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Trade War & Recession News and Discussions

trade war economy USA China EU UK Trump Mexico Canada recession

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#441
Yuli Ban

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What are the odds that this goes hot in the near future? (next 3 years).

100% chance within three years, without question. I'll put it at an 80% chance of starting within two. Even the major think tanks are giving a recession a higher-than-average chance of developing by 2020.
 
Goldman Sachs sees 36% chance of US recession in 2020
Recession 2020? Economists See High Chances

 

Normally, they put chances of recession around 10% in any given period since there are always certain factors in the global economy that could trigger a mild downturn. When even Goldman Sachs is starting to get bearish, it's time to start stocking up. 

 

 

It's just natural. In the modern globalized economy led by America, market trends ebb and flow in such a way that guarantees at least one US recession per decade. And this has been true going back to the 1800s. It's just a cold truth of regulation and relatively government-free market trading that human irrationality will cause crashes— just look at how common recessions were in the 1800s, or how frequently crypto crashes and loses sickeningly high amounts of its value. 

 

I'm just more of a pessimist in terms of how bad I think it will be. Most economists are wise to expect it to be mild— when we first started dipping into the depths of the Great Recession, most economists thought it wouldn't be any worse than the Dot Com Bubble crash because predicting anything worse just comes off as needless hysteria and doomsaying. 

Whereas I'm just going to say right now "expect it to be at least twice to thrice as bad as the Great Recession" from a GDP drop POV— so something like a 10% to 15% drop, which is awful but still nowhere near as bad as the Great Depression.

 

A lot of big countries are going to start going through recession either next year or 2020 at that, and that's what I mean by "certain factors in the global economy". 


And remember my friend, future events such as these will affect you in the future.


#442
Yuli Ban

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And now to expand on that, there are three countries right off the top of my head who are expected to enter recession in 2019 no matter what happens:

 

  1. Turkey
  2. Argentina
  3. United Kingdom

 

Though in the UK's case, it does matter what sort of Brexit they have. If it's no-deal or hard Brexit, welp. I'm still expecting there to be a hard Brexit at best, with all this talk of a soft Brexit being more or less teasing and insurance about how the EU stabbed the UK in the back when it actually does come to pass. If, by some miracle, it is a soft Brexit, you'll have to wait for the American economy to crash while existing in a state of economic limbo of no growth and no contraction.

 

Heaven forfend a no-deal Brexit. That's how the UK gets run by either INGSOC or Norsefire.


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#443
Yuli Ban

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Turkey has dived headfirst into a 'steep' and 'deep' recession

  • Turkey's economy has most likely dived into a "steep" recession after the lira's recent plunge, according to Capital Economics' Jason Tuvey.
  • The Turkish economy was in a weak state even prior to the most recent collapse in the currency, he added.
  • Tuvey expects the Turkish economy to contract as much as 4% year-on-year in the final quarter of 2018.
  • "Overall, there's no getting away from the fact that the Turkish economy is experiencing a deep downturn."

Turkey's currency just died in the last few months. There's no way out of that one.


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#444
Yuli Ban

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Recession looms as Argentina economy shrinks 6.7%

Argentina's economy contracted 6.7% in June from the year-earlier period, the third consecutive month of decline, the government said Thursday.
Statistics agency Indec said the agriculture sector fell 31% in June from the same month last year, as crops were hammered by one of the worst droughts in decades. Manufacturing decreased 7.5%, while retail activity fell 8.4%. The construction sector also declined slightly, Indec said.
The economy contracted 5.2% in May and 0.6% in April, the agency said.
"The large real GDP contraction in [the second quarter] was driven chiefly by the negative weather shock over agricultural production and the impact of tighter financial conditions over the broader economy," Goldman Sachs said. "We expect the economy to remain weak in coming quarters."


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#445
Yuli Ban

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Currency Slump Shows Argentina Is Heading for Recession, Political Upheaval

Fifty years of currency crises from Chile to Indonesia signal a bleak outlook for Argentina and President Mauricio Macri -- a deep recession followed by political upheaval.

Countries that have seen their currency decline by more than 40 percent in a year have typically suffered economic contractions of more than 6 percent the year after. Argentina’s peso is down 53 percent in the past 12 months.
As Argentina’s government struggles to restore investor confidence, foreign financing has dried up and borrowing costs have soared, stalling investment and undercutting what was already a fragile economy. The only question is how big the recession will be. Moody’s is forecasting a 2 percent decline in each of the next two years, while Fitch Ratings sees a 2.5 percent recession this year, with further contractions possible.
“The currency selloff has already had a big negative impact on confidence,” said Todd Martinez, an analyst at Fitch in New York. “It means higher inflation going forward, which erodes real wages and pensions and will weigh on consumption.”
The slump has already started. Industrial output plummeted 5.7 percent in July from the year earlier, after dropping 8.1 percent the month before.


