Strengthening recessionary trends in global economy
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Last week's turmoil on global stock markets has drawn attention to the strengthening recessionary trends in the world economy. The top four economies, including the US, China, Japan, and Germany, are all experiencing signs of economic decline. Investor confidence has collapsed in Germany and the eurozone, with the ZEW Indicator of Economic Sentiment falling significantly. China's GDP growth for the second quarter was 4.7%, a significant drop from the first quarter. The country's banks have been investing in the bond market, causing yields to fall. The People's Bank of China (PBoC) has been discouraging this behavior and named and shamed rural banks for manipulating bond prices. The Japanese economy is also experiencing low growth, with a decline in consumption spending and exports. The recent market turmoil highlights the fragility of the financial system, particularly in the US. The sell-off was triggered by a lower-than-expected US jobs report and the Bank of Japan's decision to raise interest rates. The Federal Reserve is under pressure to cut rates to sustain the debt mountain. Overall, there are growing indications of a global recession and financial instability.

#GlobalEconomy #Recession #StockMarkets #InvestorConfidence #GdpGrowth #BondMarket #FinancialSystem #InterestRates

https://www.wsws.org/en/articles/2024/08/15/dybv-a15.html