- There is a well-known business cycle that goes from boom to bust in about 7 - 10 years on average.
- Unemployment is at multi-decade lows; if you look at FRED graphs the unemployment hits a low right before the recession. Of course, nobody knows how low it will go, but it can't go much lower than it is now.
- Bond yields have inverted, which has been a reliable recession-in-one-year signal.
- The trade war can't improve corporate earnings.
- Maybe the trade war triggers something bad in the US and/or Chinese economy and we have another 1997.
- Any one-time earnings juice from the tax cuts is over, so the year over year comparisons are harder.
- The markets flipped out in Dec after the Fed raised rates (I think that's what it was) and dropped 20% in a week or two. The Fed made some conciliatory statements and the party was back on. The RMB appreciates by only a few percent, but over some psychological threshold of 7 RMB to 1 USD and the market flips out, dropping 3%. It feels to me like everyone is trying to pretend that the party is just getting started, but if you keep drinking, sooner or later you pass out. It's been 10 years, it's getting pretty late, people have to stop and go home sooner or later. Sooner or later something random is going to happen like in Dec and everyone is going to flip out. But this time they'll stay passed out for a while.
- Unemployment is at multi-decade lows; if you look at FRED graphs the unemployment hits a low right before the recession. Of course, nobody knows how low it will go, but it can't go much lower than it is now.
- Bond yields have inverted, which has been a reliable recession-in-one-year signal.
- The trade war can't improve corporate earnings.
- Maybe the trade war triggers something bad in the US and/or Chinese economy and we have another 1997.
- Any one-time earnings juice from the tax cuts is over, so the year over year comparisons are harder.
- The markets flipped out in Dec after the Fed raised rates (I think that's what it was) and dropped 20% in a week or two. The Fed made some conciliatory statements and the party was back on. The RMB appreciates by only a few percent, but over some psychological threshold of 7 RMB to 1 USD and the market flips out, dropping 3%. It feels to me like everyone is trying to pretend that the party is just getting started, but if you keep drinking, sooner or later you pass out. It's been 10 years, it's getting pretty late, people have to stop and go home sooner or later. Sooner or later something random is going to happen like in Dec and everyone is going to flip out. But this time they'll stay passed out for a while.