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‘Strongest recession signal yet’: Alarm bells sound as key indicator that predicted last Wall Street crash goes negative

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If and when a recession comes, said one commentator, “it’ll be impossible not to point to a ruinous, needless trade war as a key cause”

Warning signs that the U.S. economy could be barreling toward a recession quickly became alarm bells Wednesday after the Treasury bond yield curve—a key indicator that has preceded every major downturn over the past five decades—inverted for the first time since the Wall Street crash of 2007.

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As the Washington Post reported, “the yields on short-term U.S. bonds eclipsed those of long-term bonds” on Wednesday, a phenomenon that “suggests investors’ faith in the economy is faltering.”

Chris Rupkey, chief financial economist at MUFG Union Bank, told the Post that “yield curves are all crying timber that a recession is almost a reality, and investors are tripping over themselves to get out of the way.”

CNBC described the inverted yield curve as the “strongest recession signal yet.”

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Economists and other commentators were quick to place at least some of the blame for worsening market volatility on President Donald Trump’s trade war with China, the world’s second-largest economy behind the U.S.

Though Trump sparked a brief rally on Tuesday with his decision to delay his planned 10 percent tariffs on Chinese goods until Dec. 15, markets tanked again Wednesday in response to the inverted yield curve, wiping out the previous day’s gains and triggering fears that a major recession could be imminent.

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“Amazing how many people have spent time trying to project some rationality onto Trump trade policy,” tweeted economist and New York Times columnist Paul Krugman. “What looks like raw ignorance and prejudice is, in fact, raw ignorance and prejudice.”

Talking Points Memo editor Josh Marshall pointed out that while presidents are often incorrectly blamed or credited with the state of the economy, “it’ll be impossible not to point to a ruinous, needless trade war as a key cause” if a recession hits.

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As markets slid on Wednesday, others noted the historic pattern of recessionary cycles that have corresponded with massive tax cuts for the wealthiest:

Further intensifying fears of a recession, said economists, is the fact that the Trump administration does not appear willing to take the steps necessary to combat a serious downturn, such as spending money on meaningful government initiatives like an infrastructure program.

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“If Trump proposed a serious infrastructure plan, Dems would have a hard time saying no even though it would help him politically. But no such plan has been or will be offered, for a couple of reasons,” tweeted Krugman.  “One is that [Senate Majority Leader] Mitch McConnell and his wing of the party oppose any kind of government program, no matter how much good it might do.”

“Another,” added Krugman, “is that Trump and co. just can’t bring themselves to advocate anything that doesn’t include scams on behalf of their cronies.”

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Enjoy this piece?

… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

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Trump fans smacked down for whining the president is being called a ‘racist’ in righteous rant

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Addressing complaints from both White House officials and fans of Donald Trump that they are tired of hearing the president called a racist, "AM Joy" regular Tiffany Cross fired right back saying they better get used to it.

Following clips of White House adviser Stephen Miller attempting to explain the White House's policies on immigrants, the co-founder of The Beat DC stood up for labeling the president as a bogot.

"It's accurate, you have to call a thing a thing," she began. "I think that's part of the reason why we got here because in 2015, when he kicked off his campaign with a bunch of racist rhetoric, there was a hesitancy to call it out. And there was the first two years of his presidency when he introduced ridiculous white supremacist policies and would follow that up with additional racist rhetoric and we have an echo chamber of people repeating these things, so we have to call a thing a thing."

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Before Trump eyed Greenland: Here’s what happened last time the US bought a large chunk of the Arctic

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Editor’s note: Reports that President Donald Trump has urged aides to look into buying Greenland make us think of the last time the United States bought a major territory in the Arctic: the purchase of Alaska from Russia in 1867. Two years ago, we asked William L. Iggiagruk Hensley, a visiting professor at the University of Alaska Anchorage, to write about that historic sale.

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‘That is ridiculous’: Andrew Gillum obliterates Santorum for claiming guns aren’t ‘problem’ in mass shootings

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CNN contributor Andrew Gillum called conservative pundit Rick Santorum "ridiculous" on Sunday for suggesting that guns are not the problem in mass shootings.

During a CNN discussion on gun control, Santorum criticized calls from Democratic candidates for the government to buy back assault-style weapons in addition to banning them.

"The truth is something has to give," Gillum said. "The stranglehold that the NRA seems to have over Congress, over Washington, D.C., in my opinion, is insane. How can we put the priorities of one interest group above the safety, the security of the American people?"

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