“The chance that a recession will have begun this year in the U.S. is probably about 70 percent. I think that puts me at the pessimistic end of the spectrum of opinion,” he wrote on Twitter.

Some economists have recently become more optimistic about the United States avoiding a possible recession after months of positive jobs reports and other relatively positive economic indicators. However, negativity about the state of the economy again emerged after a series of bank failures coupled with federal bailout efforts last month.

Summers was the former Treasury Secretary under former President Bill Clinton and was the former head of the National Economic Council under President Barack Obama.

“It’s not something we can be certain of, but as I put together the lags associated with monetary policy, the credit crunch risk, the need for continuing action around inflation, the risk of geopolitical or other shocks affecting commodities, 70 percent would be the range that I would be in,” Summers told Foreign Policy on Sunday, adding that he believes a recession will come within the coming 12 months.

Last week, another former U.S. Treasury secretary, Hank Paulson, told the Financial Times that he, too, believes a recession will be coming due to the banking crisis. About a month ago, both Silicon Valley Bank and Signature Bank collapsed, forcing the Treasury, Federal Reserve, and Federal Deposit Insurance Corporation to intervene.

“Some things we know and some things we don’t know,” Paulson told the paper. “What we know is that if you’re running a small or regional bank right now, you wouldn’t be lending. The capital markets shut down for two or three weeks. Now they’re opening but not to the extent they were. So I think it’s pretty likely we will see a recession if you look at what’s happening to credit.”

He did not predict when those factors might impact the U.S. economy. “It will take a while to manifest itself,” he said.

“Another thing we are almost certain to see is credit provision moving outside the regulated banking sector,” Paulson said. “This is different to the extent that the panic moves quicker when you have social media, and Twitter, and who knows where it’s going to crop up again. There will be a lot of focus on Europe, where financial institutions aren’t as strong or as well capitalized as they are here.”

More Data

Meanwhile, Bureau of Labor Statistics data released last month shows that the U.S. economy added 236,000 jobs in March while the unemployment rate dropped to 3.5 percent.

In a National Association for Business Economics survey about a month ago, 58 percent of 48 economists who responded envision a recession sometime this year, the same proportion who said so in the NABE’s survey in December. But only a quarter think a recession will have begun by the end of March, only half the proportion who had thought so in December.

The findings, reflecting a survey of economists from businesses, trade associations, and academia, were released Monday. A third of the economists who responded to the survey now expect a recession to begin in the April–June quarter. One-fifth think it will start in the July–September quarter.

Most economists told The Associated Press last month they think growth is slowing sharply in the current January–March quarter, in part because the Federal Reserve has steadily raised interest rates in its drive to curb inflation.

The central bank has raised its benchmark interest rate nine times over the past year. The Fed’s policymakers are betting that they can achieve a so-called soft landing—slowing growth just enough to tame inflation without tipping the world’s biggest economy into recession.

The resulting surge in borrowing costs has walloped the housing industry and made it more expensive for consumers and businesses to spend and invest in major purchases.

Yet as higher loan costs spread through the economy, analysts are generally skeptical that the United States can avoid a downturn. The main point of debate is whether a recession will prove mild, with only minor damage to hiring and growth, or severe, with waves of layoffs.

The Associated Press contributed to this report. Article cross-posted from our premium news partners at The Epoch Times.

#1 The IMF: “We expect one-third of the world economy to be in recession. Even countries that are not in recession, it would feel like recession for hundreds of millions of people”

#2 Bloomberg: “Economists say there is a 7-in-10 likelihood that the US economy will sink into a recession next year, slashing demand forecasts and trimming inflation projections in the wake of massive interest-rate hikes by the Federal Reserve.”

#3 The World Bank: “As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging toward a global recession in 2023 and a string of financial crises in emerging market and developing economies that would do them lasting harm, according to a comprehensive new study by the World Bank.”

#4 Bank of America CEO Brian Moynihan: “We’re going to have a shallow recession”

#5 Mohamed El-Erian: “Many ‘high-conviction’ U.S. recession calls are immediately coupled with the assertion that it’ll be ‘short and shallow.’ Reminds me of the behavioral trap ‘transitory inflation’ proponents fell into last year”

#6 Nouriel Roubini: “No, this is not going to be a short and shallow recession, it’s going to be deep and protracted”

#7 Larry Summers: “My sense is that it’s much harder than many people think to achieve a soft landing”

#8 Goldman Sachs CEO David Solomon: “Economic growth is slowing,” Goldman Sachs CEO David Solomon said at the same conference. “When I talk to our clients, they sound extremely cautious.”

#9 Charles Schwab & Co.’s Liz Ann Sonders: “We have to take our medicine still, meaning a weaker economy and a weaker labor market. The question is, is it better to take our medicine sooner or later?”

#10 BlackRock: “Central bankers won’t ride to the rescue when growth slows in this new regime, contrary to what investors have come to expect. They are deliberately causing recessions by overtightening policy to try to rein in inflation”

#11 Michael Burry: “Inflation peaked. But it is not the last peak of this cycle. We are likely to see CPI lower, possibly negative in 2H 2023, and the US in recession by any definition. Fed will cut and government will stimulate. And we will have another inflation spike. It’s not hard.”

As you can see, there is a general consensus that things will be bad in 2023, but there is disagreement about just how deep the coming economic downturn will turn out to be.

If the worst of these forecasts turn out to be accurate, that will actually be incredibly good news.

Because the reality of what we will be facing in 2023 is likely to be significantly worse than any of these experts are currently projecting.

With each passing day, we continue to get even more numbers that indicate that big trouble is ahead.

For example, we just learned that luxury home sales absolutely cratered during the months of September, October and November…

Sales of luxury homes fell 38.1% year over year during the three months ending November 30, 2022, the biggest decline on record, according to a new report from Redfin, a technology-powered real estate brokerage. That outpaced the record 31.4% decline in sales of non-luxury homes. Redfin’s data goes back to 2012.

The luxury market and the overall housing market lost momentum in 2022 due to many of the same factors: inflation, relatively high interest rates, a sagging stock market and recession fears.

We haven’t seen anything like this since 2008.

And we all remember what the housing crash of 2008 ultimately did to the financial markets.

Normally, the beginning of a calendar year is a time for optimism.  As we look forward to a completely clean slate, it can be easy to forget the difficulties of the previous 12 months.

But this year things seem completely different. On some level, just about everyone can feel that very challenging times are ahead of us.

Decades of very foolish decisions are starting to catch up with us in a major way. Our leaders tried very hard to keep the party going for as long as possible, and to a certain extent they were quite successful in doing so.

Our politicians in Washington kept borrowing and spending trillions upon trillions of dollars that we did not have, and that definitely delayed our day of reckoning.

And the Federal Reserve kept the financial markets artificially propped up for years by endlessly pumping giant mountains of fresh cash into the system. But such foolish measures only made our long-term problems even worse, and now our leaders are losing control.

All of the “mega-bubbles” are starting to burst, and the system is beginning to fall apart all around us. It is time to turn out the lights, because the party is over.

We all had a lot of fun while it lasted, but now the bill is due and an extraordinary amount of pain is ahead.

***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com.  In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

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Article cross-posted from The Economic Collapse Blog.