More Recession Warning Signs

More Recession Warning Signs

More worrying stories have been flagged in recent news stories prompting fears of a looming recession.

Earlier today, the FT reported, that the Federal Reserve Bank of New York injected $66bn into short-term lending markets on Monday, building on a series of operations from last week to support the market after a severe bout of turmoil. The cost of overnight cash borrowing in exchange for US Treasuries — known as a repurchase agreement, or repo — soared early last week, pushing the main interest rate targeted by the Federal Reserve out of its target range. That prompted the New York Fed to intervene in the market for the first time in a decade on Tuesday. It subsequently continued daily $75bn cash injections throughout last week. Source: FT.Com

Then we had a report in The Times of “central bank warnings” after the Bank for International Settlements warned of the “troubling” rise of negative-yielding bonds to more than $17 trillion.

This afternoon, the Evening Standard Business News reported that bank share prices have tumbled following JP Morgan’s “gloomy prediction”.

I have previously written about the inverted yield curve, which has always preceded a recession.

Property prices are slowing, despite low interest rates and a shortage of housing in the UK, and smart money is moving into safe havens, such as gold and silver.

Almost 3000 shops closed in the first half of 2019 and large companies, like Thomas Cook, are going bust putting thousands out of work on a regular basis.

I don’t want to be a doom monger, but I think we are due for a recession.

Word of the Day


In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending.

Officially, a country is in recession after a period of general economic decline, defined usually as a contraction in the GDP for six months (two consecutive quarters) or longer. Marked by high unemployment, stagnant wages, and fall in retail sales, a recession generally does not last longer than one year and is much milder than a depression.

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