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Big stock market declines are often lead indicators for recession, and global markets are heading into their last week of trading for the month with the risk of seeing one of their biggest ever January declines.Despite a big bounce in markets Friday, which saw the S&P 500 rise two per cent, fear is in the air. Bank of America Merrill Lynch economists said in an update Friday that they now see a 20 per cent chance that the U.S. economy will slip into a recession this year, up from the 15 per cent chance they predicted in December.The rising chance...

successfully navigated, global growth could be derailed." Of the warning signs, the decline in U.S. industrial production has one of the best track records. The output from mines, factories and utilities has always begun to decline before recession strikes. "Manufacturing tends to lead the economic cycle and it tends to be an indicator of the swings," said Thomas Costerg, senior economist at Standard Chartered. "Manufacturing is struggling." A strong U.S. dollar and weak economies internationally are taking a toll. But unlike past declines in industrial production, today's decline has been driven primarily by the collapse in the oil industry. The...

The world's financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, according to a leading global banker. William White, chairman of the OECD's review committee and former chief economist of the Bank for International Settlements, suggests the stresses in the financial system are "worse than it was in 2007." Speaking with the UK Telegraph's Ambrose Evans-Pritchard before the start of the World Economic Forum in Davos, Switzerland, White warned that macroeconomic ammunition to fight further economic downturns was essentially "all used up."

There has been increasing focus on the US economy's probability of heading into a recession. According to John Hussman of Hussman Funds, it's not just probable; it's nearly guaranteed. "Since October, the economic evidence has shifted from supporting a growing risk of recession, to a guarded expectation of recession, to the present conclusion that a US recession is not only a risk but an imminent likelihood, awaiting confirmation that typically only emerges after a recession is actually in progress," Hussman said in a post Monday. His key piece of evidence stems from Friday's US report on industrial production. The data...

There will be a recession in the United States and much of the rest of the world in 2016. After reading the above sentence, you should be thinking, what possibly could the writer know that the International Monetary Fund, the Federal Reserve and the Obama administration do not know given all their resources and all of their professional economic forecasters? If one looks at the forecast record of the IMF and the Fed over the past several decades, one will not find any case in which a year of positive growth was followed by a year of contraction in which...

Despite recent gloomy private sector and regional Fed surveys, the Federal Reserve's new December industrial production figures revealed that real manufacturing output dropped a bare 0.05 percent on month, and revisions barely worsened the picture. Yet the weak year-end number left such output down on net for five months - one short of a technical recession. And the automotive sector, which has led industry's post-Great Recession comeback, sank into technical recession. Full-year 2015 manufacturing after-inflation growth of 0.74 percent was the lowest such figure since the last recession began, and less than 20 percent as strong as 2014's 4.16 percent...

CSX Corp. executives said on Wednesday that current pressures on rail cargo volumes are at levels not seen outside a recession. “You have multiple aspects working against you: the low [natural] gas prices, the low commodity prices, the strength of the dollar,” Chief Executive Michael Ward said during an earnings call with analysts. “Except for markets like automotive and housing related, you’re seeing pressure on most of the markets.”

Reflections on the last State of the Union Address from Barack Hussein Obama… The modern Democratic Party has made no secret of the fact that they detest the free market. No, not dislike, not disrespect, not even misunderstand... they detest the free market. From Secretary Hillary Clinton haughtily declaring to Senator Bernie Sanders famously declaring that 23 brands of deodorant are … the leading lights of the modern Democratic Party are dim bulbs indeed, when it comes to economics. They proudly refuse to understand the subject, and they set themselves up as superior to its realities. It has long been...

It's hard not to wonder: Is the stock market telling us something? True, the market's record in forecasting recessions is horrendous. Stocks often move according to whim or fad. But just because the market is wrong much of the time doesn't mean it's wrong all the time. Could last week's turbulent trading be one of the times it's right? By Friday's close, stocks had dropped 6% for the week, a paper loss of $1.5 trillion, says Wilshire Associates. Are we staring at the next recession? The selloff originated in China with a weaker-than-expected report on manufacturing activity. This triggered a...

Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world. He told me they had no ships at sea right now, because operating them meant running at a loss. This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.

