AuthorTopic: Hyperinflation or Deflation?  (Read 132393 times)

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📉 These people are most likely to lose their jobs first in a recession
« Reply #645 on: August 24, 2019, 11:45:37 AM »
https://finance.yahoo.com/news/these-people-are-most-likely-to-lose-their-jobs-first-in-a-recession-160247635.html

These people are most likely to lose their jobs first in a recession
Sibile Marcellus
Reporter
Yahoo FinanceAugust 23, 2019


No one can predict how severe an economic downturn might be – and which workers are most at risk of a job cut. But it’s useful to put historical data in context.

While having at least a bachelor’s degree does reduce the likelihood of getting laid off, all college graduates are not treated the same by employers.

Young college graduates will likely be the first to receive pink slips in the next recession. That has been the case during the Great Recession, which lasted from December 2007 to June 2009, and during the 2001 recession which Americans endured for eight months.

Brookings Institution economist Harry Holzer says newer college graduates are among the first to be targeted by employers in a recession, because they are the most marginal people in the workforce, having just entered it. "Young people get hit the hardest during a recession and that will include young college grads. It will take them longer to find any job, and it will take longer for them to find the jobs they really like in terms of beginning a career," he says.

Youth is a factor that tends to work against workers in a recession. People who have recently entered the labor market “are most vulnerable to economic shock, by comparison, to people who are more established in their careers,” says Hamilton Project policy director Ryan Nunn. They “may have a more durable relationship with a particular employer and maybe can ride out the recession a little more easily.”

During the Great Recession, the unemployment rate for workers aged 20 to 24 with a bachelor’s degree rose from 5.4% in 2007 to 8.5% in 2009, according to the BLS. It was much lower for older college graduates with the same education during the financial crisis – it went from 2.2% in 2007 to 5.2% in 2009.

Although the recession officially ended in June 2009, the unemployment rates for both groups were even higher in 2010. Unemployment for young college graduates was 9.2%, and 5.4% for older college graduates.
Stock exchange market is falling. Red arrow graph is showing a fall on a black trading board. Selective focus. Horizontal composition with copy space.
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People have cause to be a least a little concerned. A few signs have been bubbling up that suggest a less-than-rosy economic picture – both in the US and globally. U.S. manufacturer growth slowed to the lowest level in almost 10 years in August, according to results from IHS Markit data. And last week the Federal Reserve reported that manufacturing output fell 0.4% in July from a month earlier, and was 0.5% lower compared with a year ago.

Not to mention a closely watched part of the yield curve inverted on Aug. 14. (The yield curve is a powerful predictor of an economic downturn, and an inversion has preceded each of the last seven recessions dating back to 1969.)

These factors have been fueling recession fears, and with it memories of the millions of layoffs that hit U.S. workers a decade ago during the Great Recession.

Whenever a recession does hit, it’s important to remember, it wouldn’t necessarily be like the last one in 2008. At its lowest point, in February 2010, U.S. employment had declined by 8.8 million jobs from its pre-recession peak, according to the Bureau of Labor Statistics. Monthly job losses averaged 712,000 from October 2008 through March 2009 – the most severe six-month period of job losses since 1945.

Lingering impact of 2008 financial crisis

The 2008 recession wreaked havoc on the financial well-being of many workers by delaying the trajectory of their careers and costing them lost wages. Millennials who graduated into the recession faced “large, negative, and persistent effects on their incomes,” according to a report by the Hamilton Project at Brookings Institution, “The Damage Done by Recessions and How to Respond.”
wage losses in recession
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Source: Hamilton Project at Brookings

Young people who graduate in a recession face a more than 6% wage loss in that initial year of graduation. That economic loss slowly subsides over time. Five years after graduation, though, they still earn 5% less than those who graduated during non-recessionary years, according to Brookings.

“What’s striking is that those wage losses don’t disappear immediately. Those are very persistent. Fifteen years after graduation, in a recession you’re still talking about a non-trivial wage decline,” says Nunn.
« Last Edit: August 24, 2019, 11:49:07 AM by RE »
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📉 Recession Now, Please
« Reply #646 on: August 25, 2019, 07:34:52 AM »
https://www.counterpunch.org/2019/08/23/recession-now-please/

August 23, 2019
Recession Now, Please
by Andrew Levine

Mural by Diego Rivera showing Karl Marx, in the National Palace in Mexico City. Photograph Source: Wolfgang Sauber – CC BY-SA 3.0

It is a basic fact of economic life in capitalist economies: recessions happen, there are cycles of boom and bust.

By the 1850s, Karl Marx had pretty well figured out the how and why, the underlying mechanisms. His account has held up well over the years, though you would hardly know it to hear mainstream macro-economists tell it.

“Bourgeois economists,” as Marx would have called them, seldom acknowledge the historical and conceptual connections between their work and Marx’s, and they seem not to notice how much some of their views about the trajectories of capitalist economies resemble his.

This is not entirely their fault; many of them have no idea. Much to the detriment of progress in economic science, their training and professional allegiances disincline them to take bodies of theory that “speak truth to (class) power” seriously.

They are, however, very aware of and generally sympathetic towards the work of John Maynard Keynes and others whose thinking is generally in line with Marx’s, notwithstanding the fact that Keynes and his co-thinkers wanted, unlike Marx, to save capitalism, not move beyond it.

Also, mainstream economists have observed quite a few recessions over the past century and a half, and have therefore become adept at identifying signs that suggest when recessions should be expected. They also know in general how to minimize the damage recessions cause and how to get capitalist economies back on track when the time comes.

Needless to say, Trump knows little and cares less about any of this. Nevertheless, his views on the economy, like everything else, do matter — because of the power he wields. On their merits, there is no reason to take them seriously at all.

