Bets are placed on when the next recession will occur. Unbelievable as it may seem, media as serious as the Financial Times polled fifty economists on when they think the next recession will start in the US, and while 70% of respondents agree it will happen in 2023, the Majority points to the second quarter of 2023. I disagree with respect to a particular quarter.
Let’s remember that a recession requires two consecutive quarters with negative GDP growth, and this must happen as a result of the FED’s fast and intense interest rates in the face of high inflation, let’s remember, last month the US was 8.6%, just one-tenth less than ours. .
As far as I know, no similar research has been conducted in Spain, which does not prevent the world economy from falling over ours in the autumn, after the already declared unstoppable boom for the summer. severe recession. So, no more. And, as is usually the case with this type of scam, he doesn’t know what to deal with next: are those who can initiate it, I think they think about weakening the Government by blaming them, or are they taking it seriously and taking it seriously? few, so it comes to me. What we now call “financial markets”, deadly with zero or negative rates and bringing the American experience to Europe, seem to expect strong increases within a year for the ECB to place the official rate at 2%.
The truth is, if there’s one thing that characterizes this 21st century, it’s that all swans are black. Therefore, I certainly will not be the one to guarantee that this will not happen (the inventors of deception play with it). However, I certify that I have not found any data that gives it the slightest credibility. We are where we are: a growth forecast of just over 4% (eurozone will be 2.6%) and the second quarter, when inflation will start to gradually decline. Forecasts for 2023 show growth of close to 3%, above the average of the three years before the pandemic, with no one talking about a recession.
Those trying to find rational arguments for the overt manipulation of citizens’ moods can point to two facts. The first is the significant social gap that arises when 53% of Spanish residents say they can’t get along or have difficulty doing it. However, let’s remember that 35% cannot go on vacation even for a week a year, or 26% are at risk of social exclusion. Although none of this is new, unfortunately, this is the sector that lost its relative purchasing power the most, due to its weight in energy and food, in the face of high inflation, as has been the case with us for years. The shopping cart, which is the two sections that increase the prices the most, is higher.
The second figure is the normalization of monetary policy implemented by the ECB, which has already resulted in two measures: accelerating the withdrawal of net public debt purchases and the announcement of the first rate hike (0.25%) in July. ten years. On two nuances: the ECB can continue to buy new debt, which serves to repay the old debt (will try to compensate for deviations in the risk premium) until the end of 2024, and interest rates have already risen (Euribor and ten-year debt) even earlier and more than advertised with its official type . As everyone points out, if inflation falls in the second part of the year, no further tightening in European monetary policy is expected.
Multiply your bets if you have nothing better to do.
There is no new speculative bubble in housing. Like a hard-boiled cat, the rising prices of flats have been enough to keep us from the human distress that brought the speculative bubble from the end of the last century to the speculative bubble that hit us in the face of the 2008 crisis, causing suffering we haven’t fully recovered from yet.
The various statistics coincide with reflecting two realities: Home sales in Spain are recovering at a good pace, and with that, we’ve had five consecutive quarters where prices have risen quite intensely and homogeneously in different communities. According to the Price Index by INE, new homes will be at 139 based on the 2015 price of 100, still far from the 152 reached in early 2009, and second-hand homes will be at 136, away from second-hand homes. 169 peak at full bubble.
But beyond prices, there are two key differences that prevent us from literally relating what’s going on in the real estate industry today to that speculative bubble at the turn of the century: sales today are focused on used housing, because residential construction is hardly new. That exceeds one hundred thousand per year compared to 600,000 new flats approved in 2008.
In other words, very little new construction is being done today, partly because of the lack of land and partly because of the lack of public policy aimed at facilitating access to home ownership for high-cost young people without family assistance. (not covered by mortgages) kicks them out of the buyout market despite the low interest rates we have. As a result of these restrictions, thousands of young people are left behind without making the main investment in their lives, and in parallel, we are witnessing an increase in the purchase of second-hand housing as well as rental housing prices. absorbing these demanding markets would otherwise be inclined to buy new housing.
Bad job for everyone. Pessimism is an absolutely wonderful thing right now, perhaps because too many people are walking around looking in the rear view mirror and afraid of the future. And the biggest risk is that some countries may find it profitable to speculate against their debt, as financial markets did against the euro in 2011/12 and the European Monetary System in the early 1990s. Pure malicious speculation.