PMorgan Now Expects A Global Depression In The Second Quarter byTyler Durden Wed, 03/18/2020 - 21:00
Earlierwe reportedthat in a report titled the lamps are going out all across the economy, JPMorgans chief US economist, Michael Ferolislashed his Q2 US GDP forecast to a staggering -14%,which he optimistically expects to form the bottom of a V-shaped recovery that then lifts the US economy by +8% and +4% in Q3 and Q4, respectively (at least until the next downward revision in his forecast).
We doubt the V-shaped recovery will take place, in fact if there is any recovery it will be L-shaped especially if medical experts are correct that the pandemic will take 12-18 months to full clear out. That said, the Q2 prediction alone is catastrophic, and if that slowdown persists the US is facing not only a recession, but probably a second Great Depression.
However, if JPMs forecast revision for the US was catastrophic, than its latest global outlook is downright apocalyptic.
In a separate note by JPMs Bruce Kasman, has also taken a flamethrower to his global economic forecasts, and the banks head of economic policy now anticipates Europe to implode an unprecedented 22%, the UK to crater by a depressionary and with the US plunging 14%, he sees the global economy ex China contracting by a whopping -13.7%. In short, JPM now expects no less than a global depression in the second quarter. This will follow a Q1 quarter in which China is expected to collapse by -40.8%, which however will somehow surge by 57.4% in the second quarter.
This is how Kasman lays out his latest forecast:
Last week we concluded that the COVID-19 shock would produce a global recession as nearly all of the world contracts over the three months between February and April. This weeks reports, which show a collapse in Chinas activity in February and in survey readings for March elsewhere in the world, validate this view. There is no longer doubt that the longest global expansion on record will end this quarter.The key outlook issue now is gauging the depth and the duration of the 2020 recession.
Here are some more details on the timing of the upcoming depressionary collapse:
As the virus spreads rapidly across the globe, we have also been rapidly adjusting our estimates of the impact on 1H20 growth. This week we have again lowered forecasts.For China this quarter and the rest of the world next quarter, these GDP declines represent the biggest quarterly contractions recorded over the past 50 years at least.These contractions will be sufficient to tip 2020 global GDP growth down 1.1% on a year average basis (0.5% 4Q/4Q). Of particular note (Table 1):
China collapses this quarter. We have reduced 1Q20 China GDP growth to -40%q/q, saar. Economies closely tied to the China supply-chain (such as Korea and Taiwan) will directionally follow Chinas growth path. Forecasts there have also been lowered. The US and Europe follows next.For the US and Western Europe, the COVID-19 shock will likely straddle the first two quarters of the year.The stall in activity in March is likely sufficient to tip both economies into contraction this quarter but the shocks impact is expected to be concentrated next quarter, where both regions are expected to contract at a double-digit annualized pace. These outcomes are worse than were recorded during the global financial crisis or the European sovereign crisis. The EM is not immune.While the COVID-19 shock is moving more slowly through EM countries outside Asia, their vulnerability is increasing along a number of fronts. In addition to their heightened sensitivity to falling DM demand for manufactured goods and commodities, they are experiencing a significant tightening in financial conditions. Oil producers are experiencing concentrated terms-of-trade losses. Finally, their relatively weak public health
With these outcomes representing an unprecedented seizing up in activity across a wide range of sectors, JPM warns to brace for a disturbing set of economic releases in March and April,arguably as soon as tomorrows jobless claims report which according to some, may surge by over a million newly unemployed workers(!). Commensurate with the projected sharp decline in GDP, February-March global industrial production is now expected plunge by more than 10% and US and Euro area PMIs may test their global financial crisis lows.
Yet while JPM expects the crash in industrial production to normalize swiftly, it anticipates a much more extended hit to the unemployment rates, as a result of what it now sees as a much deeper downturn: for the DM as a whole the bank now forecasts theunemployment rate to rise 1.6%-pts in the next two quarters.As was the case during 2008-9, this move reflects a much sharper rise in the US than in the Euro area, even if smaller in magnitude (Figure 3).Most immediately, US initial jobless claims should spike above 400,000 in the coming weeks(Figure 4).