Outside the blooming buzzing confusion of the Donald’s mind, it is widely accepted that, whether or not a recession is imminent, one is, by now, overdue.

It is also the view of most informed observers that Keynesian fiscal remedies are no longer as feasible or as likely to be effective as they used to be, and also that monetary “solutions” are unlikely to be of much help either.

For this, Trump and the sycophants he has empowered to run the government for him have a lot to answer for; so do Barack Obama and his vaunted neoliberal economic advisors and functionaries.

Nothing that any of them has done has made the next recession any more or less inevitable. When it finally does come, however, it will bring a lot more hurt than it might otherwise have. To some considerable extent, that is on them.

Unchecked Trumpian rule poses almost as great a threat to the health and wellbeing of planet earth as the cretaceous-paleogene asteroid collision that led to the extinction of the dinosaurs. Even so, if there were ways to postpone the next recession indefinitely, it might almost be worth giving them a try.

This would, of course, mean increasing the likelihood of a second Trump term, so the calculation is not exactly slam-dunk. However, there is no need to agonize over that, because there is now way to keep the next recession permanently at bay; capitalism’s “laws of motion” will exact their due no matter what Washington does.

As long as the American economic system remains capitalist – in other words, as long as major productive assets are privately owned and operate at the mercy of market forces – recessions can be temporarily postponed, but not permanently evaded. The question is not whether, but when.

Trump and his advisors – like Larry Kudlow, the Director of the National Economic Council – disagree, but only because they don’t dare cross their master, or because they haven’t a clue what they are talking about, or both. I’d vote for “both.” Kudlow, by the way, isn’t even a real economist; he just plays one on TV.

Trump can, however, affect the timing of the next recession to some extent. There is, by now, not much more he could do to delay its arrival; his tool chest is depleted. But his tweets and flip-flops on trade and other matters and his increasingly evident mental decline can hasten its onset. The process is already well underway.

It has become harder than ever to claim that there must be some method to Trump’s madness. The story line used to be that he couldn’t have come as far as he has by being stupid; and therefore that what looks like stupidity run riot is actually cleverness in disguise.

Newsflash: Trump is as stupid as he seems, maybe even stupider, and he got as far as he has thanks to his father’s money and political juice, and to the largesse of some of the sleaziest crooks on the face of the earth. It used to be possible to say of those who thought otherwise that they were merely willfully blind. The kindest thing to say about them now is that they are stark raving mad.

All Trump’s flailing about does is cultivate uncertainty, discouraging business investment while encouraging market volatility. This is the standard, timeworn recipe for bringing on long overdue, far-reaching economic downturns.

Ultimately, though, it is up to the gods whose playthings we are to determine when the proverbial shit will hit the fan. Those gods are mean bitches and sons of bitches and, lately they have been especially unkind.

Setting Trump loose upon the world was mischievous and cruel. Turning the less odious duopoly party over to Clintonites — neoliberals, liberal imperialists, unreconstructed corporate stooges – was wicked and heartless as well.

At this point, the GOP is hopeless; Democrats not nearly as much. Indeed, for keeping them on the negative side of the ledger, indications now are that the gods have overplayed their hand.

Or, to put the point somewhat differently, it is now beginning to look like the stars are finally aligning right.

But, of course, the words Shakespeare had Cassius proclaim in “Julius Caesar” are spot on — that “the fault is not in our stars, but in ourselves, that we are underlings.” That thought may finally be penetrating the thick skulls of significant numbers of potential Democratic voters.

With Trump acting out egregiously and mainstream Democrats in the House doing nothing more about it than talking up a storm, it would be hard to imagine the public mood not shifting in ways that would force a turn for the better.

Thus, despite the best efforts of Democratic National Committee flacks at MSNBC, CNN, and, of course, The New York Times, The Washington Post, and, worst of all, PBS and NPR, the Democratic Party now has a “squad” with which its Pelosiite-Hoyerite-Schumerian leadership must contend.

It also has Bernie Sanders and Elizabeth Warren, front-runners for the presidential nomination, who reject the neoliberal economic policies that the Democratic Party has been championing since the waning days of the Carter administration.

In calling them front-runners, I haven’t forgotten Joe Biden, still in the lead in most polls. It is just that I think that, after nearly three years of Trump, the candidacy of a doddering Clintonite doofus doesn’t – and shouldn’t — merit serious consideration. I trust that this will become increasingly apparent even to the most dull-witted Democratic pundits, and of course to the vast majority of Democratic voters, as the election season unfolds.

The better to defeat Trump and Trumpism next year, Sanders or Warren or whichever candidate finally gets the nod, along with the several rays of light in Congress – there are more of them than just the four that Trump would send back to “where they came from” — will undoubtedly make common cause with corporate Democrats at a tactical level.

This is all to the good. Nevertheless, the time to start working to assure that it goes no deeper than that is already upon us.

When the dust clears, it will become evident that the squad-like new guys and the leading Democrats of the past are not on the same path; that the former want to reconstruct the Democratic Party in ways that will make it authentically progressive, while the latter, wittingly or not, want to restore and bolster the Party that made Trump and Trumpism possible and even inevitable.

It is also relevant that the public mood is undergoing a sea change for reasons that go beyond the sensibilities of a new generation coming of age.

The first signs of this transformation revolved around LGBTQ issues. Remember how in 2004, it worked against John Kerry that the Massachusetts Supreme Court, following Hawaii’s lead, had just ruled in favor of gay marriage. Back then, that was a lot for a Massachusetts Senator seeking the presidency to overcome.

Remember too how in 2008, the vaunted Barack Obama, President Drone, the Deporter-in-Chief that Biden and other “centrists” have lately all but beatified, declared that he was not quite there yet.

