"Well, we know where we're goin'
But we don't know where we've been
And we know what we're knowin'
But we can't say what we've seen" – Talking Heads
We had a very nice Macro Discussion on our Live Trading Webinar Yesterday.
The bottom line is the "Recession" is a lagging measurement of the damage that's already been done by War, Supply Chain Disruption, Covid, Inflation, Global Warming and the Labor Shortage – it's like getting the bill after you've eaten the food – the bill doesn't make things worse – it just sums up the damages.
That's the problem with Stimulus Spending – the Government spent $11Tn in the past two years and we have/had a $22Tn economy so 25% of it has been stimulus and now there is no more stimulus (after Biden's last $2Tn) so we have to stand on our own and, if you think a $17Tn economy (without stimulus) bounces back to a $22Tn economy in one year – you just don't understand how economies work. So, that means we'll be at LESS than $22Tn without stimulus and that means, on paper, the economy will contract.
The thing is, it already contracted 25% during Covid but we pretended it didn't and we papered over the gaping economic hole with Trillions of Dollars and now we are finally paying the proverbial piper but there's no sense in whining about it or panicking over it – this is simply an honest measturement of our economy for a change and labeling it a "Recession" doesn't make it worse. That's like saying you can say the temperature is 32 degrees but don't say "freezing" – because that would make it cold…
So stop whining and find things to buy but buy with caution and scale into the positions (see our Strategy Section) because, as we learned in 2008/9 – there's no limit to how panicked traders can get. The entire banking sector was trading below 5x earnings, many Blue-Chip companies were priced like they were going bankrupt. Did the whole thing turn around in a month? No, but by September of 2009, we were happily counting our winnings! (see: "Stock Market Crash – Year One Review III – March Madness!")
IN PROGRESS
