Gary Shilling, who predicted several recessions over past 40 years, thinks U.S. is in mild slump 

Mail Online | 6/26/2019 | Ariel Zilber For;Reuters
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The well known economist who accurately predicted the housing crisis of 2008 says that America is in a recession, albeit a mild one.

Gary Shilling, the economist and financial analyst, thinks the United States is in the midst of a slight downturn.

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‘I think we’re probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5 per cent to 2 per cent, not the 3.5 per cent to 4 per cent you had in the very serious recessions,’ said Shilling, who is president of A. Shilling & Co.

While the stock market may not go into a freefall as it did during other more serious recessions, it will likely dip somewhat, according to Shilling.

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In an interview with Real Vision, he predicted that stocks would drop about 22 per cent.

Shilling says that the current recession could be attributed to a decline in industrial production as well as a slowdown in the global economy.

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Exacerbating matters is the Trump administration’s trade war with China.

In more bad news for the economy, U.S. consumer confidence tumbled to a 21-month low in June as households grew a bit more pessimistic about business and labor market conditions amid concerns about a recent escalation in trade tensions with China.

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The economy’s prospects were further dimmed by other data on Tuesday showing sales of new single-family homes unexpectedly fell for a second straight month in May.

Growing risks to the economy, especially related to the trade war between Washington and Beijing, and low inflation prompted the Federal Reserve last week to signal interest rate cuts beginning as early as July.

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‘The headwinds from the ongoing trade war the economy faces are definitely growing stronger, and it will be a miracle if Fed officials can pull a rabbit out of their hats and keep the...
(Excerpt) Read more at: Mail Online
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