Steve Keen Says US Heading for 2020 Recession

Sep.19, 2018 -- Steve Keen, professor of economics at Kingston University, discusses inequality, Federal Reserve policy, house prices and the U.S. economy. He speaks on "Bloomberg Surveillance."

Shares Sell-off amid Fears over US Recovery and Greek Downgrade
THE GUARDIAN: Fears that the US economy is lurching towards a double-dip recession sent world stock markets falling sharply on Thursday morning.

The sell-off that began in London and New York on Wednesday gathered pace, as traders reacted to warnings that the world's biggest economy is running out of steam.

The latest downgrade of Greece's credit rating also dampened spirits, with a Greek default now seen as a 50:50 chance.

The FTSE 100 index of blue chip shares shed 65 points, or over 1%, at the start of trading to 5863, with other major European indices also bathed in red. This followed losses across Asia, as investors across the globe reacted to the worst day's trading in New York in almost a year.

In Japan, the Nikkei tumbled 1.7% to 9,555.04 with exporters leading the losers. Confidence was also knocked in Tokyo by the "no confidence" vote in the embattled Japanese prime minister Naoto Kan over his handling of the earthquake and nuclear crisis at the Fukushima plant. Kan survived the ballot, but has offered to quit once Japan's economy is in better shape.

"I think right now there's almost a market consensus of the slowing down of economic growth around the world," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong told Associated Press. » | Fiona Walsh, business editor | Thursday, June 02, 2011

The New Poor: Blacks in Memphis Lose Decades of Economic Gains
THE NEW YORK TIMES: MEMPHIS — For two decades, Tyrone Banks was one of many African-Americans who saw his economic prospects brightening in this Mississippi River city.

A single father, he worked for FedEx and also as a custodian, built a handsome brick home, had a retirement account and put his eldest daughter through college.

Then the Great Recession rolled in like a fog bank. He refinanced his mortgage at a rate that adjusted sharply upward, and afterward he lost one of his jobs. Now Mr. Banks faces bankruptcy and foreclosure.

“I’m going to tell you the deal, plain-spoken: I’m a black man from the projects and I clean toilets and mop up for a living,” said Mr. Banks, a trim man who looks at least a decade younger than his 50 years. “I’m proud of what I’ve accomplished. But my whole life is backfiring.”

Not so long ago, Memphis, a city where a majority of the residents are black, was a symbol of a South where racial history no longer tightly constrained the choices of a rising black working and middle class. Now this city epitomizes something more grim: How rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress. >>> Michael Powell | Sunday, May 30, 2010

Recession’s Toll on Black Wealth in Pictures >>>

Global Shares Dive as US Recession Deepens
TIMES ONLINE: Shares across the UK, America and Europe tumbled today after it emerged that the US economy shrank at the fastest rate since 1982 in the final three months of last year, far worse than the US Government had initially estimated.

Gross domestic product (GDP) fell at an annual rate of 6.2 per cent between October and December, above initial estimates of a 3.8 per cent decline during the fourth quarter of 2008.

In response, London's FTSE 100 index plunged further below the 4,000 level today, losing 127.35 points to 3,788.29 and America's Dow Jones industrial average fell 132.45 points to 7,049.63.

Investors in Germany and France also took fright - Frankfurt's Dax fell 4.1 per cent while French-listed stocks dropped 3.3 per cent to 2,654.52.

With President Obama's fiscal stimulus packages not expected to become effective until the second quarter of this year, Wall Street is expecting growth numbers for the current quarter of 2009 to be as bad as the last three months of 2008.

According to the new GDP numbers, the US economy actually contracted by 6.2 per cent - the worst showing in 27 years - at the end of last year because American exports plunged by more than expected and the US consumer stopped spending.

The worse than expected numbers show that the US economy is struggling to cope on two fronts - on one side, foreign markets have applied the brakes to buying US goods as their own economies plunge deeper into recession.

On the other front, Americans have become so anxious that they may also join the soaring numbers of unemployed that they have stopped spending on all but essential items such as food and petrol. >>> Grainne Gilmore | Friday, February 27, 2009

The Dawning of a New Dark Age – Paperback (US) Barnes & Noble >>>
The Dawning of a New Dark Age – Hardcover (US) Barnes & Noble >>>

Can the World Survive US Downturn
TIME: Finding an empty table at a Starbucks in Hong Kong on a Sunday afternoon these days feels like winning the lottery. So does getting a reservation at a good dim sum restaurant or renting an affordable apartment. While the U.S. suffers the convulsions of an impending recession and massive wealth destruction, here the malls are stuffed full and the streets bumper-to-bumper with BMWs. The good times keep rolling, and not just in Hong Kong, but across much of emerging Asia, from Shanghai to Mumbai. Sure, the U.S. turmoil has had some impact — jittery investors have knocked back stock markets from last year's lofty heights — but in general, the story of America's economic woes has been confined to the morning newspapers.

Recession? What recession?

In the past, any downturn in the U.S. economy would send Asian policy makers, businessmen and workers into cold sweats. The reason is that Asia has been so dependent on exports to the U.S. that any slowdown in demand in the American economy inevitably dragged down Asian growth as well. In recent months, however, there has been a debate raging among economists over whether the forces of globalization have weaned the rest of the world off its heavy reliance on the U.S. The hope has been that the global economy can continue to grow quite nicely even if the U.S. fell into recession.

So far, that seems to be true, at least here in Asia. Though the exact extent of America's downturn is still uncertain, the early signs tell us that Asia isn't as reliant on the U.S. as it once was. "Economies in Asia will see potential to grow at reasonably fast rates" says Robert Horrocks, head of research at fund management firm Mirae Asset Global Investments. Nigel Richardson, chief investment officer for Asia at AXA Investment Managers says that "the U.S. is still the driving force of the world economy" but "Asia is probably far more resilient than it would have been in the past."

