The CONVERSATION examines the latest Empire Manufacturing Index, a measure of business activity in New York State, which is now 42 points below where it stood 12 months ago. The widely-followed index is at its lowest level since 2009, showing decreases in orders, shipments and payrolls at factories. DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, in a recent note, points to the Empire Manufacturing Index along with other indicators, such as labor markets conditions, as signs of a long-anticipated recession taking hold. "The Empire study shows not just a slowdown, but a huge drop," BOVE says on this episode, referring to this US economic contraction. BOVE discusses his other research, such as the tighter lending standards at banks, as well as his fresh data on the housing market. While the US has not technically entered recession yet, BOVE says consumer behaviour suggests a recession may have started. "The economy is slowing," he says.

Elsewhere, in an unconfirmed report out of China, an insider tells BOVE that a large number of major US banks with operations in China, are firing local staff en masse. "I am told that there is a huge wave of firings by American companies who do business in China," BOVE explains, noting how one insider feels the layoffs are poliitically motivated. BOVE believes the layoffs, if confirmed, are linked instead to the currency markets, and China's desire to undermine the US dollar. Joining the CONVERSATION, JOHN AIDAN BYRNE, says China's ambitions, and economic rise, should be kept in context given its history of oppression as well as the full reality of its economic progress.

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