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#446
Yuli Ban

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Not to mention South Africa has entered a "technical recession"
 

SA in technical recession as second quarter GDP falls

South Africa has officially entered a technical recession, after Stats SA announced on Tuesday that the country's real gross domestic product had decreased by 0.7% in the second quarter of the year. 
This follows a GDP contraction of 2.2% in the first quarter. A technical recession is two consecutive quarters of negative growth.
The first quarter's GDP contraction has now also been revised upward to -2.6%. This is SA's first recession since the 2008/2009 global financial crisis. 
Shortly after the economic data release at 11:30, the rand piled on losses against the dollar, falling to a daily low of R15.23/$, down 2.4% on the day.


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#447
kjaggard

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I've said many time that I've seen the echoes of the great depression, the dust bowl and the world wars, rippling through events of the last few years. Tariffs, nationalism, switching from the gold-silver/petro dollar standard, MacCarthiism... it's all very familiar.

 

Maybe it's a sort of sick nihilistic optimism that I feel this might be a point where something fundamentally changes. I find myself looking at it all and thinking that perhaps once we break things this time that we build something more sustainable and robust that serves the greater population.

 

It's not just wishful thinking though. I just look at the direction and capabilities our future has before us, not promises and possibilities but actual near impossible to avoid consequences of the groundwork which we've been putting in for decades. We've lit the fuse on things our current socio-political models aren't even capable of understanding let alone controlling.

 

We see it in attempts a copyright legislation, managing blockchain, labor automation, home manufacturing tech, ... and the systems we've used for decades and centuries are using nets to capture rain water. They are about to have another major fault, one which will be a long hard road to try and get back up from. But while banker and oil Czars/Barons get pummeled, decentralized currencies, and home manufacture can continue. use of blockchain in exchange for goods made by your neighbor who gained the designs through copy left open source... communities can keep functioning.

 

And that might well spell the death throughs of the current system and be the moment we are able to establish the next iteration of socio-political model for human progress.

 

I'm intensely curious to see what that looks like.


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#448
Yuli Ban

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Trump will slap 10% tariffs on $200 billion in Chinese goods — and they will go to 25% at year end

President Donald Trump will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year.
The action, announced by the Trump administration Monday, escalates a trade conflict between the world's two largest economies. China has already threatened to retaliate against new duties.
The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals, and other products such as bicycle helmets and high chairs.
 
Trump, in a statement, said that the tariffs would rise to 25 percent on Jan. 1, 2019, adding that "if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."

Oh, so they WILL go up to 25%. Damn it.


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#449
Yuli Ban

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China's second-in-command: We're facing 'greater difficulties' in keeping economy stable

As U.S.-China trade tensions are escalating, Chinese Premier Li Keqiang said Wednesday his government is able to help the domestic economy withstand challenges.
"China is confronted with a host of difficulties and challenges in economic development," Li acknowledged during an address speaking at a World Economic Forum conference in Tianjin, China.
"Deeply integrated into the world economy, the Chinese economy is inevitably affected by notable changes in the global economic and trade context," he said. "Indeed, we're facing greater difficulties in keeping stable performance of the Chinese economy."

Damn, just imagine the prospect of a Chinese recession.

America sneezes = the world catches a cold.

China sneezes = the world catches a fever.

Both sneeze = the world gets severe pneumonia.


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#450
wjfox

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Yeah, that'll do wonders for the global economy (not).



#451
Alislaws

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If we get a global recession/depression whatever as bad as the 2008 events, given the relatively unstable political climate in many places around the world (very much changed since 2008) politics is going to go nuts all over the world. 

 

We might get new people trying socialism out (Yay!) and then probably messing it up and falling into authoritarianism (Boo!)*.

 

On the other side of the spectrum we may see a surge of far right victories and with it a resurgence in protectionism and ramping up global conflict. As some ultranationalist governments break longstanding alliances etc. While others need "short victorious wars" to distract the people from the fact that foreigners have been expelled and yet somehow the nation's problems still exist!



#452
Yuli Ban

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Canada considering proposal to void patents of major US pharmaceutical companies in midst of trade disputes. The plan would target valuable U.S. patents, granting Canada’s generic pharmaceutical firms the right to copy, sell and potentially export American drugs.


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#453
kjaggard

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niiiice, I'm all for this. 


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#454
Outlook

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tfw trade war ends corporatism and inevitably aids the economy

The Prophet (saw) said: He who does not thank the people is not thankful to Allah.


#455
Yuli Ban

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US tariffs on China are actually making China more competitive

There is an unintended consequence of the White House’s trade battle with China: Companies in the Pearl River Delta, the center of China’s manufacturing might, are accelerating toward making higher-quality products to compete against American goods.
In response to tariffs, which make his goods more expensive, Michael Lu of LTS Group plans to trim costs by using more robots at his plants, which make lamps, bulbs and other lighting products sold at American stores. He is also moving low-skilled work elsewhere in Asia.
 

Left in Shenzhen will be his research and development operations and a team of skilled workers who make his company’s more complex products, such as smart lighting.
“The U.S. tariffs are pushing China toward making the higher-end stuff,” Mr. Lu said as he walked past red-uniformed workers assembling table lamps in his Shenzhen factory. “It’s helping China be more competitive down the road.”

Check out the discussion.


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