Charles Biderman, CEO of TrimTabs Asset Management, warns that the U.S. and world economies are on the path to economic chaos.
“We’re in a manufacturing recession,” he explained to CNBC
. And because of Brexit, “the world is entering into a global recession.”
He explained that a unique combination of economic and financial factors may possibly doom the U.S.
"The fuel for the rising market, which is stock buybacks, is declining. June was the least amount of stock buybacks in many a month. For the first half of this year, we have seen a one-third decline in announced buybacks," he said. "That is the only fuel for us taking stock higher — companies giving money to shareholders by reducing the share count," he said.
"We’re also seeing a dramatic decline in growth in the U.S. economy’s incomes," he said. "Everybody talks about spending and GDP, but it’s incomes that count," he said.
He said individuals are showing a 2 percent gain in income and that’s not enough to take the economy higher.
Plus, "companies are doing worse you’re seeing very poor earnings gains."
Meanwhile, Fed Governor Jerome Powell has said the Brexit vote has the potential to create new headwinds for economies, including the U.S., introducing uncertainties that may merit reassessing policy.
Traders now see a greater probability the bank will cut rates in upcoming meetings than raise them.
But Marc Faber, publisher of the Gloom, Boom & Doom Report, said many global economies are already in trouble, and were so way before the Brexit vote or uncertainty about the Fed's next rate move.
“Global growth has contracted, in other words, growth rates have been reduced and many countries are in recession already. That has nothing at all to do with Brexit,” Faber told Bloomberg.
“Brexit is actually not about an end of globalization. On the contrary, it’s about people that rebel against the arrogant elite in the financial centers.”
But Biderman isn't alone in fearing a U.S. recession.
Democratic White House hopeful Hillary Clinton has called her Republican rival Donald Trump a potential disaster for the economy, saying the "the king of debt" would cause a "Trump recession."
"He made a fortune filing bankruptcies and stiffing his creditors," Clinton said of Trump, Reuters
reported. "The United States of America doesn't do business Trump's way," she added.
(Newsmax wire services contributed to this report).
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