Hi members,
There’s already a likely culprit for the next recession: corporate debt. While the previous economic downturn was characterized by the excessive borrowing and lending around home ownership, our field guide writer this week, Gwynn Guilford, points out how American household debt is now at historically low levels. That’s not the same for companies, which have been recklessly borrowing and lending ever since 2012. It’s a precarious place for the global economy to be right now, and Gwynn makes a compelling argument as to why it should be a cause for concern.
In other economic news and analysis, we have our weekly Tipping Points feature today. Allison Schrager identifies another potential source of economic malaise: government pension obligations. Allison writes “As pension liabilities grow and populations age, the payments governments owe current and past employees threaten to crowd out other spending for things like schools and roads, and could make even reasonable debt levels unsustainable.”
Just a one-two punch of economic anxiety to mark the middle of this week! Tomorrow, we’ll have an interactive that helps you understand what you should invest in during a recession, as well as new Insider View and Private Key features.
And join us Friday at 11 a.m. ET/4 p.m. GMT for our members-only conference call with Gwynn Guilford, author of this week’s field guide. I’ll send the conference information tomorrow.
Let’s keep learning. Send questions, comments, and Klonopin to members@qz.com.
Here’s to a rewarding day,
Sam Grobart
membership editor