Art Laffer weighs in as recession indicator sparks fears

Art Laffer weighs in as recession indicator sparks fears


SINCE 2007, SENDING A POTENTIAL ALARM FOR RECESSION. REAGAN ECONOMIST ART LAFFER. TYPICALLY ON AVERAGE THE STOCK MARKET PEAKS 18 MONTHS AFTER INVERSION. ECONOMY PEAKS 22 MONTHS AFTER INVERY. NOT NECESSARILY RECESSION AFTER THE CORNER. SOME ARE SAYING NOT NECESSARILY WILL BE RECESSION AT ALL THIS TIME?>>I DON’T SEE ANY REASON FOR RECESSION RIGHT NOW UNLESS SOMETHING IN THE FUTURE THAT DEVELOPS QUITE MATERIAL LIKE A TRADE WAR OR SOMETHING LIKE THAT. RIGHT NOW, I DON’T SEE ANY CHANGE IN POLICIES. THE TAX BILL IS WORKING NICELY. MONETARY POLICY A LITTLE SLOW CATCHING UP. THEY SHOULD DROP THE RATE COUPLE, HALF A PERCENT OR SO IF YOU LOOK AT ALL OF THIS. LET ME SAY, TRADE ISSUES ARE EXTREMELY IMPORTANT TO THE MARKET, AND MARKET IS EXTREMELY IMPORTANT TO THE FUTURE OF THE ECONOMY. JUST THE DROP WE’VE SEEN FROM THE PEAK TO RIGHT NOW, CHARLES IS A LOSS IN U.S. WEALTH OF ABOUT $1.7 TRILLION. WHICH IS A HUGE AMOUNT OF MONEY. IT PUTS INTO PERSPECTIVE ALL OF, THAT IS ONLY 30 BILLION. WE LOST 1.7 TRILLION IN WEALTH BECAUSE OF I BELIEVE FEAR ABOUT THE TRADING MARKET, WHAT IS GOING ON IN CHINA. SO WHEN I LOOK AT THIS WORLD, I DON’T THINK WE’RE IN A RECESSION. I DON’T THINK WE’RE GOING INTO ONE BUT IF THE TRADE THING WERE TO COME AROUND TO BE FOOD, I THINK WE COULD PULL OUT OF THIS VERY QUICKLY. CONNELL: ARE YOU SAYING 30 BILLION JUSTIFIES $1.7 TRILLION IN LOSSES?>>WELL THAT IS WHAT THE NUMBERS ARE. EXTRA 10% ON 300 BILLION IN TRADE WITH CHINA. UNLESS I DID MY MATH WRONG. CHARLES: THAT IS THAT A LEGITIMATE FEAR, CORRELATION THOUGH?>>I THINK ABOUT 1 1/2 TRILLION. CHARLES: RIGHT IS. I LOOK AT WILSHIRE 5000 EVERY DAY. I DO THE MATH MYSELF. I’M SAY SOMETHING THAT LEGITIMATE CORRELATION, ART? SHOULD IT BE DOWN THAT MUCH OR IS THIS AN OVERREACTION?>>I DON’T KNOW DEPENDS WHAT HAPPENS IN THE THE FUTURE WITH THE TRADE DEAL. IF THE TRADE DEAL COMES THROUGH IT IS WAY OVERREACTING. IF THE TRADE DEAL DOESN’T COME THROUGH AND THERE IS TRADE WAR, MAY BE OVERREACTING. YOU LOOK WHAT HAPPENED WITH THE SMOOT-HAWLEY. I DON’T MEAN TO TALK ABOUT SMOOT-HAWLEY. THE MARKET FELL 90%. WHEN I