cloudy with a chance of recession
The markets aren't looking good, but former Treasury Secretary Lawrence Summers says not to panic ... yet.
Amid a month of falling stocks, Summers cautioned that "weak markets" don't necessarily mean "economic disaster is around the corner." Still, he's increasing his prediction of a recession from "a bit less than 50 percent" to 60 percent, he tweeted Wednesday.
Summers served as former President Bill Clinton's Treasury Secretary and directed the National Economic Council under former President Barack Obama. In tweets Wednesday, he cited the assertion of Robert Rubin, his predecessor at the Treasury Department, that "markets go up, markets go down" to describe slumping stocks. President Trump shouldn't have claimed credit for August's roaring markets, Summers said. But seeing as "one can see essentially no trace of even the 1987 crash in economic data," Summers said we should remember "markets are noisy, flawed predictors of the economy."
Still, Summers went on to say that before December's tanking market he predicted a "bit less than 50 percent" chance of a recession starting next year. He's now increased those odds to 60 percent.
Stock markets are still on track for their worst December performance since the Great Depression, especially after an unprecedented Christmas Eve drop.