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- By David Zeiler, Associate Editor, Money Morning
- March 8, 2013
Pay no attention to the new market highs or the cheerleading of government officials - recession 2013 is already here.
That's what Lakshman Achuthan, co-founder and chief operations officer for the Economic Cycle Research Institute (ECRI), is saying now.
Achuthan told the Daily Ticker that ECRI believes the U.S. economy has been mired in a "mild recession" since the middle of last year.
And yes, he insists that recession 2013 is already underway despite record highs for the stock market and an obvious lack of the most widely accepted definition of a recession - two consecutive quarters of negative gross domestic product (GDP).
"What we see here ... are the hallmarks of a recession," Achuthan wrote in a report on the ECRI Web site. "Separately, we are not seeing signs of an imminent growth upturn that so many claim to see."
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How to Prepare for Recession 2013
Restoration of the payroll tax and higher gas prices have put the squeeze on consumers, prompting nearly half of Americans to cut spending.
Is the combination of higher taxes and higher gas prices enough to bring on a recession in 2013?
Money Morning Chief Investment Strategist Keith Fitz-Gerald appeared Friday on FOX Business Network's "Varney & Co." to talk about the potential for an economic slowdown.
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Recession 2013: Can We Avoid It?
- By Diane Alter, Contributing Writer, Money Morning
- January 24, 2013
The U.S. economy is currently two-for-two in its attempts to skirt recession 2013.
The first came after we narrowly avoided a tumble over the fiscal cliff with a down-to-the-wire deal on New Year's Day. The second came Wednesday with the passage of a three-month extension on raising the debt ceiling.
Had we not averted one or the other, the Congressional Budget Office warned on numerous occasions that a recession in 2013.
But we are not out of the woods just yet, even though the odds may have changed.
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Why Recession 2013 Could Hit Regardless of Fiscal Cliff Deal
- By Diane Alter, Contributing Writer, Money Morning
- December 20, 2012
Stalled fiscal cliff negotiations have fueled concerns the U.S. could face a recession in 2013 if the country fails to avert the cliff.
But recession 2013 may be on the way regardless of what happens with the fiscal cliff talks.
The latest sign of an economic downturn came Tuesday in a U.S. Commerce Department report showing imports to the United States have fallen two consecutive months after dropping 8.4% in the third quarter and 2% the previous quarter.
Robert Brusca, chief economist at FAO Economics, told MarketWatch when the economy weakens, imports decline quickly.
Brusca called the latest figures a "red flag" and said a 2013 recession is a "real risk."
The last time imports declined for two quarters was in 2009, at the end of a four-quarter decrease in imports during the Great Recession.
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How to Prepare for Recession 2013
- By Diane Alter, Contributing Writer, Money Morning
- November 26, 2012
U.S. President Barack Obama recently met with congressional leaders in attempts to carve out a way to avoid falling off the quickly approaching fiscal cliff.
If no deal is reached, President Obama and scores of economists warn, the U.S. is destined to plummet into a recession in 2013.
Money Morning Global Investing Strategist Martin Hutchinson cautions that even if lawmakers avoid the fiscal cliff by the most likely scenario of raising taxes on wealthy Americans while leaving the majority of the budget deficit status quo, the short-term outlook for the health of the U.S. economy is far from rosy.
"U.S. economic growth has been held back in the last few years by the blizzard of regulations coming out of Washington, and there's reason to believe there is an especially heavy storm of them in the next few months, having been held up before the election," said Hutchinson.
And despite the easy monetary policies of Fed Chief Ben Bernanke, and the latest round of QE3 (dubbed QE Forever), "the U.S. economy is not going back to robust growth in 2013," Hutchinson added. Creating more money, he said, will just increase inflation.
"In the long run, a recession is coming," Hutchinson warns.
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Prepare for the "Alarmingly High" Threat of Recession 2013
- By Diane Alter, Contributing Writer, Money Morning
- October 10, 2012
The International Monetary Fund (IMF) delivered a dismal report Tuesday that basically said to get a survival strategy ready now because Recession 2013 is on its way.
In its latest "World Economic Outlook " presented in Tokyo, a kick-off to the IMF World Bank 2012 Annual Meeting, the agency cuts its forecast for overall global growth to 3.3% for the remainder of this year. It said growth in 2013 would remain lethargic at 3.6%. These estimates were down from July's forecast of 3.5% and 3.9%, respectively.
The IMF presently sees"alarmingly high" risks of a steeper slowdown, with bleak one-in-six odds that growth will dip below 2%.
"A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slowdown has a more lasting component. The answer depends on whether European and U.S. policy makers deal proactively with their major short term economic challenges,' the report said.
