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Another Recession in 2015?

Started by TheCat, April 13, 2015, 12:15:23 PM

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TheCat

April 13, 2015, 12:15:23 PM
QuoteNov. 10 (Bloomberg) -- In 1929, a businessman and economist by the name of Jerome Levy didn't like what he saw in his analysis of corporate profits. He sold his stocks before the October crash.

Almost eight decades later, the consultancy company that bears his name declared "the next recession will be caused by the deflating housing bubble." By February 2007, it predicted problems in the subprime-mortgage market would spread "to virtually all financial markets." In October 2007, it saw imminent recession -- the slump began two months later.

The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome's grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65 percent probability of a worldwide recession forcing a contraction in the U.S. by the end of next year.

That call runs counter to the forecasts of Morgan Stanley and Goldman Sachs Group Inc. The two banks posit an expansion that has plenty of room to run.

"Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn," chairman David Levy told clients in an Oct. 23 edition of a monthly forecasting report, which at over 60 years purports to be the oldest of its kind.
Why the gloom? Levy argues the U.S. and many advanced economies still have balance-sheet excesses exposing them to renewed financial crisis. There is limited room for policy makers to reverse any slump, and low inflation risks tipping into deflation in many parts of the world.

http://www.bloomberg.com/news/articles/2014-11-10/predictors-of-29-crash-see-65-chance-of-2015-recession

Other links on the same topic:

http://fortune.com/2014/10/28/global-recession-us-europe-china/

http://www.economist.com/node/21636720

No Recession. Levy is Wrong:
http://www.bloombergview.com/articles/2014-11-11/my-prediction-your-forecast-is-wrong

TheCat

#1
April 14, 2015, 06:16:04 PM
Tumbling Interest Rates in Europe Leaves Some Banks Owing Money on Loans to Borrowers

http://www.wsj.com/articles/as-interest-benchmarks-go-negative-banks-may-have-to-pay-borrowers-1428939338

spuwho

#2
April 15, 2015, 06:12:49 AM
Market uncertainty drives these kinds of predictions both ways.

The geo-political situation along with a mortgage hangover and financial authorities cracking down on capital levels globally is a weird mix that is making some prognosticators work overtime. The plunge in oil prices from record highs also adds to the uncertainty.

Depending on ones forecast tools and what indicators they use to lead can determine their results.

Rob68

#3
April 15, 2015, 08:17:28 AM
Who said the republican caused recession was over?....for soo many its only getting worse.

chipwich

#5
April 15, 2015, 02:04:01 PM
The Fed has a very tricky road ahead if it plans to raise interest rates in the fall.  In a world where every other country has a QE program in place, a contracting Fed balance sheet with rising interest rates simply is not plausable.

Without normal interest rates, you have too much liquidity and worldwide bonds remain in a major bubble.  It's a catch-22, I guess.

Either way, the stronger US$ that has taken hold since the end of our QE is no doubt trickling into corporate profits.  Without a significant rise in US consumer spending (which is not materializing), then I would expect US corporate earnings to start revising downward.  They may lead to a correction in the stock market, which some perceive a precursor to recession.

US will probably just migrate into lower growth 1.5-2.5% later this year.  Without some worldwide conundrum taking place, a US recession doesn't seem imminent this year.

spuwho

#8
August 24, 2015, 01:25:27 PM
Quote from: TheCat on August 24, 2015, 12:36:43 PM
More headlines:

Stocks Pare Losses but Market Upheaval Continues

http://www.nytimes.com/2015/08/25/business/dealbook/daily-stock-market-activity.html


Why global markets are going crazy

http://www.nytimes.com/2015/08/25/upshot/why-global-financial-markets-are-going-crazy.html?ref=business&abt=0002&abg=0

Canadian recession will go beyond 1st half of 2015

http://www.cbc.ca/news/canada/manitoba/canadian-recession-will-go-beyond-1st-half-of-2015-1.3201171


Market adjustments to China currency updates and wishy washy update from Fed on LT interest rates.

It will settle in a week.

E_Dubya

#9
August 24, 2015, 02:53:23 PM
Quote from: Rob68 on April 15, 2015, 08:17:28 AM
Who said the republican caused recession was over?....for soo many its only getting worse.

