The mood of the mainstream media is really starting to shift dramatically. At one time they seemed determined to convince all of us that happy days were here again for the U.S. economy, but now some mainstream news outlets are openly warning that the next recession will be “worse than the Great Depression”. Do they really believe that this is true, or is there some other purpose behind their bold headlines?
Of course it isn’t exactly difficult to predict that another recession is coming, because the U.S. economy has experienced recession after recession ever since the Federal Reserve was first established in 1913. But the phrase “worse than the Great Depression” implies that what we will soon be facing will be the worst economic downturn in all of U.S. history. That is a very bold statement to make, and it should not be done lightly.
That is why I have been absolutely astounded by some of the mainstream headlines that I have been seeing lately. For example, the following comes from a New York Post article entitled “Next crash will be ‘worse than the Great Depression’: experts”…
“We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years,” said Murray Gunn, head of global research at Elliott Wave International.
And in a note, he added: “Should the [US] economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”
And here is an excerpt from an article posted on MSN entitled “Experts warn the next recession will be ‘worse than the Great Depression’ and predict it will hit US within two years as $247 trillion global debt outdoes 2008”…
The next recession could put the 2008 financial crash to shame if two experts’ predictions about the worldwide debt of $247 trillion are correct.
Expected to hit the United States within the next two years, the impact has been compared to the severe worldwide economic crisis which started 1929 and last until 1939.
It is particularly interesting that the author of the last article chose to use the phrase “within the next two years”.
That strongly implies that the U.S. economy will have plunged into the next recession before the next presidential election takes place.
Other mainstream outlets are using similar language. For example, the following comes from a Bloomberg article entitled “Two-thirds of U.S. business economists see recession by end of 2020”…
Two-thirds of business economists in the U.S. expect a recession to begin by the end of 2020, while a plurality of respondents say trade policy is the greatest risk to the expansion, according to a new survey.
About 10 percent see the next contraction starting in 2019, 56 percent say 2020 and 33 percent said 2021 or later, according to the Aug. 28-Sept. 17 poll of 51 forecasters issued by the National Association for Business Economics on Monday.
Those are stunning numbers.
If they are correct, and I have no reason to doubt them, that means that 66 percent of mainstream economists believe that the next recession will strike in either 2019 or 2020.
the U.S. economy is already slowing down.
I wanted to share another one of those signs with you today. For years, the real estate market in Manhattan was red hot, but now we just witnessed “the fourth straight quarter of double-digit declines”…
Total real estate sales in Manhattan fell 11 percent in the third quarter compared with a year ago, marking the fourth straight quarter of double-digit declines, according to new data from Douglas Elliman Real Estate and Miller Samuel Real Estate Appraisers & Consultants. It was also the first time since the financial crisis that resales of existing apartments fell for four straight quarters.
Prices fell, inventory jumped and discounts were higher and more common. Real estate brokers say the Manhattan real estate market is suffering from an oversupply of luxury units, a decline in foreign buyers and changes in the tax law that make it more expensive to own property in high-tax states.
At this point, the housing market in New York City has become “a buyer’s market”, and there are no signs that things are going to turn around any time soon…
“Offers 20 percent and 25 percent below asking prices began to flow in, a phenomenon last seen in 2009,” wrote Warburg Realty founder and CEO Frederick W. Peters in the report, which surveys real estate conditions around the city.
Warburg’s report dovetails with separate data showing a definitive cooling in New York’s housing market. The number of homes for sale in the city recently hit a record, according to StreetEasy data, amid fewer sales transactions. Meanwhile, September’s report from real estate firm MNS showed Manhattan apartment rental prices — the most expensive in the city — on the decline.
Of course this is not just happening in New York City. Home sellers all over the nation are slashing their prices at the fastest rate that we have seen in at least eight years.