WAS IN WHITE HOUSE 1970 TO 1972, DEVALUATION OF DOLLAR, 10% IMPORT SURCHARGE, JOB DEVELOPMENT CREDIT, EXCLUDED FOREIGN AID, WE HAD PROTECTIONIST ADMINISTRATION, THE STOCK MARKET FELL BY 50%. WHEN YOU LOOK AT IT HISTORICALLY TRADE HAS A HUGE, HUGE NET EFFECT, WAY BEYOND WHAT YOU WOULD EXPECT GIVEN THE SIZE OF HOW MUCH TRADE THERE IS. IT IS REALLY VERY IMPORTANT TO MARKETS. ONE OF YOUR PREVIOUS GUESTS SAID, IT HAS BEEN A LONG TIME FOR THE BOOM TO OCCUR, THAT IS NOT WHAT CAUSES RECESSIONS. RECESSIONS ARE CAUSED BY POLICY ACTIONS. THEY CAN OCCUR IN TAXES, OCCUR IN SPENDING. OCCUR IN REGULATIONS. THEY CAN INCUR BECAUSE OF TRADE POLICY. THAT IS ONLY THING I SEE WE HAVE A BIG ISSUE ABOUT RIGHT NOW. WE’RE WITH CHINA. I WOULD LOVE TO SEE A GREAT FREE TRADE DEAL DONE WITH CHINA THAT WOULD BOOST THE MARKET BY WELL OVER 5,000 POINT, THIS MORNING WE WERE GREETED WITH REALLY POOR ECONOMIC DATA OUT OF GERMANY, POOR ECONOMIC DATA OUT OF CHINA. SO-CALLED GLOBAL RECESSION. THAT IS NOT PLAYING A ROLE AT ALL? EVERY TIME WE GET NUMBERS OUT OF CHINA, IT SENT OUR BOND YIELDS DIVING LOWER AS MONEY CONTINUES TO COME FROM AROUND THE WORLD, POURING INTO OUR 10-YEAR BOND, WHICH MIGHT BE SKEWING HISTORICAL REFERENCE THAT WE USE. MAYBE THIS TIME IS SOMEWHAT DIFFERENT. WE’VE NEVER BEEN IN A WORLD, ART, WITH $17 TRILLION WITH A T, OF NEGATIVE YIELDING RATES AND ALL THESE GLOBAL ECONOMIES GOING DOWN AT SAME TIME EXCEPT AMERICA.>>THE REST OF THE WORLD IS IN RECESSION, THEY’RE IN VERY BAD SHAPE. THAT DOES IMPACT US, CHARLES. YOU’RE COMPLETELY CORRECT. WE’VE BEEN FIGHTING AGAINST IT BECAUSE WE’VE BEEN DOING VERY GOOD POLICIES WHILE THEY HAVE NOT BEEN DOING GOOD POLICIES. WHY WE ARE PERFORMING WELL AND THEY ARE NOT PERFORMING WELL. THEY ARE DRAG US DOWN, THEY ARE DRAG US DOWN WITH INTEREST RATES. WHEN YOU HAVE NEGATIVE INTEREST RATE YIELDS AROUND THE WORLD, HOW CAN U.S. YIELDS BE HIGHER THAN REST OF THE WORLD. OUR POLICIES MADE US VERY RESILIENT. CHARLES: ART, THANK YOU VERY MUCH. WE ALWAYS BRING YOU IN.>>CHARLES, YOU’RE GREAT. IT IS MY BIRTHDAY TODAY. DIDN’T WISH ME HAPPY BIRTHDAY.>>LOOK AMAZING FOR 38.>>I’M GOING INTO MY 80th YEAR. CAN YOU BELIEVE IT. CHARLES: YOU’RE FOR REAL. YOU’RE A GREAT GUEST.

