{"id":17536,"date":"2016-02-09T11:43:57","date_gmt":"2016-02-09T16:43:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17536"},"modified":"2016-02-09T11:45:27","modified_gmt":"2016-02-09T16:45:27","slug":"the-spook-in-the-casino-recession-just-ahead-part-1","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17536","title":{"rendered":"The Spook In the Casino\u2014\u2013Recession Just Ahead, Part 1"},"content":{"rendered":"
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The Spook In the Casino\u2014\u2013Recession Just Ahead, Part 1<\/a><\/h3>\n

The wise guys keep buying the dips owing to the simple proposition that there is never a lasting\u00a0bear market without a recession. So after today\u2019s blow-out we are likely to get another call to scoop up the \u201cbargains\u201d because the correction has run its course and the US economy is still chugging along notwithstanding the contretemps in China and other places of purportedly\u00a0limited moment.<\/p>\n<\/header>\n

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Indeed, on the basis of Wall Street\u2019s muscle memory alone there is\u00a0surely another dead cat bounce on its way any day. But here\u2019s the memo. BTFDs is not working any more and, more crucially, there is a recession coming and soon. And then the bear will maul, not simply\u00a0paw as today.<\/p>\n

The fact\u00a0is,\u00a0BTFD hasn\u2019t worked on\u00a0a net basis hasn\u2019t for about 730 days now. The S&P 500 closed today where it first crossed in February 2014.
\n\"^SPX<\/a><\/p>\n

^SPX<\/a>\u00a0data by\u00a0YCharts<\/a><\/p>\n

In light of this extended dwell time in no man\u2019s land, it is not surprising that the market is getting spooked. After all, the real driver of the\u00a0post-March 2009 rebound of the stock indices was the Fed\u2019s massive intrusion in money and capital markets, not a sustainable recovery\u00a0of main street business activity\u00a0or real household incomes. Real net CapEx is still below 2007 levels, for example,\u00a0as is the real\u00a0median household income.<\/p>\n

And most certainly the market\u2019s 220% gain\u00a0between the\u00a0post-recession bottom of 670\u00a0and the\u00a0May 2015 peak of 2130 was not owing to an explosion of corporate earnings. If you set aside Wall Street\u2019s annually renewable ex-items\u00a0hockey stick,\u00a0what you actually have on the\u00a0profits front is a paltry 8% cummulative\u00a0gain since the pre-crisis earnings peak way back in June 2007.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Spook In the Casino\u2014\u2013Recession Just Ahead, Part 1 The wise guys keep buying the dips owing to the simple proposition that there is never a lasting\u00a0bear market without a recession. So after today\u2019s blow-out we are likely to get another call to scoop up the \u201cbargains\u201d because the correction has run its course and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[2661,7418,6122,5979,2120,1264,1138,860],"class_list":["post-17536","post","type-post","status-publish","format-standard","hentry","category-economics","tag-capex","tag-capital-markets","tag-casino","tag-contracorner","tag-david-stockman","tag-recession","tag-stock-market","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17536"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17536\/revisions"}],"predecessor-version":[{"id":17538,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17536\/revisions\/17538"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}