- May 31, 2019, allied aircraft take out storage tankers, oilprice.
- May 3, 2019, Syria scrambling, AP News.
- April 25, 2019, Damascus, misery, Bloomberg.
- Back on March 22, 2019, another incident in which oil to Syria was turned back; in The Wall Street Journal.
Reminder: when the China trade war began, there were stories that as bad as this would be for the US, it would be worse for the Chinese. Some suggested the China-US trade war would end when Chinese bankers started jumping out of windows. Hold that thought.
Now, from zerohedge comes this: US banks and the recession panic.
As we await for Goldman to throw in the towel and admit its forecast of one rate hike in 2020 (and no cuts in 2019), was overly... optimistic, moments ago Barclays had a "hold my beer" moment, and just hours after JPMorgan changed its forecast, and as a result of an economic slowdown resulting from the escalating trade war now expects 2 rate cuts in 2019, Barclays has one-upped the largest US bank, and moments ago revised its FOMC forecast, now expecting 3 rate cuts in 2019.
Now, while some may debate whether a curve inversion begins the clock on an upcoming recession, one things is undisputable (sic): while many analysts will caution that it is the Fed's rate hikes that ultimately catalyze the next recession and that every Fed tightening ends with a financial "event", the truth is that there is one step missing from this analysis, and it may come as a surprise to many that the last three recessions all took place with 3 months of the first rate cut after a hiking cycle!
Conclusion: the US will enter a recession somewhere around January, 2020.
If so, it will be one of the shortest recessions on record.
Having said that, we're back to the "chicken and egg" problem/question. How does a rate cut "catalyze" a recession. My hunch is the writer has that all wrong. My hunch is that by the time the Fed gets around to a rate cut they are too late: they see the recession coming, react too late, and by the time they make the rate cut, the recession is already in motion.
By the way, if the Chinese trade war does not end soon (like by the end of June), it will be a very, very bad Christmas for US retailers in 2019. US retailers are making their Chinese buying decisions by the end of June, perhaps by the end of July at the latest. US retailers go to trade shows to find out what's hot, to make their bets on what to order early in the summer. The Chinese need time to make the products, and then time to ship the products in time for Christmas. We are now down to less than six months when these Chinese products need to be on US store shelves.
As "bad" as it might be in the US regarding a "Fed" rate cut, the Europeans have an even bigger problem. Europe has no more arrows in their quiver.
From The Wall Street Journal:
For five years, European nations have been trying to jump-start their ailing economies with what was supposed to be a radical, short-term remedy—negative interest rates.
Instead, central banks haven’t been able to wean their economies off them.
Increasingly, they appear to be a permanent feature of the landscape.
No major bank that introduced negative rates during Europe’s debt crisis has turned main policy rates positive again.
“Overall, we are on a painkiller,” said Tamaz Georgadze, chief executive of Raisin GmbH in Berlin, which provides a platform for consumers and businesses to deposit through 77 banks in 25 countries, “and it’s very hard to get off it.”
Wow, look at Switzerland -- I never would have expected that.