{"id":24541,"date":"2017-07-30T17:04:10","date_gmt":"2017-07-30T22:04:10","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24541"},"modified":"2017-07-30T17:04:10","modified_gmt":"2017-07-30T22:04:10","slug":"mauldin-one-of-these-3-black-swans-will-likely-trigger-a-global-recession-by-end-of-2018","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24541","title":{"rendered":"MAULDIN: One Of These 3 Black Swans Will Likely Trigger A Global Recession By End Of 2018"},"content":{"rendered":"
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MAULDIN: One Of These 3 Black Swans Will Likely Trigger A Global Recession By End Of 2018<\/a><\/a><\/h3>\n<\/header>\n
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Exactly 10 years ago, we were months way from a world-shaking financial crisis<\/a>.<\/p>\n

By late 2006, we had an inverted yield curve steep<\/a> to be a high-probability indicator of recession. I estimated at that time that the losses would be $400 billion at a minimum. Yet, most of my readers and fellow analysts told me I was way too bearish.<\/p>\n

Turned out the losses topped well over $2 trillion and triggered the financial crisis and Great Recession<\/a>.<\/p>\n

Conditions in the financial markets needed only a spark from the subprime crisis to start a firestorm all over the world. Plenty of things were waiting to go wrong, and it seemed like they all did at the same time.<\/p>\n

We don\u2019t have an inverted yield curve now. But when the central bank <\/strong>artificially holds down short-term rates<\/strong><\/a>, it is difficult if not almost impossible for the yield curve to invert.<\/strong><\/p>\n

We have effectively suppressed the biggest warning signal.<\/p>\n

But there is another recession in our future (there is always another recession), which I think will ensue by the end of 2018. And it\u2019s going to be at least as bad as the last one was in terms of the global pain it causes.<\/p>\n

Below are three scenarios that may turn out be fateful black swans. But remember this: A harmless white swan can\u00a0look<\/em>\u00a0black in the right lighting conditions. Sometimes, that\u2019s all it takes to start a panic.<\/p>\n

Black Swan #1: Yellen Overshoots<\/strong><\/p>\n

It is clear that the US economy is not taking off<\/a> like the rocket some predicted after the election:<\/p>\n