It's hard not to wonder: Is the stock market telling us something? True, the market's record in forecasting recessions is horrendous. Stocks often move according to whim or fad. But just because the market is wrong much of the time doesn't mean it's wrong all the time. Could last week's turbulent trading be one of the times it's right?... Behind this chain reaction is a huge transfer of economic power from advanced countries (mainly North America, Europe and Japan) to "emerging-market"... The trouble is that their growth is slowing... One is high debt levels... The other problem is the legacy...

US factory orders have never dropped this far for so long without the US economy overall being in recession. November's 4.2% YoY drop is the 13th consecutive monthly drop. Revisions to durable goods data shows a 1% drop in new orders ex-defense in November after rising 1.4% in October.. and as a reminder, this data was buoyed by a 46.9% surge in defense aircraft and parts orders to all-time highs. Factory Orders are flashing deep red recessionary indicators...

On Monday, December 28, 2015, Chicagoland was hit by a particularly unpleasant ice storm. No, not a blizzard – we get them every year – this was an ice storm, the kind where you’re peppered by tiny bits of ice as you walk or run to your car, the kind that leaves inches of slush and ice on the ground instead of nice soft snow. The kind that’s even more painful, even more dangerous, than most snowstorms. The kind that weighs down power lines, causing them to collapse and leave whole towns without power. It wasn’t the worst of the...

If you regularly drive north from Chicago to Milwaukee on I-94, as I do, you have watched Amazon’s Kenosha distribution center grow by leaps and bounds. The parking lot is full, day and night, as it is in online retailers’ similar facilities all over the country nowadays. They may be on the outskirts of a metro like the Kenosha one, or in the heart of town, like Amazon’s 26 urban fulfillment centers in Houston, New York, San Francisco, Miami and Atlanta, often saving a blighted neighborhood by new construction and new jobs that no other business could justify bringing there....

A surprisingly large share of Americans are in a precarious financial state, according to a new, detailed study from The Pew Charitable Trust. For its study, Pew sampled nearly 8,000 individuals, and it found that the typical American household’s finances have not recovered in any substantial way since the downturn, especially in regards to income, savings and covering emergency expenses. Pew’s conclusions have strong implications for the future of housing, so we have spotlighted several of the study’s most notable findings: 1. Income Instability – For the typical U.S. family, earnings have grown just 2 percent from 1999 to 2009, and more than half of U.S....

... It's fueling financial turmoil on Wall Street with Standard & Poor's Ratings Service recently warning that a stunning 50% of energy junk bonds are "distressed," meaning they are at risk of default. Overall, about $180 billion of debt is distressed. It's the highest level since the end of the Great Recession and much of it is in energy companies. ... Not a repeat of 2008...

The outlook for the global economy next year is darkening, with a U.S. recession and China becoming the first major emerging market to slash interest rates to zero both potential scenarios, according to Citi. As the U.S. economy enters its seventh year of expansion following the 2008-09 crisis, the probability of recession will reach 65 percent, Citi's rates strategists wrote in their 2016 outlook published late on Tuesday. A rapid flattening of the bond yield curve towards inversion would be an key warning sign.

If you recall, the popular storyline since late last year has been that the U.S. economy is moderately improving while the world’s other major economies – Japan, China, and Europe – are rolling over. The U.S. economy would power through. Moreover, stock prices had achieved a permanently high plateau.

Over the past year we have regularly contended that a far greater threat to the global economy than either corporate earnings, currency devaluations, rate cuts (or hikes), reserve outflow, or even the stock market, is the sudden, global trade crunch which has been deteriorating rapidly since late 2014 and has seen an even more dramatic drop off as 2015 is winding down. Actually, that is incorrect: global trade is merely a manifestation of the true state of the above listed items. ... We have in the past joked that the only thing that could possibly save the world from what...

Akin OyedeleOctober 31, 2015We recently detailed why some economists are spooked about the economy. Harvard professor Larry Summers also noted that the consensus of economists has failed to forecast a recession one year in advance in post-war America. So, once again, we may not know for sure until we are really close to an economic downturn, or even in one. However, it doesn't exactly look like we're there. If you were, however, trying to build a case that we're near recession, the manufacturing sector is where you'd start. It's A Services Economy "We are seeing questions come up as to...