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 (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://fortune.com/2014/10/28/global-recession-us-europe-china/)
http://www.economist.com/node/21636720 (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 (http://www.bloombergview.com/articles/2014-11-11/my-prediction-your-forecast-is-wrong)
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 (http://www.wsj.com/articles/as-interest-benchmarks-go-negative-banks-may-have-to-pay-borrowers-1428939338)
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.
Who said the republican caused recession was over?....for soo many its only getting worse.
IMF: Brazil in Recession in 2015
http://news.yahoo.com/imf-sees-brazil-recession-2015-weighing-down-region-180643355.html (http://news.yahoo.com/imf-sees-brazil-recession-2015-weighing-down-region-180643355.html)
Is Canada Headed For Another Recession? Eight Troubling Signs
http://www.huffingtonpost.ca/2015/02/03/canada-recession-signs_n_6606364.html (http://www.huffingtonpost.ca/2015/02/03/canada-recession-signs_n_6606364.html)
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.
Recent economic headlines:
http://www.thestreet.com/story/13110797/1/us-corporate-earnings-run-off-the-rails.html
http://money.cnn.com/2015/04/14/news/economy/economy-growth-imf/
More headlines:
Stocks Pare Losses but Market Upheaval Continues
http://www.nytimes.com/2015/08/25/business/dealbook/daily-stock-market-activity.html
(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 (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
(http://www.cbc.ca/news/canada/manitoba/canadian-recession-will-go-beyond-1st-half-of-2015-1.3201171)
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
(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 (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
(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.
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?
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.
http://money.cnn.com/2015/08/24/news/economy/economy-stock-market-plunge/index.html?iid=surge-stack-dom
(http://money.cnn.com/2015/08/24/news/economy/economy-stock-market-plunge/index.html?iid=surge-stack-dom)
We're going to be just fine.
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.
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.
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.
Quote from: Houseboat Mike on 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.
Perhaps - but it's not like the banks weren't actively trying to get customers. And it's not like the government's actions that you refer to weren't driven by the will and desires of the banks. It's not like Carter, Reagan, Bush, Clinton, etc woke up one morning and said - I think I'll reduce regulation. They did so because they were asked to do so - and it wasn't by the people who couldn't afford houses.
But I agree that some people probably share part of the blame - and those would be all the idiots taking out five year interest-only loans in the hopes of flipping properties for a profit. I lost track of the number of loans of that nature that I processed for BoA in the early 2000s.
And I'm no fan of Bill Clinton, but I think it's sad when people seem more concerned about the Lewinsky affair than Iran-Contra.
Quote from: spuwho on August 25, 2015, 11:46:10 AM
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.
A bit of hyperbole, maybe, but they're still relatively 'business as usual' while I believe most other businesses would have folded many times over.
I don't know enough to argue over the nuances, but as a general perception - unscathed.
Quote from: spuwho on August 25, 2015, 11:46:10 AM
Banks unscathed?
Hardly.
When toxic assets threatened the operations of the banks, bailout funds provided them liquidity. The total amount lent at below market interest rates was well over $10 trillion; although most of the loans were relatively short-term. These subsidized loans enabled the financial sector to return to its pre-recession profit levels by 2009. In contrast, American households are
still recovering from income shocks, unemployment stints and wealth shocks.
So yes, unscathed.
Curious, what would be classified as "scathed" in your personal measurements on the banks?
QuoteBanks 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.
Name one of the Bank Execs who ever went to jail over the bundling of toxic assets with good assets.........nuff said. Bankers are greedy despicable people, they rank up there with Lawyers as gum on the bottom of a shoe.
Quote from: spuwho on August 25, 2015, 05:51:48 PM
Curious, what would be classified as "scathed" in your personal measurements on the banks?
If they had been broken up and sold off, their executives sent to jail, and their stockholders left with worthless pieces of paper. As it turned out, they are bigger, richer and more powerful than they were before the taxpayers bailed them out; not scathed at all.
[Note to any dimbulbs reading this: I'm not talking about
every single bank. I'm referring to the "Too Big To Fail" institutions that deliberately gambled with their assets and then had Henry Paulson et. al. tell President Bush and Congressional leaders that we would have tanks in the streets if they didn't get their $700 Billion in TARP bailout funds.]
Per Quartz:
$260 BILLION DOWN...