Why is that? One theory is that the region has enough centers of growth of its own — mainly, the roaring economies of China and India — that trade within Asia can drive the region's GDP onwards even if the U.S. economy wanes. The idea is called decoupling, as if the continent has just extricated itself from an unhappy relationship. By this reckoning, America just isn't as important to the region as it used to be.

But can that possibly be the case? Can the U.S. really become economically irrelevant? Can the World Survive US Downturn? >>> By Michael Schuman | April 30, 2008

The Dawning of a New Dark Age (Paperback – USA)
The Dawning of a New Dark Age (Hardcover – USA)

Further Cut in US Interest Rates
BBC: The Federal Reserve has cut its key interest rate from 2.25% to 2.0% as it aims to avoid a possible US recession.

It is the seventh rate cut since last September, when the federal funds rate was cut from 5.25% to 4.75%.

Opinion was divided about whether the Federal Reserve's statement indicated that this would be the last cut in interest rates.

The economy has been hit by a housing market downturn and some analysts believe it is already in recession.

"This the seventh cut from the Fed since September and the committee will obviously be hoping it can be the last," said BBC economics editor Stephanie Flanders.

"The fact that today's GDP figures showed positive growth in the first quarter offers some grounds for hoping that the US will not see two quarters of negative growth this year, at least if the fiscal stimulus package works as intended and boosts spending over the summer." Further Cut in US Interest Rates >>>

The Dawning of a New Dark Age (Paperback – USA)
The Dawning of a New Dark Age (Hardcover – USA)

US Earnings Tell Tale of Two Economies
REUTERS: NEW YORK (Reuters) - U.S. quarterly earnings so far tell a tale of two economies: those that do big business overseas like IBM are doing well, while companies more dependent on the American consumer like Harley-Davidson Inc are hurting.

There was broad-based weakness in earnings on Thursday from companies exposed primarily to the U.S. economy, as the sharp slowdown crimped demand for goods and services from the iconic Harley motorcycles to Marriott hotel rooms.

Harley-Davidson said it would report full-year earnings well below its forecast, while hotel operator Marriott International Inc said the slowing U.S. economy was taking a toll on travel spending.

"Things that are domestic and exposed to consumer discretionary spending -- absolutely they're having a bad time. This is a recession, and I would say its not time to buy these stocks yet," said David Bianco, chief U.S. equity strategist at UBS in New York.

But investors were encouraged by a strong showing from some of the large multinational companies that benefit from the weak dollar, either through the conversion of overseas profits into greenbacks or because they are more competitive against foreign rivals. US Earnings Tell Tale of Two Economies >>> Analysis by Kristina Cooke | April 17, 2008

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

Bernanke Should Use the ‘R’ Word
TIMESONLINE: Is Ben Bernanke in a state of denial? Despite the almost daily deluge of bleak US economic news, the Fed Chairman insisted yesterday that he was still "not ready to say" that the world’s biggest economy faces recession.

He should get ready to say it. Mr Bernanke’s reluctance to use the "R" word may be understandable, given his need to offer reassurance to markets and consumers, yet almost every serious commentator now accepts that recession is already a reality for America, the only question being how deep and prolonged the condition will prove. Commentary: Bernanke Should Use the ‘R’ Word >>> By Gary Duncan

DAILY MAIL:
Three Million Families ‘Will Be Plunged into Negative Equity within a Year’ By Becky Barrow

Mark Alexander

Slump Moves from Wall Street to Main Street
NEW YORK TIMES: In Seattle, sales at a long-established hardware store, Pacific Supply, are suddenly dipping. In Oklahoma City, couples planning their weddings are demonstrating uncustomary thrift, forgoing Dungeness crab and special linens. And in many cities, the registers at department stores like Nordstrom on the higher end and J. C. Penney in the middle are ringing less often.

With Wall Street caught in a credit crisis that has captured headlines, the forces assailing the economy are now spreading beyond areas hit hardest by the boom-turned-bust in real estate like California, Florida and Nevada. Now, the downturn is seeping into new parts of the country, to communities that seemed insulated only months ago.

The broadening of the slowdown, the plunge in home prices and near-paralysis in the financial system are fueling worries that what most economists now see as an inevitable recession could end up being especially painful.

Indeed, some economists fear it will last longer and inflict more bite on workers and businesses than the last two recessions, which gripped the economy in 2001 and for eight months straddling 1990 and 1991. This time, these experts say, a recession in which economic activity falls over a sustained period and joblessness rises across the board could even persist into next year. Slump Moves from Wall St. to Main St. >>> By Peter S. Goodman | March 21, 2008

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Australia Is Beginning to Catch a Cold as America Sneezes Into Recession
THE AGE: IT'S official. The collapse of the US housing market has hit the broader American economy — and Australia is about to feel the effects. The loss of 63,000 US jobs last month was the second consecutive fall — and the strongest indication so far that the world's biggest economy is in recession.

The news comes as Melbourne's property market hit its own rocky patch, with sales at an 18-month low yesterday and almost a third of properties failing to sell under the hammer.

The Real Estate Institute of Victoria blamed the 67% clearance rate on surging interest rates and the fact that the number of properties for sale was double that for the Labour Day weekend last year. The clearance rate is the lowest recorded for Saturday auctions since September 2006, and 16% below last year. We're feeling it as US economy worsens >>> By Peter Weekes and Chris Vedelago

Mark Alexander (Paperback)
Mark Alexander (Hardback)