Chinese Economy Braces for a Crash as US Recession Risk Rises

Episode #137

The Chinese economy is facing one of its most significant tests in years. With real estate prices falling off a cliff, unemployment skyrocketing, and a currency crisis, Asia’s largest economy could hit even harder times ahead. But this doesn’t mean the rest of the world will remain unaffected. In the US, recession risks are starting to rise as hopes of a “soft landing” are gradually fading away. With inflation still rearing its ugly head and American households running out of cash savings, the worst could be yet to come.

To give us a global view of the economy is Bloomberg LP’s Chief US Economist, Anna Wong, who also served on the Federal Reserve Board, the White House’s Council of Economic Advisers, and the US Treasury. Few people in the entire country have as good of a read on today’s economic situation as Anna, so we spared no questions about what could happen next.

Anna has some recession predictions that go against the grain of popular economic forecasts. From her data, the risk of a recession is far from over, and we could be heading into a shaky Q4 of 2023 and a dismal start to the new year. She details what could happen to inflation, unemployment rates, foreclosure risk, and why the Chinese economy’s failures could have lasting effects back home.

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00:00 Intro

03:06 Trade Wars, Inflation, and Economic Collapse

15:21 When The Recession Could Hit

24:03 How Bad Will it Get?

28:00 Real Estate Risk

32:14 China Begins to Crash

42:35 Connect with Anna!

[shelby_shaw]

I'm wondering if people who went through the '08 financial crisis had a tougher time than I am having now, my plan was to work, save and retire at 55, but high price for everything have become a huge obstacle, Sigh* I now look towards the stock market to fuel my goal.

[SquirrelSurfer]

Great job. Great guest. Consistent with what i'm hearing from some my other favorite analysts.

[dm]

I love Anna. She is a top-notch economist.

[bloomip]

Mind blowing bro… wow!! You need to bring her back

[backwoodsbungalow]

7:16 Soft landing topic
28:00 Residential mortgage foreclosures
33:17 economy of China ☮️

[pamelamcgehee]

Great guest and fantastic content. This is why your show is a STAND OUT!!! Keep up the good work, Dave.

[KongOsburn]

Its a "soft landing" only to those who don't get hurt in the "soft landing recession"

[rebeccahuangli]

Great interview. Anna articulated very well

[tonysu]

Anna's suggestion that price data can be more reliable than volume data because of its availability doesn't necessarily work in a managed economy like China where price controls are common.

This very basic principle suggests to me that she might not have spent a lot of time analyzing China's economy enough to be skeptical about the data that's reported and how to get around the most egregious Chinese data reporting.

[roirobert]

"Goldielocks miraculous disinflation" the best alternate name I've heard for the soft landing, which was a Morgan Stanley economist

[skyfinancellc]

fantastic stuff; thank you for bringing her to us!

[Cedartreetechnologies]

Almost lost me with extended intro for a gal who worked at the WH....glad I stayed with it. Great insights and surprising data, particularly with strength before GFC.

[trentgumpp]

That was a lot of good information I hadn't heard presented that way before.

[berhanegebriel]

Any Reason Why She Is Not Shown During This Interview???

[templeviewgate]

What we deduce since 2008 the China started stripping itself with disastrous decisions and real estate market is in complete chaos ...Time now has ripened so much that deflation is the present stage.

[happyzahn]

*two thumbs up* just for mentioning the month/year in the middle of your video. So rare.

[rdanzi]

She is being rather kind say things will be mild. There's no way that will happen. Commercial Realestate is going down hard. China's economy is crashing, inflation is out of control, Residential Realestate is out of control, Cars doubled in price. Non of this is affordable. Good luck with mild.

[rockycata]

Interesting ...from a very source🤗👍 Anna Wong is one of the most knowledgeable economists today(.) However, "economics is more psychology than science", and the resilience of each economy ultimately will depend on the people/culture/society. The 'probability' of something unforeseen is very high, particularly on the US side. That niggling 'uncertainty' of another "Lehman Moment", where 'every' asset-valuation is shocked. 350M Chinese 'consumers' are never wrong, and with BRICS+6 another 350M will open up to Chinese production. Like the draconian CoVID lockdown, Chairman Xi understands what 'hard-landing' means for China, but restructuring China's economy means opening up to new global markets[...BRICS+20 ...BRICS+40], one step at a time, while making sure it's a new "Great Leap Forward". Patience, and the long game ...

[atlantaguy]

As we approach the end of December and 2023, the risk of a recession in the US have dropped considerably as inflation continues to decrease, US unemployment stays stable and the Federal Reserve now talks 3 rate cuts in the US rates during the Spring of 2024.

[tonysu]

That's interesting that Anna believes that there will be a big hit on consumption as various Pandemic related aid expires.

First, AFAIK all or practically all Pandemic related aid has already expired. The other interesting issue is that I just commented on another channel how the opposite is happening in China, that consumption has actually increased. I responded that overall consumption numbers might be misleading especially in China where lifting Pandemic restrictions probably meant more discretionary spending was allowed. Pandemic lockdowns in the US weren't as severe but there is a chance a similar effect might be seen especially in the robust American economy where more businesses might be able to suddenly produce more giving the American Consumer more opportunities to spend.