the EU? Whatever the outcome, this time will be different, and in the past decade QE has not only benefited banks but has helped prop up the stock markets.

    It’s a scary thought, then again, powers to be will ensure there is no repeat of the Great depression.

  4. #4
    Debut
    Jul 2012
    Venue
    UK
    Runs
    4,092
    Mentioned
    52 Post(s)
    Tagged
    3 Thread(s)
    Oh no, not again

  5. #5
    Debut
    Feb 2015
    Venue
    New York
    Runs
    531
    Mentioned
    9 Post(s)
    Tagged
    0 Thread(s)
    The recessionary cycle is definitely overdue - historically every 10 years or so we see a major market correction & the last one was 2017. However the US markets are doing well so far with employment & consumer spending on record high & tax reforms having positive effect on company margins which are propping up the world markets. But with Europe slowing down & US -China trade-war heating up, it might hit us sooner rather than later.

    The timing of the recession depends solely on market sentiment &/or some trigger point (like no-deal brexit or Trump losing mid-term elections). Buckle up, its coming soon - possibly towards the end of this year.


Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •