General Motors just announced the closing of four factories in the US and one in Canada.
Three of the factories are in Michigan and Ohio - states that voted for Donald Trump in 2016, in part thanks to his promise to bring back American manufacturing jobs. So much for that.
GM has long been a troubled company, requiring a government bailout in the Great Recession and struggling to build popular cars ever since. But the recent plant closures may have a cause that goes beyond GM’s boardroom. Auto sales in the US have declined from their level of three years ago and have taken a considerable drop from their peak in 2017: and that’s even with petrol prices that have fallen significantly in the past few months.
Looking at history, a clear pattern emerges - car sales tend to rise in the early stage of an expansion, but peak and decline shortly before a recession.
There’s actually a fundamental economic reason why this should be true. Unlike non-durable goods and services such as food, heating and insurance that people have to purchase even in bad times, consumption of durable goods like cars and houses can be delayed. If you’re unemployed, or worried about becoming unemployed, or if sales at your company are bad this year, you can keep driving your old car a little while longer, or put off buying that new apartment.
As economists Robert Barsky, Christopher House and Miles Kimball pointed out in a 2007 paper, putting off spending on durable goods is a big part of what triggers a recession. Lower auto and home sales are a consequence of a bad economy, but they also cause the economy to get worse.
Housing is usually a bigger factor than cars. In another 2007 paper, economist Ed Leamer argued that residential investment is the biggest driver of the economic cycle. He wrote: Residential investment consistently and substantially contributes to weakness before … recessions…Eight of the 10 [US postwar] recessions [before 2007] were proceeded by sustained and substantial problems in housing.
And of course, one year after that was written, the US saw the biggest housing-driven recession of them all.
Housing has been particularly weak throughout the recovery from the Great Recession, probably because Americans bought so many houses before the crash, and also probably because more young people are living longer with their families:
But even from this low level, 2018 has seen a downturn in new home sales. Housing starts are at essentially the same level as 2016.
So with car sales in decline and new home sales low and falling, the economy looks to be on shaky footing. But businesses are still investing enthusiastically.
All of this makes for a very strange expansion. Why is business investment holding up, even as GM prepares to shut factories and housing falters from already-low levels?
It could be that they’re planning to ramp up exports. But those don’t look particularly strong either:
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Read more:
When the going gets tough, markets cast blame everywhere
US Federal Reserve faces a mixed set of possibilities
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And with President Donald Trump’s trade war hitting US exports such as gas and agricultural products, there seems to be little reason to expect an overseas sales boom in the near future.
One possibility is that American consumer tastes are simply shifting, as millennials trade cars for smartphones and choose to live with their parents. Overall consumption of durable goods is holding up better than cars.
But another possibility is that the US economy has simply hit the top of the current business cycle, and is headed for a downturn. That’s certainly what Mr Leamer’s paper, with its emphasis on housing over business investment as a leading indicator of recessions, would suggest.
So is a recession coming soon? Some of the pieces do seem to be falling into place. Macroeconomic indicators like term and credit spreads have been looking shaky. Lots of observers have been watching the corporate-debt market, especially BBB-rated bonds and leveraged loans. If consumption falters, corporations that loaded up on risky debt could suffer a wave of defaults. Meanwhile, Trump’s trade war seems to be causing unpredictable and mostly negative effects, as companies find it harder to purchase inputs from overseas, or they run into foreign retaliation.
Thus, a particularly strange expansion may soon turn into a rather typical recession. That would be sad, because it would mean that the biggest trough in 80 years was followed by one of the most underwhelming peaks.
That’s a good argument for the Fed to hold off on rate hikes in order to stave off this possibility, and Mr Trump should think twice about continuing his trade war.
Bloomberg
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Details
Through Her Lens: The stories behind the photography of Eva Sereny
Forewords by Jacqueline Bisset and Charlotte Rampling, ACC Art Books
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
RESULT
Manchester United 2 Tottenham Hotspur 1
Man United: Sanchez (24' ), Herrera (62')
Spurs: Alli (11')
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Profile of MoneyFellows
Founder: Ahmed Wadi
Launched: 2016
Employees: 76
Financing stage: Series A ($4 million)
Investors: Partech, Sawari Ventures, 500 Startups, Dubai Angel Investors, Phoenician Fund
No%20Windmills%20in%20Basra
%3Cp%3EAuthor%3A%20Diaa%20Jubaili%3C%2Fp%3E%0A%3Cp%3EPages%3A%20180%3C%2Fp%3E%0A%3Cp%3EPublisher%3A%20Deep%20Vellum%20Publishing%C2%A0%3C%2Fp%3E%0A
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Seemar’s top six for the Dubai World Cup Carnival:
1. Reynaldothewizard
2. North America
3. Raven’s Corner
4. Hawkesbury
5. New Maharajah
6. Secret Ambition
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
UAE Team Emirates
Valerio Conti (ITA)
Alessandro Covi (ITA)
Joe Dombrowski (USA)
Davide Formolo (ITA)
Fernando Gaviria (COL)
Sebastian Molano (COL)
Maximiliano Richeze (ARG)
Diego Ulissi (ITAS)
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
How much sugar is in chocolate Easter eggs?
- The 169g Crunchie egg has 15.9g of sugar per 25g serving, working out at around 107g of sugar per egg
- The 190g Maltesers Teasers egg contains 58g of sugar per 100g for the egg and 19.6g of sugar in each of the two Teasers bars that come with it
- The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
- The Milky Bar white chocolate Egg Hunt Pack contains eight eggs at 7.7g of sugar per egg
- The Cadbury Creme Egg contains 26g of sugar per 40g egg
'THE WORST THING YOU CAN EAT'
Trans fat is typically found in fried and baked goods, but you may be consuming more than you think.
Powdered coffee creamer, microwave popcorn and virtually anything processed with a crust is likely to contain it, as this guide from Mayo Clinic outlines:
Baked goods - Most cakes, cookies, pie crusts and crackers contain shortening, which is usually made from partially hydrogenated vegetable oil. Ready-made frosting is another source of trans fat.
Snacks - Potato, corn and tortilla chips often contain trans fat. And while popcorn can be a healthy snack, many types of packaged or microwave popcorn use trans fat to help cook or flavour the popcorn.
Fried food - Foods that require deep frying — french fries, doughnuts and fried chicken — can contain trans fat from the oil used in the cooking process.
Refrigerator dough - Products such as canned biscuits and cinnamon rolls often contain trans fat, as do frozen pizza crusts.
Creamer and margarine - Nondairy coffee creamer and stick margarines also may contain partially hydrogenated vegetable oils.
pakistan Test squad
Azhar Ali (capt), Shan Masood, Abid Ali, Imam-ul-Haq, Asad Shafiq, Babar Azam, Fawad Alam, Haris Sohail, Imran Khan, Kashif Bhatti, Mohammad Rizwan (wk), Naseem Shah, Shaheen Shah Afridi, Mohammad Abbas, Yasir Shah, Usman Shinwari
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
