Important Takeaways:
- Europe’s economy risks a recession after output falls in the third quarter
- The euro area economy risks falling into recession later this year after official data Tuesday showed that output shrank slightly in the third quarter.
- Gross domestic product across the 20 countries that use the euro fell 0.1% in the July-to-September quarter compared with the previous three months, according to an initial estimate published by Eurostat, the European Union’s statistics office.
- The dip follows a rise of only 0.2% in the April-to-June quarter and highlights the fine line between contraction and growth in the eurozone. GDP was stagnant in the final three months of 2022 and the first quarter of this year.
- “The big picture is that the eurozone is struggling. It has only grown by 0.1% over the past year, and the timeliest business surveys consistently point to activity declining at the start of [the fourth quarter],”
- Recent survey data shows that activity in the eurozone’s manufacturing and services sectors has been on a downward trajectory, with demand for goods and services set to weaken further.
- Even if the region avoids a recession, economists say a meaningful recovery is still some way off.
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Important Takeaways:
- The rise of the MEGA bankruptcy: 459 US firms have filed for bankruptcy this year – the most since 2020 – and 16 had more than $1 billion in assets
- Large-scale corporate bankruptcies are at their highest level since 2020 as elevated interest rates continue to batter businesses.
- Economists warn large-scale bankruptcies can have devastating consequences
- Some 459 firms filed for bankruptcy so far this year – already more than in 2021
- Bed Bath and Beyond, trucking firm Yellow and Silicon Valley Bank among the biggest casualties
- David’s Bridal have filed for Chapter 11 bankruptcy thanks to a perfect storm of rampant inflation, high rates and supply-chain disruptions.
- Economists warn the rise in large-scale collapses can have devastating consequences on the economy.
- For example, the demise of trucking firm Yellow – which reportedly had $2.15 billion in assets at its time of filing – reverberated through domestic shipping and real estate markets to Wall Street.
- The rise in bankruptcies coupled with a weakening stock market and surge in credit card delinquencies has sparked fears the US is heading for a recession.
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Important Takeaways:
- Banks are bracing for a recession as Treasury yields surge
- Bank stocks might be on pace for yearly losses as sharply higher interest rates take a toll, but the industry’s reserves are at the highest level in three decades, according to DBRS Morningstar.
- Bank shares have come under more selling pressure since the Federal Reserve in September signaled it could keep rates higher for longer than earlier anticipated. The tough talk has dampened the year’s rally in stocks and reignited a dramatic selloff in the roughly $25 trillion Treasury market.
- “Right now, there is nothing standing in the way of higher Treasury yields,” Kathy Jones, chief fixed-income strategist at Schwab Center for Financial Research, told MarketWatch. “It’s fairly obvious it’s not good for banks. The rise in yields has just been relentless.”
- Higher yields on newly issued Treasury bonds erode the value of portfolios that include lower coupon debt issued when rates were lower. Banks also tend to hold large exposure to commercial property loans that could be difficult to refinance if rates stay higher for longer.
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Important Takeaways:
- This Extremely Important Indicator Is Absolutely Screaming That A Recession Is Coming
- A lot of the talking heads on television seem to think that the threat of a recession has passed
- [But]…the numbers are clearly telling us that economic conditions are rapidly getting worse.
- There is one extremely important indicator that has been absolutely screaming that a recession is coming.
- 10-year bond yields have now been below 3-month bond yields for 212 trading days in a row, and such an inversion has “telegraphed the last eight recessions”…
- But for 212 straight trading days, no matter what the indicators have said, the Treasury market has delivered what is widely understood as a starkly different message: The economy is veering toward a contraction, since 10-year yields have held below 3-month ones.
- Such an inversion telegraphed the last eight recessions. And on Thursday, the market surpassed the 1980 record to hold that way for the longest consecutive daily stretch since Bloomberg’s records begin in 1962.
- But there have been times when the inversion has happened quite a bit before the recession arrived…
- Moreover, the yield curve sometimes inverts long before a contraction. In July 2006, the 10-year yield started holding consistently below the 3-month rate, but the downturn didn’t start until December 2007.
- It appears that something similar is happening now.
- A very painful storm is going to hit our economy.
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- Just when it seemed there was a light at the end of the tunnel with pandemic-related disruptions subsiding, the vast majority of U.S. CEOs (91%) are convinced we are heading toward a recession in the next 12 months. Moreover, only about a third of U.S. CEOs (34%) believe this recession will be mild and short.
