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Wed Dec 5, 2018, 07:51 PM

Top economist: "We have moved our forecast for the next recession up...to the first half of 2020"

Diane Swonk wrote:

The recent G-20 meeting should have allayed some fears but the more we learn, the less we know about the deal to delay additional tariffs on Chinese imports. Chinese news agencies are reporting a different version of the agreement. White House negotiators also contradict the presidentís statement. The dissonance, short time frame (90 days) for negotiations and the appointment of one of the administrationís most ardent protectionists to close the deal are not encouraging. The results will delay the implementation of additional tariffs to the second quarter of 2019 from the first quarter, instead of eliminating them.

Uncertainty surrounding NAFTA is growing. The signing of the new NAFTA, dubbed the USMCA, at the G-20 by leaders from Canada, Mexico and the U.S. was little more than a photo op. The legislatures of all three countries still need to ratify the treaty to make it binding. That was a heavy lift in Congress prior to the midterm elections; it will be even harder now that Congress is split. The problem is so acute that the president threatened to pull out of the existing NAFTA agreement to try to force a quick resolution by Congress. A move like that would face legal challenges, but the risk is that we could end up with no agreement. That would further undermine our competitiveness and delay investment decisions.

This edition of Economic Currents takes a close look at the outlook for 2019. *The economy is poised to slow but not to the point of recession until 2020. We have moved our forecast for the next recession up by six months to the first half of 2020.* Election years donít stop recessions from occurring; that said, recessions are notoriously hard to time. No one knows for sure which straw will break the camelís back, only that they are piling up.

https://www.grantthornton.com/library/articles/advisory/2018/economic-analysis/economic-outlook/economic-outlook-december-2018

About the author: according to the University of Michigan, Diane Swonk "advises the Federal Reserve Board and its regional banks. She has periodically advised the Congressional Budget Office (CBO) and the Council of Economic Advisers (CEA) for the White House on a nonpartisan basis."
https://lsa.umich.edu/econ/alumni-friends/economics-leadership-council--elc-/diane-c--swonk.html

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Arrow 9 replies Author Time Post
Reply Top economist: "We have moved our forecast for the next recession up...to the first half of 2020" (Original post)
Yosemito Dec 5 OP
Me. Dec 5 #1
Blue_true Dec 5 #5
Me. Dec 5 #6
Blue_true Dec 5 #7
Me. Dec 5 #8
peggysue2 Dec 5 #2
JCMach1 Dec 5 #3
Wellstone ruled Dec 5 #4
tammywammy Dec 6 #9

Response to Yosemito (Original post)

Wed Dec 5, 2018, 08:25 PM

1. THey Hope

I bet it '19

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Response to Me. (Reply #1)

Wed Dec 5, 2018, 09:09 PM

5. I am guessing 19 also. It could get really chronic in 2020.

But the bleeding starts next year.

This is similar to 2006 when economists were predicting strong year ahead. Then the wheels slowly started to come off in 2007, then Lehman Brothers hit and the shit that had been piling up hit the fan.

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Response to Blue_true (Reply #5)

Wed Dec 5, 2018, 09:17 PM

6. Funny You Should Mention Lehman

You could see it coming but a. they didn't want to see it...b. they simply hoped they were wrong...and that toxic tax cut with nothing to hold it up thus making it top heavy will be a huge contributor...imho

I read ...somewhere...some economist said earth simply cannot afford/be able to keep growing at the rate expected as it's unsustainable

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Response to Me. (Reply #6)

Wed Dec 5, 2018, 09:41 PM

7. Financial institutions have spent the last 2 years going back

to the crazy risks that brought on 2007. It took two years for that bubble to start leaking, we are at that point now.

Have you ever heard about the experiment with rats? A colony of rats were put in something that they could not escape from. They were fed and reproduced. Then the feeding got reduced and kept getting reduced. At some point the rats turned on the weakest, then the strong turned on each other until there was only one rat left alive. I may have heard that on some Bond movie. But I really feel that is where the Human species is going, except, we take all other living things with us.

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Response to Blue_true (Reply #7)

Wed Dec 5, 2018, 11:04 PM

8. Interesting

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Response to Yosemito (Original post)

Wed Dec 5, 2018, 08:41 PM

2. Hummmm.

Is this why the Trumpster said he wouldn't be around when the economy crashed?

Maybe he really does feel the walls closing in. As for the economy crashing? He doesn't appear to care as long as he isn't held accountable.

Then again, if asset forfeiture is on the horizon for these mobsters, he'll feel the pain along with the rest of us.

A sweet justice despite the financial distress.

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Response to Yosemito (Original post)

Wed Dec 5, 2018, 08:43 PM

3. Rubbish... Beware economists bearing predictions

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Response to Yosemito (Original post)

Wed Dec 5, 2018, 08:43 PM

4. Talk about someone

who has outstanding credibility making this statement. Swonk is one of the few real honest Wall Streeters. And if she says early 2020 and if her forecast hits earlier,she will be the first to announce it.

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Response to Yosemito (Original post)

Thu Dec 6, 2018, 12:22 AM

9. The yield curve has started to inverse.

Recession will start around October/November 2019.

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