Morgan Stanley is hinting that we should all consider cancelling our summer vacations.
Quants at the Wall Street investment bank say the risk of the global economy sliding back into a recession is now nearly a one-in-three shot, according to coverage in the Telegraph UK.
But why? In a word: oil.
Here's more, from Mehreen Khan:
The US investment bank said a "low growth environment" had made the world vulnerable to a litany of shocks, including fears that central banks have lost control over domestic financial conditions, while rising political risks from Europe to the Middle East threaten to overwhelm governments.
What's more, for economic tigers, such as the United States, consumers aren't putting the money they save on gas toward lavish purchases.
We simply aren't racking up the debt to benefit global economies.
This means further investments in the country's operations is "collapsing."
More from Khan:
Contrary to many expectations, consumers in the advanced world have also failed to spend the windfall from lower prices, opting instead to pay down debts and save. Lower consumption levels have thus weighed down on economic activity.
On the bright side, Morgan Stanley predicts the European Central Bank balance sheet will overtake the Federal Reserve this year (the article has a graph). Proof that not just consumers, but our nation itself, is becoming more frugal.