Global Investors Fear Brexit Vote Will Trigger Global Depression


B00Mer
No Party Affiliation
#1
Global Investors Fear Brexit Vote Will Trigger Global Depression



Global investors are once again dusting off studies of the 1930s as fears of protectionism, nationalism and a retreat of globalization, sharpened by this week’s Brexit referendum, escalate anew.



With markets on tenterhooks over Thursday’s “too close to call” vote on Britain’s future in the European Union, the damage an exit vote would deal business activity and world commerce is amplified by the precarious state of the global economy and its inability to absorb any left-field political shocks.

As such, the Brexit vote will not be an open-and-shut case regardless of the outcome. Broader worries about global trade, frail growth and dwindling investment returns have festered since the banking shock of 2007/08 and have mounted this year.

Stalling trade growth has already led the world economy to the brink of recession for the second time in a decade, with growth now hovering just above the 2.0-2.5 percent level most economists say is needed to keep per capita world output stable.

Three-month averages for growth of world trade volumes through March this year have turned negative compared with the prior three months, according to the Dutch government statistics body widely cited as the arbiter of global trade data.

And it’s not a seasonal blip. Last year saw the biggest drop in imports and exports since 2009 and their average annual growth of 3 percent over the intervening seven years was itself half that of the 25 years before, according to Swiss asset manager Pictet. 2016 is set to be the fifth sub-par year in row.

A study published by the Centre For Economic Policy Research shows this paltry pace of trade growth is also below the 4.2 percent average for the past 200 years.
Foreign direct investment growth of 2 percent of world output is also at its lowest since the 1990s, while the hangover from the credit crunch has seen annual growth rates in cross-border bank lending grind to a halt from some 10 pct in the decade to 2008.

Parsing the big investment themes of the next five years, Pictet this month highlighted “globalization at a crossroads” – offering both benign and malignant reasoning and implications.

One of these was that trade deceleration was due in part to the inwards reorientation of the world’s two mega economies, the United States and China — the former due to the shale energy boom and the latter’s planned shift to consumption from exports.

Another factor cited was a shift in the world economy towards services and digital activity that is not captured by statistics on merchandise trade.

But Pictet had little doubt about what brewing developments could swamp all that — rising nationalism on the far right and left of the political spectrum in Europe and the United States.

Britain “threatens to drive a fault line” through one of the world’s biggest free trade blocs, it said, and both presumptive candidates for November’s U.S. presidential election have talked of renegotiating the still-unratified Trans Pacific Partnership binding economies making up 40 percent of world trade.

“If the rising tide of nationalism results in greater protectionism, then the decline in international trade the world has experienced so far could well morph into something more pernicious,” the Swiss firm said, adding that multinationals — particularly banks and tech companies — were most vulnerable.

“1937-38 REDUX?”

Against that backdrop, this year’s market wobbles make total sense — especially as near-zero interest rates limit central banks’ ability to insulate against further shocks.
But echoes of the last major hiatus in trade globalization during and between the World Wars has economists looking again to the 1930s for lessons and policy prescriptions.

In a paper entitled “1937-38 redux?”, Morgan Stanley economists detail the mistakes that saw monetary and fiscal policy tightened too quickly once a recovery from the 1929 stock market crash and subsequent Depression started in 1936.

Over-eagerness to reset policy before private sector confidence in future growth and inflation had picked up saw a relapse into recession and deflation by 1938. The devastation of World War Two followed, and with it huge government spending on military capacity, war relief and eventually reconstruction.

Morgan Stanley goes on to draw a parallel with the global response to 2008’s crash and subsequent world recession.

Waves of monetary and fiscal easing by 2009 underpinned economic activity, but government budgets have again tightened quickly and before inflation expectations or private investment spending and capital expenditure have been restored.

The second world recession in a decade is now seen as a threat, but with a heavier starting debt burden, historically low inflation and interest rates, stalled trade and a worsening demographic profile. That could mean another global government spending stimulus is needed to re-energize private firms.

“The effective solution to prevent relapse into recession would be to reactivate policy stimulus,” Morgan Stanley said.

Success in preventing a new recession without the cataclysm of a world war would be a profound lesson learned. Political extremism, isolation and protectionism make the task far harder.

Read more at Global Investors Fear Brexit Vote Will Trigger Global Depression TRUNEWS with Rick Wiles

........................................

LOL Russia and Iran congratulate Britain.. they love the rejection of the EU..
 
Tecumsehsbones
+3
#2
Better hide under the bed, Boom.
 
B00Mer
No Party Affiliation
+1
#3
Quote: Originally Posted by Tecumsehsbones View Post

Better hide under the bed, Boom.

Yup, move aside, you're hogging all the space.

Could care if there's a world depression.. I have a camper would love to travel the country.
 
Walter
+4
#4  Top Rated Post
Piffle. Only gubmint intervention can cause a depression. Brexit means less gubmint intervention.
 
Tecumsehsbones
+1
#5
Quote: Originally Posted by B00Mer View Post

Yup, move aside, you're hogging all the space.

Could care if there's a world depression.. I have a camper would love to travel the country.

Ever notice there's maybe three people here that post the shrieking, arm-waving DOOOOOM! garbage? And one of em's you?

Better'n the love letters to Trudeaubama, I guess, but not by much.
 
Mowich
Conservative
+2
#6
Well if it comes Boomer us country folk will survive fairly well. I buy my beef, milk/cream/butter, eggs, chickens, turkeys and vegetables from neighbors. One of my newest neighbors is in the process of building a high-tec greenhouse designed specifically to grow vegetables in the midst of our cruelest winters. Not only do I know exactly what is going into the things I eat but I get to see some of it on the hoof or wing. And I pay much less than I otherwise would for a much much better product.