Good news! Big banks only have $65 billion in legal fines left to pay
Burning money. (Reuters/Stephanie Keith)
Seven years and $260 billion later, big banks are nearing the end of their long legal nightmare. From dodgy mortgages to duff insurance, rigged rates to skirted sanctions, lenders have been paying the price for a wide range of misdeeds, as regulators dig deeper into their activities both before and after the financial crisis.
Analysts at Morgan Stanley estimate that the 25 largest banks in the US and Europe have taken some $260 billion in litigation-related charges since 2009. Over the next two years, they face around $65 billion in additional penalties, the analysts reckon in a recent research note.
Mortgage malpractice is the biggest source of legal trouble for the banks, both in the past ($94 billion in fines and provisions) and the future ($13 billion more to come). British banks have paid more than $40 billion for peddling a misleading form of personal insurance, the second-largest source of fines. The rest of the charges come from a mix of interest-rate manipulation, sanctions violations, tax evasion, and other transgressions.
Although Bank of America and JPMorgan are far ahead of the pack in terms of costs already incurred, the UK's Royal Bank of Scotland faces the biggest bill to come—nearly $11 billion between now and 2017, the bulk related to US mortgage misdeeds. The charges are worth more than RBS's estimated operating profit in 2017; a dividend won't likely be paid until 2018, a decade after long-suffering shareholders last received one from the bailed-out bank.
Given banks' seemingly endless capacity for bad behavior, putting a price tag on future legal trouble is guesswork, the analysts admit, as some of their forecasts include "general provisions for issues not yet identified, given the ongoing focus of regulators on a broad spectrum of historic issues."
Things seem to be moving in the right direction, the analysts note. Across the industry, executive pay has fallen by around 30% since 2006, with more emphasis on long-term incentives and non-financial targets. Banks are also hiring compliance and risk-management staff like crazy—compliance headcount has more than doubled at banks like JPMorgan and HSBC over the past few years.
But changing dysfunctional corporate cultures doesn't happen overnight: dealing with past transgressions is one thing, but are banks better prepared to stamp out wrongdoing in the future?
Quote from: spuwho on August 26, 2015, 08:30:47 PM
Per Quartz:
$260 BILLION DOWN...
Good news! Big banks only have $65 billion in legal fines left to pay
Yay! But where does the money go?
Quotehttp://www.marketwatch.com/story/heres-where-all-the-bank-fines-go-2015-05-20
Checks will soon get sent to the Justice Department, Federal Reserve, Commodity Futures Trading Commission, New York State Department of Financial Services and the U.K.'s Financial Conduct Authority. But what does all that cash get used for?
For deficit reduction, mostly.
Wait a sec... That money doesn't just sit under a mattress, does it? Who holds all of that debt to begin with?
C'mon. You're smarter than that.
Quote from: finehoe on August 26, 2015, 07:56:08 AM
Quote from: spuwho on August 25, 2015, 05:51:48 PM
Curious, what would be classified as "scathed" in your personal measurements on the banks?
If they had been broken up and sold off, their executives sent to jail, and their stockholders left with worthless pieces of paper. As it turned out, they are bigger, richer and more powerful than they were before the taxpayers bailed them out; not scathed at all.
[Note to any dimbulbs reading this: I'm not talking about every single bank. I'm referring to the "Too Big To Fail" institutions that deliberately gambled with their assets and then had Henry Paulson et. al. tell President Bush and Congressional leaders that we would have tanks in the streets if they didn't get their $700 Billion in TARP bailout funds.]
I would agree that some executives conducted in criminal behavior. Abuse was definite and many involved did not get adequate levels of prosecution sent their way.
There was a lot more to the US banking system involved here than what can be distilled into a blog bite. I have never agreed with the "too big to fail" mantra. But I do agree with the "too big to close".
QuoteAnother Recession in 2015?
Unlikely.
Economy grows at a robust 3.7% rate in second quarterTe U.S. economy grew at a brisk pace during the spring quarter, an encouraging sign that economic momentum was building before the turmoil in financial markets.
The nation's output of goods and services expanded at a 3.7% annual rate in the second quarter, much faster than the 2.3% rate initially estimated last month by the Commerce Department.
