🔴 The US Economy Sliding into Recession (w/Danielle DiMartino Booth)

🔴 The US Economy Sliding into Recession (w/Danielle DiMartino Booth)


I like to think of big sell-side Macroeconomists as saying well the car is running so it must be fine Well, they’re just looking at the headlines If you look underneath the hood There’s leaks here and tubes breaking there and you know the engines about to break down and your transmissions about to fall out So at the beginning of the year quill intelligence came out with its three big predictions for the year one of them Was that Germany would go into recession? It looks like we’re just about there the other was that the tenure note would get down to two percent people Thought we were absolutely nuts. And the third one was that despite all of this. We saw the dollar strengthening and We’re standing by all three of those calls for the remainder of the year despite the fact that our targets have largely been met mainly because if you look outside of the United States There’s every reason to believe that the United States will continue to be the most attractive horse in the glue factory as my old boss Richard Fisher used to say so on a relative basis, you know, we’ve got talks about the european central bank relaunching stimulus I think that Japan would certainly follow them Australia’s in a cutting move after an expansion that’s lasted almost 30 years because China’s slowing to the extent that it that it has So if if negative rates are going to be getting more negative then there will be a Flocking to the the ten-year Treasury at the same time that we know that there’s there aren’t enough dollars out there there’s simply a dearth of Dollars a dearth of dollar funding which is going to have investors continued to clamor to get their hands on greenbacks so a lot of these things run cross-current to one another but the overarching I Haven’t bought gold in years but a few months ago. I finally stepped back in and said We’re not going to be decoupling forever. Mmm Everybody on bubble vision who says that the United States can indefinitely d couple from the rest of the world I’m like, I’ve heard that somewhere like a decade ago, and it didn’t work out too Well then and I think that that’s why we’ve seen gold pushing six-year highs here so let’s unpack that that’s a lot in terms of the US economy because I mean that’s where the rubber hits the road in terms of what you’re talking about and you have a Bevy of stats that you look at that You know traditional macro economists aren’t getting into the weeds into these places. Tell me what are the things that are the most Salient for you in terms of where we are I mean are we actually on the cusp of recession that I think that the US economy is definitely sliding into recession And you mentioned where the rubber hits the road. I like to think of big sell-side Macroeconomists as saying well the car is running so it must be fine Well, they’re just looking at the headlines if you look underneath the hood Yeah, there’s leaks here and tubes breaking there and you know the engine’s about to break down and your transmissions about to fall out and We if you look at things like the cast Freight index You know when they were down month-over-month? For three months in a row and then four months in a row and then five minutes in a row they held the line saying this could just be a slow down like the industrials recession of 2015 8 2016 we could be coming out of it. But once they hit that sixth consecutive month of year-over-year declines in and we are a Nation of consumers we are what we buy and if there are fewer trucks Delivering whatever Jeff Bezos is selling us then that is a sign that a consumption that economy is slowing So after that sixth consecutive month cast came out and used the word Contraction that they see a contraction in the third or fourth quarter of this year and I can’t disagree with their assessment given the fact that even even the labor market has started to show some signs of serious weakening tell me about the labor market in particular because one of the things that I find interesting is the concept of revisions that is is is that Two things on that one is the real-time revisions that we see Oh, by the way, the last two months we revised them down But also then the benchmark revisions that we have now, so in some senses We’re not really seeing the actual numbers that we will see Once all the data come into play and you know to your point about benchmarks I think we needed a particular attention because for a few years there we could just ignore them because they were being revised upwards But that hasn’t been the case in recent years I wouldn’t expect that to be the case in the latest batch that we’re expecting and On top of that one of the first things that they teach you at the Federal Reserve, is that lags matter? Which we know they do and the tightening that was that was unleashed that ended in December It’s still percolating its way through the economy and in various forms, but also that backwards revision Really tell us what inflection points are right that June non-farm payroll headline it was fine but we had what the Fed considers to be a moment of truth three consecutive months of downward revisions to the prior months that tends to tell you that the unemployment rate is heading up and that we’ve seen Kind of peak labor growth. If you start to see these backward revisions in real time. We’re not waiting a year for the benchmark We’re seeing them in real time right now three consecutive months running. Yes So let’s think about this the ten-year Treasury in that context because I mean what you’re talking about is a slowdown in You know in growth in the United States and potentially a recession coming on to that so What does that mean in terms of your macro thesis of the Treasury from here because we’re already near the 2% level that you talked About earlier. Do you see that going even lower because we spoke to Gary Schilling He’s talking about 1% I’m good friends with Gary and I read some of his work But if you think about what some of the prior lows have been in this cycle 165 if we’re actually going into recession and we’ve bounced off these lows before when it was just kind of a dress rehearsal Oh, it’s just a earnings recession. We’re gonna be fine. We’re gonna come out of it. Not once but twice and again The major differentiating factor between those earnings recessions and now is that we have residential construction That is going down 11.2% rate the latest read over the prior year. That was a huge Tailwind during the industrials recession of 15 and 16 We don’t have that as an offset and that tells me that there’s no reason in the world if a larger Proportion of the US economy is slowing that we wouldn’t break through that 165 and keep going back towards 1% Especially again given what’s happening off our shores, right? So, you know Actually, I wanted to pivot to other things in the US economy when you said off our shores tell me about that I mean what is actually happening you were talking about the second and third largest economies Germany and China what’s happening there? Well, they’re exporting powerhouses and there’s a symbiotic relationship between the two of them So you and I were speaking before about the fact that you can’t urbanize an entire country twice. So China’s kind of checked that box. They won’t be able to pull the entire world economy out if you look at worldwide car sales in 2008-2009 it looks like just a little blip and then off we went to the races that was largely a reflection of Chinese strength That was also seen in Germany exporting millions and millions of cars I mean BMW Mercedes Volkswagen these massive brands rely on on China as an export market and that is simply not there and we’re beginning to see a trickle-down effect we’re seeing things like the beginnings of rising unemployment in Germany and Germans are beginning to talk about Fiscal relief and spending more. They’re the most prudent people in the world they do not want to take debt on but they know that their economy is going to be needing it and soon and that there’s no way to turn away from The fact that the bulk of their auto manufacturing is the internal combustion engine When their main consumer China has changed over to electric vehicles. So these are structural moves that we’re seeing here and There’s no reason to believe that Given the amount of investment that’s been made by these companies in the United States think of BMW in the south Think of the south carolina presence of so many of these companies kentucky a lot of it used to just be kind of detroit and the midwest but foreign especially German Manufacturers presence in the United States has been a huge benefit to the entire manufacturing sector That’s going away. Not not disappearing, but it’s definitely Decreasing at a time that we’re seeing Retail sales retail car sales in the United States also on The decline for the first six months of the year Everything’s being flattered by fleet sales, but don’t buy that don’t buy it When when Fiat Chrysler comes out and says we had a great month By the way, one in four of every cars, we sold was fleet. That is not a reflection of a strong US consumer you You You