Growth for emerging and developing regions was slashed from 6.2% to 5.3%. Markets in once stalwart regions like China, Brazil, India and Russia are all forecast to see waning growth.
World trade volume is projected to sink to 3.2% this year from last year's 5.8% and 2010's 12.6%.
IMF Chief Economist Oliver Blanchard said, "Low growth and uncertainty in advanced economies are affecting emerging market and developing economies through both trade and financial channels, adding to homegrown weakness."
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This Pattern Joins the Mounting Evidence for Recession 2013
- By David Zeiler, Associate Editor, Money Morning
- October 2, 2012
Don't worry about scanning headlines every day to determine the U.S. economy's chances of entering a recession in 2013.
We already know the answer.
Such indicators as gross domestic product (GDP), consumer spending, durable goods and exports all point to an economy not in a slow recovery, but on the verge of a 2013 recession.
That's because the trend lines, rather than showing gradual improvement, are moving in the opposite direction. The economy, after spending months with its head just barely above water, is about to go under.
The U.S. Commerce Department last week revised second quarter GDP sharply downward from 1.7% to 1.25%. The GDP was 1.9% in the first quarter of 2012. While we do not yet have any official data for the current quarter, a Federal Reserve Bank of Philadelphia survey of forecasters in August put the number at 1.6%.
That's an ominous pattern.
James Pethokoukis of the American Enterprise Institute explains: "Research from the Fed ... finds that since 1947, when two-quarter annualized real GDP growth falls below 2%, recession follows within a year 48% of the time. And when year-over-year real GDP growth falls below 2%, recession follows within a year 70% of the time."
The Mounting Evidence for Recession 2013
There's actually a term for what we're experiencing: the "stall-speed economy." It's roughly defined as a period of two or more quarters in which the GDP remains mired below 2%.
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Recession 2013 Doesn't Have to Kill Your Profits
- By Jonathan Yates, Contributing Writer, Money Morning
- September 24, 2012
With 2013 just a few months away and the U.S. on the brink of recession, now's the perfect time to prepare your portfolio with recession-proof stocks.
One way to determine how to profit during Recession 2013 is to check out what has outperformed over the past five years. During that period, the United States and other nations entered into and emerged from The Great Recession.
A key element for surviving a recession is that companies must adapt to the changing marketplace, both in the United States and abroad.
There are three companies that have proven to excel in this area, both geographically and commercially, with new product and service lines.
Plus, they're all up about 70% - 80% over the past five years, pay dividends and are likely to increase those payouts.
Let's take a look at these recession-proof stock winners.
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Recession 2013 Is On the Way; Here's What Jim Rogers is Doing
- By Don Miller, Contributing Writer, Money Morning
- September 14, 2012
If legendary investor Jim Rogers is right, not only is Recession 2013 unavoidable, it's going to be a doozy.
In recent interviews, Rogers has been predicting a 2013 recession, bowled over by a potential blowout in Europe and unsustainable spending by the U.S. government.
"Be very worried about 2013 and be very worried about 2014, because that's when the next slowdown comes," Rogers told Reuters.
And while Rogers sees no true safe havens out there, a few investments can provide some comfort - specifically, commodities in the form of agriculture, gold, and silver.
Rogers' statements usually get lots of attention, mainly because he has an uncanny tendency to be right.
Together with George Soros, he founded the Quantum Fund in the 1970s and posted returns of 4,200% over 10 years. Rogers retired in 1980 at the age of 37, but remains active as a private investor.
Back in 1999, Rogers recommended gold when it was trading at $252 and silver at $4.
We all know what happened after that.
Here's the Jim Rogers take on the economy and how to survive Recession 2013.
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Recession 2013 Looks More Likely After Weak Jobs Report
- By Jonathan Yates, Contributing Writer
Every politician promises "more jobs" for the American people. This has been the foundation of virtually every speech at the conventions for both parties.
But what we really need are "more quality jobs" - especially if we want to steer the country away from Recession 2013.
Unfortunately, quality jobs don't seem to be around.
Last Friday's U.S. jobs report showed that only 96,000 new jobs were created in the United States in August when 130,000 were expected. That's dismal enough, but a closer look at the numbers shows just how bad U.S. unemployment is.
Turns out the biggest job increases have been in food services and drinking places, which added 28,000 jobs in August and 298,000 over the past year.
MIT labor economist David Autor said posting gains in areas like these doesn't translate to sustainable, quality job growth.
"They're numerous, but they don't tend to be highly paid," said Autor. "They don't have a lot of job security."
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