by Chris Becker
Dr Dooom is calling it.
From CNBC:
The rivalry between the U.S. and China could be so disruptive that it’s starting to decouple the global economy and could eventually cause a recession, according to Nouriel Roubini, the economist famously called the housing bubble.
“The consequences of this trade and tech war and cold war [are] the beginning of de-globalizaion … and the decoupling of the global economy. We’ll have to redo the global tech supply chain. And eventually by next year, if this escalates, it will be a global recession,” said the head of Roubini Macro Associates in an interview with Bloomberg TV on Tuesday.
“My base case is … the trade and tech war between the U.S. and China is going to get worse. Manufacturing is already in a recession globally. It’s affecting services. …The tech sector is in a slowdown,” Roubini said.
“It has already been in the data — the collapse of capex. And once the capex is down, then the industrial production is down and the employment is down, and you have the beginning of a global recession that starts in tech, then in manufacturing, then in industry and then goes to services,” he said.
Manufacturing PMI’s are falling everywhere, including the canary – South Korea:
US:
source: tradingeconomics.com
China:
source: tradingeconomics.com
Australia:
source: tradingeconomics.com
Germany:
source: tradingeconomics.com
South Korea:
source: tradingeconomics.com
UK:
source: tradingeconomics.com
Luckily, stock prices are reflecting the caution…
- Macro Morning - June 5, 2020
- Macro Afternoon - June 4, 2020
- Macro Morning - June 4, 2020
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Depressing.
brighten up, this is Roubini, which now means there is a very good chance it will never happen, Ruesa actually has a much better strike rate, don’t know how it always happens, but straya always gets pegged by a rainbow at the last minute
Yes. All his energy and attention has been on eradicating Bitcoin. He’s forgotten the wider environment.
Why would South Korea be the Canary? Is it because it’s the most vulnerable of the hi tech economies?
It just tends to lead because it makes… everything from high tech to cars to ships to industrial machinery.
You want a Hyundai? Will that be PC memory, or an oil rig?
For all we know, the real canary could be China, but China’s stats are bull5hit.
On another note
Copper prices don’t seem all that bad.
Yep. Sounds simplistic but South Korea export figures are actually a decent global indicator.
Better than using sunspots, anyway…
Copper perhaps
Zinc not so much
Dr Doom may be calling it now but he simply joins a large cohort who’ve been saying the same for some time. And he’s wrong about the causes. Trade or no trade war, it’s coming. Huge post-GFC stimulus has caused all major economies’ cycles to become synchronised and we are simply arriving at the end of the next debt cycle – together. There’s not much more to it than that.
Total global debt at GFC: $140 trillion.
Total global debt right now: $250 trillion
Gunna be one for the ages.
I like simple explanations. Thanks.
Gonna be epic when it goes off..
it’s not gonna go off, it’s too big. The can (filled with explosive debt) will just be kicked down the road and passed to future generations.
18mths away right?
How did you guess
How is it different to the per capita recession that Australia has been having?
Roubini has not thought too much about UBI:
AFR published a nonsensical article on it yesterday:
Yeah. Have a recession and not even do a trial to find out. Just declare it to be bad.
What inflation? The RBA has cut the interest rate to 1%. 3G data is cheaper than ever – way cheaper than it was in 2004. And tax cuts for the rich cost nothing at all?
With the greatest respect, the one place (and possibly the only place) where we’ve seen consistent falls in prices is in technology … and possibly clothing and textiles. Outside of that the world has become increasingly more expensive over the years.
Nobody needs an iPhone to survive (teenagers may disagree) but we do need food and we do need energy and healthcare and education and housing …
“Luckily, stock prices are reflecting the caution…” – GOLD.
More like Gold prices are reflecting the situation.
Debt jubilee time
Kill off all that toxic CDO etc bizzo
Reset interest rates (waves at savers)
You must be new to this. You see that makes complete sense. And common sense is not what policy makers use.
Acceptable alternatives to the truth –
http://quillian.net/blog/acceptable-alternatives-to-the-truth/
It’s a nice thought but will never happen as one man’s liability is another man’s asset.
