Why the US economy will likely fall into a recession next year

The U.S. economy will likely fall into a recession next year, according to Liz Ann Sonders, the chief investment strategist at Charles Schwab.

“Well, there's 100 percent chance we're going to get another recession,” she said on Friday during an interview on "WSJ at Large with Gerry Baker." “In the next year, I do think trade holds the key.” Link: https://www.foxbusiness.com/economy/why-the-us-economy-will-likely-fall-into-a-recession-next-year

This woman is not (NOT) stupid! I've read her articles before. If she sees a recession coming, it would be wise to pay attention. Link: https://www.schwab.com/public/schwa...t_insight/schwab_experts/liz_ann_sonders.html

She attributes a lot of the reasons for a coming recession to "trade", and to that I would suggest that the stupidly-overvalued stock market components are another BIG reason as 'reality' begins to settle in. Isn't it totally clear by now to everyone with a triple-digit IQ that the Fed is in charge of everything of any importance in the U. S. economy...? They took over completely in August of 2007....

Thanks to Federal Reserve manipulation, pushing everybody into the stock market after the 'Great Recession', we now have a hugely overvalued stock market! The Fed did its job too well.

 

The Trump Slump?

 

What about the Federal Reserve finally having to let interest rates rise after artificially holding them down for so long?

What about when cuts to government spending (without concurrent tax decreases) have to be made because the government has been continuously running budget deficits for so long?

Imagine if $1 Trillion stopped being spent in the economy.

To some extent, the U.S. has been pushing off these problems for years now, and the day of reckoning is going to have to eventually arrive.

 

Trade wars would be a factor.
If a recession does happen, and those tax cuts that were implemented. Watch the debt and deficit explode.
But who is really surprised? Remember the early 2000s when R's ran the country? Same result. But a huuuuuuggggge recession.

 

Well lets hope it doesn't happen. But if it does will it not be President Obama's fault? According to the near entirety of Democrat friendly media this is President Obama's economy, after all.

 

Oh, don't forget our demographic "gift" of a younger - and increasingly low income earning - workforce.

These migrant families with five children don't even earn enough to pay back in taxes what it costs to pay for their children's schooling.
$12,000 a year for each child in grade school.

(and in case you think that's an "investment", you should take a look at the drop-out rates and college completion rates)

 

I think you made that up.
He was the president when the ground work for where the economy is,turned. It bottomed and turned in 2009/2010 and has been going upwards since then.

 

Could, could be a factor. As in could be a factor leading to any recession. But wont be any time soon for the US because imbalances capable of producing a large enough trade deficit are simply not currently present (or projected to be) thanks to the latest maneuvering and dealing.

And you cant point fingers at one party for the 2008 recession. The combination failures of oversight and regulation were spread through more than a decade of lawmaking. You might desperately want to lay the blame at the feet of Republicans but Democrats were there too sitting on the same committees, writing passing and amending the same laws, and failing to properly understand or appreciate the reckless risk taking of the federal reserve or the lending industry.

 

The Fed's ship called the U. S. S. Stock Market docked at the harbor during the last recession and all the clueless rats got on board and it sailed away. Now the ship is taking on water and appears to be starting to sink.

 

Deficits have widened according to recent reports.
Yes, the housing boom was decades in the making.
But a lot of the same things done back then is being done now.
Reduce taxes in good times. Instead of paying down the debt/deficit. Other than a new military war like then, there are similarities being done for the last 2 yrs as there was the last go around. Except for crazy lending practices. But I think, some of the Dodd/Frank bill was rolled back to allow for more freer lending and risk.

 

What concerns me most of all, aside from all the economic factors, is that there are a significant number of people who would revel a recession while President Trump is in office. What if some of those people actually have the power to help make it happen? President Trump dealt a huge blow to globalism and to all those who profit or would have profited from it under Ms Clinton. What if they have a mind to counter-punch?

 

My dollar says it's the property of the Federal Reserve. What does yours say?

Okay, okay. That means your money is really a loan.

 

I like it. Catchy.

 

Who can actually make a recession happen.
The fed res, perhaps, by stagnating or choking off the economy with high interest rates.
But the fed res chair is a tRUMP hand picked appointee.

Isolationism is not a path to economic expansion, IMO.
Globalism has been going on since the 1970s.
We have been the leader for most of it, and now we want to sit on the sidelines. That also in not a path to expansion, IMO.

We were dealt a huge blow in the 90s, much to do with NAFTA. 25 yrs later, we have put most of that behind us. We are at full employment at the moment, for the most part. Why stifle the gains made over the last 25 yrs?

 

Not anymore. The Obama budget and policies ended in fiscal year October 2017. After that, it is the Trump Administrations actions and budget policy actions going forward. All yours baby.

 

Generally the first year is attributed to the prior President. That would be 2017.

 

The explosion in debt has already happened.

 

jesus, Candor … you got the wrong picture.

That's Haley, Kelly, and Zinke bailing from the USS Trumptanic… lol

 

Or The Drumpf Slumpf

Whichever one may prefer... lol

 

I wonder if Trump brought the Fed in on any of his decisions. My bet is not.
I have this vision of the Fed thinking they were bringing it in for a nice soft landing only to find a tax cut while the economy was hot, followed by a trade war. This one may be a beauty. There is no dry powder anywhere.

 

With UE low and pay increasing, they are not likely to reduce interest rates if the economy goes to recession. Unless we bleed jobs again like the last one.

 

We've been hearing that since Trump was elected, at some point the prediction will be correct. There will be a rotation in stocks as the Fed has been engaged in Quantitative Tightening for the entirety of the Trump Presidency.

But, will Main Street power through as Wall Street stumbles?

The Atlantic Federal Reserve is forecasting 3% GDP growth for the current quarter. That would mean Trump has averaged 3% GDP annualized growth for all 7 of the full quarters he has been in office. That's 72% better than Obama's final 7 full quarters.

It's claimed we have been in expansion since June 30, 2009, but some economists saw a brief recession in 2015-2016, which would mean the current expansion is less than 2 years old.

The Most Important Least-Noticed Economic Event of the Decade ...
https://www.nytimes.com/2018/09/.../mini-recession-2016-little-known-big-impact.html
Sep 29, 2018 - Most important, the mini-recession of 2015-16 offers a cautionary tale for any policymaker who might want to think of the United States as an ...​

But, certainly a rotation in stocks is underway as the Fed continues to exit the extraordinary measures that were required to keep the Obama Economy a bit above water for two terms.

 

Tell me, which do you think we have to worry about more, a trade war, or the protracted effects of a long-term trade deficit?

If the brain dead don't care about trade deficits, why should I care about a trade war?

 

The only thing the trade deficit does is give China enough money to help us finance our loans.

 

As we owe more and more money to China.

You can't really be that stupid, can you? That whole concept you alluded to sounds like a pyramid scheme that's going to have to come tumbling down at some point.

(sorry, maybe I misunderstood you and you were being sarcastic)