{"id":42364,"date":"2019-01-07T08:36:31","date_gmt":"2019-01-07T13:36:31","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42364"},"modified":"2019-01-07T08:36:31","modified_gmt":"2019-01-07T13:36:31","slug":"could-stocks-rally-even-as-parts-of-the-economy-are-recessionary","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42364","title":{"rendered":"Could Stocks Rally Even as Parts of the Economy Are Recessionary?"},"content":{"rendered":"

Could Stocks Rally Even as Parts of the Economy Are Recessionary?<\/a><\/h3>\n

It’s not yet clear that the stock market swoon is predictive or merely a panic attack triggered by a loss of meds. <\/i><\/p>\n

We contrarians can’t help it:<\/b> when the herd is bullish, we start looking for a reversal. When the herd turns bearish, we also start looking for a reversal.<\/p>\n

So now that the herd is skittishly bearish, anticipating a recession, contrarians start wondering if a most hated rally<\/i> is in the offing,<\/b> one that would leave most punters off the bus.<\/p>\n

The primary theme for 2019 in my view is everything accepted by the mainstream is not as it seems.<\/i><\/b> Everything presented as monolithic and straightforward is fragmented, asymmetric and complex.<\/p>\n

Take “recession.”<\/b> The standard definition of recession is two consecutive quarters of negative GDP. But is this metric useful in such a fragmented, complex economy? What we’re seeing develop is certain sectors are already in recession, others are sliding while others are doing OK.<\/p>\n

So the question of stocks rising or falling partly depends on which parts of the economy are most heavily weighted in the stock market.<\/b> If the sectors most heavily represented by listed stocks are doing OK, then other chunks of the economy can be in freefall and stocks could still rise.<\/p>\n

There’s also the psychological state of market participants.<\/b> Was the 20% decline in the 4th quarter a much-delayed reaction to impending recession or was it a panic attack caused by the Federal Reserve withdrawing some of its largesse, i.e. lowering the Fed Put<\/i>?<\/p>\n

It it turns out to be more panic-attack than rational response, a relief rally might be expected.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Could Stocks Rally Even as Parts of the Economy Are Recessionary? It’s not yet clear that the stock market swoon is predictive or merely a panic attack triggered by a loss of meds. We contrarians can’t help it: when the herd is bullish, we start looking for a reversal. When the herd turns bearish, we […]<\/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":[127,353,22778,587,1264,1138],"class_list":["post-42364","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-gdp","tag-market-rally","tag-of-two-minds","tag-recession","tag-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42364","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=42364"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42364\/revisions"}],"predecessor-version":[{"id":42365,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42364\/revisions\/42365"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42364"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42364"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42364"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}