Wall Street Is Coming To Grips With A Possible Local And Global Recession Next Year

Looks like things are not all gung-ho on the roads. Wall Street is beginning to bite its nails about recession, both in the country as well as in the world.

Why it has happened is due to slow global growth---an important "investing theme" in 2015. This brought down S&P 500 and the MSCI World Index by about 4 percent, according to The Saint Louis Business Journal.

For the following couple of years, the International Monetary Fund projections seem to forecast that the global economy, valued at $73.5 trillion, will grow by 3.1 percent in 2015 and 3.6 percent in 2016. Still, these numbers seem lukewarm.

A global recession is predicted by a Citigroup economist, Willem Buiter, who points out that the local as well as global economy is much below its potential output, while the chance of a global recession in the coming year is increasing, reports CNBC News.

"We think that the evidence suggests that the global output gap is negative and that the global economy is currently growing at a rate below global potential growth. The negative output gap is therefore widening," he said.

"From an output gap that was probably quite close to zero fairly recently, continued sub-par global growth is likely to put the global economy back into recession, if indeed the world ever fully emerged of the recession caused by the global financial crisis."

However, his point of view is not supported by everyone. Liz Ann Sonders Charles Schwab's chief investment strategist, said that though she is not totally sure about it, his point of view also cannot be dismissed, as "weak profits and margins, widening credit spreads and slowing global trade" create worries. "We believe an economic recession remains unlikely near-term, but we are on watch," Sonders told investors.