• 6 minutes Trump vs. MbS
  • 11 minutes Can the World Survive without Saudi Oil?
  • 15 minutes WTI @ $75.75, headed for $64 - 67
  • 12 hours Satellite Moons to Replace Streetlamps?!
  • 1 day US top CEO's are spending their own money on the midterm elections
  • 6 hours EU to Splash Billions on Battery Factories
  • 10 hours U.S. Shale Oil Debt: Deep the Denial
  • 18 hours The Balkans Are Coming Apart at the Seams Again
  • 2 hours Owning stocks long-term low risk?
  • 1 day OPEC Is Struggling To Deliver On Increased Output Pledge
  • 5 hours The Dirt on Clean Electric Cars
  • 1 day Uber IPO Proposals Value Company at $120 Billion
  • 19 hours 47 Oil & Gas Projects Expected to Start in SE Asia between 2018 & 2025
  • 1 day A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day 10 Incredible Facts about U.S. LNG
  • 37 mins The end of "King Coal" in the Wales
Alt Text

Global Economy Throwing Up Red Flags For Oil

Investors are feeling increasingly gloomy…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Trending Discussions

Here Comes the Bathtub Economy

Goldman Sachs' chief US economist, Jan Hatzius, can articulate my own view of the economy better than I can, so I will just repeat what he said yesterday.

The boost the economy received from an inventory rebuild is now over, and the best we can expect is an anemic H2 GDP growth rate of only 1.5%.

If you want to see what this looks like up close and personal, take a look at the chart below of intermodal rail traffic, which shows the economy definitely taking a turn for the worse.

US Rail Carloads

The private sector ran enormous deficits from the early nineties to 2007, which have only just started to unwind. Debt/GDP, debt/income, and debt service are all still at historical highs.

In the last three years, the private sector has flipped from spending 4% of GDP to saving 7%, a massive deflationary swing.

The net effect of this sobering scenario is to keep unemployment stuck around 10% and interest rates at bargain basement levels until 2012.

But Jan doesn't see a double dip occurring without a major shock. BP and the crisis in Europe aren't big enough to do it alone. The bottom line: a "U" or "bathtub" shaped recovery in dire need of more government stimulus. This has been my own forecast for the economy since the beginning of the year.

Hint: this is not good for stocks or assets anywhere. I'm sure Ben Bernanke is listening.

By. Mad Hedge Fund Trader


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News