Now even Trump is less hostile to the idea than Obama was then; many of the Evangelicals in his base, the kind for whom the sanctity of life effectively terminates with birth, seem OK with it too.

There is reason to hope that attitudes towards America’s gun laws are beginning to change as well. All the polls indicate that much of the public has now come to realize how insane at least some of those laws are.

To be sure, most legislators still fear the NRA, and Trump remains in its pocket, but the idea that it is fast becoming a Paper Tiger is beginning to catch on. That realization is, by now, more widespread than anyone, even a year ago, would have dared to hope.

Could the Israel lobby be next? As Israeli politics veers ever farther to the right, its lobby’s stranglehold over the Democratic Party, though far from shot, is in plain decline — as increasingly many American Jews, especially but not only millennials, lose interest in the ethnocratic settler state, or find themselves embarrassed by it.

Evangelicals, who think that the in-gathering of world Jewry into Israel is key to the End Time, when they will be raptured away into God’s heaven, and Jews who refuse to accept Christ as their savior will be cast into Hell for all eternity, continue to hold fast. They are now more gung ho for the self-described Jewish state than most of its Jewish supporters.

Because Republicans need to keep those Evangelicals on board, they remain steadfast too.

Inasmuch as Israel is still key to that strain of Jewish identity politics that baby boomers and others getting long in the tooth continue to rally around, the Zionist lobby is by no means on the ropes just yet. But the writing is on the wall.

These are not the only ways in which the times are changing. Even so, as long as Trump’s economic policies look good enough to enough people not too ashamed to vote for someone as ludicrous and vile as he, there remains a chance that, come November 2020, voters won’t give him the boot.

Should that come to pass, the end will truly be near.

The gods could care less what we mortals think or want. But, given the stakes, it would still be worthwhile beseeching them, if only they could be bothered to exist, on the off-chance that they might be merciful enough to hurry the next recession along, so that, well in advance of Election Day 2020, the forty percent or so of us that does not already hate Trump with all their heart, soul, and might will finally see the light.

The sooner the better too – because fear of a second Trump term, combined with false beliefs about the wisdom of nominating Biden or some other anodyne corporate Democrat to run against him, could cause the party to make the same mistake that it made in 2016. That mistake, in a word, was to accede to the inveterate cowardice that all but defines the Democratic Party’s soul.

Especially now that it has become possible to wean the party off Clintonism, nominating someone dedicated to perpetuating its Clintonite turn would be almost criminal; it would be an error of stupendous proportions.

***

Marx devoted his later years to discovering “the laws of motion” of capitalist societies; hence his continuing relevance for understanding how and why there is an economic downturn, a recession, in our future.

Before that, though, while still in his twenties, he thought a lot about how the gods and God are nothing more than representations of essentially human traits, separated (alienated) from their source and projected onto materially unreal mental confabulations.

His thinking was influenced by his friend and older colleague, Ludwig Feuerbach (1804-1872), the foremost “Young (or Left) Hegelian” philosopher of the 1830s and 1840s. Feuerbach’s philosophical anthropology and critical interpretations of Christian doctrines, set forth in The Essence of Christianity (1841) and elsewhere, are points of reference for theoretical humanists to this day.

In the spirit of that line of thought, I would venture that now would be a good time to pray that the gods or God bring the recession on while there is still time for some good to come of it.

Let us therefore call on the divinities to be remorseful for the harm they – that is, we – have done, and beseech them to make it right.

The animal sacrifices favored by the pagans of Greco-Roman antiquity and by worshipers of the God of Abraham, Isaac, and Jacob in the days of the Second Temple might do just as well, but for the fact that, notwithstanding the continuing popularity of Trump and Trumpism in the most venal and benighted quarters of our “city upon a hill,” and of similar excrescences elsewhere around the world, that there is at least some irreversible moral and intellectual progress after all.

Therefore, let us pray for a recession now – not just to increase the likelihood that Trump will be dispatched, but also because a significant economic contraction, coming just as a Democratic president takes over, could sink Medicare for All and the Green New Deal and much else besides.

The suffering to come is inevitable; the sooner it comes and goes, the sooner recovery can begin, and the sooner the reconstruction of the Democratic Party can proceed — along with de-Trumpification and the resumption, after so many years of stasis and regression, of movement forward towards a better possible world.
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More articles by:Andrew Levine

ANDREW LEVINE is the author most recently of THE AMERICAN IDEOLOGY (Routledge) and POLITICAL KEY WORDS (Blackwell) as well as of many other books and articles in political philosophy. His most recent book is In Bad Faith: What’s Wrong With the Opium of the People. He was a Professor (philosophy) at the University of Wisconsin-Madison and a Research Professor (philosophy) at the University of Maryland-College Park.  He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).
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📉 No cushion for the Trump recession: Why this one could be worse than 2008
« Reply #647 on: August 26, 2019, 12:41:11 AM »
https://www.salon.com/2019/08/25/no-cushion-for-the-trump-recession-why-this-one-could-be-worse-than-2008/

No cushion for the Trump recession: Why this one could be worse than 2008

Even a mild downturn could hit Americans harder — the "recovery" from 2008 left too many people on the margins


Bob Hennelly
August 25, 2019 2:00PM (UTC)

As the corporate media bangs the drum of imminent recession, we need to take a look at how tens of millions of American households that live paycheck to paycheck are situated for another choreographed downturn.

It will tell you all you need to know about the predatory nature of late-stage vulture capitalism, over which Donald Trump presides as its orange mascot. What jumps out when you look at the data is just how phony the “longest recovery” has been — the one for which Joe Biden wants to take a victory lap.

