Are we recession proof?

There is quite a bit of recession risk but no one wants to admit it. Part of it is cyclical and part of it is utter political incompetence.

Interest rates are going up faster than many would like, and later than I’d have liked. I think the Fed should have been cooling off the economy in 2014, but now it’s overheated. Debt is at all time highs, wages to expenses are at all time lows, and almost like America WANTS problems, it placed a buffoon brat in 1600 Pennsylvania Avenue.

It doesn’t help that the idiot in the White House has been hyping markets like it was 2009 (when it was actually a good time to buy stocks). Now we are well past what should have been the top of the market all wondering why it’s going down lately. Hoo hoo, there’s a mystery for you. Zoom all the way out in the S&P500 chart and tell me what you see.

Had wages gone up more quickly and prices stabilized somewhat then I could see the economy running smoothly. Which is a shame because there’s actually a lot more “real” economic activity these days, and it sucks that a screwed up capital markets dynamic will rain on that parade. There’s also no infrastructure plan. Remember that? The thing America needs most, the orange clown grandstanded....the one thing I’d have happily supported him on? Now? Nothing. Just a tax gift for rich folks and companies that will just focus on yet more buybacks to desperately cling to the idea that their shares are actually worth the current price.

Adding to this, apparently, it’s more important for the president of the United States to pick twitter fights with porn stars than run the country. Such is the order of priorities under herr fRump. Meanwhile something to the tune of several White House officials a month are indicted and increasing convicted of corruption: indicative of the crooks and scum trump has gathered to himself. So now rate hikes, trade wars, general policy incompetence and corruption, and a geometrically increasing deficit are beginning to catch up to the economy. Caterpillar just posted a gloomy outlook. Good luck.

The analogy to my mind is that had the economy/markets gotten some rest in 2013-4, figuratively it would have been like going to sleep on time. Markets and the economy wouldn’t have been glamorous during this time but at least we’re productive, and wake up the next day to embrace a federal infrastructure plan that helps revitalize the nation. Even by 2016, it would have been like going to bed 4-5 hours late. Push wages up, stop bidding wars, tighten rates. Unpleasant but a cup of coffee in the morning and you’ll be ok for the most part. Instead, the economy blew lines of coke and now it’s like 3 in the afternoon two days later and still no sleep....so at some point there’s going to be a crash.

I’m all cash waitin for the crash, and I’m frankly looking forward to bargain shopping. My inner cynic tells me that folks want to push up the S&P to 3,000 before admitting defeat, but this last couple of weeks has me even questioning that.

All I can say is hold on to your hat.

Good luck.