One well-known independent economist thinks it will happen even sooner—he’s looking for a global recession to start in 2019. A. Gary Shilling, president of his eponymous consulting firm, made two of the best contrarian calls of recent decades: he saw the mega-bull market in bonds at its very outset in 1981, and in the years before the 2008 financial crisis and Great Recession, warned repeatedly that the housing bubble would turn into a bust and would take the whole economy down with it.
“We believe there are huge issues around addiction, attention, and distraction caused by social-media platforms,” he told Business Insider this week in Davos. “Last year was a tipping-point moment in the relationship between tech and global society.
“The emperor was shown to have no clothes — meaning Facebook. And Facebook and others were exposed for the fact that they committed assaults on our democratic institutions.”
“The latest decline is harder to explain. Perhaps it is the decline in consumer confidence that’s been occurring in the latter half of 2018,” said Lawrence Yun, chief economist for the Realtors. “The latest numbers do not reflect the lower, current mortgage rates compared to the November figures, so it’s really harder to explain.”
“You are not going to be able to pay that off in a timely fashion,” she added, resulting in higher interest payments and damaging your credit score in the long run.
Still, most Americans continue to take on ever-increasing amounts of debt. According to data from the Federal Reserve, the U.S. surpassed $1 trillion in credit card debt — the highest level since the Great Recession.
Peering Over The Abyss (GE Christenson)
Global central banks “printed” about $20 trillion in “funny money” that bailed out banks, levitated stock and bond markets, lowered interest rates to near zero or below, and allowed politicians to spend, spend and spend. But the flow of created dollars, euros, yen and francs is slowing, and projected to go negative in early 2019.
In the UK, EasyJet said that the Gatwick closings grounded 1,000 flights, caused 400 flight cancellations and cost it 15 million pounds in passenger compensation, calling the incident a “wake up call” for the industry. Gatwick and Heathrow purchased anti-drone systems after incidents, although police still have not identified anyone behind them after arresting and releasing two people.
Where is this new money coming from? A new generation of millionaires and billionaires probably owe as much to inheritances as to self-made fortunes. “There may be more Mark Zuckerbergs at the top of the wealth distribution than in the 1960s, but also more Paris Hiltons,” Saez and Zucman wrote. About 172,000 U.S. households have net worths of at least $25 million, Spectrem estimated last year.
Weekly applications for jobless aid are a proxy for layoffs. The data suggests employers are confident enough about the economy to hold onto their workers. The Labor Department was funded before the shutdown and is still releasing its weekly report.
Prior to December 2015, interchange fees in the EEA varied widely between countries. In December 2015, the EU capped interchange fees at a maximum of 0.2 percent of total transaction value and 0.3 percent of transaction value for debit and credit cards respectively. This interchange fee regulation reduced retailers’ costs by a significant margin that reflected in the cost of items.
According to OPEC’s secondary sources, Iran’s crude oil production plunged by 159,000 bpd from November to 2.769 million bpd in December. In the third quarter of 2018, before the U.S. sanctions were re-imposed, Iran’s crude oil production averaged 3.603 million bpd.
Before the sanctions, Iran was OPEC’s third-largest producer after Saudi Arabia and Iraq, while in December, as per OPEC’s sources, the Islamic Republic was only fifth, after Saudi Arabia, Iraq, the United Arab Emirates (UAE), and Kuwait.
Warning Signs Flash For U.S. Shale (Michael S.)
Schlumberger’s chief executive also warned that the shale industry could see other problems going forward that could be even more significant. Shale drilling suffers from a precipitous decline in output soon after a well is completed. After an initial burst in output, wells see a rapid decline in production. This is not news; it has characterized shale drilling for years.
Saudi Arabia—which has just announced that its huge oil reserves are slightly higher than previously estimated—looks to diversify its economy away from heavy dependence on crude oil, but one of the goals of its Vision 2030 diversification plan is to use less oil in domestic power generation to free up more barrels for exports.
Gold & Silver
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