Former head of equity trading, Northern Trust Bank, Chicago. Teacher, trainer, mentor, market historian, and perpetual student of all things related to the stock market and excellence in investing.
Erik,
I think there is a 4th probability. The market muddles along for quite a while going up a little down a little with no significant move in either direction (probability 50%) Can do this for many years.
Your “60% probability the market runs out of gas in a few months and recession begins” does not seem right. The regular events that cause a recession are not present–high inflation, high rates, oversupply of goods, high consumer debt along with foreclosures and repossessions , rising unemployment, currency collapse, large reduction in money supply and liquidity, bankruptcy of large bank or business etc..
Something not regular can always cause a recession. But this cannot be predicted or forecast i.e.
war in the middle east with stopped oil supply, environmental disaster, alien invasion, disease etc.
No evidence any of these things that cause recession are around the corner. Slow growth yes. But slow growth does not cause recession.
Thanks for the comment, Howard, but I have to disagree. The indicators of recession you list are only known well after the recession has started. The market peaks before the recession begins, which tells me that we must anticipate changes in the economy rather than waiting for confirmation that things have started to go south.
Report not displaying? Only comments?
Hello Erik,
Thanks for these quality market recaps, unfortunatly I cant see this week one:
“What happened last week.
What we’re watching for next week.”
Are the only phrases I see, they were supposed to be links?
Please try again and let me know if you still can’t see the full article.
Please try again and let me know if you still can’t see the full article.
We see only comments of article, but not the article. Could You fix it. Thanks.
Comments are closed.
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Erik,
I think there is a 4th probability. The market muddles along for quite a while going up a little down a little with no significant move in either direction (probability 50%) Can do this for many years.
Your “60% probability the market runs out of gas in a few months and recession begins” does not seem right. The regular events that cause a recession are not present–high inflation, high rates, oversupply of goods, high consumer debt along with foreclosures and repossessions , rising unemployment, currency collapse, large reduction in money supply and liquidity, bankruptcy of large bank or business etc..
Something not regular can always cause a recession. But this cannot be predicted or forecast i.e.
war in the middle east with stopped oil supply, environmental disaster, alien invasion, disease etc.
No evidence any of these things that cause recession are around the corner. Slow growth yes. But slow growth does not cause recession.
Thanks for the comment, Howard, but I have to disagree. The indicators of recession you list are only known well after the recession has started. The market peaks before the recession begins, which tells me that we must anticipate changes in the economy rather than waiting for confirmation that things have started to go south.
Report not displaying? Only comments?
Hello Erik,
Thanks for these quality market recaps, unfortunatly I cant see this week one:
“What happened last week.
What we’re watching for next week.”
Are the only phrases I see, they were supposed to be links?
Please try again and let me know if you still can’t see the full article.
Please try again and let me know if you still can’t see the full article.
We see only comments of article, but not the article. Could You fix it. Thanks.