100 Comments

  1. But Germany CAN AFFORD to PAY WELFARE to 2,000,000+ FAKE refugees – that is 200 Billion Euros per year.
    of YOUR MONEY that they are GIVING away.
    Why would Germany be worried about a recession???

  2. This woman was from the Federal Reserve.
    So I'm cautious about anything she says.
    Ever since Naomi Prins became popular, the bankers have wanted someone of their own to jump into the limelight and pretend to be representative of the people.

    A while back she was pushing the theory that the Federal Reserve could represent the people since some Chairmen were stepping down and news ones needed to take their seat. I mean who buys that? In the end, it is a cartel of private banks masquerading as being the representative of the people.
    I just don't trust her.

  3. I don't know why all these so-called experts have to lie about our fully-rigged, manipulated, and controlled economy (along with everything else). How can we be entering yet another recession when we never exited "The Great Recession?" Why the need to lie? Is something else coming? Are all these so-called experts about to be out of their fake jobs?

  4. Strut bolt is frozen but car still turns! The glue is expensive for other currency traders but the yields LOOK attractive? The U.S. Economy is kept in a state of recession by the 4 trillion in emergency funding stuck on the federal reserve balance sheet?

  5. She is wrong about consumer spending on stuff like Amazon. Scott's July posts both show record highs in Truck Tonnage and consumer confidence. But the rest of the vid is good.

  6. Maybe BMW will have to compete more by offering cars that people will want to purchase? Isn't that the way free markets work? She's a promoter for creating more USD out of nothing so the Fed can continue to make money in spite of everything saying they shouldn't!

  7. We've been a recessions for close to 20 years….injections of financial heroin and cocaine has kept it moving, not alive, moving…."Weekend With Bernie Economy"

  8. The money will flow into the global reserve currency. That is, and always has been, GOLD! Paper currencies are always temporary when they are decoupled from gold.