Lost ground

The stark reality is that in the last decade or so the rich have gotten richer as the rest of the country has sunk deeper and deeper into debt, with little to show for it except rent receipts.

As we head into the next downturn, whenever it happens, tens of millions of American families are hanging on the edge of economic oblivion. Thanks to the Trump tax cut, their government will be too much in debt to throw them a lifeline.
00:00/01:12

The $20 trillion in lost American household wealth that came from the unprosecuted theft of household wealth during Wall Street's Great Foreclosure caper had generational consequences that linger and still define many lives today.

The Federal Reserve Board's latest "Report on the Economic Well-Being of U.S. Households," released in May, surveyed 11,000 adults. It found that in order to cover an emergency $400 expense, 39 percent of those polled would have to either borrow or sell something to come up with the cash.

In the real world

Many years into this “amazing recovery,” the Federal Reserve found that “across the country, many families continue to experience financial distress and struggle to save for retirement and unexpected expenses."

    Changes in family income from month to month remained a source of financial strain for some individuals. Three in 10 adults had family income that varied from month to month. One in 10 struggled to pay their bills at some point in the prior year because of monthly changes in income. Financial support from family or friends to make ends meet was also common, particularly among young adults.

The annual survey found that “many adults were struggling to save for retirement” with one in four with “no retirement savings or pension whatsoever.”

Can’t imagine why.

In the years since the Great Recession, student debt has exploded from $500 billion to $1.57 trillion. Non-housing related debt was $2.65 trillion in 2008. By the second quarter of this year it had surpassed $4 trillion.

Dude, where's my car?

And, in the midst of Trump’s ranting in February about his wall with Mexico, seven million Americans, a record number, fell into that 90-day abyss of being months late with their car payment.

See a pattern here?

Now we are struggling to hold on to our family car, the same way we were clawing to hold on to our home just a decade ago.

President Obama’s fateful decision not to provide the kind of backstop for homeowners that Franklin D. Roosevelt did in the 1930s may have plumped up Wall Street. But it sent thousands of neighborhoods into a death spiral where once serviceable houses were turned into zombie shells hollowed out by ruthless speculation.

These scars are still living in our landscape in places like Flint, Michigan, and Newark, New Jersey, where homeowners have to deal with the prospect that the public water is poisoning their children and grandchildren with lead.

The millions of foreclosures that devastated neighborhoods of color hardest of all represent a massive transfer of wealth from working-class Americans — one that took generations to build — to the predator Wall Street class that precipitated the crisis in the first place.

Historically, homeownership could provide stability to an extended family by providing stopgap shelter for a family member down on their luck or a college graduate jammed up by student debt.

Remember equity?

Homeownership also offered potential lifeline of capital realized by borrowing on the equity in the property that could help a family navigate a job loss that can come in a downturn.

As the Pew Center reports, more Americans are living month to month in rental housing than at any time in the last 50 years.

In 2006 the proportion of households renting was 31.2 percent, according to Pew. By 2016 it had spiked to 36.6 percent, which exceeds “the recent high of 36.2 percent set in 1986 and 1988 and approaches the rate of 37.0% in 1965.”

    Certain demographic groups — such as young adults, nonwhites and the lesser educated — have historically been more likely to rent than others, and rental rates have increased among these groups over the past decade. However, rental rates have also increased among some groups that have traditionally been less likely to rent, including whites and middle-aged adults.

The Joint Center for Housing Studies of Harvard University found that a lack of affordable rental housing helped drive up rents four times faster than the rate of inflation. “The US Consumer Price Index for rent of primary residence rose at a 3.8 percent annual rate through April, far exceeding the 0.9 percent inflation rate for non-housing-related goods,” the analysis found. 

A half-century of betrayal

Since the 1970s, when wages flatlined as productivity spiked and unions began to shrink, American corporations have been running things by paying off both political parties.

In the last few years, as a consequence of this collusion of the comfortable, the economic circumstances of our elected representatives has continued to vastly outpace what’s been happening for everyone else. They appear ready for whatever capitalism has in store for us.

As Roll Call reported last year, the “cumulative net worth of senators and House members jumped by one-fifth in the two years before the start of this Congress, outperforming the typical American’s improved fortunes as well as the solid performance of investment markets during that time.”

    The disparity becomes clear after examining the most recent financial disclosures of virtually every current lawmaker. The news is not likely to do them any good during a midterm campaign year when disapproval of Capitol Hill remains in record territory and sentiment remains strong that politicians in Washington are far too disconnected from the lives of their constituents.

Can't be helped

One essential element of keeping the lid on America’s collective anger over decades of declining wages, disappearing benefits and actual decline in our average lifespan, is to cover the ups and downs of the economy as if it were some sort of naturally occurring meteorological phenomenon. 

But the kinds of market gyrations that promote dislocation and misery for the masses are not the result of gravity or barometric pressure. They are the consequences of decisions driven by an ever-shrinking circle of people and institutions who engineer scarcity — because making a killing is the only way they know how to make a living.

Bob Hennelly

Bob Hennelly has written and reported for the Village Voice, Pacifica Radio, WNYC, CBS MoneyWatch and other outlets. He is now a reporter for the Chief-Leader, covering public unions and the civil service in New York City. Follow him on Twitter: @stucknation
« Last Edit: August 26, 2019, 12:48:45 AM by RE »
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📉 The Next Recession Will Destroy Millennials
« Reply #648 on: August 27, 2019, 01:54:51 AM »
https://www.theatlantic.com/ideas/archive/2019/08/millennials-are-screwed-recession/596728/

The Next Recession Will Destroy Millennials

Millennials are already in debt and without savings. After the next downturn, they’ll be in even bigger trouble.
6:00 AM ET
Annie Lowrey
Staff writer at The Atlantic


Max Whittaker / Reuters

The trade war is dragging on. The yield curve is inverting. Investors are fleeing to safety. Global growth is slowing. The stock market is dipping. The Millennials are screwed.

