Tag Archives: recession

Mnuchin says the U.S. government must cut spending and reduce the deficit. This will absolutely guarantee a recession.It's amazing that these views still prevail. Complete and total ignorance.

I’ve written a blog post providing an overview of poverty measurement in Canada. Points raised in the post include the following: -One’s choice of poverty measure has a major impact on whether poverty is seen to be increasing or decreasing over time. -Canada’s federal government recently chose the make the Market Basket Measure (MBM) its official poverty measure. -According to the MBM, Canada has seen a major decrease in poverty over the past decade. -Also...

I’ve written a blog post providing an overview of poverty measurement in Canada. Points raised in the post include the following: -One’s choice of poverty measure has a major impact on whether poverty is seen to be increasing or decreasing over time. -Canada’s federal government recently chose the make the Market Basket Measure (MBM) its official poverty measure. -According to the MBM, Canada has seen a major decrease in poverty over the past decade. -Also...

In the last two days, some major leading indicators have been released for the US and Europe, which have suggested the world is heading rather quickly for recession. It seems that the disruptions to global trade arising from the tariff war is impacting on US export orders rather significantly. The so-called ISM New Export Orders Index fell by 2.3 percentage points in September to a low of 41 per cent. The ISM reported that “The index had its lowest reading since March 2009 (39.4 percent)”....

All but one have been preceded by a decline in Real Gross Private Domestic Investment, which we have just observed. One indicator is hardly definitive, and presently, the economy is strong, with fiscal flows very positive. Nevertheless, private investment along with government spending drives and economy, and in the case of a net importer, it offsets demand leakage from a trade deficit. A trade deficit is offset by a fiscal deficit, but the targeting of the spending determines the...

The inverted yield curve, as it is well-known, indicates a forthcoming recession. I used it last year to suggest that the recession was not in the near horizon. The conventional explanation follows Wicksellian ideas (see this old post). In the Wicksellian story, one can think of the 10 year bond rate as a proxy for the natural rate of interest, and the Fed Funds for the monetary or banking rate. Hence, whenever the short-term rate (Fed Funds) is above the long-term one, it would be...

Just thought this would be of interest to our readers.  This was aired yesterday, 8/15/19 on: The Take Away, NPR.   (About 12 minutes long.) [embedded content]Click the arrow to hear

Yield curves have gone mad. Negative yields are everywhere, from AAA-rated government bonds to corporate junk. Most developed countries have inverted yield curves, and a fair few developing countries do too:(chart from worldgovernmentbonds.com)Negative yields and widespread yield curve inversion, particularly though not exclusively on safe assets. To (mis)quote a famous pink blog, this is nuts, but everyone is pretending there will be no crash.Here, for your enjoyment, is an à la carte...

Falling aggregate profit rate? As James Montier, the post-Keynesian economist at GMO, the large asset fund manager, points out, real earnings growth in the corporate sector has been below the rate of real GDP growth even after the significant boost from the financial engineering from share buybacks. According to Montier, when you dig down into the market you find that a staggering 25-30 per cent of firms are actually making a loss. In Montier’s view, “the US is witnessing the rise of the...

These are stats from my latest MMT Trader report. Are these recessionary signs? Warren Mosler is bearish as hell. Auto loans rising at the fastest pace in 8 months. Residential real estate loans rising at fastest pace in 3 weeks. Bank "residual" (capital) at record highs and up 3 weeks straight and up 6 of the last 7 weeks. (Implies growing bank earnings.) Bank assets at record levels. Gasoline demand at 6-month high. Distillate demand at 3-month high. Federal tax deposits have been...