Business Report: Is another recession near? - Hawaii News Now - KGMB and KHNL

Business Report: Is another recession near?

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HONOLULU (HawaiiNewsNow) -

There are more stories coming out warning that a recession may be near. A fresh example is a piece on Marketwatch, "Risk of a Recession May Be Higher than You Think."

The writer starts by saying a bear market, which is a drop of 20% or more from peak to trough, usually requires an economic recession, which in turn is always preceded by a profit recession. That's mostly true, but predicting the future by examining the past has a really poor track record. We've also seen economists say a recession could be near because the up-cycle has lasted a long time.

The problem is, every cycle is different, so forecasting based on other ones is a fool's game. What's different about the current one? The increasing interconnectedness of global economies.

The Fed factor, which has led to a long uptrend, yes, but also an anemic one. And corporations finding new ways to raise profits in slack conditions.

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