Tag: recession

The Delusional Fed

The Delusional Fed

The Fed's economic projections coming out of last week's FOMC meeting are far too optimistic. Fed's Real GDP projections for 2022, 2023 and 2024: 1.7%, 1.7% and 1.9% respectively. 2022 is going to be a zero percent to down Real GDP year in our view. 2023 will be flat with 2022 in our view. 2024 … Continue reading The Delusional Fed

A Recession Won’t Cure Inflation Anytime Soon

A Recession Won’t Cure Inflation Anytime Soon

It sure feels as though we are in a recession: Weak reports from retailers such as Amazon (AMZN) and Target (TGT, twice in Target's case).Soft retail numbers HERE.Low consumer confidence HERE.Atlanta Fed's new GDPNow estimate (as of June 15th), is zero percent Real GDP for Q2.Depleted personal savings (chart below).Even Johnny Come Latelys like Guggenheim's … Continue reading A Recession Won’t Cure Inflation Anytime Soon

Was Your RIF Deep Enough?

Was Your RIF Deep Enough?

Not sure if your reduction in force ("RIF"), was deep enough? If you must ask yourself that question, the answer is "No". Many publicly-traded Technology CEOs are about to navigate their first recessionary environment. If you are still managing headcount as if you are a venture-owned and operated company, you are carrying far too much … Continue reading Was Your RIF Deep Enough?

Living On The Edge: Investor Sentiment Feels Like 2008

Living On The Edge: Investor Sentiment Feels Like 2008

Investors are too optimistic. The economy and markets will get worse before they get better. We climbed high during 2020 and 2021 due to manufactured "stimulus" in the absence of production which could only end in inflation. Given the nose-bleed heights brought on by artificial excess, we have far to fall as markets, asset prices … Continue reading Living On The Edge: Investor Sentiment Feels Like 2008

The U.S. Economy Is Long-Term Fragile

The U.S. Economy Is Long-Term Fragile

We do not believe that investors fully appreciate how fragile the U.S. economy is. Our view is that the U.S. economy is in a recession and that this period will be followed by long-term muted growth given: 1.) the enormous U.S. Government debt load ($30.4 trillion), 2.) persistent price inflation, 3.) a consumption-driven economy rather … Continue reading The U.S. Economy Is Long-Term Fragile

A Recession Is Inevitable

A Recession Is Inevitable

It is inevitable that the U.S. Economy will enter recession this year should the Fed continue to tighten monetary policy as inflation persists. Wall Street is already seeing slowed activity with some M&A deals and credit pricings put on hold indefinitely or cancelled outright. The real economy will feel the negative effects of higher interest … Continue reading A Recession Is Inevitable

Tangible Value When Inflation Persists

Tangible Value When Inflation Persists

Last year we predicted 2022 Real GDP in the 0-2% range (The Atlanta Fed's GDPNow cast for Q1'22 is 0.5% as of March 8th). A recession this year is inevitable as the Fed moves to increase the Fed Funds rate and migrates from Quantitative Easing to Quantitative Tightening (Thereby shrinking the money supply). The first … Continue reading Tangible Value When Inflation Persists