Sunday, 30 November 2014

Recession 2015 Is that true?


Recession 2015:
In 1929, an economist called Jerome Levy was displeased with the analysis he made of corporate profits, leading him to sell his stocks before the October crash. Almost, eight decades later, the consultancy company bearing his name declared ‘the next recession will be caused by the deflating housing bubble’.
By February 2007 problems were predicted in the subprime mortgage market that would spread to nearly all financial markets. In October 2007, it saw imminent recession and the slump began two months later. The half-dozen analysts of the Jerome Levy Forecasting Center predicted a 65% probability of a worldwide recession forcing a contraction in the US by next year. This opposes the forecasts of Morgan Stanley and Goldman Sachs Group Inc whom postulate an expansion that has ample room. In October,David Levy told clients that the direction of the majority of recent global economic news suggests movement towards a 2015 downturn.
Levy argues the US and other advanced economics are uncovered to renewed financial crisis due to their balance-sheet excesses. Policy makers have little room to reverse any slump, and low inflation risks running into deflation in many parts of the world.
U.S. Exposure
Despite U.S progress, Levy is concerned that at around 13% of GDP, U.S exports represent their largest share ever. American companies are largely dependent on earnings from abroad, and hosueholds ratio of stocks to disposable income is higher leaving them vulnerable to any bear market. However, some mistakes have been made, since in September 2010 Levy told Bloomberg Television there was a 60% chance of another U.S recession, when this economy has grown stronger.
Levy has concluded from the latest forecast that even if a slump is avoided, interests rates will be kept near zero by the Federal Reserve until the next decade. He argued that without first substantial strengthening, there is no guarantee of financial stability holding to instill a rate increase by the Fed.


Such areas of life as minerals and metals, food crops, energy resources, defense and security of nations are likely to bear the brunt of these trends.
Collective wisdom in decision making, communication systems, aviation industry, and the cinema , music and TV industries are also , in addition, likely to be touched by these trends.
Countries or regions whose names begin with the letters B , E , EU, N, O, P, U or V may need to implement multilevel approach to challenges during this period".
Investors have pushed US stocks to record highs, and Fed estimates have the US growing at an annual pace of at least 3 per cent for the rest of the year, and all of 2015." If the USA is financing its growth by money derived from shares (i.e. from speculative buying and selling) then it is only a matter of time before the US economy comes crashing down.

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1 comment:

  1. Today top news from Russia:
    Mr. Putin Shelved Mega projects like south stream pipeline to shop gas to southern Europe and High speed railway from Moscow to Kazan a city east of the capital, because of future Global economic problem

    ReplyDelete