To JPM, This Is The Alarming Chart Suggesting The Next Recession “Is Just Around The Corner”

By now it is clear to even the most tenured economists that the half of the US economy, the one that deals with manufacturing and industrial production, is sliding into, if not already, in recession with today’s contractionary Chicago PMI and subzero Dallas Fed data confirming this deterioration.
But while the NBER is notoriously behind the curve when it comes to determining the onset of recessions, the market may have already spoken, and nowhere louder than in the collapse of corporate cash flow generation. This collapse in EBITDA is also what we cautioned three weeks ago is the biggest risk facing the economy.
This drop in cash flow is also one of the key catalysts listed by JPM in its report (noted earlier) which said it is time to lower allocation to US equity exposures as “the long period of indiscriminately buying any dip might be coming to an end.”
Specifically, JPM looks at the corporate financing gap, the difference between organic cash flow and the outflow on dividends and buybacks, and is very concerned with what it sees.

This post was published at Zero Hedge on 11/30/2015.