- The key issues to overcome in the next 12 months are inflation, higher interest rates and a potential collapse in demand, says Swonk, noting that the Fed is opting to increase interest rates to derail inflation. Even at the risk of a slowdown, raising rates is a better option than allowing a more corrosive and entrenched inflation to take hold, which could cause a deeper recession with larger scars, she adds.
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- Walmart laying off hundreds of US workers at five e-commerce fulfillment centers
- About 200 workers at Pedricktown, New Jersey, and hundreds of others at Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania were let go due to a reduction or elimination in evening and weekend shifts, the spokesperson said.
- The layoffs at Walmart, a retail bellwether because of its size, could be a harbinger of further turmoil in the U.S. economy, which many economists predict could enter recession this year.
- Fears of an upcoming recession have already led retailers to announce 17,456 job cuts so far in 2023, compared with 761 in the same period last year
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- Banks Trim Pandemic-Fueled Headcount
- The past few months have seen banks that include Goldman Sachs, Morgan Stanley and Credit Suisse slash more than 15,000 jobs. Industry experts said they expect other banks to make similar moves.
- Lee Thacker, owner of financial services headhunting firm Silvermine Partners, said “The job cuts that are coming are going to be super brutal,”… “It’s a reset because they over-hired over the past two to three years.”
- Last week also saw the news that Bank of America was freezing much of its hiring as it prepares for a possible recession.
- PYMNTS noted late last year that several investment banks had cut staff in Europe, including Citi, Deutsche Bank, and Credit Suisse, as deal-making stalled and markets stagnated
- The banks’ job cuts are happening as a storm of layoffs hit a number of other businesses. Google parent Alphabet announced Friday (Jan. 20) that it was cutting 12,000 jobs across the company’s product areas, functions and regions.
- Tech companies reduced their headcounts by more than 153,000 last year, with Meta slashing 11,000 jobs and Amazon cutting 10,000.
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- Average American family is spending $72-a-month more on food due to inflation as experts predict a recession in 2023
- American families continue to attempt to meet the rising cost of living as inflation continues to plague household budgets
- The most recent CPI report showed that inflation has slowed considerably since the summer, when the figure capped out at 9.1 percent
- Despite slowing inflation, however, a group of experts surveyed by the WSJ says there is a greater than 60 percent chance of recession in 2023
- Moody’s Analytics showed that families are spending an estimated $72 more on food per month than they were a year ago.
- That figure is pulled out of a report that says the typical US household is shelling out $371 on goods and services more than they were a year ago.
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- 2023 Spells Big Trouble for US Economy, Majority of Big Banks Warn: Reports
- The Wall Street Journal predict that the United States will fall into the grips of a recession in 2023 and millions of Americans will lose their jobs
- The institutions that predict a coming recession expect consumer spending to weaken as Americans deplete their savings and an aggressive Fed drives up borrowing costs, and as banks’ lending standards get tighter.
- Even though inflation has eased somewhat from its June peak, it’s far from enough for the Fed to hit the brakes on interest rates, which were brought up quickly from near zero in March 2022 to the current range of between 4.24–4.5 percent.
- Frustrated by how sticky high inflation has remained despite the rate hikes, Fed officials have pledged to keep raising rates and keep them high until inflation recedes to around the Fed’s 2 percent target
- Fed officials said they expect the terminal Fed Funds rate—meaning the highest level before it hits a ceiling and later falls—to come in at 5.1 percent.
- Rates that high will push unemployment up from the current 3.7 percent to 4.6 percent in 2023 and stay at that level in 2024, according to the Fed.
- The International Monetary Fund (IMF)… expects more economic pain. “More than a third of the global economy will contract this year or next, while the three largest economies—the United States, the European Union, and China—will continue to stall,”
- “In short, the worst is yet to come, and for many people 2023 will feel like a recession.”
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Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’
Important Takeaways:
- 5 Reasons We Should Expect an Economic Recession in 2023 (Five Trends economists are pointing to a global recession in 2023)
- Soaring Energy Costs
- Higher Interest Rates
- Rising Food Prices
- Rising Unemployment
- Global Uncertainty and Instability
- Economic or commodity shock
- Geopolitical instability
- Energy instability
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