Why the Sychronized Slump might be a thing

by Rashmee

Posted on August 16, 2019

Axios might’ve had it first: We seem headed for the Synchronized Slump, it said on August 15, as global economic data worsened.

Quite so.

The numbers are going down; things are going south. Some of the high points as cited by Axios:

** Japan and three of Europe’s four largest economies — Germany, Italy and the UK — are heading toward a recession

** China is growing at its slowest pace in nearly 30 years

** The IMF cut its global growth forecast again in July, just months after it warned this is a “delicate moment” for the world

** US manufacturing is in recession

** Airlines are expecting their worst year since 2014

And then there is the bond yield inversion. Interest rates on short-term US and UK bonds are now higher than the interest rates paid by long-term bonds. What this means is that people are worried about the near future and are opting for long-term investments ie longer-term bonds.

The coming slump couldn’t be more synchronized.

Rashmee has lived and worked in several countries in the past decade, including Afghanistan, India, Haiti, Tunisia, the UAE, US and UK

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