Recessions are never good for anyone. A sputtering economy means miserable financial, emotional, and physical-health consequences for everyone from infants to retirees. But the next one—if it happens, when it starts happening—stands to hit this much-maligned generation particularly hard. For adults between the ages of 22 and 38, after all, the last recession never really ended.

Millennials got bodied in the downturn, have struggled in the recovery, and are now left more vulnerable than other, older age cohorts. As they pitch toward middle age, they are failing to make it to the middle class, and are likely to be the first generation in modern economic history to end up worse off than their parents. The next downturn might make sure of it, stalling their careers and sucking away their wages right as the Millennials enter their prime earning years.

Derek Thompson: Millennials didn’t kill the economy. The economy killed Millennials.

It was the last downturn—the once-a-century Great Recession—that set them on this doddering economic course. The Millennials graduated into the worst jobs market in 80 years. That did not just mean a few years of high unemployment, or a couple years living in their parents’ basements. It meant a full decade of lost wages. The generation unlucky enough to enter the labor market in a recession suffers “significant” earnings losses that take years and years to rebound, studies show, something that hard data now back up. As of 2014, Millennial men were earning no more than Gen X men were when they were the same age, and 10 percent less than Baby Boomers—despite the economy being far bigger and the country far richer. Millennial women were earning less than Gen X women.

Kids of the 1980s and 1990s have had a new, huge, financially catastrophic demand on their meager post-recession earnings, too: a trillion dollars of educational debt. About a quarter of Gen Xers who went to college took out loans to do so, compared with half of Millennials. And Millennials ended up taking out double the amount that Gen Xers did. No wonder, given that the cost of tuition has gone up more than 100 percent since 2001, even after accounting for inflation.

The toxic combination of lower earnings and higher student-loan balances—combined with tight credit in the recovery years—has led to Millennials getting shut out of the housing market, and thus losing a seminal way to build wealth. The generation’s homeownership rate is a full 8 percentage points lower than that of the Gen Xers or the Baby Boomers when they were the same age; the median age of home-buyers has risen all the way to 46, the oldest it has been since the National Association of Realtors started keeping records four decades ago.

Read: How WeWork has perfectly captured the Millennial id

As a result, Millennials have not benefited from the dramatic rebound in housing prices that has occurred since the financial collapse and the foreclosure crisis. Millennials have also been forced to shell out hundreds of billions of dollars in rent as housing costs have skyrocketed in many urban areas. This represents a large generational transfer of wealth from the young to the old. Boomers own the houses and bar municipalities from building more of them, thus benefiting from rising prices and soaking up endless rent checks forked over by younger and poorer families.

Cost pressures have also made it difficult or impossible for Millennials to save or invest. The share of Americans under the age of 35 who own stocks has meandered down from 55 percent in 2001 to 37 percent in 2018, in part because employers are less likely to offer retirement-savings plans and in part because Millennials have nothing left over at the end of the month to put away. Virtually all members of the cohort are “not saving adequately,” experts warn, and two-thirds of Millennials have zero retirement savings. This means that Millennials have benefited not a bit from the decade-long boom in stock prices, as their parents and grandparents have.

Millennials are worth less on paper than members of older generations are, and are worth less on paper than members of older generations were at the same point in their lives. The net worth of your average Millennial household is 40 percent lower than for Gen X households in 2001 and 20 percent lower than for Baby Boomers’ households at the end of the 1980s.

Read: The myth of the Millennial entrepreneur

Could the Millennials make up this lost ground? Perhaps, if wage growth suddenly and dramatically accelerates, urban cores start to build millions of new homes, and Congress announces a student-loan debt jubilee. But financial experts consider it unlikely. Millennials missed out on the big asset boom that occurred between 2010 and the present, and “appreciation is unlikely to be as rapid in the near future as it was during the recent period,” argue economists at the Federal Reserve. “With the baby boomers occupying most of the top jobs and much of the housing, Millennials are doing less well than their parents,” concluded Credit Suisse. “We expect only a minority of high achievers and those in high-demand sectors such as technology or finance to effectively overcome the ‘millennial disadvantage.’”

The next recession—this year, next year, whenever it comes—will likely make that Millennial disadvantage even worse. Already, Millennials have put off saving and buying homes, as well as getting married and having babies, because of their crummy jobs and weighty student loans. A downturn that leads to higher unemployment and lower wages will force Millennials to wait even longer to start accumulating wealth, making it far harder for them to accumulate any wealth at all. (Compound interest is magic, after all.) Their trajectory, already terrible, might get even worse.

And Millennial suffering won’t just hurt Millennials. There is accumulating evidence that the economy is more sclerotic and slower-growing than it might be if the Millennials were able to buy homes, have families, start businesses, and spend like other generations—if the young were not existing just to pump up asset values for the old. Which reminds me—there’s one generation that might fare even worse than Millennials: Generation Z. ¯\_(ツ)_/¯.

