text: Good morning. Here’s your Early Warning for Thursday, 29 September 2022.TODAY’S BRIEFING:READ TIME: 17 mins 45 secondsInFocus: Weekly Economic OutlookInside the BeltwayDomestic INTSUMGeostrategic INTSUMLow-Intensity Conflict Activity Rollup & OutlookInFocus: Weekly Economic OutlookInvestment bank research has turned markedly sour over the past few weeks. “More pain ahead” is the general theme, laced with some very specific warnings about a coming financial crisis. This is not limited to a few banks – everyone is saying something like this: Bank of America, Barclays, Credit Suisse, Citi Bank, Deutsche Bank, Goldman Sachs, JP Morgan, Societe Generale, and others.First, notes from the past few days about, generally, more pain to come:Goldman Sachs Portfolio Strategy Research analysts noted that U.S. markets haven’t yet hit bottom, and are waiting on four indicators to call a market bottom: 1) low valuations, 2) growth deterioration stalling, 3) inflation peaking, and 4) investors more strongly positioned out of the market. They note that none of these market indicators are currently present, signaling lower lows in the coming weeks or months. (AC: Our favorite economist, Mohamed El-Erian, who’s had a great track record for the past couple years, notes that, “We are causing technical damage to the markets. People are more hesitant… [markets are having] liquidity issues… I’m staying on the sidelines for now.” This looks like another sign that markets haven’t bottomed out yet. – M.S.)The Goldman Sachs Commodity Research team warns that a constrained capital expenditure (capex) environment could linger, reducing investment into higher production: “Investors should remember that Fed-induced slowdowns are simply a short-term abatement of the symptom – inflation – and not a cure for the problem… With central bankers now focused on the costs of high inflation, there is a risk that the long-run cost of too deep a recession is the end of the capex cycle and a failure to grow sufficient capacity to debottleneck the system… [T]his capex cycle faces one further investment hurdle – ESG concerns – whereby capex is constrained as investors remain concerned over the true cost to society of their investments.”Rabobank (Dutch multinational): With the current geopolitical situation, “markets risk replaying 1987, 1994, 1997, 2000, 2008, the Arab Spring, 2012, 2015, and 2020 all at the same time… this is a global metacrisis.”Barclays (British multinational): “Don’t buy this dip”.JP Morgan Global Markets Strategy: “[O]ur perception that near-term recession risks associated with supply shocks has waned is accompanied by rising concern that central banks will, by intent or by accident, engineer a recession.” Analysts go on to say that an impatient Fed focused on inflation results will hike too much.Credit Agricole (France’s second largest bank): “Growing risks of a global hard landing… A more persistent inflation shock, growing stagflation and geopolitical risks plus tighter global financial conditions… [will lead to a] hard landing.” BlackRock: “Many central banks [including the Fed] aren’t acknowledging the extent of recession needed to rapidly reduce inflation. Markets haven’t priced that so we shun most stocks.”Credit Suisse: “The worst is yet to come… This pace of policy tightening has been consistent with recessions”. Six month likelihood of recession is 44% and rising. “Inflation is beginning to slow, but is likely to remain stubbornly high through next year.”