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- Robert Shiller believes that the risks of recession are exaggerated
Robert Shiller believes that the risks of recession are exaggerated
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Loading...According to the Nobel laureate, Robert Shiller, the risk of economic recession is real and it could happen this year.
Whether an economic slowdown in the United States will become a heated debate among investors, given the uncertainty surrounding the US-China talks. Given the worsening forecasts for reports and the slowdown in the global economy. This uncertainty almost led to the end of the nearly ten-year rally in US stocks last December.
"It seems that the likelihood of a recession in this or next year has risen." - says economist at Yale University, Shiller. "There are signals from the economy that are beginning to worry some people, and we see the longest bullish market in history." - added the economist.
Chances of recession over the next 12 months are 25%. Although, today's FED chairman, Powell, in his speech, said that "they do not feel overwhelmed by recession risks." According to Jeffrey Sherman, chief investment strategist at DoubleLine Capital, we are seeing a market that is pushing for the highest interest rates for some time now, shrinking corporate margins and the ability to shrink GDP to close to 2%, which is quite real.
The cyclical P-E ratio (CAPE), invented by Shiller 30 years ago, calculates reports up to 10 years ago to measure market assessments. Currently, the indicator is about 30, which is "quite high," according to Shiller, mostly considering the historical average. Looking ahead, the ratio should be reduced as a value because of the very time that is going to pass. Soon, the values of the crisis will drop out of the equation.
Source: Bloomberg Finance L.P.
Graphs: Used with permission of Bloomberg Finance L.P.
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