You May Also Like

About the Author: Oren Garnes

100 Comments

  1. These guys are dumbasses. We Are in the middle of a trade war, what do you mean if I trade you or develops in the future?? 🙄

  2. This is what denial of your debt market looks like, kids! Leave it to Fox to help bury heads in the sand all They way up to the crash.

  3. I wonder how Trump will blame the Democrats for this one? Trump has to bow to the Chinese, he tried to take on the Chinese alone…he’s a political moron.

  4. Laffer has no CREDITABILITY ,use the internet and you will find him poo! pooing the warnings of the 2008 meltdown from Peter Schiff. So who does FOX ask as their expert the guy who was wrong.

  5. Hi from Britain they are saying if we leave the great EU our finances will crash and it's all the people's fault that voted to leave the EU and Boris Johnson needs to be kicked out of office so you people in America stand firm behind your president and we will stand firm with Boris we need to stand up together and fight GLOBALIST God BLESS

  6. Gee isn't it funny how much the msm likes to cover any drop in the market like it's the end of the world? It's almost like they want a recession to happen. It's almost like they are traitors who want power so much they are willing to hurt average Americans to get it.

  7. I had a dream last night. It was about a stampede of bulls coming over a hill, and then there was a huge number of bears lurking in the woods. Can someone explain this dream?

  8. This Art Laffer clown was saying the same thing in 2007-2008 about how the economy was great and wasn't going into a recession. He was wrong then and he's even more wrong now. Pay Peter Schiff the penny you owe him for the bet you made in 2008 about how the economy wasn't going into a recession clown.

  9. I'm not spooked. I'm doubling down on buying. now is the time.all of you people who attempt to make a profit and fail in stocks, it's because you act impulsively and never realize that now is the time to buy.

  10. I'm voting for Trump…with or without a recession. Dems would only make things FAR worse than whatever they are.

  11. No more Russia, Russia, Russia (cuz it didn't work for Dems). So now it's gonna be non-stop "Recession, Recession, Recession"! from the Dems and the liberal media (which now includes Fox news).

  12. Things ignored by Trump Evangelicals:
    Sexual assault by Trump
    12,000 lies in 2 years
    Friends with dictators
    Trump's white supremacy
    What Evangelicals won't forgive:
    Stock market crash

  13. That's right, start acting like little girls, panic, drop in a ditch and start crying. If we end up worse the the great depression and come out of it debt free, people learn to respect each other again, fantastic. I've never seen people who are supposed to be our representatives act like immature brats to such a degree, it's pathetic and all hell may break loose over left vs right. There won't be any winners when it happens but it's coming very close to an all out civil war. Trump, is merely undoing the mess the sellouts for 20+ years have created.

  14. His first words were “no recession unless a trade war or something happens in the future” Your in a trade war NOW with China…. that’s just too stupid to be stupid.

  15. "MANUFACTURED RECESSION" All thats left for the LEFT after striking out on STORMY, RUSSIA, TAXES, RACIST……………………………….WAY TO PREDICTABLE DEMOCRATS COME ON NOW.

  16. Recessions are manufactured by the "policies" of the Chicago and Austrian Fascist economists like dude up there that engage in wreckage for the profits of a minority. All of these people have been screwing us since the 40's and they need to be put in jail.

  17. Correct Federal reserve has the brakes on should be 1-1.5 % lower everybody's trying to sabotage Trump what is wrong with these elitist?

  18. So, the rest of the world is in recession, yet were told here that the market drop was due to 30B in tariffs that hasn't happened? Yeah, nope.

  19. This guy is a clown. Peter Shift was right. Wheres Peter Shifts penny and apology letter? If you're listening to this clown, then you're an even bigger clown

  20. Stop being an economic idiot! Here are some rules of thumb for recession. Recession usually occurs when businesses cease to expand, the GDP diminishes for two consecutive quarters, the rate of unemployment rises, and housing prices decline. Now, GDP of the second quarter of 2019 declined a little bit, but the businesses are thriving, the unemployment rate is still quite low and the housing prices are still higher than a year ago. Stock market itself won't tell a thing. What do you think?

  21. The tax bill is working, he said. The Laffer curve led people to think cutting tax rates could increase total tax revenue. Bush cut tax rates, deficits went thru the roof. Trump cut tax rates, the deficit is going thru the roof. The most recent figures show only trivial increases in business investment after the tax cut. It did not work. All it did was transfer money into the pockets of share holders by pumping up the deficit. Trump in 30 months has created 800,000 fewer jobs than were created in the final 30 months of Obama. Now tariffs have wiped out tax cuts for most non rich people. Farmers are going under. Recession is getting more likely.

  22. I wouldn’t be surprised with all the tariffs that pathological liar trump put on many country’s products & seeing how pathological liar trump went bankrupt 6 times & lose over 1 million bucks in the 80s & 90s, so pathological liar trump sure knows how 2 lose money & he’s gonna drag America down.

