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Following Tuesday night's surprise 50 bp rate cut by the RBNZ, Central banks from Wellington to Bangkok are shocking the global economy by slashing interest rates as much of the world braces for an epic downturn. In the US alone, the recession risk is  "much higher than it needs to be and much higher than it was two months ago,"  said Lawrence Summers, a former US Treasury secretary and a White House economic adviser during the last downturn, told  Bloomberg Television. "You can often play with fire and not have anything untoward happen, but if you do it too much you eventually get burned." Summers, who teaches at Harvard, warns, the yield curve,  for both the US and German economies have flashed warning signs of downturns. Debating the Likelihood of a Global Economic Recession   According to  Fox Business , one of Wall Street's favorite indicators of a looming recession, the spread between the three-month and 10-year Treasury yields, just  flashed its most ...

As if China did not have its hands full with a trade war, a plunging yuan and growing civil unrest in Hong Kong, which is fast becoming the potential epicenter for the next global crisis (and which   Steve "The Big Short" Eisman  thinks is the next black swan), it now also has deflation to worry about at a time when its ability to boost liquidity in the system is severely limited... or maybe it's soaring inflation China should be concerned about. On Friday, China's National Bureau of Statistics reported that the Producer Price Index (PPI), i.e. factory prices, fell 0.3% in July from a year ago, missing the modest 0.1% decline expected by analysts. This was the first annual decline in China's PPI in three years - since August 2016 - and just like back then, was largely the result of tumbling commodity prices which in turn depressed both manufacturing and raw material goods prices. And with oil sliding, and  iron ore plunging , not to mention the whole trade war thi...

No Deal Brexit is a near-certainty now.   So, who will get the blame?  The finger-pointing has already started. Gove Says Gove says EU 'refusing to negotiate' on Brexit Johnson Doubles Spending on U.K.'s No-Deal Brexit Preparation The government says it does still want to negotiate a new Brexit deal with the EU. But the minister in charge of no deal preparations, Michael Gove, says Brussels isn't interested. EU Open for a Deal Says Irish Prime Minister Leo Varadkar, Ireland's Taoiseach (Prime Minister) says  EU is Open to New Brexit Deal if Boris Johnson Drops Red Lines and Offers Concessions . Mrs May's key red lines were that the UK would leave the single market, would leave the customs union, would end free movement and would bring an end to the jurisdiction of the European Court of Justice in Britain. Mr Varadkar said: "We ended up with the withdrawal agreement and the backstop because of all the red lines that were drawn up by the British Government. ...

Though it wasn't entirely unexpected, the UK economy contracted in Q2 for the first time in seven years as the cloud of uncertainty brought on by the kingdom's looming exit from the European Union discouraged business investment and prompted some consumers to put off major purchases as well. For the three months ended June, GDP contracted 0.2% compared to the previous quarter,  according to the Office for National Statistics. That's lower than what experts had expected (they had forecast growth to be flat). The biggest drag was a drop in manufacturing output, which caused the production sector to shrink 1.4%. Construction also weakened while critical service sector yielded no growth at all. The contraction marks the first time the UK economy has shrank since 2012. Pimco Says U.K. Likely Heading for Election as Brexit Cliff-Edge Nears The contraction comes amid rising fears that Britain could crash out of the European Union on Oct. 31 without a deal as negotiations with the ...