SocGen's Edwards: US recession 'virtually inevitable'

Fall in whole economy profits

Société Générale's Albert Edwards has warned investors of an imminent recession in the US and urged them to avoid US corporate bonds.

Edwards said his recession indicator is now "flashing red" rather than amber after the slump in US whole economy profits data, a characteristic of an impending recession.  Historically, he said, a fall in whole economy profits is followed by the economy tipping into recession driven by the volatile business cycle.  "Historically, when whole economy profits fall this deeply, recession is virtually inevitable as business spending slumps," he said. "And if I had to pick one asset class to avoid it would be US corporate bonds, for which sky high default rates will shock investors." ...