Malinen Warns 600,000 US Bankruptcies Signal Imminent Recession as Bond Curve Nears Uninversion
Updated
Updated · Business Insider · Aug 19
Malinen Warns 600,000 US Bankruptcies Signal Imminent Recession as Bond Curve Nears Uninversion
1 articles · Updated · Business Insider · Aug 19
Summary
More than 600,000 new US bankruptcy filings were recorded in the 12 months through June, up 12% from a year earlier, leading Tuomas Malinen to argue the economy could slip into recession abruptly.
Malinen said a private-sector yield curve—measured by long-dated Baa corporate bonds against the bank prime rate—is close to turning positive, a pattern he says preceded the COVID-19, 2008 and early-2000s recessions.
July's ISM manufacturing New Orders Index rose to 56.7 for a seventh straight month of expansion, but he said that strength may be concentrated in data centers and vulnerable if the AI trade breaks.
That view remains outside the Wall Street mainstream: most forecasters still expect the AI boom to endure, and the Atlanta Fed estimates US GDP will grow 4% in the third quarter.