The world economy faces a 'titanic problem'

[Rich]

This recovery doesn't feel like a recovery. I know the unemployment number looks pretty, but it is misleading.

It is a matter of time before we're in a tumble again.

As for what might trigger the next recession, King highlighted four things:

Wage growth will hurt corporate earnings and reduce the share of corporate profit contributing to US gross domestic product (it also doesn't help that worker productivity is low). In turn, households and businesses will lose confidence in the economy, and the "equity bubble" will burst with collapsing stock prices.

Nonbank financial systems such as insurance companies and pension funds will increasingly not be able to meet future obligations. This will cause a huge demand for liquid assets, forcing people to rush to sell despite no matching demand, triggering a recession.

Forces beyond the Federal Reserve's control, including the possibility that China's economy and its currency could collapse. Weak commodity prices could also cause collapses in several emerging markets, as could continued strength in the US dollar.

The Fed could cause the next recession by raising interest rates too soon, repeating the mistakes of the European Central Bank in 2011 and the Bank of Japan in 2000.

Read more: http://www.businessinsider.com/hsbcs-stephen-king-on-the-world-economy-2015-5#ixzz3a2m0oAqL

[Phishfan]

I'm tired of hearing about wage growth and corporate earnings. Look at the amount of money a typical worker earns while working for one of the large corporations and then check the compensation packages of the executives. If companies are hurting for profits don't look down the ladder. The top of the ladder is where the pay is skyrocketing.

[Rich]

I'm tired of hearing about wage growth and corporate earnings. Look at the amount of money a typical worker earns while working for one of the large corporations and then check the compensation packages of the executives. If companies are hurting for profits don't look down the ladder. The top of the ladder is where the pay is skyrocketing.

A lot of corporations are top heavy. Corporate overhead just keeps going up and up. The company I work for has a robust executive management component and the cost of all those salaries gets distributed down to the revenue generating business units. It is getting so bloated that we are having challenges in beating our competitors on pricing. Corporate overhead is over 60% of fixed expenses. They charge us for it but we're not approving these new executive positions. But then they ask us to reduce expenses, but they aren't going to reduce their own!

So I agree with your comments.

On the flip side, you have to pay top dollar if you want top talent in a free market. But it seems like the corporate structure in a lot of companies is out of whack.

That being said, we're still experiencing a paper thin recovery. The bottom is going to fall out of this thing sooner rather than later.

[Fau Teixeira]

england is about to go into a recession .. they're going about implementing austerity measures .. that will trigger a recession for them

[Tenshot13]

Thought this was a DiCaprio thread...disappointed.

[Rich]

england is about to go into a recession .. they're going about implementing austerity measures .. that will trigger a recession for them

Austerity measures will most likely not be the reason a recession is triggered in the UK. UK is more greatly impacted by the economies of its neighbors. There are still a lot of financial issues in some European countries and a slide back would have an impact on the UK since about 50% of its economy is impacted by what happens with the EU.

[bsmooth]

Austerity measures will most likely not be the reason a recession is triggered in the UK. UK is more greatly impacted by the economies of its neighbors. There are still a lot of financial issues in some European countries and a slide back would have an impact on the UK since about 50% of its economy is impacted by what happens with the EU.

Unless they decide to leave the EU

[Rich]

Unless they decide to leave the EU

Well since 50% of their economy is impacted by what happens with the EU, them leaving the EU would most certainly lead to a recession.

[BuccaneerBrad]

Thought this was a DiCaprio thread...disappointed.

LOLOLOLOLOL!!!!!!

[bsmooth]

Well since 50% of their economy is impacted by what happens with the EU, them leaving the EU would most certainly lead to a recession.

Perhaps not. The EU may not survive intact over the Greece issue. Plus there has been discussions about England leaving the EU prior to this election, which is one of the reasons this election was more significant. Many wonder if the voices calling for leaving the EU will get friendly ears to hear them.

[Fau Teixeira]

the voices calling for england to leave the EU didn't win the election .. they aren't going anywhere .. especially since they aren't part of the eurozone

greece also won't disband the EU .. at most they could pull down the eurozone and cause a split in currencies .. but the EU as block won't be touched by greek shenanigans