We want to hear what you think about this article. Submit a letter to the editor or write to letters@theatlantic.com.
Annie Lowrey is a staff writer at The Atlantic, where she covers economic policy.
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💱 Argentina imposes currency controls as its economic crisis deepens
« Reply #649 on: September 02, 2019, 09:37:00 AM »
https://www.cnbc.com/2019/09/02/argentina-macri-imposes-currency-controls-as-debt-crisis-deepens.html

Argentina imposes currency controls as its economic crisis deepens
Published Mon, Sep 2 2019 4:07 AM EDT
Sam Meredith
@smeredith19
   

A woman walks with an Argentinian flag during a march in support of President Mauricio Macri on August 24, 2019 in Buenos Aires, Argentina.
Ricardo Ceppi | Getty Images News | Getty Images
   
Key Points

    The temporary measures, announced on Sunday, allow the government to restrict foreign currency purchases following a sharp drop in the super-sensitive peso.
    Macri’s government and the central bank are trying to shore up confidence in financial markets ahead of the presidential election on October 27.
    The peso fell to a record low last month, after the primary result cast serious doubt over the center-right incumbent’s re-election chances.

GP: Argentina News Monthly Latam 190902 EU

Argentina’s government has imposed currency controls in a bid to stabilize financial markets, as Latin America’s third-largest economy faces a deepening economic crisis.

The temporary measures, announced on Sunday, allow the government to restrict foreign currency purchases following a sharp drop in the super-sensitive peso.

All companies must now request permission from Argentina’s central bank to sell pesos and buy foreign currency to make transfers abroad.

In an official bulletin issued on Sunday, the government said currency controls were necessary “to ensure the normal functioning of the economy.”

The latest move follows the surprise announcement on Wednesday that Argentina would seek to defer payments on roughly $100 billion of debt, which credit rating agency S&P classified as a default under its own criteria.

The measures — which will remain in place until the end of the year — constitute a startling turnabout for President Mauricio Macri.

Shortly after starting his term in December 2015, the embattled leader of South America’s second-largest country abruptly removed strict capital controls that had been in place since 2011.

Macri’s government and the central bank are trying to shore up confidence in financial markets ahead of the presidential election on October 27.
IMF doesn’t want to be the one that ‘pulled the plug’

Recession-hit Argentina has been struggling with a financial crisis, which was exacerbated by the president’s stunning defeat in a recent primary poll.

In a vote seen by many as a key gauge for the first round of Argentina’s presidential election at the end of October, business-friendly Macri lost by a far greater margin than expected to the opposition ticket of center-left Alberto Fernandez and populist ex-leader Cristina Fernandez de Kirchner.

The peso fell to a record low last month, after the primary result cast serious doubt over the center-right incumbent’s re-election chances.

Argentina’s currency, seen by some as a guide for the country’s economy, closed at around 59.49 per U.S. dollar on Friday. The peso has fallen more than 30% since the August 11 primary vote.

Market participants had expected some form of capital controls from Argentina’s government. However, some are concerned the move could jeopardize the International Monetary Fund’s (IMF) latest disbursement of its historic $57 billion bailout program.

James Athey, senior investment manager at Aberdeen Standard Investments, told CNBC’s “Squawk Box Europe” that he still believes the IMF will deliver another $5.4 billion tranche to Argentina later this month.

“Essentially, the IMF doesn’t want to be the one that pulled the plug.”

Athey argued credit rating agencies had the same problem when it comes to Argentina, with many of them “rushing” to downgrade the country to junk status in recent weeks.

“Realistically, the underlying health of the situation, I don’t think it has changed that dramatically. What has happened is that prices of some of the external assets have changed and given the facade that things are dramatically worse… They were always pretty bad.”

“So, I don’t think the IMF wants to be the one that says: ‘No, you can’t have that last bit of money’. But, $5 billion at this stage is really throwing a few pennies into the wishing well,” Athey said.
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📉 Here’s a list of recession signals that are flashing red
« Reply #650 on: September 04, 2019, 03:11:09 AM »
https://www.cnbc.com/2019/09/02/heres-a-list-of-recession-signals-that-are-flashing-red.html

Here’s a list of recession signals that are flashing red

Published Mon, Sep 2 2019 8:30 AM EDT
Maggie Fitzgerald
@mkmfitzgerald

Key Points

    Data is coming at investors from every angle with so-called recession indicators flashing signs of an economic slowdown brought on by slower growth abroad and the U.S.-China trade war.
    Here are some major recession indicators that are flashing red.


 
 
 
MarketsTraders and financial professionals work on the floor of the New York Stock Exchange.
Drew Angerer | Getty Images

Whether or not the U.S. is going into a recession is on the minds of Americans everywhere.

Google searches show recession fears have spiked exponentially since the end of July, when the Federal Reserve cut interest rates for the first time since the financial crisis.

Data is coming at investors from every angle with so-called recession indicators flashing signs of an economic slowdown brought on by slower growth abroad and the U.S.-China trade war. A slowing global economy is pressuring central banks abroad to lower borrowing rates at unprecedented levels and a tit-for-tat tariff war between Washington and Beijing is weighing on business sentiment.

Assessing these indicators is not easy, and many economists, money managers and analysts disagree about how healthy or unhealthy the U.S. economy really is and whether its long expansion can continue.

Here are some major recession indicators that are flashing red.

Bond market

Perhaps the most talked about recession indicator is the inverted yield curve.

Amid falling interest rates in the broader U.S. bond market, the yield on the benchmark 10-year Treasury note has fallen below the 2-year yield several times since Aug. 14. In a healthy market, long-term bonds carry a higher interest rate than short-term bonds. When short-term bonds deliver a higher yield, it’s a called an inversion of the yield curve. The bond market phenomenon is historically a trusty signal of an eventual recession: It has preceded the seven last recessions. A recession occurs about 22 months after an inversion on average, according to Credit Suisse.

GDP

Gross domestic product in the U.S. is slowing. The economy expanded by 2% in the second quarter, the Commerce Department said in its second reading of GDP on Thursday.

Two percent is the lowest growth rate since the fourth quarter of 2018 and down from 3% growth in the first three months of this year.