  23. Nobody EVER says this but…… when the market reaches historic highs, those who are able to exit quickly will do so WHEN they believe the timing is right because, until you actually REALIZE profits, they're only on PAPER. The smaller investor, GETS IN, STAYS IN, and must have a reason to GET OUT, then do it with DISCIPLINE.

  24. This guy felt the need to explain to everyone that 1.7 trillion dollars is a huge amount of money. Good thing he made that clear…

  25. WOW…How this alarm went over the head of ALL TRUMP SUPPORTERS,reading this comment section is baffling and so IDIOTIC

  26. This guy is a CLOWN at the highest level…..
    He needs to be put in prison for his comments….
    He is a moron……at the highest level….
    He just keeps vomiting his viewpoint …..which…..sadly
    is wrong…………….
    Art talked on and on and on……..and did not address the
    current crash in bonds….
    What planet is he on……
    The USA is simply the last turd to go down the toilet…..
    sadly everybody keeps pretending…..
    If you are a Baby Boomer…….you loose…..
    and that is the goal…….

  27. This guy wouldn't see a bubble if it slapped in the face he was wrong during the housing crisis of 08 he's wrong again I wouldn't bet your money on this so-called economist

  28. "Recession! Recession! Recession! Recession! Recession! Recession!" – Dems

    They try everything (Russia, Racist) to destriy Trump…. now it's: RECESSION !!

  29. Recessions are not the problem. They are part of capitalism. The problem is the FED trying to avoid recessions with cheap money and cheaper talk. We had recessions on a regular basis in the 1950's when America was great. Its called taking away the punch bowl before the party gets out of hand, imbalances are created, and market participants are sent false signals. The Fed waited to long to normalize rates and clean up their balance sheet under Yellen. Trump the candidate pointed this out. Trump the President wanted the Fed to make the bubble even bigger. Smoot-Hawley and China trade agreement are only catalysts, but they did and will get the blame.

  30. CHINA HAS MEGA PRODUCTS!!! SOME CHINA PRODUCTS AMERICA NEEDS!!! SOME CHINA PRODUCTS AMERICA DOES NOT NEED!!! BOTH NEED FAIR TRADE!!!
    AKA, wtkjr.!!!

  31. Art Laffer ,An Economic advisor to Reagan, Deregulation which led to Savings and Loan Crisis, Good Choice Fox

  32. This guy is an economic idiot. Do falling share prices indicate a recession?"Share prices can fall for many reasons other than recession. An oft-repeated quote is that ‘stock markets have predicted ten of the past five recessions.’ What this means is that sometimes a fall in share prices is related to a recession. But, sometimes share prices fall and there is no correlation with the economy. It could be a correction of over-valued prices or a change in market sentiment ."

  33. Haha yet they wanna bring in the worlds poor so they can live off our Taxes ahaha we are also struggling you dumb Liberals

  34. In addition to creation of almost 6 million jobs for Americans, tariffs on Chinese goods have so far created over $63 billion for the US treasury. The tariff money could reach $100 billion next year! Do we need to sell more soybeans to China? Nope, we had enough money to reimburse our farmers. However, Trump haters with an unsound mind said Trump had lost the trade battle with China! Whatever they say, having tons of extra cash to spend is a good thing, doesn't it?

  35. DJI is going to re-test 21k once again if we break down we are going to see 15k-18k to re-test those levels October 2015 when were 15k ish, my estimation will be a correction from 25k to 15k this is normal 10k points look the historical charts, market circles are normal. Doesn’t matter who is in power nothing can be forever up in short terms, DJI it’s been bull market since 1933, and we’re going up and up in the next decades. No worry shall we?

  36. I clearly remember ,November of 2007,conservative radio host Greg Garrison in Indianapolis,contrary of all the signs that a recession is imminent,saying with the confidence of a fool : "There are zero signs of a recession coming."

    One month later :: Boooom !!

  37. Should a short recession take place its a great opportunity to re-balance your portfolios but it will not prevent Trump to get re-elected!

Leave a Reply

Your email address will not be published. Required fields are marked *