by Michael Snyder, The Economic Collapse Blog:
If virtually everyone is expecting a recession, and most people start acting accordingly, do you think that will make an economic downturn less likely or more likely? Needless to say, the answer to that question is obvious. Right now, banks all over the country are getting really tight with their money, large corporations are laying off workers at a frightening pace, and consumers are cutting back on their spending. In other words, it really is starting to look a lot like a recession out there, and economic conditions are only going to get even more harsh in the months ahead.
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I know that this is not good news. Things are already far from great, and one recent survey found that 70 percent of all Americans are “feeling financially stressed”…
Inflation, economic instability and a lack of savings have an increasing number of Americans feeling financially stressed.
Some 70% of Americans admit to being stressed about their personal finances these days and a majority — 52% — of U.S. adults said their financial stress has increased since before the Covid-19 pandemic began in March 2020, according to a new CNBC Your Money Financial Confidence Survey conducted in partnership with Momentive.
Unfortunately, the truth is that the financial stress is just beginning for many families, because a significant economic downturn is on the way.
At this point what is approaching is so obvious that the Federal Reserve is even publicly admitting that a recession will start “later this year”…
Federal Reserve economists believe that recent banking turmoil will trigger a mild recession later this year, a potentially ominous sign for President Joe Biden as he heads into an election campaign.
Their projection was for “a mild recession starting later this year, with a recovery over the subsequent two years,” according to the minutes, released Wednesday. That would spark a jump in unemployment. They estimated the economy would fully recover by 2025.
I honestly cannot remember the last time that the Federal Reserve actually predicted that a recession would be coming.
Normally, the Fed is wildly optimistic with their projections because they want us to have faith that their policies are working.
But now even they have thrown in the towel.
Bank of America is also sounding the alarm. Analysts at the bank recently shared 12 charts “that show that the economy is about to enter a full-blown recession”, and I was particularly interested in what they had to say about tightening credit conditions…
“US banks have been tightening lending standards to small companies past few quarters. Credit crunch to intensify and highly correlated with small business demand for workers. Should May SLOOS report show drop in loan availability to -10 or below = unambiguous credit crunch,” BofA said.
A major credit crunch is here, and that is going to send major shockwaves throughout the entire economy.
The last time we witnessed anything like this was in 2008, and we all remember what happened back then.
If you still believe that our leaders will magically find some way out of this economic mess, you are definitely in the minority at this point. According to a survey that KPMG conducted not too long ago, 91 percent of corporate CEOs in the U.S. “are convinced we are heading toward a recession in the next 12 months”…
Just when it seemed there was a light at the end of the tunnel with pandemic-related disruptions subsiding, the vast majority of U.S. CEOs (91%) are convinced we are heading toward a recession in the next 12 months. Moreover, only about a third of U.S. CEOs (34%) believe this recession will be mild and short.
91 percent.
Just think about that.
And many CEOs have already started laying off workers in anticipation of what is coming.
In fact, we just learned that Best Buy will be giving the axe to workers “in hundreds of stores”…
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