The global recession is underway and it’s coming to an economic zone near you. Goldman’s financial conditions indexes are pointing the way.
Global FCI has eased thanks to the bear market rally but remains tight:
Sadly for it, the US is far too loose. Europe is tighter so the ECB is not going to get far:
The China crisis has crashed the activity indicator for EM while DMs motor on:
But that’s the next shoe to drop:
DM tightening will hiccup demand sooner or later and spill over into another EM shock, this time external. That ought to end the commodities mania and deliver an earnings shock.
The global recession has started but it is going to get worse before it gets better.