The Market Has Never Been More Fearful Of An Extreme Event - page 4
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All is getting set for a major market break - buy gold
LARRY SUMMERS: The global economy is facing a 'dangerous' situation During HSBC's Global Investment Seminar in New York this week, Harvard professor and economist Larry Summers brought up secular stagnation.
In 2013, Summers revived the phrase, which, over time, has come to mean all sorts of things to different people. But at its core, secular stagnation refers to a global economy growing at a slow rate because there is too much saving and not enough investment.
And right now, a lot of savings (and other monies) are heading out of emerging markets and into the developed world.
"I would suggest that the defining financial development of the last year is likely to push things towards more secular stagnation," Summers said this week at the HSBC seminar.
"It is the substantial reduction in capital inflows to developing countries, and the substantial increase in capital outflows from developing countries."
Here's the chart from Summers' presentation, which shows the decline in money coming into emerging markets.
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FOMC statement can be the catalyst. Disappointment will be major
The recession fearmongers might have it dead wrong The recession fearmongers might be dead wrong.
We recently detailed why some economists are spooked about the economy.
Harvard professor Larry Summers also noted that the consensus of economists has failed to forecast a recession one year in advance in post-war America. So, once again, we may not know for sure until we are really close to an economic downturn, or even in one.
However, it doesn't exactly look like we're there.
If you were, however, trying to build a case that we're near recession, the manufacturing sector is where you'd start.
It's a services economy
"We are seeing questions come up as to whether a manufacturing recession means that the broader economy is destined to follow suit," wrote Gluskin Sheff's David Rosenberg in a note to clients on Thursday.
Rosenberg's simple answer? Most likely not. Moreover, manufacturing is not a good bellwether for the economy, making up just 12% of total economic output, down from about 30% in the 1950s.
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S&P 500: More Printing Needed? They will need to turn the presses back on if they want it to continue higher. I do think they want it higher, and I do think they have turned back on the presses.