Claims

Factual · Economics and markets

“Nine of them are still in play today.”

Nouriel Roubini, economist, column author · 14 June 2019 · The Growing Risk of a 2020 Recession and Crisis (Project Syndicate)

As of June 2019, nine of the ten recession risks Roubini and Rosa identified in summer 2018 are still in play.

Unresolvable The public record could not settle it.

What would count as true or false

Judge as of 2019-06-14 against the list of ten risks that Roubini and Brunello Rosa published in summer 2018 (the 'ingredients' for a 2020 recession and financial crisis). True: at least nine of the ten listed risks (for example fiscal stimulus fading, trade war, Fed tightening, China slowdown, eurozone and EM risks, high asset prices, low liquidity, populism, oil or geopolitical shocks) were still present or unresolved in June 2019, according to contemporaneous data and news. Mostly true: eight of the ten were still in play, or nine with one arguably resolved. Mixed: about six or seven still in play. Mostly false: about four or five. False: fewer than four were still in play.

Evidence

1. [PDF] GLOBAL MACRO OUTLOOK - AllianceBernstein AllianceBernstein · June 2019

   “Renewed trade tension has hurt asset prices and raised fears about global growth.”

2. 1 Yardeni Research (Morning Briefing) · 11 June 2019

   “The latest global economic soft patch is getting softer, and may be spreading to the US economy.”

3. Investors warm up to Fed policy outlook after Powell hints at rate cut CNBC · 5 June 2019

   “The Dow Jones Industrial Average rallied more than 500 points on Tuesday (and was continuing that rally Wednesday) after Federal Reserve Chairman Jerome Powell opened the door to a rate cut”

4. Morning Briefing, June 11, 2019 Yardeni Research · 11 June 2019

   “Trump’s escalating trade war with China may be contributing to this development, but many key economies have plenty of homegrown problems that are weighing them down and contributing to slower global economic growth”

5. Global Macro Outlook, June 2019 AllianceBernstein (AB) · June 2019

   “With the balance of risks around the economy more clearly negative, we now expect the Fed to respond with rate cuts.”

6. Morning Briefing, June 11, 2019 Yardeni Research · 11 June 2019

   “The European Union is facing an existential crisis as Brexit Day approaches and nationalist parties gain political power throughout the region.”

7. Morning Briefing, June 11, 2019 Yardeni Research · 11 June 2019

   “The price of a barrel of Brent crude oil is down 15% from this year’s peak of $74.57 on 4/24 through Friday (Fig. 6).”

8. IMF World Economic Outlook, Growth Slowdown, Precarious Recovery (Executive Summary) International Monetary Fund · April 2019

   “By contrast, activity in advanced economies is projected to continue to slow gradually as the impact of US fiscal stimulus fades and growth tends toward the modest potential for the group.”

9. IMF World Economic Outlook, Growth Slowdown, Precarious Recovery (Executive Summary) International Monetary Fund · April 2019

   “Conditions have eased in 2019 as the US Federal Reserve signaled a more accommodative monetary policy stance and markets became more optimistic about a US–China trade deal, but they remain slightly more restrictive than in the fall.”

10. China’s economy had a steady start to 2019 CNN Business · 17 April 2019

    “China’s growth has been hit by a trade war with the United States and government efforts to rein in a huge amount of debt in China’s financial system.”

11. Energy and commodity highlights: Tanker attacks, biofuels and oil, spiraling naphtha prices S&P Global Energy · 14 June 2019

    “Global oil markets were jolted late in the week by reports of attacks on two oil tankers near the Strait of Hormuz on June 13.”

Reasoning

I couldn't settle this one. None of the evidence gives the ten-risk list Roubini and Rosa published in 2018, so the count can only be checked against the example risks named in the criteria. Mid-2019 sources show six of them still in play: US fiscal stimulus fading (E9), the US–China trade war (E1, E5), China's slowdown (E11), eurozone strain from Brexit and nationalists gaining ground (E7), and oil or geopolitical shocks (E12). The Fed-tightening risk had gone the other way by then, with the Fed signalling rate cuts (E3, E6, E10). No evidence covers emerging-market risk, low liquidity or whether asset prices were still high, so I can't confirm that nine of the ten were still in play.

Cite this claim

Nouriel Roubini, “As of June 2019, nine of the ten recession risks Roubini and Rosa identified in summer 2018 are still in play.” (said 14 June 2019). Verdict: unresolvable. Reliability API, claim c_79ed1fcc9fe0, method 0.1.0+c876030c. https://epistacklabs.com/claims/c_79ed1fcc9fe0