And so with every Wall Street bank having given up on the first half, and certainly on Q2, the only hope is that the coming massive depression will also be the shortest on record. That may be an overly aggressive assumption.
For his part, this is how Kasman does his best to put an optimistic twist on depressionary data:
As this disturbing news rolls in,it will be natural to extrapolate that the global recession will extend well into 2H20.However, our baseline forecast continues to see the dynamics of the March-April dive laying the foundation for a strong rebound in 2H20 global growth. This outcome, which projects 9% ar global GDP growth over the final two quarters of the year, does not ignore the likely lasting damage from the COVID-19 shock.
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And yet, in the very next sentence the JPM economist refutes his own optimistic take: With the income shock from lost first-half growth revenue unlikely to be reversed and tighter financial conditions expected to linger, our forecasts see the level of global GDP growth ending 2020 2.1%-pts below the baseline path before the outbreak.
More importantly, JPMorgan admits that its V-shaped recovery is contingent on three catalysts all playing out as expected:
The relaxation of social distancing policies before mid-year. Implicit in the forecast is the view that the imposition of aggressive containment measures will cause the number of active infections to peak around 10 weeks after the confirmation of cases in individual countries. The fading of the virus threat, alongside a growing recognition that the economic costs of maintaining aggressive containment policies are very large, should then begin a process of selective removal of containment measures. The success of targeted, coordinated policies. One of the consequences of the global financial crisis is that policymakers have experience in dealing with acute financial sector stress. As such, they are moving rapidly to attempt to ameliorate the threat to financial market functioning and are working to cushion the blow to corporates and households most impacted by the shock. Ensuring that credit will be provided by banks, deferring (or cancelling) tax payments, and subsidies for short-time work have been key areas of focus. Fiscal and monetary policy stimulus is building.Usually it is monetary easing that provides the initial line of defense in responding to an economic slowdown. However, the constraints facing central banks and the flexibility provided to fiscal authorities in an extremely low interest rate environment suggest that fiscal easing will be delivered earlier in this episode.
JPMorgans summary:
If a normalization in activity from depressed levels takes hold midyear alongside building policy stimulus, the depth of the current downturn can be seen as a springboard for a strong snapback in growth.However, there is a significant risk that the virus outbreak persists and activity remains restricted for a longer time. In this environment, risks rise that the depth of the initial shock unleashes negative forces that magnify the hit to activity into 2H20.Notably, firms that had been hovering on the margins of viability pre-crisis may not have sufficient equity to justify even a subsidized extension of credit and may close.The longer the duration of the interruption to activity, the deeper into the population of firms likely closures will occur, and the greater the feedback into consumer incomes and expectations.
In short, the world is facing an assured economic depression in Q2, and the only question is whether this depression persists into the second half and 2021 or reverses in Q3. The answer will depend on a combination of price to perfection events all turning out just as hoped for. Which, in a world of record political polarization, ascendant nationalism, and a torn social fabric, is recipe for not only disappointment but also disaster.
Earlierwe reportedthat in a report titled the lamps are going out all across the economy, JPMorgans chief US economist, Michael Ferolislashed his Q2 US GDP forecast to a staggering -14%,which he optimistically expects to form the bottom of a V-shaped recovery that then lifts the US economy by +8% and +4% in Q3 and Q4, respectively (at least until the next downward revision in his forecast).
We doubt the V-shaped recovery will take place, in fact if there is any recovery it will be L-shaped especially if medical experts are correct that the pandemic will take 12-18 months to full clear out. That said, the Q2 prediction alone is catastrophic, and if that slowdown persists the US is facing not only a recession, but probably a second Great Depression.
However, if JPMs forecast revision for the US was catastrophic, than its latest global outlook is downright apocalyptic.
In a separate note by JPMs Bruce Kasman, has also taken a flamethrower to his global economic forecasts, and the banks head of economic policy now anticipates Europe to implode an unprecedented 22%, the UK to crater by a depressionary and with the US plunging 14%, he sees the global economy ex China contracting by a whopping -13.7%. In short, JPM now expects no less than a global depression in the second quarter. This will follow a Q1 quarter in which China is expected to collapse by -40.8%, which however will somehow surge by 57.4% in the second quarter.