If a depression should befall us, it would be the city folks who would bear the brunt of the pain, unfortunately.
 
HarperCons
+1
#7
Quote: Originally Posted by Walter View Post

Piffle. Only gubmint intervention can cause a depression. Brexit means less gubmint intervention.

this is a serious post, he's not joking. lmfao
 
mentalfloss
#8
Quote: Originally Posted by Walter View Post

Piffle. Only gubmint intervention can cause a depression. Brexit means less gubmint intervention.

 
Walter
#9
Quote: Originally Posted by HarperCons View Post

this is a serious post, he's not joking. lmfao

Please tell us about an economic depression not caused by gubmint intervention.
 
darkbeaver
Republican
+2 / -1
#10
Quote: Originally Posted by Walter View Post

Please tell us about an economic depression not caused by gubmint intervention.

Please tell us what western Government is not owned and opreated by the international banking cartel.

That's where the paper cash comes from buddy, and those organized criminals open and close the taps for just one reason. To rape and pillage from the little people.

Boom and Bust, Shine and Rust, they make out either way.
 
Kreskin
+2
#11
I will worry if I see grainy black and white videos showing people walking fast to the soup kitchen.
 
darkbeaver
Republican
+1
#12
Quote: Originally Posted by Kreskin View Post

I will worry if I see grainy black and white videos showing people walking fast to the soup kitchen.

You can see that now if you look.
 
B00Mer
No Party Affiliation
#13
Quote: Originally Posted by Kreskin View Post

I will worry if I see grainy black and white videos showing people walking fast to the soup kitchen.

Start to panic.. LOL The USA lost 800 Billion today because of BREXIT. ( Those poor fat cats )

www.youtube.com/watch?v=IWrX6kC9Nhs

Trump on his Scottish Golf Course failed to acknowledge that he lost value/money of his Golf Course today.

You know his Infomercial about his Golf Course while everyone else was worried about their savings and 401K
 
petros
#14
Quote: Originally Posted by Mowich View Post

Well if it comes Boomer us country folk will survive fairly well. I buy my beef, milk/cream/butter, eggs, chickens, turkeys and vegetables from neighbors. One of my newest neighbors is in the process of building a high-tec greenhouse designed specifically to grow vegetables in the midst of our cruelest winters. Not only do I know exactly what is going into the things I eat but I get to see some of it on the hoof or wing. And I pay much less than I otherwise would for a much much better product.


If a depression should befall us, it would be the city folks who would bear the brunt of the pain, unfortunately.

It's not food you'd need to worry about but infrastructure decay and cuts to public services.

If you think surgery waiting lists and access to specialists are long now, you may never get what you need.
 
B00Mer
No Party Affiliation
+1
#15
2 Trillion lost on world markets today because of BREXIT.

Wonder how much is fabricated, faked by global investors and hedge fund managers to scam money.. Never let a good crisis pass you by.
 
petros
+1
#16
It's called selling short. It's basically gambling.
 
Cliffy
Free Thinker
#17
http://www.youtube.com/watch?v=IvnA91ZEBRg
 
Murphy
Conservative
#18
Brexit was a political ploy to bring meaning to the UK.

Um, I think it failed...
---

I'm sorry, my darlings, but if I was alive today, I would shout, "Brexit? Oh, the drama!" Then I'd sing a song.




www.youtube.com/watch?v=WUOtCLOXgm8
 
MHz
+1
#19
That would have had to happen before the US unemployment hit 20% and that was time time ago. The bottom falling out of oil stocks was also after the depression started.
 
Ludlow
No Party Affiliation
#20
Quote: Originally Posted by MHz View Post

That would have had to happen before the US unemployment hit 20% and that was time time ago. The bottom falling out of oil stocks was also after the depression started.

You don't know Maynard.
 
JLM
No Party Affiliation
#21
Quote: Originally Posted by Kreskin View Post

I will worry if I see grainy black and white videos showing people walking fast to the soup kitchen.


Knowing there's a soup kitchen somewhere in the neighbourhood might be a good reason NOT to worry!
 
spaminator
+1
#22
Quote: Originally Posted by B00Mer View Post

Global Investors Fear Brexit Vote Will Trigger Global Depression

 
Walter
+1
#23
Stupid markets are rising today causing more Remain heads to explode.
 
Ludlow
No Party Affiliation
#24
Quote: Originally Posted by darkbeaver View Post

You can see that now if you look.

Gloom, despair and agony on me. Deep dark depression excessive misery. If it weren't fer bad luck I'd have no luck at all. Gloom , despair and agony on me..
 
EagleSmack
#25
Pound and shares rally



http://www.theguardian.com/business/...-business-live

*snicker*
 
MHz
#26
Is that better or worse than the global recession we are just entering? (for all the wrong reasons)

Quote: Originally Posted by spaminator View Post

Those are a little larger than I imagined they would be. Mega Grams perhaps. You would need a rotating table if that was to be all put into a single 'line'. (or whatever it is called)
 
JLM
No Party Affiliation
#27
Quote: Originally Posted by Walter View Post

Stupid markets are rising today causing more Remain heads to explode.


Probably more like rising today as people are finally realizing they dropped the other day over f**k all! Markets are largely based on moods, which are largely based on Sh*t that ain't likely to happen to any great degree for a couple of years. I love it when this sh*t happens, it creates lots of buying and selling opportunities!
 
B00Mer
No Party Affiliation
#28
Brexit fallout gives Canada a peek at what could have happened in 1995: Hébert
 
Walter
#29
D'oh! Stock markets are back to where they were last Thursday just before Brexit happened. More progressive heads are exploding.
 
taxslave
Free Thinker
#30
Quote: Originally Posted by HarperCons View Post

this is a serious post, he's not joking. lmfao

Neither is wally.
 

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