The Game Has Changed: Fed's Shrinking Balance Sheet, Overwhelmed Consumers, Troubled Banks Dim Economic Outlook. Recession Risks Rise. Is World DIsorder Spreading Fast? Case for Made in America

The US economy is at a pivotal moment as the Federal Reserve reduces its balance sheeting, shrinking it by 10.5 percent, of $940 billion in the past 18 months. Banks are losing deposits, money market funds are seeing outflows. This is a turning point, says DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP as the economy faces heightened risks of recession. Many analysts were puzzled as to why the US economy has dodged a recession thus far. BOVE says one explanation is that the government propped up the economy with trillions of dollars in stimulus spending. But the game has now changed. The money supply is shrinking.

“There are bright spots in the economy,” says MAT VAN ALSTYNE, ODEON co-founder and managing partner. “That is the present reality. But where are we going? That is the real question.  The subjective realities are extraordinary negative on feelings about the US economy.” The CONVERSATION looks at the impact of higher interest rates on consumers struggling on repayments and debt servicing, and shifting more of their consumption to necessities. The manufacturing sector is weak. Is Made in America the way forward?

Meanwhile, there is world disorder. Is it spreading fast? Our host, JOHN AIDAN BYRNE, poses the question, citing one analyst who paints a grim view of the so-called rules based international order.  The politics and implications of a US government shutdown is examined.  DICK BOVE has the latest on US banks. “The banks are in trouble in the US,” he says, reprising his analysis of government plans to effective shrink the banking sector. Elsewhere, volatile China is in the spotlight once again.

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