Corporate profits

Earnings growth estimates have come down drastically this year. Last December, analysts estimated S&P 500 earnings growth for the year would be around 7.6%, according to FactSet. That number is now around 2.3%.

Goldman Sachs and Citigroup strategists last month reduced 2019 and 2020 earnings estimates for the S&P 500, citing a sluggish economy, trade war threats and potential currency devaluations.

Manufacturing contraction

U.S. manufacturer growth slowed to the lowest level in almost 10 years in August. The U.S. manufacturing PMI (purchasing managers’ index) was 49.9 in August, down from 50.4 in July.

The reading is below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit. Any reading below 50 signals a contraction.

In July, Federal Reserve members expressed concerns about weak sectors of the economy like manufacturing. They said the U.S.-China trade war, coinciding with global growth worries, continues “to weigh on business confidence and firms’ capital expenditure plans,” according to minutes from the Fed’s July meeting.

The Cass Freight Index

The economic outlook from Freight’s perspective is looking grim.

The Cass Shipments Index fell 5.9% in July, following a 5.3% decline in June and a 6% drop in May.

“We repeat our message from last two months: the shipments index has gone from ‘warning of a potential slowdown’ to ‘signaling an economic contraction,’” the July report said. “Although the initial Q2 ’19 GDP was positive, it was not as positive upon dissection, and we see a growing risk that GDP will go negative by year’s end.”

Copper

Copper, informally known as Dr. Copper for its Ph.D. in economics, is known as a barometer of economic health because of its use in homebuilding and commercial construction.

The commodity is down over 13% in the last half year.

The breakdown in copper in August was “by far the most important development” and “markets were clearly too optimistic given the multiple risks in the macro backdrop,” said the Seven Report’s Tom Essaye.

Gold

Gold prices have soared more than 20% since May when the U.S. and China escalated their tariff fight. Similar to government bonds, gold is known as a safe haven trade in times of economic uncertainty.

Global Economic Policy Uncertainty Index

The Economic Policy Uncertainty Index, an index designed to measure policy-related worries around the world, hit its all-time highest level, 342, in June.

The EPU Index tracks the amount of times newspaper articles use buzzwords related to economic and political uncertainty. Additionally, it measures the number of tax laws set to expire and the spectrum of disagreement among economists: The more dissent, the higher the index goes.

The index simmered in July to a level of 280 on hopes the a trade deal between the U.S. and China will be resolved.

Business spending

In the second quarter, gross private domestic investment tumbled 5.5%, the worst since the fourth quarter of 2015, according to the Commerce Department’s quarterly GDP report.

Coming off of a sugar high from President Donald Trump’s 2017 tax overhaul, businesses are hesitant to invest in future initiatives due to uncertainty.

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📉 The developed world is on the brink of a financial, economic, social and poli
« Reply #651 on: September 12, 2019, 03:15:09 AM »
<a href="http://www.youtube.com/v/3WclYu5l4G0" target="_blank" class="new_win">http://www.youtube.com/v/3WclYu5l4G0</a>
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💶 Euros for Nothing and your Checks for Free from Super Mario Dragon
« Reply #652 on: September 12, 2019, 08:31:10 AM »
The Sun is setting on the Euro.  :icon_sunny:

<a href="http://www.youtube.com/v/JRDgihVDEko" target="_blank" class="new_win">http://www.youtube.com/v/JRDgihVDEko</a>

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Central Banks
European Central Bank cuts its deposit rate, launches new bond-buying program
Published 4 hours agoUpdated 2 hours ago
Elliot Smith @ElliotSmithCNBC
   
   
Key Points

    The central bank’s quantitative easing program will entail 20 billion euros per month of asset purchases for as long as it deems necessary.
    The ECB also cut its main deposit rate by 10 basis points to -0.5%, a record low but in line with market expectations.
    Markets had widely expected some form of stimulus package, though hawks within the European Central Bank (ECB) Governing Council had moved in recent weeks to downplay the scale of the impending measures.
    “In view of the weakening economic outlook and the continued prominence of downside risk, governments with fiscal space should act in an effective and timely manner,” ECB President Mario Draghi said.

RT: Mario Draghi 190307
Mario Draghi, President of the European central Bank (ECB) attends a news conference on the outcome of the Governing Council meeting at the ECB headquarters in Frankfurt, Germany, March 7, 2019.
Kai Pfaffenbach | Reuters

The European Central Bank (ECB) announced a massive new bond-buying program Thursday in a bid to stimulate the ailing euro zone economy.

The central bank’s quantitative easing (QE) program will entail 20 billion euros ($21.9 billion) per month of net asset purchases for as long as it deems necessary.

The ECB also cut its main deposit rate by 10 basis points to -0.5%, a record low but in line with market expectations.

It now expects interest rates to remain at their present or lower levels until it has seen its inflation outlook “robustly converge to a level sufficiently close to but below 2% within its projection horizon, and such convergence has been persistent.”
watch now
VIDEO02:44
ECB cuts rates and resumes quantitative easing in new stimulus package

In a press conference following the decision, ECB President Mario Draghi urged governments to take fiscal measures to supplement the central bank’s monetary stimulus and reinvigorate the euro zone economy.

“In view of the weakening economic outlook and the continued prominence of downside risk, governments with fiscal space should act in an effective and timely manner,” Draghi said.

“In countries where public debt is high, governments need to pursue prudent policies that will create the conditions for automatic stabilizers to operate freely. All countries should reinforce their efforts to achieve a more growth-friendly composition of public finances,” he added.

Additionally, the ECB changed its TLTRO (targeted long-term refinancing operations) rate to provide more favorable bank lending conditions and match that of its refinancing rate, erasing a previous 10 basis point spread.

