The Great Recession Blog

It’s all about inflation, but it’s not about today’s news on inflation. The big news on inflation today is not even that it hit 6.8% — its highest level since 1983 — but that the rate of climb for inflation is the steepest it has been in seventy years. However, even that is not the […]

How overpriced, overbought and out of touch with the overall economy is the US stock market? Let me tell you in pictures. First, let’s start with a comparison of stock prices to the US economy as it stands today: Based on Warren Buffet’s favorite indicator of stock-market over-or-under-valuation, the market is far more overvalued than […]

We have just entered those days of heady inflation that I have said will kill the stock market and bond funds. There is a tipping point at which inflation and the interest changes that respond to inflation matter, but it has never been a clearly defined point.

One or two dimwits told me I was stupid to be thinking inflation would be the driving force of 2021 due to shortages and Fed money printing. The cockiest one even assured me his second-grade education in economics said inflation wasn’t even happening, yet inflation has relentlessly surged higher every month to finally now hit […]

The Fed finally begun its cautious taper and the market did not immediately self-destruct… but the consequences of 14 years of central bank experimentation, regulatory overkill and the ‘processification’ of markets will have consequences… they may be bleak…. When bond markets sneeze… equity markets can end up on ventilators, dragging confidence down in their wake. Bill […]

The energy crisis spills across the ocean And I’m not talking about the California spill. The budding energy crisis I wrote about last week is likely to explode globally this winter into a massive crisis, which is why it is already whipping up US markets. Within just a few days after I wrote that article, […]

In an effort to prove the Fed’s tapering won’t matter, I recently saw one stock advisor claim that, when the Fed tapered its QE from late 2015 into 2016, “the stock market rallied 60% in an almost straight line higher.” Wow! Let’s take a look at that! Here is what the stock market actually did […]

The evidence that inflation is ripping everyone’s face off is now widespread, and the situation is rapidly getting worse all over the world, making it harder for both US bonds and stocks to ignore it: The US stock market took it on the chin again Tuesday, plummeting on worries about sustained high inflation that pushed […]

As I’ve written about extensively, we know the Federal Reserve has painted itself into a corner where it is now pressured to start tapering its quantitative easing earlier than it had been indicating. Now we are seeing signs that the bond market isn’t liking the news out of the last FOMC meeting, which hinted strongly […]

Stagflation is showing up in data points and articles everywhere now. Delta worries, labor shortages and fading Washington stimulus — it’s enough to cast a chill on the U.S. economy this fall. A bevy of Wall Street forecasters chopped their targets for U.S. growth after a poor U.S. jobs report for August. The government on […]

To keep it simple: Nope! Not this time anyway. That is, however, what you hear from the wistful market makers who want to see last week’s CPI release as proof inflation was “transitory.” Let me disabuse you of that fantasy entirely.

The past week has been a story of stagflation infecting the US economy while the stock market grimaces as Fed officials express the need to start a gradual pullout from economic stimulus much sooner or face a rapid pull-out a little later. Word on the Street has been that inflation is coming hot and heavy […]