In other words if you attempted to eradicate all the world’s debt i.e. $250 trillion you’d simultaneously wipe out most the financial system, destroy pension funds, insurance companies would be insolvent and a huge amount of what people currently count as ‘wealth’ would disappear.
Dropping a hundred nuclear bombs on the world’s hundred largest cities would probably be less devastating.
If murdering a couple hundred million people is less disruptive than facing the debt, we’re truly fuxed.
Ww3 it is.
Way too early for that – it must collapse first. Disagree with Dom here, after the collapse a lot of the assets are worthless, debt that can’t be repaid won’t be etc. That is the time for the DJ.
And those without debt get what exactly? F**led?
https://www.realestate.com.au/news/auction-disaster-strikes-balwyn-north-block-after-buyer-runs-away/
Haha.
Interfering with an auction fine be up to $97k.
I’d suggest that a vendor bid is interfering with an auction. The gubmint could make a fortune by stopping that rubbish.
True, but the state gubmints would lose a fortune in duties if the inflationary vendor bid was taken away.
Just make the vendor pay stamp duty if they end up winning the auction.
I find it interesting that when a vendor misses out there is howls for reform! Reform is needed they yell. Not a peep about under quoting, dummy bidding, money wasted by buyers doing inspections on properties they have no hope of winning, vendor bidding, undisclosed reserves which are often higher than the quoted guide price range.
This article is propaganda when you consider that actually, bidding (and winning) is not legally binding at all. Until you sign the sale contract, all they can do is get cross with you when you say you changed your mind and wander off.
It is not against the law to run away after winning a real estate auction.
Watched a mate do it about 10 years ago. The agents running around asking if anyone saw where he went or knew who he was had to be the funniest thing I’ve ever seen. There were about ten of us who knew him and were talking to him throughout the auction, yet we all denied any knowledge. He calmly jumped into his car and drove off when the auctioneer went in to consult with the vendor. Difference was he was the lead bidder but the hammer hadn’t fallen at that stage.
Has that Chinaman in the photo sh1t his pants at the auction?
Sounds like a fun game to play.
Pick up a bunch of business cards from random RE places during the week, then drop them after you make a winning bid as you’re running away.
They will make special bidding areas to keep people in check. Like a members only type arrangement. Red carpet, Samoan bouncers lifting the velvet rope for entry, “not in those shoes” dress standards…unless you’re female.
It’ll be as classy as The Ivy and just as expensive.
Hilarious. I have seen similar once several years ago. Leading bidder ran away. Final result was also a sale to the other bidder very low. Makes me think there is a strategy here, if only I could figure it out.
Yeah, that was the vendor doing the runner after multiple vendor bids. His technique needs work. First rule of being a phoney bidder: try not to win the auction.
don’t you have to be a registered bidder over there?
(ok, could use false credentials I guess)
Not in Victoria. You just show up and raise your hand.
Looks like the only non-Chinese at the auction were the auctioneer and the bloke who ran away.
Oz property is a safe haven so it’s a good time to buy an investment property at the nitty of the cycle before o/s buyers flood back.
Ask the finance company to quote me on my Golf GTI as I wanted to keep it.. 2017, leather, sunroof, auto, 63000km, and was quoted $44.5k.
I am sure I can buy it for less at the auction.
63k kms in less than 18 months. how, or more accurately where do you drive your car ?
from Middleton Grange to CBD or wife to Chullora (if I work from home) and son after hours and all weekend. It is used mate. The kid does ~150km on the weekend. Being on lase all petrol and service is covered so we don’t touch other cars if the golf is available.
Cheaper at auction lol..
that is what I am going to do. will buy it back from the auction for around $32k. but the idiots could have saved money if they did direct deal with me. now they have to pay the auction guys handling plus fixing wheels and a scratch at the back.
63k already?!? Sounds like a sh1tbox quite frankly. Cashed up wog bogan crap. LOLOLOL
– I am convinced that the world (as a whole) is already in (a) recession. The only question is how deep/shallow is the current recession.