- Jeff Bezos, Elon Musk and Charlie Munger have signaled the risk of a US recession.
- Carl Icahn, Jamie Dimon and Ken Griffin are also preparing for a painful economic downturn.
- Here are 12 recession warnings from top executives, investors and academics.
Jeff Bezos, Elon Musk and Ken Griffin have sounded the alarm over a looming US recession, joining a chorus of CEOs, investors and academics predicting a prolonged economic downturn.
Carl Icahn, Jamie Dimon and Charlie Munger are also bracing for a shrinking economy and soaring unemployment. These experts pointed to numerous headwinds to growth, including the Federal Reserve raising interest rates to calm inflation, the Russian-Ukrainian war and ongoing lockdowns in China that are disrupting global trade.
Here are 12 recent recession warnings, slightly edited for length and clarity:
1. Jeff Bezos, Founder and Executive Chairman of Amazon:
“The economy isn’t looking great right now. Things are slowing down, you’re seeing layoffs in so many, many industries. The odds say that if we’re not in a recession right now, we’ll probably be in a very soon. Take as many risks as possible on the table. Hope for the best, but prepare for the worst.
“The odds in this economy are telling you to batten down the hatches.”
2. Elon Musk, CEO of Tesla, SpaceX and Twitter:
“There’s probably going to be a year or two of a severe recession.”
“Frankly, the economic situation ahead is dire, especially for a company like ours that is so dependent on advertising in a difficult economic climate.”
3. Citadel CEO Ken Griffin:
“For the Fed to really beat inflation here, we’re going to put unemployment somewhere in the mid-4% range. I find it hard to believe we’re not going to have a recession at this time, at some point in the mid to back half of 2023.”
4. Charlie Munger, Business Partner of Warren Buffett and Vice Chairman of Berkshire Hathaway:
“I think the Fed is ready to have a little recession so they don’t get inflation out of control. That’s what they’re supposed to do. They’re supposed to be the only guy at the party that’s not hanging around the bowl of punch getting drunk.”
5. Carl Icahn, President of Icahn Enterprises:
“Any time you have higher interest rates that have moved like they have here, you have an inverted yield curve, Treasury bills yielding close to 5% – you are going to have a recession. And I think we already have a recession. There’s a lot of things that need to happen to get this economy right, to get us out of a recession.”
6. JPMorgan CEO Jamie Dimon:
“There is a possibility of a slight recession. Consumers are in very good shape, businesses are in very good shape. And there is a possibility of something worse, mainly because of the war in Ukraine and the price of oil and all that stuff.”
7. David Solomon, CEO of Goldman Sachs:
“Typically, when you’re in an economic scenario like this, where inflation is priced in, it’s very difficult to get out of it without a real economic downturn. The United States is very likely going to have a recession.”
8. Jeff Gundlach, CEO of DoubleLine Capital:
“The recession is easily 60% over the next six to eight months, and for the year 2023 I would say more like 80%.”
9. Leon Cooperman, CEO of Omega Advisors:
“The combination of Fed tightening, quantitative tightening, a strong dollar and the price of oil will create a recession in the second half of 2023. We pushed demand forward due to very inappropriate fiscal and monetary policies, and ultimately a price is going to be paid.”
10. Greg Jensen, co-CIO of Bridgewater Associates:
“We expect a much deeper recession than the markets are expecting. 2023 is likely to be the year of a very deep global recession.”
“You probably won’t see the bottom in the stock markets until they start to ease, six to seven months from now. You probably won’t see the end of the bottom in the economy for about nine months after that.”
11. Nouriel Roubini, NYU Stern economist known as “Dr. Doom”:
“History suggests that it will be nearly impossible to avoid a hard landing. You’re going to have not just inflation, not just a recession, but what I call the ‘great stagflationary debt crisis.’ So it’s a lot worse than it was in the 70s, and it’s probably as bad as it was during the global financial crisis.”
12. Ken Rogoff, Harvard Economist:
“You really have to look at the world, which is in bad shape. It’s very difficult for the United States to resist this. I’m afraid that not only will we get a mild recession, I think the chances of us getting a major recession are really quite high.”
Read more: Here’s how investors should play it safe for 3-6 months to prepare for a decade of strong performance, according to UBS
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