Gary Shilling's Blog

Sep 30 – The economic slide will intensify as Chinese and foreign producers accelerate the movement of their operations out of that country to those that have low or even lower labor costs and are out of the line of fire in the U.S.-China trade war. These include Vietnam, India, Malaysia...

May 23 – A U.S. recession probably started in the current quarter. First quarter real GDP growth, 3.2% at annual rates, was temporarily inflated by a jump in inventories, which contributed 0.65 percentage point to growth. This was no doubt unintended

May 10 – Stocks are very expensive in relation to corporate earnings. Even if rapid economic and profits growth resumes after the next recession, a secular decline in price-to-earnings ratios is likely to mute stock performance. Prof. Robert Shiller’s cyclically-adjusted...

Mar 29 – Recently, others are joining us in forecasting a recession, or at least entertaining a growing probability of one. Of those, few also believe it will commence this year while we continue to rate a business downturn starting in 2019 as...

Mar 7 – Some 88% of all currency transactions globally involve the buck. The euro is a distant second at 31%, the Japanese yen is third at 22% and the Chinese yuan is involved in only 4%, not much more than the Mexican peso’s 2.2% despite...

By Gary Shilling – When supply is plentiful, the buyer has more power than the seller. That’s certainly true in the escalating trade war between the U.S. and China. And a trade confrontation already exists so the important question is, will it escalate to the level...

By Gary Shilling – Leveraged loans, low-quality vehicles used to finance corporate takeovers, hit a new high of $1.6 trillion last year and investors are increasingly willing to buy “covenant-lite” loans with few caveats to prevent egregious behavior by borrowers...

By Gary Shilling – Trump understands that, in a world of surpluses, the buyer, not the seller, has the upper hand. And the U.S. is the absorber of the world’s excess goods and services for which there are no other major markets. Add in Trump’s zeal for deals and...

By Gary Shilling – The Fed is thoroughly convinced that the headline unemployment rate, now 4.2%, is so low that it will soon spawn significant wage inflation that, if left unchecked, will spread throughout the economy. The central bankers fervently believe...

By A. Gary Shilling – Most forecasters, including the Fed, continue to look in vain for significant inflation generated by wage jumps. They don't take into account the depressing effects on compensation of globalization and the resulting large...