100% Chance of Recession

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 20 October 2022

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

This episode is sponsored by Nexo.io, Circle and FTX US. On today’s episode of “The Breakdown,” NLW looks at the various signals markets are grappling with, including continued hawkish commentary from the Fedeal Reserve, financial modeling that keeps increasing the likelihood of recession in 2023, better-than-expected data in Q3 earnings but painful data coming from the housing market. - Nexo Pro allows you to trade on the spot and futures markets with a 50% discount on fees. You always get the best possible prices from all the available liquidity sources and can earn interest or borrow funds as you wait for your next trade. Get started today on pro.nexo.io. - Circle, the sole issuer of the trusted and reliable stablecoin USDC, is our sponsor for today’s show. USDC is a fast, cost-effective solution for global payments at internet speeds. Learn how businesses are taking advantage of these opportunities at Circle’s USDC Hub for Businesses. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “War” by Enoch Yang and “The Life We Had” by Moments. Image credit: Nuthawut Somsuk/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:15.0	The breakdown is sponsored by nexo.io, circle, and FtX, and produced and distributed by CoinDesk.
0:22.9	What's going on, guys? It is Wednesday, October 19th, and today we are talking about the 100%
0:28.6	chance of recession that markets and analysts are now anticipating. Before we get into that,
0:34.4	however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation,
0:40.9	come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash
0:45.4	breakdown pod. Also a disclosure, as always, in addition to them being a sponsor of the show,
0:50.1	I also work with FTX. All right, folks, well, today we have a ton of news from markets.
0:57.6	We are out here getting a sense of how people are feeling.
1:00.8	Are they optimistic?
1:01.8	Are they bearish?
1:02.6	And we're going to start with something that I think will probably not be at all shocking to listeners of the breakdown.
1:10.2	According to new economic projections from
1:12.2	Bloomberg, a U.S. recession in the next year is now a certainty. The latest probability
1:17.6	models by economist Anna Wong and Eliza Winger forecast a 100% chance of a recession in the U.S.
1:23.1	by October next year. That's up from about 65% in previous models. A separate Bloomberg survey of 42
1:30.0	economists predicted the probability of recession within a year at 60%, up from 50% a month earlier.
1:36.0	According to the Bloomberg model, recession risk is also up on shorter timeframes. The 11th month
1:40.9	risk is at 73%, which is up from 30%, and the 10-month risk is now at 25% up from 0%.
1:46.8	The Bloomberg model takes broad-based economic and financial indicators as inputs, some of which have significantly deteriorated over the last month, particularly industrial production metrics.
1:57.2	Mohamed El-Ery and the president at Queens College, Cambridge, writes,
	...

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