February 2016

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Perhaps some countervailing power against all the pessimism, from Goldman Sachs:

Tell-tale signs of late-cycle excess have yet to emerge in the US or Europe. There is plenty of economic slack and credit growth is muted. The US investment bank said the global stock market rout and the credit tremors this year are sending off false signals, insisting that underlying indicators of economic health show little sign of a sudden rupture in Europe, the US or across the OECD bloc of rich states. An array of “alarm” indicators - based on the experience of 20 countries since 1970 - suggest that the current business cycle is still in full swing and far from exhaustion, even if risks have been ratcheting up over recent months... Credit ratios are high but they have not been spiking higher in most OECD states, and there is still plenty of slack left in the economy. This allows central banks to take their time before having to slam on the brakes – the time-honoured cause of recessions. Jan Hatzius, Goldman’s chief US economist, cited a string of episodes where markets were gripped by fear and emotion yet the storm passed without doing much damage.

Goldman Sachs sees near-zero risk of UK recession despite market tantrum - Telegraph