Soc Gen strategist Albert Edwards, has warned of a looming recession in the US

Soc Gen strategist Albert Edwards, has warned of a looming recession in the US. The key precursor to this recession is slowing productivity growth. Edwards has noticed a worrying trend in a cycle that began in June 2009. Unit labor costs are now running well ahead of output price inflation meaning a margin and profits downturn for US businesses is now about to unfold. Edwards believes that a full-blown profits and investment downturn is most likely to be triggered by Asian and emerging market devaluations. This situation would release surplus capacity onto the West and crushing pricing power even further. In addition, Edwards argues, recent market phenomena have skewed investors perspectives of what is fair value for equities. He raises the question, do you need monetary tightening to burst a credit bubble? (VIEW LINK)