The time for warnings of a global slowdown is over. The slowdown is here.

Over the past few months, we’ve highlighted warnings of slower growth, excessive debt and the potential for a new market crash coming from prominent officials in the international monetary system, including Christine Lagarde of the IMF, economists from the BIS and preeminent academics like Larry Summers of Harvard and many others. This article includes new warnings as well as new data on growth and a summary of recent warnings by others.

What sets this article apart from others is the claim that the slowdown is not just coming but that it has already arrived. The article reports that global trade volumes are in decline, air freight volumes in Hong Kong were down 5% in December and certain economies outside the U.S. (Germany, France, Japan and Italy) showed negative growth or material slowing in the second half of 2018.

Most striking was the fact that the OECD composite leading indicator fell to 99.3 in November 2018. In the last 50 years, whenever that index fell below 99.3, a recession almost always resulted (1970, 1974, 1980, 1981, 1990, 2001 and 2008).

The time to brace for a recession by reducing allocations to risky assets (stocks, corporate debt, emerging markets) and increasing allocations to cash is now.

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