Juggling Dynamite

Solar & wind break records; taking huge market share from coal & gas. Here is a direct video link.

Lakshman Achuthan and Anirvan Banerji are co-founders of the Economic Cycle Research Institute (ECRI), which determines recession dates for 22 economies around the world. Their latest findings are summarized in Don’t be fololed! A recession really is coming:

Recession concerns in the US are widespread these days. Yet, some economists argue that the strength of the labor market — as well as household balance sheets — will keep the economy strong enough to avoid a recession.

We disagree. Despite the relatively robust job growth we’ve been seeing, the Economic Cycle Research Institute (ECRI), which we co-founded, has been predicting recession since last spring, and it remains our expectation that the US economy will enter a recession this year…

We saw a mirror image of today’s economy in the spring and summer of 2008, when the Great Recession, which started in December of 2007, was already underway.

Hoisington Management’s fourth quarter 2022 Review and Outlook is now available to the public on its website here. As always, a concise master class on monetary impacts and the economic cycle, see A Theory of Interest Rate Cycles. The bottom line: growth bearish and investment grade bond bullish:

Poor consumer spending over the critical Christmas shopping period, slumping exports, sharp deterioration in residential construction, and contracting diffusion indices in both the manufacturing and service sectors will result in business conditions in the first quarter that should be dramatically weaker than the fourth quarter. The risks of recession will become much clearer as 2023 progresses. Headline inflation will recede further from the 1.9% pace in the CPI of the latest six months. These developments are aligned with interest rate cycle theory as well as the case for lower U.S. Treasury bond yields.