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ALBERT EDWARDS: The Next Shock Will Be Enough To Send The Economy Into Recession
BI ^ | 3-25-2014 | Sam Ro

Posted on 03/25/2014 5:35:35 AM PDT by blam

ALBERT EDWARDS: The Next Shock Will Be Enough To Send The Economy Into Recession

Sam Ro
Mar. 25, 2014, 8:15 AM

  

For years now, many economists have been predicting that a business investment recovery would come, spurring corporate profits, GDP growth, jobs, and all sorts of wonderful things for the economy.

However, Albert Edwards and his colleagues at Societe Generale warn that it's not coming.

"The bulls will point out, quite correctly, that on many key measures the profits situation in the US looks quite healthy," wrote Edwards in a new research note to clients. "But experience shows us that it is not the level of profits, nor the rate of profitability (ROE), nor the level of margins that drives the investment cycle. Instead it is the rate of growth of profits that should be monitored."

Edwards' seven-page note leads with the chart above showing profit growth and business investment growth.

"Over the years we have found that profits are probably the single most important leading indicator of recession," he said. "A decline in profits is inevitably followed by recession shortly thereafter as investment, the most volatile of all GDP components, is cut."

Edwards acknowledges that at 13% of GDP, business investment is a pretty small component of the economy. But...

(snip)

(Excerpt) Read more at businessinsider.com ...


TOPICS: News/Current Events
KEYWORDS: economy; investing; markets; recesson

1 posted on 03/25/2014 5:35:36 AM PDT by blam
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To: blam

who is Albert Edwards and why should we believe his crystal ball

no one can foretell the future and I am sick of this bull hockey


2 posted on 03/25/2014 5:36:32 AM PDT by yldstrk ( My heroes have always been cowboys)
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To: blam

When did we come out of the last recession? Seems like we’re still in a very deep recession ...


3 posted on 03/25/2014 5:37:26 AM PDT by Ken522
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To: Ken522

Yeah RECESSION?! The guy must have blinders on! We’re already there!
GREAT DEPRESSION II worse than the original is imminent.


4 posted on 03/25/2014 5:41:57 AM PDT by jsanders2001
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To: yldstrk

I like this article. But the way I see it, businesses became very profitable because new technologies and new anything is really cheap (thank you china) and very good (thank you USA designers).

However, businesses have already implemented the cap ex they wanted to and now the chart shows capital expenditures to be declining.

This means going forward, there will be very slow growth if not a recession.


5 posted on 03/25/2014 5:47:40 AM PDT by staytrue
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To: staytrue

Dr Copper

6 posted on 03/25/2014 6:10:01 AM PDT by blam
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To: blam
GOLDMAN: 4 Reasons Growth Is About To Pick Up
7 posted on 03/25/2014 6:20:39 AM PDT by blam
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To: blam

Hey Albert, we are already in a recession.....


8 posted on 03/25/2014 6:42:25 AM PDT by caver (Obama: Home of the Whopper)
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To: yldstrk

“no one can foretell the future and I am sick of this bull hockey”

Listen to Rush. He does it with liberals and he’s right
ninety something percent of the time.


9 posted on 03/25/2014 7:14:10 AM PDT by Slambat
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To: jsanders2001

“GREAT DEPRESSION II worse than the original is imminent.”

It’s here and been here all along. It’s just that it is
being hidden by quantitative easing, food stamps, welfare
and years of unemployment handouts. It all started when it
became obvious the wormtard Obama was going to win in 08.
You can thank the moderate (democrat lite) republicans for
that.


10 posted on 03/25/2014 7:22:40 AM PDT by Slambat
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To: blam

Gee I thought we were in depression now. Silly me.


11 posted on 03/25/2014 7:25:49 AM PDT by Georgia Girl 2 (The only purpose o f a pistol is to fight your way back to the rifle you should never have dropped.)
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To: yldstrk
who is Albert Edwards and why should we believe his crystal ball

no one can foretell the future and I am sick of this bull hockey

_________________________________________________________________

There is no crystal ball reading, he shows what has happened for the last several years. If you do something over and over again and expect to get different results I think they define you as crazy. We have been doing the same thing for the last 5 years over and over, more government takeover of the economy, more taxes, more regulations.

Entrepreneurs are leaving France in droves for the same reason. This economy will not start a recovery while Democrats are in charge.

As the wonderful Margaret Thacher said, Socialism only works until you run out of other peoples money. We are running out. There more employable people not working in this country than at any time in Her history, there are more people living on Social Security than at anytime in our history. There are more people living on Government Disability than at any time in the history of the country. There are more people on food stamps than at anytime in the history of the country. There are more people receiving unemployment "insurance" than at any time in the history of the country. How is it paid for? Partially paid by taxes but 40% is borrowed from our grandchildren.

These things are not a crystal ball but writing on the wall.

12 posted on 03/25/2014 7:55:00 AM PDT by JAKraig (Surely my religion is at least as good as yours)
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To: blam

I am not an economist but you can take this to the bank:

The current recession will sooner rather than later, become much, much worse!

Don’t ask for a link, I reach my conclusions based on observation and life experience, and from where the rubber meets the road, here at FR.


13 posted on 03/25/2014 8:35:12 AM PDT by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: Slambat
"became obvious the wormtard Obama was going to win in 08. You can thank the moderate (democrat lite) republicans for that."

oh, I can't blame the low information voters?..nor the conservative whites who thought it was there duty to give the black man a chance?...nor the dolts that invariable vote third party libtard?....nor the millions and millions of takers that have skin in the game in voting for the rat?

14 posted on 03/26/2014 10:06:26 AM PDT by cherry
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To: cherry

I can’t blame the low information voters? No.
nor the conservative whites who thought it was there duty to give the black man a chance? They don’t exist.
nor the dolts that invariable vote third party libtard? No.
nor the millions and millions of takers that have skin in the game in voting for the rat? Yes, not much you can do
about the bums.

It’s all about voter turnout and getting your message out.
Neither McCain nor Romney were able to do that or their
message wasn’t no different than the Obamas. Reagan was
able to get his message across and educate the people.
McCain and Romney were either ignorant of the issues or
were too moderate (tard lite) to get the turnout. They
were so bad it seemed like the republicans were intentionally
trying to loose which I think they were. The RINO’s hate
the conservatives because, well, they are RINO’s. You know
the guys who knew all about Obama using the IRS on the
Tea Party and sat there and did or said nothing about it.
You’ve been here for 14 years, you should know this.


15 posted on 03/27/2014 7:16:15 AM PDT by Slambat
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