  9. If they were honest about inflation, we'd see that we've been in a recession for the past ten years. They can make the numbers say anything they want, since they're based on statistical lies.

  10. Recession?, North America has been living in a recession with greed fueled feed back loops for 10 years. Now comes DEPRESSION. Enough word crap.

  11. China prints more money, Germany and EU prints more money, U.S. prints more money…..debt is negative yielding…the bastards get bailed out with debt buyback and we are left holding the bag. Welcome to Slavelandia

  12. Yes the Trump economy was never a good economy it was never good at all. Trump just threw a bunch of money in the form of corporate tax cuts at the economy. Giving us a short term boost which was just an illusion.We've always had recessions we're going to have a recession it's nothing new.

  13. I would rather see a slow decline in residential construction, car sales, etc than a huge bubble and a sharp decline/burst… is it possible that we could have a normal and natural downturn/recession and then a natural and organic recovery due to the free market and organic economic law without manipulation of interest rates, quantitative easing etc… at the risk of answering my own question; not likely

  14. Di Martino Booth, Dalio, Gundlach = $$$MART.
    America REALLY should listen to these 3 financial markets wunderkinden instead of the delusional CNBC/Bloomberg/Fox news "economists".

  15. Tariffs and higher treasury, fed funds and discount interest rates to overcome currency devaluation for stronger currencies to increase import / export trade and money velocity through greater purchasing power

  16. She is very smart woman she takes macro Makes it easy-to-understand,I believe she Has some very clear insight Into The What is going on in the economy today

  17. These "experts" waffle on about the coming recession but for 90% of us, the recession started in 2008 and hasn't let up. The private sector has been struggling for 10 years. Wages have gone sideways or backwards, living costs have increased and job security is non-existent in most sectors.

  18. Wow! Great discussion…I have admired Ed Harrison since his old "Boom Bust" days on RT, and Danielle is a very well-informed lady. Glad to have just discovered this site…and instantly subscribed!

  19. Hardcore Absolute Fact: Americans continue to be ( still are ) in a recession since 2007! Capitalism is dead! Wages are far too low and no longer motivating Americans to work! Not worth it!!!!

  20. Danielle you’re a very attractive woman but you have gained some weight lately… please take care of it. I like to listen what you have to say and look at you at the same time 😉 Sorry for my brutal statement but I want to remain your fan 😘

  21. Sliding into a recession is putting it mildly. Putin appointee US President trump speeding it up China looking on laughing

  22. Women do not know anything of importance in this world.This women is just quoting what other learned people have found.Women have no intellect or forethought.

  23. Some interesting points being made.. I think she's overreacting about US retail auto sales though. Like iPhone sales slightly declining, auto sales are at least partially declining because the average car has gotten unnecessarily expensive so people are holding onto their old cars for longer (everything is a $30k SUV with tons of superfluous tech features that only make the car more expensive to repair/insure).

  24. We haven’t seen anything yet ! It’s gonna get ruff like we haven’t seen in our lifetimes.
    Credit is a whore it’s called USARY Deuteronomy 23 ; 19 thru 24. Don’t like it tuff we have been played ‼️
    Matthew 6:24 no man can serve two masters you cannot serve Jesus Christ and Mammon 🤷‍♂️
    Illusion in the grand scale , 🐷👹

  25. Two of my favorite economists. It's great to see you again Ed! RT destroyed your show, and I'm so glad your still sharing your expertise. Great video!

  26. Truck Drivers transport 70% of all goods; meaning, anything in planes, ships, railroad, air planes, etc., will be ( sooner/ later) deliver by trucks; in other words, no shortage of loads/shipments (all kinds of freight) detected, as of yet.

  27. Once we go back to zero and ultimately zero we will no longer remain the worlds largest safe haven. A country with less debt and more production is going to win the day.

  28. ………lets give globalisim 35 more years to work………….lloll….
    if it dont by 2055…..when im 80.
    …then we should ditch it and go back to a domestic economy……lloll…

  29. I do believe that the US economy is a giant with feet of paper right now. I am no economic expert, far from it, and personnally can not see those signs, but I absolutely believe something will happen. Whether it will be milder or worst than 2008 is up for debate….Excellent video though, she makes it very easy to understand even for amateurs like me.

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