This is how Kasman lays out his latest forecast:
Last week we concluded that the COVID-19 shock would produce a global recession as nearly all of the world contracts over the three months between February and April. This weeks reports, which show a collapse in Chinas activity in February and in survey readings for March elsewhere in the world, validate this view. There is no longer doubt that the longest global expansion on record will end this quarter.The key outlook issue now is gauging the depth and the duration of the 2020 recession.
Here are some more details on the timing of the upcoming depressionary collapse:
As the virus spreads rapidly across the globe, we have also been rapidly adjusting our estimates of the impact on 1H20 growth. This week we have again lowered forecasts.For China this quarter and the rest of the world next quarter, these GDP declines represent the biggest quarterly contractions recorded over the past 50 years at least.These contractions will be sufficient to tip 2020 global GDP growth down 1.1% on a year average basis (0.5% 4Q/4Q). Of particular note (Table 1):
China collapses this quarter. We have reduced 1Q20 China GDP growth to -40%q/q, saar. Economies closely tied to the China supply-chain (such as Korea and Taiwan) will directionally follow Chinas growth path. Forecasts there have also been lowered. The US and Europe follows next.For the US and Western Europe, the COVID-19 shock will likely straddle the first two quarters of the year.The stall in activity in March is likely sufficient to tip both economies into contraction this quarter but the shocks impact is expected to be concentrated next quarter, where both regions are expected to contract at a double-digit annualized pace. These outcomes are worse than were recorded during the global financial crisis or the European sovereign crisis. The EM is not immune.While the COVID-19 shock is moving more slowly through EM countries outside Asia, their vulnerability is increasing along a number of fronts. In addition to their heightened sensitivity to falling DM demand for manufactured goods and commodities, they are experiencing a significant tightening in financial conditions. Oil producers are experiencing concentrated terms-of-trade losses. Finally, their relatively weak public healthWith these outcomes representing an unprecedented seizing up in activity across a wide range of sectors, JPM warns to brace for a disturbing set of economic releases in March and April,arguably as soon as tomorrows jobless claims report which according to some, may surge by over a million newly unemployed workers(!). Commensurate with the projected sharp decline in GDP, February-March global industrial production is now expected plunge by more than 10% and US and Euro area PMIs may test their global financial crisis lows.
Yet while JPM expects the crash in industrial production to normalize swiftly, it anticipates a much more extended hit to the unemployment rates, as a result of what it now sees as a much deeper downturn: for the DM as a whole the bank now forecasts theunemployment rate to rise 1.6%-pts in the next two quarters.As was the case during 2008-9, this move reflects a much sharper rise in the US than in the Euro area, even if smaller in magnitude (Figure 3).Most immediately, US initial jobless claims should spike above 400,000 in the coming weeks(Figure 4).
And so with every Wall Street bank having given up on the first half, and certainly on Q2, the only hope is that the coming massive depression will also be the shortest on record. That may be an overly aggressive assumption.
For his part, this is how Kasman does his best to put an optimistic twist on depressionary data:
As this disturbing news rolls in,it will be natural to extrapolate that the global recession will extend well into 2H20.However, our baseline forecast continues to see the dynamics of the March-April dive laying the foundation for a strong rebound in 2H20 global growth. This outcome, which projects 9% ar global GDP growth over the final two quarters of the year, does not ignore the likely lasting damage from the COVID-19 shock.
NEVER MISS THE NEWS THAT MATTERS MOSTZEROHEDGE DIRECTLY TO YOUR INBOX
Receive a daily recap featuring a curated list of must-read stories.
And yet, in the very next sentence the JPM economist refutes his own optimistic take: With the income shock from lost first-half growth revenue unlikely to be reversed and tighter financial conditions expected to linger, our forecasts see the level of global GDP growth ending 2020 2.1%-pts below the baseline path before the outbreak.
