Musk, Bezos, Dimon, Solomon… These are the voices warning of the economic ‘hurricane’ of the recession

Recession is the word that has been reverberating around the world’s economies in recent months. More and more analysts or experts are betting on this significant drop in economic activity after the rate hike led by the United States Federal Reserve. In this sense, the economists surveyed in the WSJ have estimated that the probability of recession in the next 12 months is 63%, compared to a forecast of 49% in July. However, since Bloomberg Economics give a 100% at this probability.

Also, several business and finance personalities have expressed their opinion on the matter. One of them is Elon Muskthe richest person in the world (200,000 million dollars, according to the index of billionaires of Bloomberg), which warns that the recession will last until spring 2024. For the founder of Tesla and SpaceX, a recession can be positive for some companies: “Companies that should not exist, will cease to exist”, although he did not specify which ones he was referring to .

In the meeting held between Musk and his investors during the month of October, the richest person in the world declared that “America is in very good health”, although he rejected the Fed’s decision to continue raising interest rates. “There is more deflation than inflation,” he said. “The Fed’s decisions make sense if you look in the rearview mirror, but not if you look in the front windshield.”

Another of the world’s great fortunes (49.5 billion dollars), such as Mark Zuckerberg, founder of Facebookassured his workers that “this could be one of the worst recessions we have seen in recent history.”

The founder and CEO of Amazon, Jeff Bezos, has been the latest to jump on the recession bandwagon. For the second-highest net worth person in the world ($138 billion), “the odds in this economy tell you to tighten your belt.” This phrase was the one used by the tycoon when sharing a video of David Solomon, CEO of Goldman Sachswhich said that “it is time for great CEOs and investors alike to understand the risks that are accumulating and to prepare accordingly for what is to come.

Solomon remains as cautious as possible in saying that “you have to expect that there is now more volatility on the horizon. This does not mean for sure that we have a really difficult economic scenario,” he revealed in a statement to CNBC.

For his part, the JPMorgan CEO Jamie Dimon, has probably been one of the loudest voices when it comes to talking about recession. He came to alert saying that “this is very serious”, although he did not want to set deadlines for the duration of this recession in the United States. “It can go from very light to quite severe and a lot will depend on what happens with this war. So I think that guessing is difficult, so you have to be prepared,” she told the CNBC.

The Fed’s Beige Book indicates that several regions of the United States are already in recession

In this line, The Beige Book of the United States Federal Reserve (Fed), a document that provides a detailed evaluation of the economy by the 12 US regional central banks with information compiled before last October 7, has indicated that several regions of the country are already in recession. The causes of the stagnation or contraction, according to Fed contacts, are due to higher interest rates, inflation and supply problems. In this context, consumption did not register growth in recent weeks and the generation of new mortgages slowed down its growth.

Christian Sewing, CEO of Deutsche Bank, it already warned German citizens in September, warning them that they are preparing for a recession. “We will no longer be able to avoid a recession in Germany. However, we believe that our economy is resilient enough to weather this recession well, provided central banks act quickly and decisively,” Sewing said.

Microsoft CEO Satya Nadella, has also experienced in its flesh the meaning of recession. “None of us is immune to macroeconomic obstacles,” she confessed in an interview with Yahoo Finance. The technology company is studying the possibility of laying off more than 1,000 employees of the 221,000 it has hired. In this way, Microsoft joins an already large number of technology firms that have announced plans to stop hiring or fire part of their staff.

Another businessman betting on this recession is Raj Subramaniam. FedEx CEO believes we are headed for a “global recession”. At this point, the US logistics company has announced a series of aggressive cost-cutting measures, including the closure of 90 stores and five corporate offices, as well as a hiring freeze.

Mohamed El-Erian, chief economic adviser at Allianz, warns that the risk of global recession is high. In the specific case of Europe, “it is already a fact”, while in China, the Asian country will not technically enter one, although it will feel its effects. “Even Chairman Powell (Fed) has gone from hoping for a soft landing to now talking about economic pain. And that’s the problem. That’s the cost of a Fed being late. It not only has to beat inflation, but has to restore its credibility,” he said on the chain CBS. With all this, he considers that “we run the risk of a very high probability of a damaging recession that was totally avoidable.”

Lastly, the Citadel CEO Ken Griffin, warned at the end of September that “there will be a recession in the US”. He also insisted that “the Federal Reserve has to do more to reduce inflation,” referring to the European Central Bank (ECB) raising its benchmark interest rate by 0.75 percentage points for the third consecutive time.

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Musk, Bezos, Dimon, Solomon… These are the voices warning of the economic ‘hurricane’ of the recession