A new system will see borrowers receive preferential rates if their eligible net lending exceeds a benchmark, providing an incentive for banks to use that money.
VIDEO00:47
We’re seeing full-on Japanification of European monetary policy, economist says

In line with market expectations, the ECB also introduced a two-tier rate system, a measure encouraged by the heads of various major European banks during the latest earnings season. The move is intended to alleviate some of the pressure of negative interest rates on the balance sheets of European banks, which have seen profits squeezed by the persistent low rate environment.

Draghi added in his press conference: “In order to support the bank-based transmission of monetary policy, the Governing Council decided to introduce a two-tier system for reserve remuneration, in which part of banks’ holdings of excess liquidity will be exempt from the negative deposit facility rate.”
‘Draghi’s final stunt’

Markets had widely expected some form of stimulus package, though hawks within the European Central Bank (ECB) Governing Council had moved in recent weeks to downplay the scale of the impending measures.

A slowing euro zone economy, persistent low inflation and the U.S.-China trade war had all pointed toward the central bank being forced to inject stimulus.

Recent economic data has not been promising, though the latest Purchasing Managers’ Indexes (PMIs) had indicated some stability despite enduring industrial weakness.

This will be the second round of QE from the ECB, the first coming four years ago in response to the chaotic fallout of the euro zone sovereign debt crisis.
VIDEO04:16
European Central Bank cuts deposit rate to -0.5% from -0.4%

Outgoing President Mario Draghi will be hoping his final policy decision at the helm will help the bloc avoid a recession and get growth and inflation back on track.

Incoming replacement Christine Lagarde has already called for more fiscal stimulus to complement the ECB’s policy.

ING Chief Economist Carsten Brzeski said in a note Thursday that “despite all market excitement now, the question remains whether this will be enough to get growth and inflation back on track as the real elephant in the room is fiscal policy.”

“It is clear that without fiscal stimulus, Draghi’s final stunt will not necessarily lead to a happy end,” Brzeski added.
Market reaction

The pan-European Stoxx 600 index jumped 0.6% immediately after the first announcement, as markets reacted positively to ECB President Mario Draghi delivering on expectations of a “bazooka” stimulus package.

Euro zone bond yields tumbled and the euro weakened as a result of the new measures. Germany’s benchmark 10-year bond yield tumbled 8 basis points to -0.64% while the euro slid back below $1.10.

European banking stocks plunged, however, giving back early gains to slip 0.9% below the flatline.
VIDEO02:04
ECB’s stimulus package not supportive of banks, Commerzbank analyst says

Artur Baluszynski, head of research at Henderson Rowe, said the ECB pushing rates further into negative territory is “essentially a tax on euro zone banks, and for the already weakened bank-financed economy like the euro zone, this move could spell more trouble.”

“Also, with the Fed still being the tightest of the G-7 central banks, the eurodollar liquidity could come under pressure adding further stress to the increasingly challenged European banking system,” he added.
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📉 These states are best prepared for the next recession
« Reply #653 on: September 20, 2019, 09:04:06 AM »
https://www.foxbusiness.com/economy/states-best-prepared-recession

These states are best prepared for the next recession

By Ann SchmidtPublished September 19, 2019RecessionFOXBusiness


Economist: We could have the first global recession without the US

Harvard University economics professor Kenneth Rogoff discusses his outlook for the global economy and interest rates.

North Dakota has the best credit conditions in the U.S., making it the state that is best prepared to get through a recession, according to a new report.

CardRatings.com published its research on Tuesday and released lists of the 10 states that are best equipped to deal with a recession and the 10 states that are least prepared.

After North Dakota, the states that are second and third-best prepared in the U.S. are Vermont and New Hampshire.
MORE ON FOXBUSINESS.COM…

    ECONOMISTS SEE NO END TO US-CHINA TRADE WAR: POLL
    FED MAY NEED RADICAL MEASURES TO PROTECT US ECONOMY FROM NEXT DOWNTURN

Meanwhile, Nevada had the worst credit conditions in the country, followed by Georgia and Louisiana tied for second place.

"For states with unfavorable credit conditions, things may soon reach a boiling point if the economy starts to show any cracks or signs of a cool down,” Richard Barrington, the author of the report said in a statement.

North Dakota is the state with the best credit conditions, according to a new report from CardRatings.com. Fargo, N.D. is pictured. (iStock)

Nevada is the state with the worst credit conditions, according to CardRatings.com. Reno, Nev., is pictured. (iStock)

“The sharp contrasts in the best and worst states means that the credit conditions of your neighbors matter to the long-term prosperity of the area where you live, with the differences between states being magnified even further if the economy were to slip into a recession,” Barrington added.

To calculate its findings, CardRatings.com analyzed all 50 states -- as well as Washington, D.C. -- across five measurements including average credit scores, foreclosures, credit card debt, unemployment and bankruptcy rates.

CLICK HERE TO READ MORE ON FOX BUSINESS

The website used data from a variety of sources including the Census Bureau, the Bureau of Labor Statistics, the Justice Department and consumer reporting agency Experian.

For the full results, here are the 10 states with the best and worst credit conditions in the U.S., according to CreditRatings.com.

STATES WITH THE BEST CREDIT CONDITIONS

1. North Dakota

2. Vermont

3. New Hampshire

4. Minnesota

5. (Tie) Massachusetts

5. (Tie) South Dakota

7. Iowa

8. Colorado

9. Hawaii

10. Nebraska

STATES WITH THE WORST CREDIT CONDITIONS

1. Nevada

2. (Tie) Georgia

2. (Tie) Louisiana

4. Mississippi

5. Alabama

6. New Mexico

7. Tennessee

8. Oklahoma

9. Arizona

10. Illinois
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