A Recession Worse Than 2008 Is Coming

[Purveyor]

The S&P 500 has begun 2016 with its worst performance ever. This has prompted Wall Street apologists to come out in full force and try to explain why the chaos in global currencies and equities will not be a repeat of 2008. Nor do they want investors to believe this environment is commensurate with the dot-com bubble bursting. They claim the current turmoil in China is not even comparable to the 1997 Asian debt crisis.

Indeed, the unscrupulous individuals that dominate financial institutions and governments seldom predict a down-tick on Wall Street, so don't expect them to warn of the impending global recession and market mayhem.

But a recession has occurred in the U.S. about every five years, on average, since the end of WWII; and it has been seven years since the last one — we are overdue.

Most importantly, the average market drop during the peak to trough of the last 6 recessions has been 37 percent. That would take the S&P 500 down to 1,300; if this next recession were to be just of the average variety.

But this one will be worse.

MORE...

http://www.cnbc.com/2016/01/15/a-recession-worse-than-2008-is-coming-commentary.html

[cheapdate]

1. I say no. Investors are selling out of nervousness and caution,

but there is no underlying time-bomb like the mortgage bond security collapse of 2007.

Stocks will fall, then recover.

[Squinch]

4. I agree. I think it will be bad, but it is not based on everyony in financial

industries intentionally scamming everyone else, like the last one.

That said, hold onto your hat.

[Warpy]

5. There is a student loan time bomb

and there has been a real estate boomlet in California that has brought "creative financing" scammers back out of the woodwork. Derivatives are still unregulated and greedheads are still not looking at the quality of their investments, only on the rate of return that is so much higher than traditional, safe investments.

S&P has also cracked down on corporate bonds now that the latest M&A frenzy is ongoing, meaning a lot of newly merged companies are going to have to curtail operations and lay people off to maintain operating capital.

Finance is one place people park their common sense outside while they try for that one big score, then panic when it doesn't pan out. We're seeing a lot of panicky people selling, in no small part due to the Royal Bank of Scotland's doom and gloom on Jan 12.

[Pauldg47]

8. Bernie said he's going to fix this w a crackdown on Wall Street paying....

.....he and Liz are starting to hammer em now.

[enid602]

2. tragedy

It will be real tragedy if it does happen. With debt at historic levels, there will be no money to prime the pump. Hope you've saved up for a rainy day.

[Purveyor]

3. Certainly can't lower interest rates like was done in '08 either. eom

[OilemFirchen]

6. Looneytarians have been predicting currency collapses since Looneytarianism was invented.

Dude's also (unsurprisingly) a gold-bug. And not a very good one:

At the beginning of 2014, he predicted that gold prices would approach $1,600 by the end of 2015.

They barely hit $1,300 and they never looked back.

He does appear on RT, however, so... something.

[Dawson Leery]

7. More libertarian garbage.

Every recession is not caused by the same factors.

Remember, many of these people want to go back to the gold standard and will find any excuse to do so.

[SCantiGOP]

12. Agree

Just seeing that this comes from CNBC should make it suspicious.

[Pauldg47]

9. Purveyor....is that you...

...it seems you talk doom and gloom a lot....or is it someone else I'm thinking of? Would the Bern be able to fix this? Is that why your bringing this up?

[Pauldg47]

10. That was a damn depression in my opinion.

[Cartoonist]

11. Economics is not my strong point

But my BS detector went off when I read this:

But a recession has occurred in the U.S. about every five years, on average, since the end of WWII; and it has been seven years since the last one — we are overdue.

And the Cubs are overdue to win the World Series.

I'm not saying a recession won't happen, but you need a better argument than that.