As more negative macro data seeps out from the US, the bears are starting to gain ground. There’s a slew of grizzly voices out there.
Freddie Mac CEO Richard Syron gave a very bearish prediction on Friday, telling the FT that the chance of a recession in the US was around 45 per cent:
Some parts of the housing market are literally frozen up. [Credit turbulence] has introduced an enormous amount of fear, and I use that word advisedly, into large parts of the household sector about what’s going to happen to them when they get to reset.
Grim news from the US’s largest mortgage lender. And does Mr Syron think Ben Bernanke will move to cut rates again?
I would bet that he would . . . by a material amount.
And the chorus of bears is growing louder. A 30 per cent chance of a recession was last week’s orthodoxy. But this week the consensus is nearing the 50:50 mark. And the voices are more mainstream.
Alan Greenspan, former Fed chair, gave a similar outlook to Syron, when he told the BBC’s radio 4 that the chance of a recession was “still below 50 per cent” – but only just, was the implication.
Goldman Sachs, meanwhile, has quietly shifted from super-bull to bear – and given the bank’s impressive results this quarter, its opinion is probably one to watch. According to a report out Friday, “The Global Economy Hits a Crunch”, Western markets are showing “signs of wear” and the chance of a recession in Japan is two in three. Goldman has evidently ditched its “decoupling” cheerleader gear and is now very firmly in the slowdown camp.
And in the UK, oracular fund manager Anthony Bolton says equities are just about to enter a nine-month bear run, according to Reuters.
All in all then, it’s a grim Friday.