I have to preface this by saying that I'm a moderate and not in favor of either party over the other:

Your comment dismisses the notion that both sides of the aisle were guilty of walking us into our last major recession. Dodd-Frank and irresponsible home lending ring any bells?

finehoe

#10
August 24, 2015, 03:11:38 PM
Quote from: E_Dubya on August 24, 2015, 02:53:23 PM
Your comment dismisses the notion that both sides of the aisle were guilty of walking us into our last major recession. Dodd-Frank and irresponsible home lending ring any bells?

The last recession began in December 2007.  Dodd-Frank wasn't signed into law until July 21, 2010.  Neither Democrats nor Republicans were engaging in irresponsible home lending, that was all on the banks.

JeffreyS

#11
August 24, 2015, 04:31:29 PM
Lenny Smash

Houseboat Mike

#12
August 24, 2015, 11:58:58 PM
Quote from: finehoe on August 24, 2015, 03:11:38 PM
Quote from: E_Dubya on August 24, 2015, 02:53:23 PM
Your comment dismisses the notion that both sides of the aisle were guilty of walking us into our last major recession. Dodd-Frank and irresponsible home lending ring any bells?

The last recession began in December 2007.  Dodd-Frank wasn't signed into law until July 21, 2010.  Neither Democrats nor Republicans were engaging in irresponsible home lending, that was all on the banks.

Seriously? All on the banks? No responsibility from government mandates? No culpability from the repeal of Glass-Steagall? No blame on the people who signed the flipping mortgages?

It is all the "Evil"Bank's fault? Sorry- I don't agree.

From the invention of the CRA (Jimmy Carter), to the deregulation of the S&L's (Ronald Reagan) to the cleanup of the S&L's (Bush #1) to the repeal of Glass-Steagall (Bill "Blue Dress"Clinton", to the "no homeowner left behind"(Bush part 2) to Holy crap its falling apart lets blame the person in office (Obama), it is hilarious to me that we are blaming the big evil banks for this.

Are they innocent? Of course not. Are they the only reason for the 9 YEARS that we have been like this?

NO.

When are we going to put ANY BLAME on the people who signed the Damn mortgages?

"Lets blame Wall Street"

"Let's blame Congress!"

"Let's blame _____(insert bad bank here)"

Sorry...I put some of the blame on the people who thought housing was like a Ponzi scheme, and they would never lose money.

But that is just me.



Non-RedNeck Westsider

#13
August 25, 2015, 12:13:44 AM
OK.  Let's blame the people signing the mortgages.

How many of those people were tied to the housing industry in some way, shape or form and were devastated when the bubble burst?

From the laborers who had steady paychecks to the real-estate agents making money hand over fist to the processors and call-center jobs that were always looking for more help, and even down to the servers in restaurants and other tertiary industry employees that were catching their fair share because everyone else had more disposable income than they had been accustomed to having.

I'm not taking the blame away so much as I'm trying to paint a picture of the rug being snatched out from under so many people.

It's easy to blame the banks because they were the some of the only ones who came out unscathed. 
A common mistake people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools.
-Douglas Adams

spuwho

#14
August 25, 2015, 11:46:10 AM
Quote from: Non-RedNeck Westsider on August 25, 2015, 12:13:44 AM
OK.  Let's blame the people signing the mortgages.

How many of those people were tied to the housing industry in some way, shape or form and were devastated when the bubble burst?

From the laborers who had steady paychecks to the real-estate agents making money hand over fist to the processors and call-center jobs that were always looking for more help, and even down to the servers in restaurants and other tertiary industry employees that were catching their fair share because everyone else had more disposable income than they had been accustomed to having.

I'm not taking the blame away so much as I'm trying to paint a picture of the rug being snatched out from under so many people.

It's easy to blame the banks because they were the some of the only ones who came out unscathed.

Banks unscathed?

Hardly. Over a hundred billion in legal claims made post meltdown.

Loss of dividends.

Restrictions on exec pay.

New capital stress tests.

A few execs still walked with bonuses in hand, but many more got walking papers. That "bust" made honest workers at those banks lose their jobs as well.

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