2024: Will we make it?
Many Americans fear a recession as severe as 2008 could be coming. Here’s what experts say
It has been well reported that an economic downturn could be coming.
But the big question is when might a recession happen, and how bad could it be?
Many Americans fear an economic downturn could be as bad as the 2007 to 2009 Financial Crisis, a recent Nationwide survey of 2,000 adults found.
To that point, 68% are expecting a recession in the next six months, and 80% of those respondents expect it to be severe.
Hotel REIT Says It Will ‘Likely’ Return 19 Properties to Lenders
Ashford Hospitality Trust Inc. expects to return 19 hotels to lenders in cities including Las Vegas and Atlanta, declining to pour more cash into the properties, which are part of a $982 million mortgage pool that missed a repayment deadline in June.
Keeping the hotels would have required a paydown of about $255 million to extend the financing and $80 million in capital expenditures through 2025, Dallas-based Ashford Trust said in a statement Friday. The equity in the properties is already negative, based on comparable sales and brokers opinion of value, according to the statement.
BREAKING: There was a 68% increase in commercial Chapter 11 cases compared to the same point a year ago, per MW.
— unusual_whales (@unusual_whales) July 7, 2023
The global economy and financial system must brace for the coming storm
The global economy is at a critical juncture that could weigh on prosperity for years to come. For the first time in decades, we face a combination of high inflation and financial fault lines. To stop these problems from becoming entrenched, it’s time for a reality check on what current policy settings can and cannot achieve.
Global inflation has crept down from its peaks as supply chains normalized, commodity prices fell and central banks embarked on the strongest and most synchronized monetary policy tightening in years. As we report in the latest Bank for International Settlements (BIS) Annual Economic Report, history shows that it typically takes a year for inflation to return to its previous level after surges, even during episodes less acute than the one following the pandemic.
Against this backdrop, there is an emerging sense of hope in some quarters that the global economy will achieve a soft, or soft-ish, landing. But we must be ready to tackle the significant risks that cloud this outlook.
One risk is that high inflation could persist. New price pressures could emerge. In many countries, households’ purchasing power has fallen, as wages have not kept pace with inflation. With tight job markets, workers may seek to redress the balance. Firms have found it easier to raise prices and may pass higher costs on to consumers, creating a vicious cycle. Once this sets in, it is hard to stop.
Meanwhile, risks to financial stability loom. Debt and asset prices exceed those in past periods of interest-rate hikes. So far, there are still buffers from pandemic-era savings and longer loan terms locked in during years of low borrowing costs. But these buffers are depleting. As they exhaust, growth could slow more than currently expected.
The resulting financial strains will likely come through credit losses. Weak banks risk losing their footing. Historically, banking stress often goes in tandem with higher interest rates. High debt, high asset prices and high inflation add to the risks. The current episode ticks all the boxes. Although banks are stronger than before, pockets of vulnerability remain, especially where rules to make banks stronger were not applied to smaller banks. As recent experience has shown, even small institutions can trigger systemic collapses in confidence.
‘People are dying’: South Africa workers protest economic woes
The price of scamdemic:
$Economy.
Unfortunately, that's not a conspiracy theory. pic.twitter.com/gugQx0BlwZ
— Mac10 (@SuburbanDrone) July 8, 2023
This chart predicts we will soon see record down volume. At the lowest liquidity period of the entire year. pic.twitter.com/3Yk7AKKRSF
— Mac10 (@SuburbanDrone) July 8, 2023
Everything is fine …… 🔥🔥🔥
If I quit working I’d be in poverty too. I hope this study didn't cost very much. I could have saved them the time. pic.twitter.com/8UyjQ15y93
— Wall Street Silver (@WallStreetSilv) July 8, 2023
“I think we're going to see a multi-year, maybe decade-long fallout”
Yet all the Twitter Economists, wearing bibs sponsored by housing industry professionals, are calling the race over at mile 3 of the marathon t.co/KXQIPUVXP4
— Amy Nixon (@texasrunnerDFW) July 8, 2023
⚠️ #BankingCrisis Update ⚠️
Next Friday $JPM, $C, and $WFC are going to kick off bank earnings season; the stage is set for a horror show! 😨👻
1 – Let’s start with ballooning MTM losses.
Considering where Treasuries traded on the 30th of June (thank God I didn’t use last… t.co/gScIhLuibj pic.twitter.com/fGpRo85iBf
— JustDario 🏊♂️ (@DarioCpx) July 8, 2023
All Dreams End: The Collapse of Keynesian Economics
The Keynesian bedrock of modern economics, relying on financial repression and government spending funded by debt, is an artifact of favorable conditions that are now reversing. Factors such as abundant and affordable energy, favorable demographics, untapped natural capital, and globalization have reached their limits. The cost of debt is rising faster than the tepid growth it generates, and speculative credit-asset bubbles are becoming unsustainable. The Keynesian fantasy is coming to an end, and the risks and costs of rising debt cannot be ignored. The collapse of this unsustainable model is looming, and individuals should prepare accordingly by reducing their exposure to risk through self-reliance.
Bankrate’s 30Y Mortgage Rate Rises To 7.31%, Up 154% (Fed Likely To Continue Rate Hikes)
Under the economic policies of Bidenomics, characterized by massive federal spending and soaring inflation, the top-down approach resembles a Soviet-style command economy. As the Federal Reserve grapples with the challenges posed by Bidenflation, the 30-year mortgage rate has surged to 7.31%, a stark contrast to the 2.88% rate observed at the beginning of President Biden’s term. This represents a significant 154% increase in the 30-year mortgage rate under the influence of Bidenomics.
More Americans Can’t Afford Their Car Payments Than During The Peak Of Financial Crisis
Focusing on the alarming state of the auto sector and its implications for the US economy. The data suggests that the auto industry is approaching a critical point, indicating an imminent auto loan crisis and signaling a forthcoming recession. Americans are increasingly relying on debt to afford skyrocketing car prices. Recent developments, such as a significant increase in new car loans and unprecedented spikes in auto loan rates, further contribute to the precarious state of the industry. The situation is likened to the fictional character Wile Coyote reaching a point of no return, emphasizing the severity of the issue.
German Industrial Production Falls, Signaling Prolonged Economic Downturn
German industrial production unexpectedly dropped by 0.2% in May, raising concerns about a prolonged economic downturn. The decline was mainly attributed to a significant decrease in pharmaceuticals, overshadowing any gains from increased vehicle production. Chief economist Carsten Brzeski warns that the poor outlook, lack of orders, and ongoing challenges such as the conflict in Ukraine and the transition to green energy are contributing to Germany’s stagnant industrial sector.
h/t mark000