Morgan Stanley warns tariffs could 'likely lead to an economic recession'

[libertybele]

Unfortunately, I think MS is predicting correctly.  Anyway you cut it, a recession is not going to bode well for Trump's re-election in 2020.  Yes, China has gotten away with unfair trade practices for decades; unfortunately, correcting that practice is going to be painful.

Morgan Stanley warns tariffs could 'likely lead to an economic recession'

The latest tit-for-tat tariffs on Chinese imports have already taken a wrecking ball to stocks’ gains. Now, some analysts are bracing for the impact to trickle out to the broader economy.

“The potential cost headwinds of 25% tariffs on on all Chinese exports to the U.S. could be in the range of 1.0-1.5% of the index’s net income,” Morgan Stanley analyst Michael Wilson wrote in a note Monday. “But demand destruction and ailing confidence increase the potential impacts well beyond just higher costs and would likely lead to an economic recession in our view.”

Late last week, the Trump administration raised the rate of tariffs on $200 billion worth of Chinese imports to 25%, and announced that further levies on another $300 billion in imports would be forthcoming. Trump has claimed repeatedly that China “broke the deal” the two sides had been working toward over the past several months, leading to the use of tariffs to try and extract further concessions.

On Monday, Beijing retaliated by announcing plans to set a tariff rate as high as 25% on a portion of $60 billion worth of U.S.-made goods, effective June 1. The news sent contracts on the Dow down more than 500 points in pre-market trading.
‘Volatility may not subside’

In the past, Wilson has repeatedly highlighted the likelihood of an “earnings recession,” or a contraction in S&P 500 companies’ bottom-line growth. With this thesis in mind, he’s maintained that the S&P 500, at its near-3,000 level approached earlier this year, was probably overvalued.

“While last week’s correction helped move the risk-reward closer to balance, we think there is likely more downside than upside based on our high conviction view that (next twelve month) earnings expectations remain too high by 5-10%,” Wilson said.

Last week, the S&P 500 posted a weekly loss of 2.18% as concerns about trade tensions simmered. However, the index was still up about 15% for the year-to-date.

But earnings recession aside, an increase in the prospect of increased trade tensions has also pulled up the probability of a full-blown economic recession, Wilson said...........

https://www.yahoo.com/finance/news/tariffs-could-lead-to-economic-recession-morgan-stanley-140357584.html

[Wingnut]

Color me shocked  a douche bank/investment company wants to protect their ass ets.

[Right_in_Virginia]

Color me shocked  a douche bank/investment company wants to protect their ass ets.

Took the words right off my keyboard.   

[IsailedawayfromFR]

So Morgan Stanley does not issue a report talking about the negative effects in jobs from China stealing them, but now chicken-littles when both sides declare war.

When one person steals, silence, but when that person is caught and targeted, we need to now worry ourselves.

This is all about a financial services company seeing its total profit going down as investors rein back in.

[libertybele]

And it just so happens that Deutsche Bank was the only bank that lent Trump money when no other bank would  even after he declared bankruptcy(s) and was in enormous debt...just sayin'.

This is also about many financial institutions and people scrambling as the recession hits.

[Absalom]

Honor forbids individuals and their nations from cheating, lying and stealing.
China cheats, lies and steals; hence they are dishonorable!
That is the very core of this matter!!!
Obviously financial hustlers like Morgan Stanley have no interest in this
Principle when it impacts their wallets.
As such, they are as dishonorable as the Chinese! 

[Right_in_Virginia]

And it just so happens that Deutsche Bank was the only bank that lent Trump money when no other bank would  even after he declared bankruptcy(s) and was in enormous debt...just sayin'.   

@libertybele .... Got any news from the 1940s to support your latest "hair on fire" thread?

[libertybele]

@libertybele .... Got any news from the 1940s to support your latest "hair on fire" thread?

Obviously, as usual, you aren't paying attention.   

Could Trump’s Jones Day Lawyers End Up in Deutsche Bank-Gate?

Lawyers from Jones Day have been functioning like a Praetorian Guard around the president since the day he took office. How the firm landed so many of its partners into key positions in the Trump administration has baffled the media, especially since its partners were big supporters of Hillary Clinton’s campaign. According to Bloomberg News, Jones Day’s lawyers contributed $7,422 to Trump’s campaign while showering Hillary Clinton’s campaign with $267,899.

Wall Street On Parade has previously reported that Jones Day lawyers in Trump’s White House Counsel office had previously represented Freedom Partners, the front group of Koch Industries, the giant fossil fuels company majority owned by the billionaire Koch brothers. Freedom Partners had quickly provided the Trump administration with a list of regulations it wanted gutted – like the Paris Climate accord (which Trump revoked on June 1, 2017) and numerous EPA rules. Jones Day had also been a lead law firm for Koch Industries’ mergers and acquisitions for years. SourceWatch reported last year that a dozen people who previously worked at Freedom Partners were given jobs in the Trump administration. Among that group was Marc Short, former Freedom Partners President, who became Director of Legislative Affairs for Trump. Short stepped down in July of last year after many of his key objectives had been achieved.

On the same day that Donald Trump was sworn into office, the Jones Day law firm issued a press release indicating that 13 of its lawyers were heading to the Trump administration. Key among the posts were Don McGahn, who had been General Counsel to Trump’s campaign committee, and was now going to be serving as White House Counsel. McGahn’s Chief of Staff was also coming from Jones Day, Annie Donaldson. Both had previously represented Freedom Partners...........

Last month the House Intelligence and the House Financial Services Committees subpoenaed documents from Deutsche Bank, President’s Trump long time banker which has, over the years, loaned Trump “a total of well over $2 billion,” according to the New York Times. During much of the time these loans were being made by Deutsche Bank, other banks refused to loan to Trump because of his history of defaulting and his businesses filing bankruptcy. That fact has raised the curiosity of these two House Committees because what Trump also has in common with Deutsche Bank is Russian money.

In 2017 Deutsche Bank settled with U.S. and U.K. authorities over a $10 billion Russian money laundering scheme, paying a combined fine of $630 million. In November of last year, Deutsche Bank’s offices in Frankfurt, Germany were raided by 170 law enforcement officials. The probe involved potential money laundering..............

http://wallstreetonparade.com/2019/05/could-trumps-jones-day-lawyers-end-up-in-deutsche-bank-gate/

   

[Right_in_Virginia]

Obviously, as usual, you aren't paying attention.   

 

May today be the day you find an opinion and hold it for 24 hours.  Good luck! @libertybele 

[libertybele]

May today be the day you find an opinion and hold it for 24 hours.  Good luck! @libertybele 

Don't you have some of Trump's "tweets" to post today?     

[Jazzhead]

It's the age-old dilemma of workers vs. consumers.   Tariffs may protect some jobs, but they raise prices for all consumers.    Is my higher grocery bills and diminished stock portfolio worth it because my neighbor got to keep his middle class job?

There is no easy answer.   For now,  I'm with the President.     

[libertybele]

It's the age-old dilemma of workers vs. consumers.   Tariffs may protect some jobs, but they raise prices for all consumers.    Is my higher grocery bills and diminished stock portfolio worth it because my neighbor got to keep his middle class job?

There is no easy answer.   For now,  I'm with the President.   

My reason for posting this article was not to criticize Trump's tariffs on China, but merely to post Morgan Stanley's prediction of a recession as a result.  The article was criticized in here because of their association with Deutsche Bank and I merely pointed out Trump's very long and close relationship with the bank.

You are correct @Jazzhead there is no easy answer.