Monday, July 27, 2015

Economic indicators look more and more like 2007, and forecast the new global recession

Few people remember that the start of the Great Recession, and the lead-up to the 2008 credit crisis, began a year before when several economic indicators marked a tremendous slowdown and popping of artificial bubble throughout the world.  In fact, 2007 was when we saw the height of the last stock market boom, and where the Dow lost over 1000 points before the great crash occurred in October of 2008, leading to a 777 point drop in a single day.
But while the stock markets today are the primary benefactors of central bank cheap lending policies and near zero interest rates, equities were not the only indicators forecasting an oncoming crash.  And one of those alternative indicators was the amount of global trade taking place, which for the first time since the middle of 2009 reached an apex and began to slump.
Just like it did at the very end of 2007.
 

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