More importantly, JPMorgan admits that its V-shaped recovery is contingent on three catalysts all playing out as expected:
The relaxation of social distancing policies before mid-year. Implicit in the forecast is the view that the imposition of aggressive containment measures will cause the number of active infections to peak around 10 weeks after the confirmation of cases in individual countries. The fading of the virus threat, alongside a growing recognition that the economic costs of maintaining aggressive containment policies are very large, should then begin a process of selective removal of containment measures. The success of targeted, coordinated policies. One of the consequences of the global financial crisis is that policymakers have experience in dealing with acute financial sector stress. As such, they are moving rapidly to attempt to ameliorate the threat to financial market functioning and are working to cushion the blow to corporates and households most impacted by the shock. Ensuring that credit will be provided by banks, deferring (or cancelling) tax payments, and subsidies for short-time work have been key areas of focus. Fiscal and monetary policy stimulus is building.Usually it is monetary easing that provides the initial line of defense in responding to an economic slowdown. However, the constraints facing central banks and the flexibility provided to fiscal authorities in an extremely low interest rate environment suggest that fiscal easing will be delivered earlier in this episode.JPMorgans summary:
If a normalization in activity from depressed levels takes hold midyear alongside building policy stimulus, the depth of the current downturn can be seen as a springboard for a strong snapback in growth.However, there is a significant risk that the virus outbreak persists and activity remains restricted for a longer time. In this environment, risks rise that the depth of the initial shock unleashes negative forces that magnify the hit to activity into 2H20.Notably, firms that had been hovering on the margins of viability pre-crisis may not have sufficient equity to justify even a subsidized extension of credit and may close.The longer the duration of the interruption to activity, the deeper into the population of firms likely closures will occur, and the greater the feedback into consumer incomes and expectations.
In short, the world is facing an assured economic depression in Q2, and the only question is whether this depression persists into the second half and 2021 or reverses in Q3. The answer will depend on a combination of price to perfection events all turning out just as hoped for. Which, in a world of record political polarization, ascendant nationalism, and a torn social fabric, is recipe for not only disappointment but also disaster.
怎么融洽同子女的关系?
·不要监控孩子的电话，尊重其隐私权。
·对孩子的朋友要和蔼可亲，但不要同他们过于亲近。不要侵入他（她）的天地。
·不要在他人面前夸奖孩子，这样会使其尴尬。
·不要在他人面前批评或斥责孩子。如果必须要这样做的话，应该在无人的时候。
·母亲在他人面前要注意服饰。母亲的形象不整洁，孩子会感到羞耻。
·如果你的孩子参加学校的演出，他（她）在舞台上时你不要打手势，这样会令他（她）紧张，甚至出错。
·孩子和你一起坐自己家的车出门时，不要把汽车收音机调到你所喜爱的频道。让孩子挑选电台，但可要求他调低音量。
·在子女需要帮助时要给予帮助，但要注意方法。
·子女在一定的阶段就像需要食品一样需要爱抚，但是爱抚要适可而止，不要在公开场合这样做，更不要在朋友面前这样做。
·不要让你的孩子在外人面前表现他的“本事”，如朗诵、唱歌、跳舞或弹钢琴。如果你为他的本领自豪并希望让人家看到，那就对他提出请求。如果父母坚持让他们在外人面前表现本领，有的孩子会感觉自己像马戏团的猴子。
·不要向他的朋友和亲属讲他的怪癖，尤其不要当他的面前。任何孩子都不愿意别人知道自己的隐私。
·不要让他失去对你的信赖。他向你透露的秘密，你不要告诉别人。你一定要完全尊重他的意愿。
·在他面前不要说谎。他看到自己的父母说谎或弄虚作假，就会感觉不好。例如，父母在某人背后说坏话，而当面又装出热情的样子，孩子就会反感。
下页：父母教育是家庭教育成败的关键
V型U型还是L型？
反应过激，人为造成recession/depression，recession/depression谁可能得利最多？
或者说到时谁最可能背包袱？
仔细想想。。。
安家也可以
我还没算，想着很烦人。
以後自然會回到60以上啊
纷纷关店或缩短营业时间，这会影响整个供应链，旅游航空酒店餐饮娱乐遭受重创，唯一能想到的可能是制药企业会得利。
大公司，有政府背书，都掉的稀里哗啦的……我有心也没那个胆啊。
轉世好幾次了
你现在看行，已经养肥了，有十集了，每周一次更5集