An upward revision had been expected, but Thursday's report on the nation's gross domestic product was even better than what most economists had anticipated, thanks mostly to stronger business investments and the best percentage increase in state and local government expenditures in nearly 14 years.
http://www.latimes.com/business/la-fi-gdp-2qtr15-20150827-story.html
GDP growth in the "recovery" part of the cycle should be north of 4. Shows how stupid the stimulus was.
Quote from: fsquid on August 28, 2015, 09:17:47 AM
GDP growth in the "recovery" part of the cycle should be north of 4. Shows how stupid the stimulus was.
Says who? There is no developed economy on the planet growing at 4+%. Your stimulus comment is nonsensical. The stimulus was designed (and succeeded in) providing growth during the depths of the recession, not adding points to GDP growth six years later.
Quote from: finehoe on August 28, 2015, 12:25:11 PM
Quote from: fsquid on August 28, 2015, 09:17:47 AM
GDP growth in the "recovery" part of the cycle should be north of 4. Shows how stupid the stimulus was.
Says who? There is no developed economy on the planet growing at 4+%. Your stimulus comment is nonsensical. The stimulus was designed (and succeeded in) providing growth during the depths of the recession, not adding points to GDP growth six years later.
I said 4% in the recovery part of the economic cycle. Not sustained. Economies generally bounce back strongly after recessions, and the harder and deeper the recession, the stronger and faster the bounce back.
The two weakest recoveries in our history were the 1930s and now. Those are the two times that Keynesian "stimulus" have been tried on a massive scale. Draw your own conclusion.
Quote from: fsquid on August 28, 2015, 03:16:44 PM
The two weakest recoveries in our history were the 1930s and now. Those are the two times that Keynesian "stimulus" have been tried on a massive scale.
You're wrong: http://www.nytimes.com/interactive/2009/01/26/business/economy/20090126-recessions-graphic.html
QuoteSince the Great Depression, presidents have frequently experimented with Keynesian economics to combat recessions.
Fsquid give it up or pick another battle, on the economy just give a quiet thanks to Obama or at least ignor the subject. China (crisis) , Russia (bigger crisis),Brasil (broken), Japan (suffered natural, nuclear and Ecconomic disaster), half the EU (spiraling down), the other half ( floundering trying to help) and the USA (shaking them off like speed bumps while moving forward).
Quote from: Houseboat Mike on August 24, 2015, 11:58:58 PM
It is all the "Evil"Bank's fault? Sorry- I don't agree.
Read this for a comprehensive bankster fraud tally: http://twistedeconomix.com/2015/08/27/a-comprehensive-bankster-fraud-tally/
Quote from: finehoe on August 31, 2015, 02:56:11 PM
Quote from: Houseboat Mike on August 24, 2015, 11:58:58 PM
It is all the "Evil"Bank's fault? Sorry- I don't agree.
Read this for a comprehensive bankster fraud tally: http://twistedeconomix.com/2015/08/27/a-comprehensive-bankster-fraud-tally/
This line in the web screed you reference says it all:
After a fraud is discovered, banks, their corporations, and their vassal governments collude on fake settlements for which they are fined mills on the dollar; then, the pattern is repeated, thus fraud is the business model:Governments allow themselves to be vassals as long as it permits one to stay in power. If they cross the line in such a way that it threatens that power, that "vassal" role will stop and become reversed.
Because we still have an unashamed cadre of quack economists and their ideologically blind followers blaming the victims, prescribing harsh punishments for the weak, laying all the blame on 'government' and not corrupt officials on the payrolls of Big Money, and giving the gods of the market and their masters of the universe a big kiss on the head, and expecting them to just do the right thing the next time out of the natural goodness of their unrestrained natures the next time. What could go wrong with that?
Not sure its that complex...really it comes down to 1 component, greed.
Pulling $500k in trading bonuses is not enough.....they want more and lack of ethics drives them past the edge.
Hitting 30 home runs a year isnt enough, gotta take roids to hit 60.
Getting re-elected isnt enough, I have to break in to the oppositions HQ and plant bugs.
The list goes on. The mortgage bust, LIBOR manipulation, all of it is part of the concept of greed.
The currency devaluations in Malaysia and Brazil as well as other European countries are troubling because their exports are more expensive coming to the U.S. and so fewer people will be buying them. Any country that has a major % of its GDP tied to commodities, especially oil, is really going to struggle the next few years. Even the U.S. is bumping along at 2-3% growth, about the same as inflation.